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Case: 14-30841 Document: 00513333364 Page: 1 Date Filed: 01/07/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-30841 United States Court of Appeals
Fifth Circuit
FILED
UNITED STATES OF AMERICA, January 7, 2016
Lyle W. Cayce
Plaintiff – Appellee Clerk
v.
C. RAY NAGIN, also known as Mayor Nagin,
Defendant – Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
Before BENAVIDES, DENNIS, and COSTA, Circuit Judges.
JAMES L. DENNIS, Circuit Judge:
A federal jury convicted Defendant C. Ray Nagin of bribery, “honest-
services” wire fraud, conspiracy to commit bribery and honest-services wire
fraud, conspiracy to commit money laundering, and filing false tax returns.
The district court sentenced Nagin to ten years in prison, imposed forfeiture in
the form of a personal money judgment, and ordered Nagin to pay restitution
to the federal government for unpaid taxes. On appeal, Nagin challenges the
district court’s jury instruction as to honest-services wire fraud as contrary to
the Supreme Court’s holding in Skilling v. United States, 561 U.S. 358 (2010).
Nagin also claims that the personal money judgment the court imposed as
forfeiture was not authorized by statute and therefore constituted an illegal
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No. 14-30841
sentence. Alternatively, he claims that the district court erred in failing to
specify that he was to bear liability for a portion of the forfeiture jointly and
severally with Mark St. Pierre, one of his co-conspirators. 1 We affirm the
judgment in all respects while confirming the district court’s authority to
correct any clerical error therein.
I
Nagin served as Mayor of the City of New Orleans from May 2002 to May
2010. In 2013, a grand jury returned a 21-count indictment against Nagin,
charging him with one count of conspiracy to commit honest-services wire
fraud and bribery, six counts of bribery, nine counts of honest-services wire
fraud, one count of conspiracy to commit money laundering, and four counts of
filing false tax returns.
According to the indictment, during his tenure in office, Nagin solicited
and accepted payments from contractors and business entities that sought
business opportunities, favorable treatment, and contracts from the city.
Pertinent to the honest-services wire fraud charges, in one instance, the
indictment alleged that Nagin asked city contractor Frank Fradella to arrange
a post-mayoralty consulting contract for Nagin in return for his support for a
city lighting project contract that Fradella was pursuing. After Nagin left
office, he signed a consulting contract with an affiliate of Fradella and
subsequently received nine wire payments, totaling $112,500, pursuant to that
contract. 2
1 Nagin also argues that the district court violated his Sixth Amendment right to a
jury trial by imposing forfeiture and restitution based on the court’s own factual findings, but
he concedes that this argument is foreclosed by United States v. Rosbottom, 763 F.3d 408,
420 (5th Cir. 2014), and he raises the issue only to preserve it for possible further review.
2 These nine wire payments that Nagin received after leaving office formed the
predicate for the nine charges of honest-services wire fraud in his indictment.
2
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No. 14-30841
At the close of trial, the district court instructed the jury on, inter alia,
the elements of honest-services wire fraud, without objection from Nagin. The
jury subsequently returned guilty verdicts on all counts of the indictment,
except for one count of bribery. The district court sentenced Nagin to ten years
in prison, imposed forfeiture in the form of a personal money judgment in the
amount of $501,200.56, and ordered Nagin to pay $84,264 in restitution to the
federal government for unpaid taxes. Nagin appealed.
II
A
Nagin did not object at trial to the district court’s relevant jury
instructions. We review jury instructions that were not objected to at trial for
plain error. United States v. Boyd, 773 F.3d 637, 644 (5th Cir. 2014). To meet
the plain-error standard, Nagin must show that (1) there was error; (2) the
error was clear and obvious, not subject to reasonable dispute; (3) the error
affected his substantial rights; and (4) the error seriously affects the fairness,
integrity, or public reputation of judicial proceedings. Puckett v. United States,
556 U.S. 129, 135 (2009). If those four prongs are satisfied, this court has the
discretion to remedy the error. Id.
“The first step in plain-error review is to determine whether there was
error.” United States v. Rodriguez-Escareno, 700 F.3d 751, 753 (5th Cir. 2012).
In reviewing jury instructions, we consider “whether the instruction, taken as
a whole, is a correct statement of the law and whether it clearly instructs jurors
as to the principles of law applicable to the factual issues confronting them.”
United States v. Ebron, 683 F.3d 105, 151-52 (5th Cir. 2012) (citations and
internal quotation marks omitted).
On appeal, Nagin challenges only the part of the district court’s
instruction that stated, “It is not a defense to claim that a public official would
have lawfully performed the official action in question even without having
3
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No. 14-30841
accepted a thing of value.” Nagin argues that this part of the jury instructions
was plainly erroneous in light of the Supreme Court’s decision in Skilling v.
United States, 561 U. S. 356 (2010). According to Nagin, Skilling held that a
conviction for honest-services fraud requires proof that the official accepted a
thing of value with the specific intent to be influenced by it in his official
actions, and the district court’s jury instructions negated this requirement.
Nagin misinterprets Skilling.
A conviction for honest-services wire fraud requires proof that the
defendant used wire communications in interstate commerce to carry out a
“scheme or artifice to defraud,” 18 U.S.C. § 1343, by depriving another of “the
intangible right of honest services,” id. § 1346. In Skilling, the Supreme Court
construed § 1346 narrowly and held that honest-services fraud encompasses
only bribery and kickback schemes. 561 U.S. at 408-09. To define the scope of
the honest-services statute’s proscription of bribes and kickbacks, the Skilling
Court directed courts to look to, inter alia, federal statutes defining similar
crimes, such as 18 U.S.C. § 201(b), the principal federal bribery statute. See
id. at 412-13 & n.45.
We follow the Supreme Court’s direction in Skilling and look to § 201(b)
to give substance to the prohibition on honest-services fraud. In United States
v. Valle, we held that an official may be convicted of bribery under § 201(b)(2)
“if he has corruptly entered into a quid pro quo, knowing that the purpose
behind the payment that he has . . . agreed to receive[ ] is to induce or influence
him in an official act, even if he has no intention of actually fulfilling his end
of the bargain.” 538 F.3d 341, 347 (5th Cir. 2008). Accordingly, pursuant to
Valle, a conviction for bribery under § 201(b)(2) does not require proof that the
official intended to be influenced in his official actions. See id. Viewed through
Skilling’s lens, Valle instructs that honest-services fraud also does not require
such proof. See Skilling, 561 U.S. at 412; Valle, 538 F.3d at 347.
4
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No. 14-30841
Nagin’s arguments that Skilling somehow overruled or superseded our
definition of bribery are unavailing. The Skilling Court did not undertake to
redefine the preexisting crimes of bribery or accepting kickbacks that must
underlie honest-services fraud; it merely held that to convict a person of
honest-services fraud the prosecution must prove a bribery or kickback scheme
as part of the crime. See 561 U.S. at 408-09. The district court’s jury
instruction was consistent with our circuit precedent as to the crime of bribery
under § 201(b)(2).
Nagin also contends that the district court’s instruction allowed the jury
to convict even in the absence of a quid pro quo exchange, contrary to Skilling.
This contention is meritless. The district court’s instructions as to honest-
services fraud, explaining the concept of public bribery, stated very clearly that
“bribery occurs when a public official accepts or offers to accept . . . anything of
. . . value . . . in return for being influenced in his performance of an official
act.” (Emphasis added). The instructions also explained, “[T]he public official
and the payor need not state the quid pro quo in express terms.” (Emphasis
added). The district court thus properly instructed the jury to convict only if it
found a corrupt quid pro quo exchange. 3 Accordingly, we find no error in the
district court’s jury instructions.
B
As part of Nagin’s sentence, the district court rendered a personal money
judgment ordering Nagin to forfeit to the United States an amount of
$501,200.56. 4 Nagin contends that this personal money judgment, rather than
3 It is worth reemphasizing that this exchange need not involve the actual commission
of an official act by the bribed official; it is sufficient that the official promises to be influenced
by the bribe in his official actions, “even if he has no intention of actually fulfilling his end of
the bargain.” Valle, 538 F.3d at 347.
4 A personal money judgment is an in personam judgment against the defendant
rather than an in rem judgment against specified property. See, e.g., United States v. Casey,
5
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No. 14-30841
forfeiture of specific property, was not authorized by statute. Although Nagin
did not raise this objection at sentencing, we review it de novo because he
claims that this element of his sentence is illegal. See United States v. Nolen,
472 F.3d 362, 382 & n.52 (5th Cir. 2006) (“[A]n illegal sentence always
constitutes plain error.” (citing United States v. Del Barrio, 427 F.3d 280, 282
& nn. 3-4 (5th Cir. 2005)).
In imposing the money judgment on Nagin, the district court invoked
18 U.S.C. § 981(a)(1)(C), which authorizes civil forfeiture of the proceeds of
certain offenses, and 28 U.S.C. § 2461(c), which permits the government to
seek criminal forfeiture whenever a civil or criminal forfeiture is authorized by
statute and the defendant is found guilty of the relevant offense. 18 U.S.C. §
981(a)(1)(C) provides for the forfeiture of “[a]ny property, real or personal,
which constitutes or is derived from proceeds traceable to” certain offenses.
Nagin contends that this statute does not authorize personal money judgments
because it does not expressly provide for this form of forfeiture. We have
already rejected a similar argument, however, in the context of an analogous
statute.
In United States v. Olguin, we held that 21 U.S.C § 853 authorizes
personal money judgments as forfeiture for violations within the scope of that
statute. 643 F.3d 384, 395 (5th Cir. 2011). The text of 21 U.S.C. § 853(a) is
substantively identical to that of 18 U.S.C. § 981(a)(1)(C), and it similarly does
not expressly provide for personal money judgments. Compare 21 U.S.C.
§ 853(a) (“any property constituting or derived from any proceeds the person
obtained, directly or indirectly as a result of the violation” is subject to
forfeiture), with 18 U.S.C. § 981(a)(1)(C) (“any property, real or personal, which
444 F.3d 1071, 1075-76 (9th Cir. 2006) (discussing in personam nature of money judgment
forfeitures).
6
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No. 14-30841
constitutes or is derived from proceeds traceable to [certain violations]” is
subject to forfeiture). In United States v. Monsanto, the Supreme Court
rejected a defendant’s argument that 21 U.S.C. § 853 does not authorize the
forfeiture of funds used to pay attorney’s fees. 491 U.S. 600, 607 (1989). The
Court explained, “Congress could not have chosen . . . broader words to explain
what was to be forfeited.” Id. In Olguin, we stated regarding 21 U.S.C. § 853,
“The text of the [statute] is plain and unambiguous, and we handle it according
to its plain meaning.” 643 F.3d at 395-96. Citing Monsanto and pointing to
21 U.S.C. § 853’s broad definition of “property” as “real property . . . [and]
tangible and intangible personal property,” we explained we were “reluctant to
create an exception for [the defendant’s] personal money.” Olguin, 643 F.3d at
396. Thus, we concluded that 21 U.S.C. § 853 authorized personal money
judgments. Id. at 396-97.
Our reasoning and holding in Olguin are readily applicable to 18 U.S.C.
§ 981(a)(1)(C). The Supreme Court’s statement in Monsanto that “Congress
could not have chosen . . . broader words to explain what was to be forfeited,”
491 U.S. at 607, applies with equal force to 18 U.S.C. § 981’s broad language.
Under 18 U.S.C. § 981(a)(1)(C), “personal property” is subject to forfeiture.
Personal property means “[a]ny movable or intangible thing that is subject to
ownership and not classified as real property.” Property, BLACK’S LAW
DICTIONARY (10th ed. 2014). Similar to the text of 21 U.S.C. § 853(a), nothing
in 18 U.S.C. § 981(a)(1)(C)’s text excludes personal money judgments. See
Olguin, 643 F.3d at 395-97.
Moreover, the exclusion of personal money judgments would undermine
the purpose of criminal forfeitures. In United States v. Hall, the First Circuit
explained:
There are two primary reasons for permitting money
judgments as part of criminal forfeiture orders. First,
7
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No. 14-30841
criminal forfeiture is a sanction against the individual
defendant rather than a judgment against the
property itself. Because the sanction follows the
defendant as a part of the penalty, the government
need not prove that the defendant actually has the
forfeited proceeds in his possession at the time of
conviction. Second, permitting a money judgment, as
part of a forfeiture order, prevents a [defendant] from
ridding himself of his ill-gotten gains to avoid the
forfeiture sanction.
434 F.3d 42, 59 (1st Cir. 2006) (citations and internal quotation marks
omitted). Thus, although neither 18 U.S.C. § 981(a)(1)(C) nor 28 U.S.C.
§ 2461(c) expressly refers to personal money judgments, our sister circuits
have uniformly agreed that personal money judgments are a proper form of
criminal forfeiture under these statutes. See, e.g., United States v. Newman,
659 F.3d 1235, 1242-43 (9th Cir. 2011); United States v. Padron, 527 F.3d 1156,
1162 (11th Cir. 2008); United States v. Day, 524 F.3d 1361, 1377-78 (D.C. Cir.
2008).
The amount of a personal money judgment is measured by the proceeds
of the defendant’s illegal activity, rather than the amount of assets he retains
at the time of sentencing. E.g., Day, 524 F.3d at 1377-78. Following Olguin’s
analysis, we join our sister circuits in holding that the combined operation of
18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) authorizes personal money
judgments as a form of criminal forfeiture. 5
5 There is no consensus among the circuits over whether the government must make
a showing that satisfies the requirements of 21 U.S.C. § 853(p)(1)’s substitute-asset
provisions as a precondition to imposing a personal money judgment under 28 U.S.C.
§ 2461(c). Compare Newman, 659 F.3d at 1242-43 (Ninth Circuit holding no substitute-assets
showing required), with United States v. Abdelsalam, 311 F. App’x 832, 847 (6th Cir. 2009)
(holding “government must comply with the requirements of Section 853(p)(1)” to obtain a
personal money judgment). We need not decide this issue, however, because Nagin concedes
that the record evidence in his case would satisfy 21 U.S.C. § 853(p)(1)’s requirements.
8
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No. 14-30841
C
As a general matter, co-conspirators subject to criminal forfeiture are
held jointly and severally liable for the full amount of the proceeds of the
conspiracy. See United States v. Edwards, 303 F.3d 606, 643 (5th Cir. 2002).
The district court correctly stated the law, but both Nagin and the Government
agree that due to a clerical error the district court’s judgment does not
specifically state that Nagin is to bear liability for an $8,133.85 portion of the
amount forfeited jointly and severally with Mark St. Pierre, one of his co-
conspirators. Any clerical error relating to the joint and several liability
designation of any portion of Nagin’s forfeiture is correctable under Federal
Rule of Criminal Procedure 36. See FED. R. CRIM. P. 36 (“After giving any
notice it considers appropriate, the court may at any time correct a clerical
error in a judgment.”); see also United States v. Quintero, 572 F.3d 351, 353
(7th Cir. 2009) (“[T]he failure to include forfeiture in a judgment, that everyone
intended to be included, constitutes a clerical error, correctable under Rule
36.”). The parties may therefore move the district court to correct the judgment
in this respect.
III
For these reasons, we AFFIRM the judgment in all respects without
affecting the district court’s authority to correct any clerical errors therein.
9
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754 F.Supp. 49 (1991)
Jerome H. JAFFE
v.
Helen JULIEN and Seymour L. Mantel, Executors of the Estate of Alfred S. Julien, and Stuart A. Schlesinger, and Edward J. Sanocki, Jr., and Denise Mortner Krans, and Julien & Schlesinger, P.C.
Civ. A. No. 90-4895.
United States District Court, E.D. Pennsylvania.
January 11, 1991.
*50 Mark S. Pearlstein, Philadelphia, Pa., for plaintiff.
Howard J. Sedran, Philadelphia, Pa., for defendants.
MEMORANDUM
WALDMAN, District Judge.
Presently before the court is defendants' motion to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). The defendants are a New York City law firm with offices in Manhattan, several *51 members of the firm and the executors of the estate of one of the firm's former principals. Plaintiff is a Pennsylvania lawyer who referred a case to the New York law firm and now seeks to recover a referral fee. He has requested that, should the court find jurisdiction lacking, the case be transferred to the Southern District of New York rather than dismissed, citing 28 U.S.C. § 1406(a) and § 1631. The record includes affidavits of Mr. Jaffe and Mr. Schlesinger and several exhibits submitted by plaintiff.
I. BACKGROUND
In June 1984, a client of Mr. Jaffe approached him regarding the possible representation of her sister and brother-in-law, James and Maureen Gilboy, in a civil case to be prosecuted in New York. Mr. Jaffe contacted Mr. Julien, an attorney at Julien & Schlesinger, about the representation and then travelled to New York to meet with Mr. Julien and the Gilboys. The Gilboys live in New York City. Mr. Julien accepted the case for the firm and agreed to pay a referral fee to Mr. Jaffe.
On July 2, 1984, Mr. Julien sent Mr. Jaffe a letter in which he confirmed that a referral fee would be paid and requested Mr. Jaffe's formal approval. The letter was written under the firm letterhead and provides:
Re: Gilboy v. South Shore Thoracic & Cardiovascular Surgical Group, et al Our file no. 23,097
Dear Mr. Jaffe:
This will confirm that you will receive twenty-five (25%) percent of our net fee in the above matter. Kindly sign a copy of this letter indicating your consent and return in the envelope provided.
Per your request, enclosed please find a copy of the summons and complaint in this matter.
Very truly yours,
/s/ Alfred S. Julien
SO AGREED:
____________________
Jerome H. Jaffe, Esq.
Mr. Jaffe signed the letter and returned it to Mr. Julien. Thereafter, some correspondence was exchanged between Mr. Jaffe and Mr. Julien and between Mr. Jaffe and the Gilboys.
In 1988, the Gilboys became dissatisfied with their representation by the New York firm, specifically by Mr. Schlesinger. Mr. Jaffe went to New York in an attempt to quell the Gilboys' dissatisfaction. The Gilboys later disengaged Julien & Schlesinger and engaged Mr. Harvey Waxman, a Nassau County, New York attorney to represent them. Mr. Waxman obtained a settlement for the Gilboys in April 1989 of $2,375,000.00.
Following a hearing, a Queens County judge determined that of the $791,666.66 in legal fees generated by the settlement, Julien & Schlesinger should receive $527,777.76 and Mr. Waxman should receive $263,888.88. It is 25% of the $527,777.76 received by Julien & Schlesinger, or $131,944.44, that plaintiff seeks in this action.
Defendants contend that they are not subject to suit in Pennsylvania. Julien & Schlesinger conducts no business in Pennsylvania and has no lawyer in its office who is licensed to practice in Pennsylvania. The underlying case involving the Gilboys had nothing to do with Pennsylvania, and was prosecuted in New York. Defendant attorneys never went to Pennsylvania in their representation of the Gilboys for any reason.
II. DISCUSSION
In deciding a motion to dismiss for lack of personal jurisdiction the allegations of the complaint are taken as true, however, the burden of proof remains with the plaintiff to demonstrate a jurisdictional predicate by competent proof. Bucks County Playhouse v. Bradshaw, 577 F.Supp. 1203, 1206 (E.D.Pa.1983).
Defendants' motion must be assessed in light of Pennsylvania's long-arm statute, 42 Pa.Cons.Stat.Ann. § 5301 et seq. See Strick Corp. v. A.J.F. Warehouse Distrib., Inc., 532 F.Supp. 951, 953 (E.D.Pa. 1982); Spelling-Goldberg Prods. v. Bodek & Rhodes, 452 F.Supp. 452, 453 (E.D.Pa. 1978). This statute permits a court to assert *52 personal jurisdiction over a defendant "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with [the] Commonwealth allowed under the Constitution of the United States." 42 Pa.Cons.Stat.Ann. § 5322. The parameters of jurisdiction set by Pennsylvania's long-arm statute are therefore co-extensive with those of the Due Process Clause of the Fourteenth Amendment.
The Pennsylvania statute contemplates that a court may exercise in personam jurisdiction on two basesgeneral jurisdiction or specific jurisdiction. A finding of "general" jurisdiction requires that defendant be "present" in the state either because he is a resident, has consented to be sued here, or, in the case of a corporation or business entity, maintains "a continuous and systematic part of its general business" in Pennsylvania. 42 Pa.Cons. Stat.Ann. § 5301(a)(2)(iii). Plaintiff must demonstrate that the defendant maintained "continuous and substantial" forum affiliation. Schwilm v. Holbrook, 661 F.2d 12, 14 (3d Cir.1981).
Personal jurisdiction over defendants in this case clearly cannot be based upon general jurisdiction under § 5301. Plaintiff does not contend that the defendants carry on a continuous and systematic part of their business in Pennsylvania and nothing was proffered from which any such finding could be made.
By contrast, the "specific" jurisdictional provision provides that jurisdiction over non-resident corporate defendants may be "based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States," 42 Pa.Cons. Stat.Ann. § 5322(b), but that such an exercise of jurisdiction must be confined to causes of action which arise from these contacts with the state. Id. at § 5322(c).
In International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Supreme Court held that due process is satisfied when a nonresident defendant has sufficient contacts with the forum state "that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Id. 326 U.S. at 316, 66 S.Ct. at 158. A plaintiff must show that a defendant's activities reasonably should have made him aware that he could be haled into court in the forum state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).
The defendant must have purposefully availed itself of the privilege of conducting activities in the forum state, thus invoking the benefit and protection of its laws. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). The cause of action, in turn, must arise from the defendant's activities within the forum state. Helicopteros Nationales de Columbia, S.A. v. Hall, 466 U.S. 408, 414-16, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984); McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957); Gehling v. Saint George's School of Medicine, Ltd., 773 F.2d 539, 541 (3d Cir.1985). The tendering of a payment by a contracting party to the other contracting party in the forum is not sufficient. See Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir.1984). The placing of telephone calls or the sending of letters into the forum by a party to the formation of a contract is not sufficient. See Bucks County Playhouse, supra at 1209; Baron & Company, Inc. v. Bank of New Jersey, 497 F.Supp. 534, 538-39 (E.D.Pa.1980).
Plaintiff contends that his cause of action arises from defendants' activities in Pennsylvania, that is the breach of a contract executed in Pennsylvania. In analyzing such a claim, the court will consider the nature of the pre-contract negotiations; the location of those negotiations; the terms of the contract, including the manner and method of performance; and, the subject matter involved. See Strick, supra at 958.
As to the nature and location of the negotiations, it appears that plaintiff prompted the agreement by contacting Mr. Julien in New York in June of 1984, and that whatever negotiations ensued took *53 place in New York at Mr. Julien's office. This weighs heavily against a finding that the defendants purposefully availed themselves of the privileges of conducting business in Pennsylvania. Cf. Gagner v. Parsons & Whittemore, Inc., 450 F.Supp. 1093 (E.D.Pa.1978) (negotiations took place in New York; therefore, no jurisdiction in Pennsylvania).
After agreeing to represent the Gilboys and pay a referral fee, Mr. Julien sent the letter of July 2, 1984 to plaintiff to "confirm" that a referral fee of 25% would be paid. The heading of the letter indicates that the firm had opened a case file and commenced its representation of the Gilboys. There is no reference to what this payment was in consideration of. The letter appears to confirm a prior understanding between the parties and to be designed to secure a formal acknowledgement that plaintiff would accept a 25% referral fee in circumstances where larger fees are not uncommon. Even if plaintiff's return of the letter constituted the final formal step in executing an agreement, this alone would not create in personam jurisdiction. Contract formalities are not determinative for purposes of jurisdiction. Lakeside Bridge and Steel Co. v. Mountain State Construction Co., 597 F.2d 596, 604 (7th Cir.1979), cert. denied, 445 U.S. 907, 100 S.Ct. 1087, 63 L.Ed.2d 325 (1980).
The terms and subject matter of an agreement are particularly helpful in determining whether a defendant could reasonably expect to be sued in the forum. The principal consideration provided by plaintiff was the "referral" which was consummated in New York. Moreover, the unsolicited referral of business to a non-Pennsylvania lawyer from a Pennsylvania lawyer does not provide sufficient contacts to make the former amenable to suit in Pennsylvania. See Reliance Steel Products Company v. Watson, Ess, Marshall & Enggas, 675 F.2d 587 (3d Cir.1982). The essence of the agreement was the performance of legal services in New York by a New York law firm related to litigation pending in New York on behalf of two New York clients. Moreover, the alleged breach on which this action is premised occurred in New York.
The Court concludes that plaintiff has not established sufficient contacts between the New York defendants and Pennsylvania to sustain a finding of personal jurisdiction over these defendants. Rather than grant defendants' motion to dismiss, however, the court in the interest of justice will grant plaintiff's alternative request to transfer this case to the Southern District of New York.
In support of his request for transfer, plaintiff relies on 28 U.S.C. § 1406(a) and § 1631. This cause of action arose from an alleged breach of contract and misrepresentations in the Southern District of New York and thus "could have been brought" there. 28 U.S.C. § 1391(a). While the matter is not free from doubt, the court believes that the language of § 1406(a) may fairly be read broadly enough to permit transfer of a case for want of personal jurisdiction. See Porter v. Groat, 840 F.2d 255, 257 (4th Cir.1988); Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77, 80 (2d Cir.1978); Taylor v. Love, 415 F.2d 1118, 1120 (6th Cir.1969), cert. denied, 397 U.S. 1023, 90 S.Ct. 1257, 25 L.Ed.2d 533 (1970); Mayo Clinic v. Kaiser, 383 F.2d 653, 656 (8th Cir.1967); Dubin v. U.S., 380 F.2d 813, 815 (5th Cir.1967); Shaw v. Boyd, 658 F.Supp. 89, 92 (E.D.Pa.1987). While § 1631 was intended to address cases where subject matter jurisdiction is lacking, its plain language, as noted and applied by at least one court in this circuit, also permits the transfer of a case for lack of personal jurisdiction. See Starline Optical Corp. v. Caldwell, 598 F.Supp. 1023, 1028 (D.N.J.1984). The court notes that applying the criteria of Gulf Oil v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), transfer of this case could also be justified under § 1404(a). (While some key witnesses and records appear to be in Queens and Nassau Counties, in the Eastern District of New York, they are far more proximate to Foley Square than to Philadelphia.)
An appropriate order will be entered.
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254 F.2d 849
Joseph BUCHANAN and Eva Buchanan, Appellants,v.Jack WILSON, Appellee.
No. 13379.
United States Court of Appeals Sixth Circuit.
April 21, 1958.
Myron S. Rudd, Cincinnati, Ohio, for appellants.
C. Robert Beirne, Cincinnati, Ohio, and Don Anderson, Jellico, Tenn., for appellee.
Before McALLISTER and MILLER, Circuit Judges, and CECIL, District Judge.
PER CURIAM.
1
Appellants had a claim for damages against appellee arising out of an automobile accident at Jellico, Tennessee. Appellee, a garage owner, arranged to repair appellants' automobile and since appellants were residents of Cincinnati, Ohio, he agreed to bring the repaired automobile to Cincinnati during the week following the accident. Appellants consulted their attorney about suing appellee, and it was agreed that an effort would be made to serve him with summons when he brought the car to Cincinnati. A petition was accordingly filed against appellee, and arrangements made with a deputy sheriff whereby he would be available on telephone call to serve summons on appellee. When appellee arrived in Cincinnati he called one of the appellants, Mrs. Buchanan, by telephone, and told her that the car was available for delivery. Mrs. Buchanan replied by asking him to bring the car to their home; and appellee decided to do so the next day. When he delivered the car at appellants' home, Mr. Buchanan asked him to wait while he tried the car out. Appellee accordingly waited about half an hour while Mr. Buchanan was driving the car about. In the meantime, appellants had called their attorney and the deputy sheriff, who arrived in a short time, and the deputy sheriff thereupon served the summons upon appellee.
2
Appellee came into the State of Ohio, voluntarily with appellants' automobile, with the intention of delivering it to appellants in the downtown area of Cincinnati, and not with any intention of making delivery at appellants' home or waiting while it was tried out by Mr. Buchanan. The sole reason why appellee drove the car to appellants' home was because of the request of Mrs. Buchanan. The purpose in having the appellee come to appellants' home was to make him available for service of summons there; and the request to the appellee to wait at appellants' premises while Mr. Buchanan drove the car around to try it out, was to induce appellee to remain at their home so that he could be served with summons there.
3
The District Court, on the foregoing stipulated facts, granted appellee's motion to quash the service of summons and to set aside and vacate the summons and return, on the ground of abuse of process; and, upon the election of appellants not to have appellee served by alias summons, the Court entered an order dismissing appellants' petition.
4
Appellee, a non-resident, was not induced by artifice to come within the jurisdiction of the Court; but having come within the jurisdiction he was induced by artifice, and for the sole purpose of subjecting him to service of summons, to come to a certain place within the jurisdiction, and was there induced, by artifice, to remain until a deputy sheriff could arrive and make service of summons upon him. It is here not a question whether the service made under such circumstances, amounts to the acquisition of jurisdiction over the appellee; it is rather a question whether the Court will enforce its jurisdiction, obtained by the abuse of its own process.
5
We concur in the view of the District Court that the service of summons made upon appellee under the foregoing circumstances constituted an abuse of process. The judgment of the District Court is accordingly affirmed.
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Case: 13-13210 Date Filed: 01/21/2014 Page: 1 of 2
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-13210
Non-Argument Calendar
________________________
D.C. Docket No. 6:11-cr-00327-CEH-KRS-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MICHAEL DENARD JONES,
a.k.a. Bleek Jones,
a.k.a. Michael D. Jones,
a.k.a. Bleek,
a.k.a. B,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(January 21, 2014)
Case: 13-13210 Date Filed: 01/21/2014 Page: 2 of 2
Before TJOFLAT, HULL and MARCUS, Circuit Judges.
PER CURIAM:
Meghan Ann Collins, appointed counsel for Michael Denard Jones in his
sentence-reduction proceedings pursuant to 18 U.S.C. § 3582(c)(2), has filed a
motion to withdraw on appeal, supported by a brief prepared pursuant to Anders v.
California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967). Our independent
review of the entire record reveals that counsel’s assessment of the relative merit of
the appeal is correct. Because independent examination of the entire record reveals
no arguable issues of merit, counsel’s motion to withdraw is GRANTED, and the
denial of Jones’s § 3582(c)(2) motion is AFFIRMED.
2
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-6314
MARJIL LEE BERGARA,
Plaintiff - Appellant,
versus
A. BENTON CHAFIN,
Defendant - Appellee.
Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. James P. Jones, Chief District
Judge. (7:07-cv-00061-jpj)
Submitted: August 30, 2007 Decided: September 6, 2007
Before MICHAEL, KING, and SHEDD, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Marjil Lee Bergara, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Marjil Lee Bergara appeals the district court’s order
dismissing under 28 U.S.C. § 1915A(b) (2000) his complaint filed
pursuant to Bivens v. Six Unknown Named Agents of Fed. Bureau of
Narcotics, 403 U.S. 388 (1971). We have reviewed the record and
find that this appeal is frivolous. Accordingly, we dismiss the
appeal for the reasons stated by the district court. See Bergara
v. Chafin, No. 7:07-cv-00061-jpj (W.D. Va. Feb. 20, 2007). 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 -
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110 F.3d 798
U.S.v.One 1983 Beige Rolls Royce*
NO. 96-4152
United States Court of Appeals,Eleventh Circuit.
Mar 04, 1997
Appeal From: S.D.Fla. ,No.8906997cvwjz
1
Affirmed.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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946 F.2d 886
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.TRAVELER'S EXPRESS, INCORPORATED, a body corporate, Plaintiff-Appellee,v.BEL AIR EXXON, INCORPORATED, t/a B & J Liquors, t/a BelAirExxon, Incorporated, t/a J & B Check Cashers, Sandco,Incorporated, t/a Sandco Liquors, J & S Incorporated, t/aOrleans Shell, Jimmy Brown, Socorro Brown, Defendants-Appellants,andMel's Corner, Incorporated, formerly known as J.R. Brown,Incorporated, Billy Whaley, Sandra Whaley, Defendants.
No. 90-1834.
United States Court of Appeals, Fourth Circuit.
Argued April 10, 1991.Decided Oct. 3, 1991.As Amended Nov. 21, 1991.
Appeal from the United States District Court for the District of Maryland, at Baltimore. Deborah K. Chasanow, Magistrate Judge. (CA-88-3748-HAR)
Argued: Randall Curtis Smith, Olney, Md., for appellant.
Richard Michael Kind, Kind and Dashoff, Baltimore, Md., for appellee.
On Brief: Arnold D. Dashoff, Kind and Dashoff, Baltimore, Md., for appellee.
D.Md.
AFFIRMED.
Before DONALD RUSSELL, K.K. HALL and HAMILTON, Circuit Judges.
OPINION
PER CURIAM:
1
The Appellants, Jimmy and Socorro Brown, former husband and wife, appeal from the magistrate judge's order entering judgment in favor of the Appellee, Traveler's Express, Inc. ("Traveler's"), after a two-day bench trial.* The underlying dispute concerns amounts due and owing for the Browns' sale of money orders for Traveler's through their Baltimore area businesses. After hearing oral argument and considering the parties' briefs and the record, we affirm.
I.
2
The Browns' relationship with Traveler's is memorialized in various trust agreements between Traveler's and the Baltimore City check cashing businesses with which the Browns were involved, including Mel's Corner. Pursuant to those agreements, the Browns and other defendants who have chosen not to appeal, all of whom were corporate officers or spouses of corporate officers in the named businesses, agreed to sell Traveler's money orders, collect the funds, retain a specified commission, and remit the remaining proceeds to Traveler's. In connection with these trust agreements, Socorro Brown signed personal indemnity and guarantee agreements which are now in dispute. The trust agreements encouraged, but did not require that proceeds from sale of the money orders be kept in a separate account. In those cases where the proceeds of the money orders due Traveler's were commingled with business funds, however, the trust agreements provided that Traveler's retained an interest in the proceeds as "trust funds."
3
Traveler's terminated all money order sales by the businesses and commenced the present action to recover outstanding money order proceeds after an audit revealed over $230,000 in unpaid funds. The Browns contend that the shortages were attributable not to their personal wrongdoing, but to the fact that the businesses had been the victim of a check-cashing scam and an armed robbery. Socorro Brown also asserts that she verbally rescinded her guarantee and that in the alternative, Traveler's was put on notice of a change in guarantee when it received information that the Browns were divorcing.
4
Several of the issues raised by Traveler's were disposed of by partial summary judgment below. The issues remaining on appeal include (1) whether Jimmy Brown is liable for conversion of Traveler's funds used for other purposes, and (2) whether Socorro Brown can be held responsible on her personal guarantees for outstanding funds belonging to Traveler's, notwithstanding her alleged verbal rescission of those guarantees.
II.
5
We first discuss the issue of conversion. Under Maryland law, conversion is defined as "any distinct act of ownership or dominion exerted by one person over the personal property of another in denial of his right or inconsistent with it." Hamilton v. Ford Motor Credit Co., 502 A.2d 1057, 1066 (Md.Ct.Spec.App.), cert. denied, 507 A.2d 631 (Md.1986). Seealso Battista v. Savings Bank of Baltimore, 507 A.2d 203 (Md.Ct.Spec.App.1986). The person claiming conversion must also have the right to immediate possession. Hamilton, 502 A.2d at 1066. Although conversion is an intentional tort, a showing of improper motive is not required. Keys v. Chrysler Credit Corp., 494 A.2d 200, 208 (Md.1985).
6
The magistrate judge found that the parties had a clear understanding that moneys received from sale of Traveler's money orders could be commingled with other business proceeds, but that the funds belonging to Traveler's had to be accounted for on a regular basis. This finding of fact may not be set aside unless clearly erroneous. Fed.R.Civ.P. 52(a).
7
The record reveals that Jimmy Brown used Traveler's funds to cover his own business expenses. He testified that he considered all the money in the business checking account, including all funds received for sale of Traveler's money orders, to be corporate money rather than Traveler's funds. This testimony reflects a gross misperception of the responsibilities created by the trust agreements. The trust agreements expressly provided that funds received for the sale of money orders, absent commissions, retained their character as Traveler's funds even when deposited in a general account. Brown's conduct in treating those funds as corporate funds reflects the necessary intent and the requisite dominion and control to bring his actions within the definition of conversion. All other elements of conversion being present, the magistrate judge correctly determined that a conversion of funds occurred each time that Jimmy Brown used Traveler's funds deposited in the Mel's Corner general bank account for other purposes, and that Brown is therefore liable for conversion of $152,417.13.
III.
8
The remaining issue of Socorro Brown's alleged rescission of her personal guarantees is easily resolved. The Browns assert on appeal that Traveler's was affirmatively obligated to act to obtain proper trust agreements (and presumably guarantees as well) upon oral notice of a change in business ownership. However, the trust agreements in effect between the parties provided for notice of a change in business ownership by telegram or registered mail, with continued liability for failure to provide such notification. The Traveler's representative, Ms. Tompros, denied ever having received verbal notice from the Browns about their divorce or their desire to have Socorro Brown's name removed as guarantor for those businesses in which she no longer held an interest. After hearing this conflicting testimony, the magistrate judge found that regardless of the Browns' unilateral expectations, no effort was made to formalize the termination of Socorro Brown's personal guarantee and that Traveler's never agreed to such termination or rescission. That finding is not clearly erroneous, Fed.R.Civ.P. 52(a), and is dispositive of this claim.
9
Accordingly, we find no error in the magistrate judge's rulings and affirm.
10
AFFIRMED.
*
The parties consented to proceed before a magistrate judge in accordance with 28 U.S.C. § 636(c)
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377 U.S. 311 (1964)
RED BALL MOTOR FREIGHT, INC., ET AL.
v.
SHANNON ET AL., DOING BUSINESS AS E. & R. SHANNON.
No. 406.
Supreme Court of United States.
Argued April 28, 1964.
Decided June 1, 1964.[*]
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS.
Amos M. Mathews argued the cause for appellants in No. 406. With him on the briefs were Phillip Robinson, Charles D. Mathews, Roland Rice and John S. Fessenden.
Robert W. Ginnane argued the cause for the United States et al. in No. 421. With him on the brief were Solicitor General Cox, Assistant Attorney General Orrick, Lionel Kestenbaum, Elliott Moyer and Fritz R. Kahn.
Walter C. Wolff, Jr. argued the cause and filed a brief for appellees in both cases.
*312 Briefs of amici curiae, urging reversal, were filed by Robert E. Redding for the Transportation Association of America, by James E. Wilson for the Common Carrier ConferenceIrregular Route of the American Trucking Associations, Inc., and by Joseph E. Keller and William H. Borghesani, Jr. for the Private Carrier Conference, Inc.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
The Interstate Commerce Act provides that it is unlawful for any person engaged in a business other than transportation to "transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person." § 203 (c), 49 U. S. C. § 303 (c).[1] Appellees deal in livestock and commodities from a place of business in San Antonio, Texas. They make deliveries in their own trucks to customers in Louisiana, and buy sugar at Supreme, Louisiana, which they backhaul 525 miles for resale to customers in San Antonio. The Interstate Commerce Commission held that this backhaul was not exempt under § 203 (c) as "transportation. . . within the scope, and in furtherance, of a primary *313 business enterprise . . ." of appellees, but was "conducted with the purpose of profiting from the transportation performed, and, as such, constitutes for-hire carriage for which operating authority from this Commission is required." 81 M. C. C. 337, 347.[2] A three-judge court in the District Court for the Western District of Texas set aside the ICC order. 219 F. Supp. 781.[3] We noted probable jurisdiction. 375 U. S. 901. We affirm.
Section 203 (c) was designed explicitly to authorize the ICC to eliminate transportation which, though carried on in the guise of private carriage, was in effect for-hire carriage, and thus might lawfully be carried on only by an authorized common or contract carrier. Before the enactment of § 203 (c) the ICC was able to reach such abuses by interpreting § 203 (a) (17), 49 U. S. C. § 303 (a) (17), so as to exclude such "pseudo-private" carriage from its definition of a "private carrier of property by motor vehicle" as a person, not a "common" or "contract" carrier, who transports property of which he "is the owner, lessee, or bailee, when such transportation is for the purpose of sale, lease, rent, or bailment, or in furtherance of any commercial enterprise." Many of the cases involved nonauthorized carriers in the transportation business who resorted to transparent "buy-and-sell" devices to evade ICC regulation. A typical buy-and-sell arrangement is one under which the carrier "buys" property at a shipping point, transports it to a delivery point and there "sells" it to the real purchaser, the "profit" to the carrier amounting to the price of the transportation between the *314 two points.[4] Similar evasions through the use of spurious buy-and-sell agreements were found in cases where property was transported in trucks regularly used by noncarrier businesses to make pickups and deliveries.[5] The ICC was faced with the necessity of determining on the facts of each case whether the transportation constituted private carriage beyond the scope of ICC economic regulation, or for-hire transportation subject to all relevant provisions of the Act. In other words, here, as in United States v. Drum, 368 U. S. 370, 374, in which we dealt with another aspect of the "pseudo-private" carriage problem, the ICC has also "had to decide whether a particular arrangement gives rise to that `for-hire' carriage which is subject to economic regulation in the public interest, or whether it is, in fact, private carriage as to which Congress determined that the [noncarrier's] interest . . . should prevail."
In the course of discriminating between this pseudo-private carriage and that transportation which was in fact in furtherance of a noncarrier business, the ICC developed the so-called "primary business" test. This test was first enunciated by the full Commission in Lenoir Chair Co., 51 M. C. C. 65, aff'd, sub nom. Brooks Transportation Co. v. United States, 93 F. Supp. 517, aff'd, 340 U. S. 925. A chair manufacturer delivered some of its products in its own trucks. Whenever possible, it also used the vehicles to backhaul manufacturing materials for use and processing in its own plant. The ICC concluded, 51 M. C. C., at 76, that the delivery of goods and the backhaul were lawful private carriage because undertaken "as a bona fide incident to and in furtherance of *315 [its] primary business . . . ." The governing standard was stated as follows, id., at 75:
"If the facts establish that the primary business of an operator is the supplying of transportation for compensation then the carrier's status is established though the operator may be the owner, at the time, of the goods transported and may be transporting them for the purpose of sale. . . . If, on the other hand, the primary business of an operator is found to be manufacturing or some other noncarrier commercial enterprise, then it must be determined whether the motor operations are in bona fide furtherance of the primary business or whether they are conducted as a related or secondary enterprise with the purpose of profiting from the transportation performed. In our opinion, they cannot be both."
The ICC believed, however, that § 203 (a) (17) was not sufficiently explicit, particularly since decisions of some lower courts after Brooks raised doubts whether a truck operator could be found to be an unauthorized "for-hire" carrier in the absence of some affirmative showing that his operations brought him within the definitions of common or contract carriage.[6] Consequently the Commission sought additional legislation.[7] The original ICC bill in this area would have amended the definition of "private carrier" in § 203 (a) (17) to prohibit the buy-and-sell device employed by pseudo-private carriers as a subterfuge to avoid regulation. See S. 1677, H. R. 5825, 85th Cong., 1st Sess. This was withdrawn, however, in favor of a *316 more broadly phrased provision, sponsored by the Transportation Association of America, which encompassed not only buy-and-sell devices, but also similar subterfuges which might be employed to engage in unauthorized for-hire transportation.[8] The second clause of § 203 (c) is substantially the TAA proposal.
The 1958 amendment appears on its face to codify the primary business test as the standard for determining whether a particular carrier is engaged in a private or for-hire operation. The appellants argue, however, that the amendment was intended to impose a broader limitation in the case of backhaul operations of the kind engaged in by appellees. The United States urges in its brief that Congress in 1958 was particularly concerned with the diversion of traffic from regulated carriers by backhauling operations, and that one object of the 1958 amendment was "to make plain that the purchase and sale of goods solely to take advantage of available backhaul capacity cannot qualify as a `primary business enterprise (other than transportation).' " We understand this argument to be that Congress in effect enacted a per se test outlawing trucking operations limited to backhaul capacity without inquiry into whether that operation was undertaken pursuant to a bona fide noncarrier business enterprise. We find no support in either the words of the amendment or its legislative history for putting that gloss upon the amendment. On the contrary, we are persuaded that *317 Congress meant only to codify the primary business test which, as applied by the ICC, requires an analysis of the backhaul operation in the factual setting of each case.
The legislative history fully supports this view. The ICC Chairman, speaking in support of the TAA amendment, expressly stated that, in his view, its effect would be to "incorporate the primary business test into the statute."[9] Similarly, the President of TAA, speaking directly to the backhaul problem, said that "Our proposal. . . would affect . . . the carrier who delivers his own goods in one direction, as a legal private carrier, but then resorts to the buy-and-sell practice to get a return load."[10] The Senate and House Reports, while less crystal clear, nevertheless reveal no purpose beyond codification of the Brooks test. Thus the Senate Report states that the amendment "accurately reflects the holding in the Brooks case."[11] Although the House Report includes a discussion of the backhaul problem in language which tracks the statement in the ICC 1953 Annual Report where the Commission first directed the attention of Congress to the problem of buy-and-sell arrangements[12] the House Report concludes: "There is no intention *318 on the part of this Committee in any way to jeopardize or interfere with bona fide private carriage, as recognized in the Brooks case."[13] Moreover, the managers of the bills in both Senate and House gave assurances that the object of the amendment was to incorporate the primary business test into positive law.[14] No application of the primary business test by the ICC or the courts gave conclusive effect to backhauling. The critical determination made in each case was between spurious buy-and-sell arrangements, whether or not as part of a backhaul, and a true wholesaling operation utilizing the operator's own trucks. Backhauls were treated as merely one aspect of the buy-and-sell problem, since the presence of backhaul capacity presents a special temptation to indulge in pseudo-private carriage.
We therefore conclude that § 203 (c) merely codifies the primary business test, and embodies no outright prohibition of backhauling practices. The statutory scheme recognizes that mere availability and use of backhaul capacity may in particular cases be completely consistent with the bona fide conduct of a noncarrier business. Thus the question in this case is a narrow one: whether, applying the standards developed under the primary business test, appellees' backhauling of sugar was within the scope, and in furtherance, of a primary, noncarrier business.
In developing and applying the primary business standard, the ICC has elaborated criteria characteristic of the spurious buy-and-sell device. Among these are *319 the large investment of assets or payroll in transportation operations;[15] negotiating the sale of goods transported in advance of dispatching a truck to pick them up;[16] direct delivery of the transported goods from the truck to the ultimate buyer, rather than from warehoused stocks;[17] solicitation of the order by the supplier rather than the truck owner;[18] and inclusion in the sales price of an amount to cover transportation costs.[19]
We are not persuaded from our examination of the record that there is sufficient evidence to support the ICC's conclusion that the appellees' sugar operation was for-hire transportation and not transportation within the scope, and in furtherance, of appellees' noncarrier business enterprise. The ICC found that appellees "have long been buying and selling certain commodities and in connection therewith transporting them to purchasers, in bona fide furtherance of their primary business, as a dealer in those commodities." 81 M. C. C., at 345. The ICC found further that "The more usual arrangement under which [appellees] operate . . . appears to be one in which the [appellees] have no preexisting sugar order, but buy with the intention of selling later either en route or after the transportation is accomplished. This procedure is ordinarily coordinated with a backhaul, and the *320 purpose of their sugar dealings is the generation of sugar shipments which they can transport as return lading for their trucks which are moving in the opposite direction." 81 M. C. C., at 346. But these findings, on this record, are consistent with an operation "within the scope, and in furtherance, of a primary business enterprise." Appellees began their business in 1934 as dealers in livestock. They gradually added a feed mill and the buying and selling of corn, oats, wheat, bran, molasses, salt and fertilizer. They added sugar in 1954. Moreover, in addition to the absence of the elementusually found in spurious buy-and-sell arrangementsof obtaining orders for a commodity (in this case sugar) before purchasing it, other indicia are absent. Appellees' assets are not in large part composed of transportation facilities, nor is transportation a major item of expense; appellees bear the full risk of damage in transit and, since they sell at market price, also of loss in value due to price changes; they buy the sugar on credit with a discount for payment in 10 days, and sell on the same terms; their sugar accounts receivable at the date of hearing exceeded $10,000, and amounted to $20,000 or $30,000 during the previous year. It is true that they warehoused only a small stock of sugar and that generally the trucks delivered the sugar directly to buyers upon, or within a day or two after, arrival in San Antonio. Appellees offered an entirely reasonable explanation for this, however: sugar is a perishable commodity, the preservation of which apparently requires air conditioning facilities with which their warehouse is not equipped; the ICC offered nothing to the contrary. And the ICC offered no evidence that other sugar dealers in San Antonio conducted their businesses differently from appellees. It is also true that since the motor carrier rate for transporting sugar from Supreme is 69 cents, and the rail rate $1.09 per hundred pounds, appellees could not have conducted the sugar *321 business but for the availability of the backhaul capacity of their trucks. This shows no more than that appellees were able to make efficient use of their equipment; on these facts it does not prove, as the ICC found, that the "transportation . . . is, with respect to their primary business of buying and selling livestock and certain other commodities, a related or secondary enterprise conducted with the purpose of profiting from the transportation performed. . . ." 81 M. C. C., at 347. We agree with the District Court that, rather, "The record clearly indicates that [appellees] are in a general mercantile business buying and selling many items, including sugar." 219 F. Supp., at 782. As such, on the facts shown, their purchase of sugar at Supreme to provide a backhaul in connection with outbound movements of livestock and other commodities from San Antonio is within the scope, and in furtherance, of their primary general mercantile business enterprise.
Affirmed.
MR. JUSTICE GOLDBERG, with whom MR. JUSTICE HARLAN, MR. JUSTICE STEWART and MR. JUSTICE WHITE join, dissenting.
I agree with the Court "that § 203 (c) merely codifies the primary business test," ante, at 318, enunciated by the Commission in the Brooks case.[*] I also agree that "the primary business test . . . , as applied by the ICC, requires an analysis of the backhaul operation in the factual setting of each case." Ante, at 317.
This is all that we need and should decide. The Court errs, in my view, in deciding the purely factual question of "whether, applying the standards developed under the primary business test, appellees' backhauling of sugar *322 was within the scope, and in furtherance, of a primary, noncarrier business." Ante, at 318.
The primary responsibility for granting or denying enforcement of Commission orders is in the District Courts and not in this Court. 28 U. S. C. § 1336; cf. Labor Board v. Pittsburgh Steamship Co., 340 U. S. 498, 502. The District Court in enjoining enforcement of the Commission's order in this case did not refer explicitly or implicitly to § 203 (c) of the Act. It did not cite any cases enunciating the "primary business test" as a basis for its decision. Moreover, the District Court did not discuss the facts upon which the Commission based its determination that appellees' backhaul transportation of sugar was not within the scope and in furtherance of a primary business enterprise other than transportation. See 219 F. Supp. 781; compare United States v. Drum, 368 U. S. 370, 385.
Having determined, as the Court does, that § 203 (c) codifies the primary business test, I would remand the case to the District Court for that court to decide the issue of unsubstantiality of the evidence under the proper test. Under this disposition of the case, the District Court would have to be mindful that this is the kind of case which "belongs to the usual administrative routine" of the agency, Gray v. Powell, 314 U. S. 402, 411, and that the Commission's application of the statutory test to the specific facts of this case "is to be accepted if it has `warrant in the record' and a reasonable basis in law." Labor Board v. Hearst Publications, Inc., 322 U. S. 111, 131; United States v. Drum, supra, at 386.
MR. JUSTICE WHITE, dissenting.
I join the dissenting opinion of my Brother GOLDBERG. I add that the Court has failed to demonstrate how appellees' sugar business qualifies as a "primary" business when it clears only 35 cents per 100 pounds of sugar over *323 and above the cost of the sugar at Supreme, Louisiana. This is less than the normal costs of transportation from Supreme to San Antonio. No one without backhaul capacity could make a viable business out of selling Supreme sugar in the San Antonio market and appellees admit that they are "backhauling to make a profit." I therefore cannot view the sugar business as a bona fide primary business to which a private transportation operation is only an incident. It would be more appropriate to say that this catch-as-catch-can sugar business is wholly incidental to an otherwise empty backhaul.
NOTES
[*] Together with No. 421, United States et al. v. Shannon et al., doing business as E. & R. Shannon, also on appeal from the same court.
[1] Section 203 (c), as added in 1957, 71 Stat. 411, provided in pertinent part:
". . . no person shall engage in any for-hire transportation business by motor vehicle, in interstate or foreign commerce . . . unless there is in force with respect to such person a certificate or a permit issued by the Commission authorizing such transportation."
In 1958, 72 Stat. 574, the section was amended to add the provision here involved providing,
"nor shall any person engaged in any other business enterprise transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person."
[2] The 1957 version of § 203 (c) was enacted after the examiner submitted his report but as amended in 1958 was part of the Interstate Commerce Act when Division 1 of the Commission served its report.
[3] Appellees' action was brought pursuant to 28 U. S. C. §§ 1336, 1398. The statutory three-judge court was convened under 28 U. S. C. § 2325.
[4] See, e. g., Lyle H. Carpenter, 2 M. C. C. 85; B. E. Farnsworth, 4 M. C. C. 164; Thomas Stanley Redding, 7 M. C. C. 608; ICC v. Tank Car Oil Corp., 151 F. 2d 834 (C. A. 5th Cir.).
[5] See, e. g., T. J. McBroom, 1 M. C. C. 425; Triangle Motor Co., 2 M. C. C. 485. Cf. Congoleum-Nairn, Inc., 2 M. C. C. 237.
[6] See, e. g., ICC v. Woodall Food Prods. Co., 207 F. 2d 517 (C. A. 5th Cir.); Taylor v. ICC, 209 F. 2d 353 (C. A. 9th Cir.). See the discussion of Taylor in the Commission's Sixty-eighth Annual Report (1954), p. 82.
[7] The Commission pressed for amendments in its Annual Reports from 1953 through 1957: 1953 Report, p. 55; 1954 Report, p. 5; 1955 Report, p. 99; 1956 Report, p. 2; 1957 Report, pp. 137-138.
[8] In amending § 203 (c) rather than the definitional sections, the TAA proposal also met the protests of private carriers who opposed ICC's proposal on the ground that it might be construed to throw doubt on the Brooks test, and unduly restrict the scope of private carriage. See Remarks of Frazor T. Edmondson, Private Truck Council of America, Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 1384, 85th Cong., 1st Sess., 163 (1957); Remarks of R. J. Van Liew, Private Carrier Conference, American Trucking Associations, id., at 275.
[9] See Remarks of Chairman Clarke, Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 1384, 85th Cong., 1st Sess., 13, 19 (1957).
[10] See Statement of Mr. Baker, President, Transportation Association of America, id., at 244, 246.
[11] S. Rep. No. 1647, 85th Cong., 2d Sess., 5 (1958).
[12] In its 1953 Annual Report the Commission said (p. 55):
"Merchandising by motortruck, whether actual or pretended, over long distances is increasing to such an extent that it is becoming a major factor in the transportation of freight between distant points. Manufacturers and mercantile establishments, which deliver in their own trucks articles which they manufacture or sell, are increasingly purchasing merchandise at or near their point of delivery and transporting such articles to their own terminal for sale to others. Such transportation is performed for the purpose of receiving compensation for the otherwise empty return of their trucks. Sometimes the purchase and sale is a bona fide merchandising venture. In other cases, arrangements are made with the consignee of such merchandise for the `buy-and-sell' arrangement in order that the consignee may receive transportation at a reduced cost." Compare H. R. Rep. No. 1922, 85th Cong., 2d Sess., 18 (1958).
[13] See id., at 19.
[14] See 104 Cong. Rec. 12535-12536 (1958) (House); 104 Cong. Rec. 10818 (1958) (Senate).
[15] See Virgil P. Stutzman, 81 M. C. C. 223, 226; Joseph V. Hofer, 84 M. C. C. 527, 540.
[16] See Lyle H. Carpenter, 2 M. C. C. 85, 86; Thomas Stanley Redding, 7 M. C. C. 608, 609; Jay Cee Transport Co., 68 M. C. C. 758, 759; Church Point Wholesale Beverage Co., 82 M. C. C. 457, 459, aff'd, sub nom. Church Point Wholesale Beverage Co. v. United States, 200 F. Supp. 508 (D. C. W. D. La.).
[17] See L. A. Woitishek, 42 M. C. C. 193; Jay Cee Transport Co., supra; William Stewart, 89 M. C. C. 281, 286.
[18] See Subler Transfer, Inc., 79 M. C. C. 561, 565; Riggs Dairy Express, Inc., 78 M. C. C. 574, 575-576; Donald L. Wilson, 82 M. C. C. 651, 661.
[19] See Riggs Dairy Express, Inc., supra.
[*] Lenoir Chair Co., 51 M. C. C. 65, aff'd, sub nom. Brooks Transportation Co., Inc., v. United States, 93 F. Supp. 517, aff'd, 340 U. S. 925.
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379 So.2d 658 (1980)
William Victor GRUMAN, Petitioner,
v.
BANKERS TRUST COMPANY, a New York Corporation, Respondent.
No. 79-1751.
District Court of Appeal of Florida, Third District.
January 15, 1980.
Rehearing Denied February 29, 1980.
*659 Dubbin, Schiff, Berkman & Dubbin and Evan J. Langbein, Miami, for petitioner.
Mershon, Sawyer, Johnston, Dunwody & Cole and H. Michael Madsen, Pyszka, Kessler & Adams and William M. Douberley, Miami, for respondent.
Before PEARSON and SCHWARTZ, JJ., and EZELL, BOYCE F., Jr. (Ret.), Associate Judge.
SCHWARTZ, Judge.
The petitioner, who is the counter-defendant below in an action for the conversion of a vessel, seeks certiorari review of an order requiring that he answer an interrogatory which asked for information as to every bank account in which he held an interest. Gruman has unequivocally conceded before us in open court that he utilized the funds received for the property in question, some $140,000, for his own personal benefit.[1] Particularly in the light of this stipulation, the interrogatory before us is substantially overbroad in that, without a showing of even potential relevance to the issues in the case, it seeks personal financial information of a type ordinarily discoverable only in aid of execution after judgment has been entered. See Cooper v. Fulton, 117 So.2d 33, 35-36 (Fla. 3d DCA 1960); cf. Tennant v. Charlton, 377 So.2d 1169 (Fla. 1979);[2]Leonhardt v. Cammack, 327 So.2d 848 (Fla. 4th DCA 1976), cert. denied, 339 So.2d 1167 (Fla. 1976). Therefore, we grant the petition and quash the order under review. We do so, however, specifically without prejudice (a) to the respondent's right to discover the manner by which Gruman disposed of the particular funds in issue,[3] and (b) to further discovery, if it becomes appropriate, as to punitive damages[4] or in aid of execution.
Certiorari granted.
NOTES
[1] He contends that the only remaining issue below on the merits is whether he had the authority to sell the vessel on his own behalf.
[2] The respondent makes no contention that, as in Tennant, the information is discoverable on the ground that it is pertinent to the issue of punitive damages.
[3] Evidence, for example, that he attempted to secrete the moneys would be pertinent on the substantive issue of his right to dispose of the vessel. See Helton v. State, 135 Fla. 458, 185 So. 864 (1938); Long v. State, 11 Fla. 295 (1866).
[4] See note 2, supra; Tennant v. Charlton, supra.
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T.C. Memo. 2001-87
UNITED STATES TAX COURT
REGINA S. DAVIS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5882-00L. Filed April 10, 2001.
Regina S. Davis, pro se.
Stephen J. Neubeck, for respondent.
MEMORANDUM OPINION
POWELL, Special Trial Judge: This case is before the Court
on respondent’s motion for summary judgment and petitioner’s
motion to strike for lack of “personam” (sic) jurisdiction.
Petitioner seeks review of respondent’s denial of relief under
- 2 -
section 6330.1 At the time the petition was filed, petitioner
resided in Cincinnati, Ohio.
The facts may be summarized as follows. Respondent issued
notices of deficiency determining deficiencies in petitioner’s
Federal income taxes and additions to tax (rounded to the nearest
dollar) as follows:
Additions to Tax
Year Deficiency Sec. 6651(a) Sec. 6654
1993 $3,629 $649 $103
1994 4,845 1,100 222
1995 5,564 1,198 255
1996 6,613 1,361 283
The notices were sent to petitioner at 6727 High Meadows Drive,
Cincinnati, Ohio 45230. This is the same address shown on the
petition filed in this case. Petitioner did not file a petition
to seek review of respondent’s determinations of the deficiencies
and additions to tax, and respondent assessed the liabilities.
On or about July 28, 1999, respondent sent a notice of intent to
levy, and petitioner requested a hearing pursuant to section
6330. On May 1, 2000, after a hearing before an Appeals officer,
respondent notified petitioner that her objections to collection
were denied.
1
Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
- 3 -
On May 25, 2000, petitioner filed a petition in this Court
to review respondent’s actions. The petition simply alleges that
petitioner was denied a lawful “due process” hearing. Respondent
filed an answer. Respondent subsequently filed a motion for
summary judgment.
Section 6331(a) provides that if any person liable to pay
any tax neglects or refuses to pay such tax within 10 days of
notice and demand for payment, the Secretary may collect such tax
by levy upon the taxpayer’s property. Section 63302 generally
provides that the Secretary cannot proceed with the collection of
taxes by way of a levy until the taxpayer has been given notice
and an opportunity for administrative review in the form of an
Appeals Office hearing. Section 6330(c)(2), provides
(2) Issues at hearing.--
(A) In general.–-The person may raise at the
hearing any relevant issue relating to the unpaid tax
or the proposed levy, including--
(i) appropriate spousal defenses;
(ii) challenges to the appropriateness of
collection actions; and
(iii) offers of collection alternatives,
which may include the posting of a bond, the
substitution of other assets, an installment
agreement, or an offer-in-compromise.
(B) Underlying liability.-–The person may also
raise at the hearing challenges to the existence or
amount of the underlying tax liability for any tax
period if the person did not receive any statutory
2
Sec. 6330 was enacted by the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3401,
112 Stat. 746.
- 4 -
notice of deficiency for such tax liability or did not
otherwise have an opportunity to dispute such tax
liability.
The determination of the Appeals officer may be reviewed
judicially if the taxpayer files a timely petition in this Court
or in an appropriate United States District Court. See sec.
6330(d). In Goza v. Commissioner, 114 T.C. 176, 181-182 (2000),
we noted that “where the validity of the underlying tax liability
is properly at issue, the Court will review the matter on a de
novo basis. However, where the validity of the underlying tax
liability is not properly at issue, the Court will review the
Commissioner’s administrative determination for abuse of
discretion.”
The constitutionality of the levy provisions has long been
established. See United States v. National Bank of Commerce, 472
U.S. 713, 721 (1985); Davis v. Commissioner, 115 T.C. 35, 36
(2000). We assume, therefore, that when petitioner refers to a
denial of a “due process” hearing, she is referring to statutory
rights under section 6330, rather than a constitutional attack on
the levy power.
In the hearing before this Court petitioner alleged that she
was denied “due process” on the grounds that (1) she is not a
taxpayer because “the Internal Revenue laws repealed [the]
National Prohibition Act”; (2) “anything that was called adjusted
gross income is actually the Quam [Guam] income tax” and that
does not apply to petitioner; (3) “the U.S. Internal Revenue
- 5 -
Service is a function of the Puerto Rican Bureau of Alcohol,
Tobacco and Firearms”; (4) “the Secretary of Health and Human
Services is the only one who can determine * * * wages”; (5) “the
[Form] 1040 * * * was classified as [a] Virgin Island Return” and
petitioner had no connection with the Virgin Islands; (6) “it’s a
felony to disclose the social security [number] to the Internal
Revenue Service prior to service of a 6001 notice”; and (7) the
Internal Revenue Service is not “an agency of the United
States”.3
Initially, we note that the petition for review of
respondent’s determination to proceed with levying petitioner’s
property does not satisfy the requirements of our Rules. Rule
331(b) requires that the petition contain clear and concise
assignments of each and every error in respondent’s determination
and clear and concise statements of the facts on which petitioner
bases each assignment of such error. A general statement that
petitioner was denied “due process” is insufficient.
3
In response to respondent’s motion for summary judgment,
petitioner filed a “Motion to Strike for Lack of Personam
Jurisdiction” in which she states that “the United States Tax
Court * * * lacks jurisdiction over states of the United States
of America and is limited to the states of the United States,
which includes the District of Columbia, Puerto Rico, Virgin
Islands, Guam, American Samoa, other unnamed possessions and
insular possessions of the Federal government.” Petitioner’s
conclusion is that the Tax Court’s jurisdiction is limited to the
District of Columbia, Puerto Rico, territories, and insular
possessions and, accordingly, the Court lacks jurisdiction to
accept motions filed by the Commissioner.
- 6 -
Second, as we understand petitioner’s position, she contends
that she is not liable for the taxes. Petitioner does not allege
that she did not receive the notices of deficiency for the tax
liabilities in issue, nor does she allege that she did not have
an opportunity to contest the deficiencies. Under section
6330(c)(2)(B), a taxpayer is precluded from contesting the
existence or amount of the tax liability at an Appeals Office
hearing or in this Court unless a taxpayer did not receive a
notice of deficiency and did not otherwise have an opportunity to
dispute such tax liability. See Pierson v. Commissioner, 115
T.C. 576, 579 (2000); Goza v. Commissioner, supra at 180-181.
Third, even if petitioner were not precluded from contesting
the liabilities, the arguments that she makes are totally
frivolous.
Finally, it should be pointed out that petitioner has not
contended that any other issue under section 6330(c)(2) should
have been considered. She did not offer any collection
alternative or offer-in-compromise. As to these issues, the
propriety of respondent’s determination is deemed to be conceded.
See Rule 331(b)(4).
In sum, petitioner has not raised any issue that would call
into question the correctness of respondent’s determination to
proceed with the collection of the tax liabilities. Under these
circumstances, it makes no difference whether we grant
- 7 -
respondent’s motion for summary judgment or dismiss the case for
failure to state a claim upon which relief may be granted. In
all events, our decision affirms respondent’s determination to
proceed with collection. Accordingly, respondent’s motion is
granted, and petitioner’s motion shall be denied.
We next consider whether this Court should impose a penalty
against petitioner under section 6673(a). That section provides
that in proceedings before this Court where the position of a
taxpayer is frivolous or groundless the Court may impose a
penalty not to exceed $25,000. In Pierson v. Commissioner, supra
at 581, the Court warned that we would impose the section 6673(a)
penalty in collection cases arising under section 6320 and/or
section 6330 if the taxpayer instituted or maintained such a case
primarily for delay or took a position that was frivolous in such
proceeding. Furthermore, at the hearing in this case, the Court
warned petitioner that the penalty could be imposed. Petitioner
did not heed our warnings4 and persisted in making frivolous and
groundless arguments. Accordingly, we award a penalty to the
United States of $4,000 under section 6673.
An appropriate order and decision
will be entered.
4
Wayne C. Bentson appeared with petitioner at the hearing and
attempted to represent her. Bentson is not qualified to practice
before this Court, and the Court refused to recognize him.
Bentson is no stranger to this Court. See Bentson v.
Commissioner, T.C. Memo. 1987-172, where we imposed damages under
the statutory antecedent of sec. 6673(a) of $4,000 against
Bentson.
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134 F.3d 367
Juddv.University of New Mexico**
NO. 97-50242
United States Court of Appeals,Fifth Circuit.
Dec 09, 1997
Appeal From: W.D.Tex. ,No.MO96CV122
1
Dismissed.
**
Conference Calendar
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 97-1522
___________
United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the Western
v. * District of Missouri.
*
Alfonso Moore, *
*
Appellant. *
___________
Submitted: June 11, 1997
Filed: September 10, 1997
___________
Before BOWMAN, FLOYD R. GIBSON, and MORRIS SHEPPARD ARNOLD,
Circuit Judges.
___________
MORRIS SHEPPARD ARNOLD, Circuit Judge.
Alfonso Moore appeals the district court's1 denial of his motion to suppress a
statement that he made to a government agent. We affirm.
1
The Honorable Russell G. Clark, United States District Judge for the Western
District of Missouri.
I.
While Mr. Moore was incarcerated in New York state on unrelated state
charges, the Bureau of Alcohol, Tobacco, and Firearms ("BATF") filed a criminal
complaint against him in the Western District of Missouri, alleging that he had violated
18 U.S.C. § 922(g)(1), which prohibits the possession of firearms by a felon. An
affidavit by a BATF agent accompanied the complaint, and, after making a finding of
probable cause, a United States magistrate judge issued a warrant for Mr. Moore's
arrest. On the basis of that warrant, Mr. Moore was arrested in New York and taken
before a United States magistrate judge for the hearing required by Fed. R. Crim. P.
40(a). At that appearance, Mr. Moore waived his right to an identity hearing, and the
magistrate judge ordered him returned to the Western District of Missouri.
Upon Mr. Moore's return to Missouri, a pretrial services officer interviewed
him. During this interview, Mr. Moore completed the financial status affidavit used by
the court to evaluate claims of financial need. After that interview, while Mr. Moore
was awaiting his appearance before the magistrate judge for appointment of counsel,
the BATF agent conducted a second interview of Mr. Moore. The BATF agent
obtained a signed, written waiver of Mr. Moore's right to counsel and a statement by
Mr. Moore that he had possessed and sold a firearm. A federal grand jury indicted
Mr. Moore, charging him with violating 18 U.S.C. § 922(g)(1), soon thereafter. After
the district court denied Mr. Moore's motion to suppress the statement that he made to
the BATF agent, he pleaded guilty to the charge against him.
II.
Mr. Moore appeals the district court's refusal to suppress the statement that he
made to the BATF agent. He argues that his Sixth Amendment right to counsel
attached with the filing of the criminal complaint, that he invoked that right during the
interview with the pretrial services officer, that any waiver of that right without counsel
was ineffective, and that his statement to the BATF agent was therefore taken in
violation of the Sixth Amendment. Because we believe that Mr. Moore's Sixth
-2-
Amendment right to counsel had not attached at the time of the statement in question,
we disagree.
In Kirby v. Illinois, 406 U.S. 682, 688-89 (1972) (plurality opinion), the
Supreme Court held that the right to counsel guaranteed by the Sixth Amendment
attaches only "at or after the time that adversary judicial proceedings have been
initiated ... whether by way of formal charge, preliminary hearing, indictment,
information, or arraignment." It is at that point, the Court explained, that "the
government has committed itself to prosecute, and only then that the adverse positions
of government and defendant have solidified," id. at 689 (plurality opinion), thus
initiating judicial criminal proceedings and rendering the assistance of counsel
necessary. While it is well settled that an arrest is not a "formal charge" giving rise to
a right to counsel, United States v. Gouveia, 467 U.S. 180, 190 (1984), our court has
not yet decided whether the filing of a complaint under Fed. R. Crim. P. 3 constitutes
a "formal charge" that does give rise to such a right. We believe that it does not.
As explained in United States v. Pace, 833 F.2d 1307, 1312 (9th Cir. 1987), cert.
denied, 486 U.S. 1011 (1988), and United States v. Duvall, 537 F.2d 15, 22 (2d Cir.
1976), cert. denied, 426 U.S. 950 (1976), the principal function of a complaint under
Fed. R. Crim. P. 3 is to serve as the basis for a judicial determination of probable cause
for an arrest warrant under Fed. R. Crim. P. 4(a). Complaints under Fed. R. Crim. P. 3
are, therefore, by definition, issued before an arrest occurs. If an arrest does not
trigger the Sixth Amendment right to counsel, we are unable to see how the issuance
of a complaint that serves as the basis for a probable cause determination authorizing
a later arrest would trigger that right. Because warrantless arrests are sometimes
authorized, moreover, we note that if we were to hold that the right to counsel does
attach when a complaint under Fed. R. Crim. P. 3 issues, we would be granting greater
protection to persons arrested with warrants than without, thus discouraging the use of
warrants in making arrests for federal crimes. See Duvall, 537 F.2d at 22. We
therefore hold that the issuance of a complaint under Fed. R. Crim. P. 3 is not the type
-3-
of "formal charge" contemplated by Kirby, 406 U.S. at 689 (plurality opinion), and that
a person's Sixth Amendment right to counsel does not attach upon the filing of such a
complaint. See, e.g., United States v. Langley, 848 F.2d 152, 153 (11th Cir. 1988) (per
curiam), cert. denied, 488 U.S. 897 (1988); Pace, 833 F.2d at 1312; and Duvall, 537
F.2d at 22.
We note further that our decision in Chewning v. Rogerson, 29 F.3d 418 (8th
Cir. 1994), does not govern the case before us. Chewning, 29 F.3d at 420, addressed
the point at which the right to counsel attached in a criminal case in a particular state,
and our holding today is limited to complaints filed pursuant to Fed. R. Crim. P. 3.
III.
For the foregoing reasons, we affirm the district court's order denying
Mr. Moore's motion to suppress his statement.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-4-
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735 F.2d 1373
U.S.v.McKeon
83-5191
United States Court of Appeals,Ninth Circuit.
5/4/84
1
S.D.Cal.
AFFIRMED
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105 Wn.2d 679 (1986)
717 P.2d 273
RAY O'LEARY, ET AL, Appellants,
v.
THE DEPARTMENT OF REVENUE, Respondent.
No. 51105-5.
The Supreme Court of Washington, En Banc.
April 17, 1986.
*680 Roberts & Shefelman and Brian L. Comstock, for appellants.
Kenneth O. Eikenberry, Attorney General, and Maureen Hart, Assistant, for respondent.
DOLLIVER, C.J.
In 1973 Ray O'Leary, Michael Angiuli, and Eugenia Lewis formed a general partnership, M & R Investments to "engage in and carry on a building management business and other ventures of mutual agreement." Initially, M & R purchased several small apartment complexes. It then bought and sold a number of complexes so that it could obtain more apartment units in fewer buildings.
The Department of Revenue audited M & R for the period beginning January 1, 1976 through June 30, 1980. During the audit period, M & R sold 17 of the 23 apartment complexes it owned. All of these 17 complexes were sold through real estate contracts which required the purchaser to make periodic payments of principal and interest. The interest payments received on these contracts in the audit period were in excess of $1,500,000. In calculating the business and occupation tax owed by the M & R partners, the Department of Revenue included all interest payments received by the partnership from the sale of the complexes. The Department asserted the partnership owed $21,714 in back taxes. M & R paid the amount and filed a petition in superior court for a refund.
M & R argued that its real estate contracts constituted an "investment" and, as such, the interest payments received on the contracts were deductible from the B & O tax pursuant to the provisions of RCW 82.04.4281. In rejecting this argument, the trial court concluded that the selling and financing of sales of capital assets by means of *681 real estate contracts does not constitute an investment within the meaning of RCW 82.04.4281. The trial court dismissed M & R's petition; from the dismissal, M & R appeals directly to this court.
The Washington Legislature has imposed a business and occupation tax "for the act or privilege of engaging in business activities" in this state. RCW 82.04.220. "Business" is defined in RCW 82.04.140 to include "all activities engaged in with the object of gain, benefit, or advantage to the taxpayer or to another person ..." Clearly, under this broad definition, the partners in M & R are conducting business activities and are, therefore, subject to the B & O tax.
Subject to narrowly circumscribed exceptions, the B & O tax owed is calculated based on the "gross income of the business". RCW 82.04.290. "Gross income of the business" is defined in RCW 82.04.080 to specifically include interest:
"Gross income of the business" means the value proceeding or accruing by reason of the transaction of the business engaged in and includes gross proceeds of sales, compensation for the rendition of services, gains realized from trading in stocks, bonds, or other evidences of indebtedness, interest...
(Italics ours.) Thus, unless M & R can prove it is entitled to a statutorily enumerated deduction or exemption, the interest payments received through its real estate contracts are part of the gross income of the business and, accordingly, are subject to the B & O tax.
The partners in M & R contend RCW 82.04.4281 entitles them to deduct the interest received through M & R's real estate contracts. RCW 82.04.4281 provides:
In computing tax there may be deducted from the measure of tax amounts derived by persons, other than those engaging in banking, loan, security, or other financial businesses, from investments or the use of money as such, and also amounts derived as dividends by a parent from its subsidiary corporations.
For the partners to qualify for the deduction, they must show both (1) the real estate contracts from which they received interest constituted investments, and (2) M & R is *682 not engaged in a financial business.
[1] To decide if the partners meet the first requirement, we must define investment and then determine if the real estate contracts meet that definition. Exemptions to the tax laws are to be construed narrowly. Budget Rent-A-Car of Wash.-Or., Inc. v. Department of Rev., 81 Wn.2d 171, 500 P.2d 764 (1972). "Taxation is the rule and exemption is the exception." Budget Rent-A-Car, at 174.
[2] As we stated in John H. Sellen Constr. Co. v. Department of Rev., 87 Wn.2d 878, 883, 558 P.2d 1342 (1976), an interpretation of an "investment" should be limited to the plain and ordinary meaning of the word. In Sellen we allowed a deduction for income from a business' "incidental investments of surplus funds ..." Sellen, at 883. Whether an investment is "incidental" to the main purpose of a business is an appropriate means of distinguishing those investments whose income should be exempted from the B & O tax of RCW 82.04.4281. Here the real estate contracts held by M & R investment partnership were neither incidental investments nor were they made from surplus income of the partnership.
We previously have determined the vendor of a real estate contract may be treated differently than other holders of debt investments. We directly addressed this contention in Clifford v. State, 78 Wn.2d 4, 8, 469 P.2d 549 (1970) stating:
Making a loan and taking a land contract as security is not the same activity as selling a piece of land and accepting the payment in installments. In one activity, money is advanced. In the other, no money is advanced by the seller; rather he relinquishes the right to immediate payment.
It is uncontroverted that plaintiffs derived the interest income at issue from a financing method which permitted deferred payment. The plaintiffs expected and received interest for allowing their buyers to make payments on time.
The plaintiffs' sale of their apartments was not an *683 investment "or the use of money as such". The plaintiffs are not entitled to a deduction under the provisions of RCW 82.04.4281. Therefore, we need not determine if they are engaged in a "financial business". The trial court is affirmed.
UTTER, BRACHTENBACH, DORE, PEARSON, ANDERSEN, CALLOW, GOODLOE, and DURHAM, JJ., concur.
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0076n.06
FILED
Case No. 14-3419 Jan 26, 2015
DEBORAH S. HUNT, Clerk
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
HENRY MCCLUSKY, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE SOUTHERN DISTRICT
CENTURY BANK, FSB, nka Iberiabank, ) OF OHIO
)
Defendant-Appellant. )
_____________________________________
BEFORE: SUHRHEINRICH and GRIFFIN, Circuit Judges; and LEITMAN,
District Judge.*
LEITMAN, District Judge. In 2011, Plaintiff-Appellee Henry McClusky (“McClusky”)
and Defendant-Appellant Century Bank, FSB, n/k/a Iberiabank (“Century Bank”) agreed to
resolve state-court litigation between them. They memorialized their agreement in an “Amended
Judgment Entry – Settlement Order” (the “Settlement Order”) that the state court entered at their
mutual request. Century Bank believed that the Settlement Order canceled $159,478.87 of debt
owed by McClusky. Accordingly, it issued an Internal Revenue Service (“IRS”) Form 1099-C to
McClusky reflecting the cancellation of that debt (the “McClusky 1099”). McClusky then
brought this breach of contract action, alleging that Century Bank violated the Settlement Order
– which the parties agree is a binding contract – by issuing the McClusky 1099. The district
court granted summary judgment in favor of McClusky on his contract claim.
————————————
*The Honorable Matthew F. Leitman, United States District Judge for the Eastern
District of Michigan, sitting by designation.
No. 14-3419
Henry McClusky v. Century Bank, FSB
The district court believed, and the parties now contend, that resolution of McClusky’s
contract claim turns upon a question of federal tax law: whether Century Bank acted in
accordance with the Internal Revenue Code when it issued the McClusky 1099 based on its
determination that the entry of the Settlement Order resulted in “income” to McClusky. We
view this case much differently. We believe that the determination of McClusky’s contract
claim depends upon the plain language of the Settlement Order, not federal tax law. The
Settlement Order plainly did not prohibit Century Bank from issuing the McClusky 1099;
indeed, it said nothing about tax treatment or tax reporting issues. Thus, McClusky’s claim that
Century Bank breached the Settlement Order by issuing the McClusky 1099 fails as a matter of
law. We REVERSE the judgment of the district court and REMAND for entry of judgment in
favor of Century Bank.
I. Background
On November 14, 2005, McClusky obtained a loan from First Place Bank (“First Place”)
to purchase real property located at 7444 Welbley Street in Blacklick, Ohio (the “Property”). As
part of the transaction, McClusky executed a promissory note to First Place in the amount of
$527,992. The loan was secured by a mortgage on the Property that named First Place as the
mortgagee. Thereafter, Century Bank acquired the mortgage. McClusky eventually defaulted on
the loan, and on December 14, 2009, Century Bank initiated foreclosure proceedings in the
Common Pleas Court of Franklin County, Ohio (the “State Court”).
On June 1, 2010, the State Court entered a judgment against McClusky in the amount of
$524,478.87, plus interest and late fees (the “Judgment”). In addition, the State Court ordered
the Sheriff of Franklin County to sell the Property. Century Bank assigned its right to bid at the
sheriff’s sale to CB Florida RRE Holdings, LLC (“CB Florida”). On September 10, 2010, CB
-2-
No. 14-3419
Henry McClusky v. Century Bank, FSB
Florida purchased the Property at the sheriff’s sale for $280,000. After accounting for fees and
costs, the State Court credited McClusky $269,557.90 toward the balance that he owed Century
Bank on the Judgment.
On June 1, 2011, McClusky, through retained counsel, filed a motion in the State Court
to set aside the Judgment on the ground that Century Bank had failed to mitigate its damages.
McClusky asserted that, prior to the sheriff’s sale, Century Bank had received two offers to
purchase the Property for $435,000 and $372,000, respectively. McClusky argued that
(1) Century Bank had unreasonably failed to pursue those offers and (2) because the winning bid
at the sheriff’s sale was substantially less than the other offers Century Bank had received, the
credit that the State Court applied toward the balance McClusky owed on the Judgment was too
low.
Century Bank and McClusky ultimately agreed to resolve McClusky’s motion to set aside
the Judgment. As part of that resolution, McClusky agreed to pay Century Bank $5,000, and
Century Bank agreed to negate the portion of the Judgment reflecting amounts owed by
McClusky. The parties memorialized their agreement by stipulating to the entry of the
Settlement Order, which contained the following terms:
1) For good and valuable consideration, the receipt of which Plaintiff,
Century Bank, n/k/a Iberia Bank, Successor to Century Bank, FSB by
Receivership from the FDIC, acknowledges, the deficiency judgment as to
Defendants, Henry McClusky and Mojgan E. McClusky (as to her dower interest
only) has been resolved and settled among the parties, in total; and
2) Any such deficiency judgment as to Defendant, Henry McClusky, is
hereby released and/or vacated.
Following the entry of the Settlement Order, Century Bank issued the McClusky 1099 to
both McClusky and the IRS. On that form, Century Bank indicated that it had cancelled
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No. 14-3419
Henry McClusky v. Century Bank, FSB
$159,478.87 in debt owed by McClusky.1 It appears that McClusky included that amount in the
gross income he reported on his 2011 federal tax return. McClusky says that the additional
$159,478.87 in reported income increased his 2011 tax liability by $68,660.
After paying his 2011 federal taxes, McClusky filed this action against Century Bank in
the State Court. McClusky alleged that Century Bank breached the Settlement Order when it
issued the McClusky 1099. Century Bank removed the action to the United States District Court
for the Southern District of Ohio. Both parties moved for summary judgment.
The district court granted summary judgment in favor of McClusky on his contract
claim.2 The court explained that resolution of that claim “necessitate[d] evaluation of income tax
law and terms of art utilized in that area of law.” The court believed that the “contested liability
doctrine” was particularly relevant. That doctrine provides that, under certain circumstances, the
settlement of a debt that is disputed in good faith will not result in “income” to the purported
debtor. See, e.g., Zarin v. Comm’r of Internal Revenue, 916 F.2d 110, 115 (3d Cir. 1990)
(“Under the contested liability doctrine, if a taxpayer, in good faith, disputed the amount of a
debt, a subsequent settlement of the dispute would be treated as the amount of debt cognizable
for tax purposes. The excess of the original debt over the amount determined to have been due is
disregarded [in calculating gross income].”). The court reasoned that because McClusky
contested the amount of the debt that was negated by the Settlement Order, that order did not
result in “income” to McClusky. The court then concluded that because the Settlement Order did
1
The record does not clearly indicate how Century Bank calculated the amount of
cancelled debt that it reported on the McClusky 1099.
2
The district court entered judgment in favor of Century Bank on three other claims
brought by McClusky. McClusky did not cross-appeal the district court’s judgment on these
claims. Accordingly, these additional claims are not before us and are not at issue in this appeal.
-4-
No. 14-3419
Henry McClusky v. Century Bank, FSB
not result in income to McClusky, Century Bank breached the order by issuing the McClusky
1099.
Century Bank now appeals the district court’s judgment in favor of McClusky on his
breach of contract claim.
II. Standard of Review
We review a district court’s order granting summary judgment de novo. See Geiger v.
Tower Auto., 579 F.3d 614, 620 (6th Cir. 2009). Summary judgment is proper when, viewing
the evidence in the light most favorable to the nonmoving party, there is no genuine dispute as to
any material fact and the moving party is entitled to judgment as a matter of law. See Fed. R.
Civ. P. 56(a). “The moving party bears the burden of proving that there are no genuine issues of
material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
III. Analysis
In resolving McClusky’s contract claim in this diversity action, “we are obliged to apply
the substantive law of the forum state, Ohio, in accordance with the controlling decisions of its
highest court.” Lutz v. Chesapeake Appalachia, L.L.C., 717 F.3d 459, 464 (6th Cir. 2013). A
straightforward application of Ohio contract law to the Settlement Order – which the parties
agree is a valid contract – confirms that the order did not prohibit Century Bank from filing the
McClusky 1099.
“Under Ohio law, ‘[w]hen confronted with an issue of contract interpretation, [a court’s]
role is to give effect to the intent of the parties.” Eastham v. Chesapeake Appalachia, L.L.C., 754
F.3d 356, 361 (6th Cir. 2014) (quoting Sunoco, Inc. (R & M) v. Toledo Edison Co., 953 N.E.2d
285, 292 (Ohio 2011)). That intent is “presume[d]” to be “reflected in the language of the
contract.” Id. Thus, “[w]hen the language of a written contract is clear, a court may look no
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No. 14-3419
Henry McClusky v. Century Bank, FSB
further than the writing itself to find the intent of the parties.” Id. As the Ohio Supreme Court
has emphasized, where “the parties following negotiations make mutual promises which
thereafter are integrated into an unambiguous contract duly executed by them, courts will not
give the contract a construction other than that which the plain language of the contract
provides.” Aultman Hosp. Ass’n v. Cmty. Mut. Ins. Co., f/k/a Hosp. Care Corp., 544 N.E.2d 920,
924 (Ohio 1989). Thus, a court may not “rewrite the parties’ contract” to give it a meaning other
than and/or beyond that expressed in its unambiguous language. Id.
The Settlement Order consisted of two short, clear sentences. Therein, Century Bank did
only two things: (1) it “acknowledge[d]” that the “deficiency judgment” against McClusky had
been “settled among the parties, in total,” and (2) it agreed that the deficiency judgment was
“resolved and/or vacated.” That’s it. And it is undisputed that Century Bank has not made any
effort to resuscitate McClusky’s debt, has not taken any action that indicates to anyone or any
entity that McClusky remains indebted to Century Bank, and has not made any effort to collect
any debt from McClusky. Thus, Century Bank has not breached the Settlement Order.
McClusky nonetheless insists, and the district court held, that Century Bank breached the
Settlement Order by issuing the McClusky 1099. We disagree. The Settlement Order says
nothing about how each party would treat the transaction memorialized in the Settlement Order
for tax purposes nor about how (or whether) each party would report the transaction to the IRS.
Given the complete absence of any reference to tax reporting issues, the Settlement Order cannot
be read as precluding Century Bank from issuing the McClusky 1099. Indeed, it would violate
Ohio’s fundamental rules of contract interpretation to read into the Settlement Order a limitation
on Century Bank’s conduct that the order simply does not contain. See, e.g., Aultman Hosp.
-6-
No. 14-3419
Henry McClusky v. Century Bank, FSB
Ass’n, supra (refusing to read into a contract a limitation on one party’s conduct that exceeded
the “only limitation” that was “expressly provided in the agreement between the parties”).
This case is similar to Ward v. Am. Family Life Ins. Co. of Columbus, 444 F.Supp.2d 540
(D. S.C. 2006), in which the court refused to read into a settlement agreement a prohibition
against the filing of a Form 1099. The defendant in Ward had previously paid $100,000 to settle
a claim by the plaintiff for disability benefits under an accidental death and dismemberment
insurance policy. In relevant part, the settlement agreement provided that “all sums paid in
accordance with the agreement are for compensation for physical injuries and damages and/or
emotional injuries and damages and are intended to compensate the Plaintiff solely for his losses
suffered in connection with those injuries and damages.” Ward, 444 F.Supp.2d at 541. The
defendant later filed a Form 1099-MISC with the IRS, reporting $85,600 of the settlement as
“other income” to the plaintiff. The plaintiff then sued the defendant, arguing that the issuance
of the Form 1099-MISC breached the parties’ settlement agreement because the reported funds
were not taxable income. The court granted summary judgment in favor of the defendant
because the parties’ agreement did not prohibit the defendant from filing the Form 1099-MISC:
Here, the language of the settlement agreement is not ambiguous. The agreement
itself does not forbid Defendant from filing a Form 1099-MISC reporting any
income to Plaintiff. Nor does the agreement state that settlement proceeds do not
constitute taxable income.
***
The agreement did not go so far as to state that the payment is not subject to
withholding taxes. Nor did the agreement expressly forbid the filing of the Form
1099-MISC.
***
Ultimately, the court finds that Defendant did not breach the settlement agreement
by filing the Form 1099-MISC. In fact, given the lack of instruction regarding the
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No. 14-3419
Henry McClusky v. Century Bank, FSB
Form 1999 in the settlement agreement, the potential penalties for the failure to
file a required information return, and the fact that the ultimate decision of
taxability rests with the IRS and not Defendant, the court finds that Defendant’s
decision to report the $85,600.00 … entirely reasonable.
Id. at 542, 544. As in Ward, the Settlement Order makes no reference to tax reporting/treatment
issues. Accordingly, there is no basis to read the order as precluding Century Bank from filing
the McClusky 1099.
The absence of any reference to tax treatment/reporting issues in the Settlement Order is
especially significant because it is common practice for parties to address these matters in
settlement agreements when the parties have, in fact, agreed upon them. Indeed, one treatise on
Ohio law advises Ohio attorneys drafting a settlement agreement to specify the tax consequences
that the parties intend to govern the agreement. See 5A Ohio Jurisprudence 3d, Alternative
Dispute Resolution, Section 120 (instructing attorneys to “think ahead about the terms required
in a settlement agreement, such as … tax treatment….”) (emphasis added). Another general
treatise on commercial litigation offers a sample “tax treatment provision” for settlement
agreements. See 3 Business and Commercial Litigation in Federal Courts (3d Ed.), Section
33:120. Against this background, it is most reasonable to conclude that if the parties here had, in
fact, reached an agreement on tax treatment/reporting matters, they would have clearly expressed
that agreement in the Settlement Order. Since that order said nothing about tax
treatment/reporting issues, it did not embody an enforceable agreement by Century Bank not to
file the McClusky 1099.
The district court erred when, at the parties’ urging, it went beyond the plain language of
the Settlement Order and resolved McClusky’s contract claim based upon its “evaluation of
income tax law and terms of art utilized in that area of the law.” It may be appropriate for a
-8-
No. 14-3419
Henry McClusky v. Century Bank, FSB
federal court facing a contract claim like McClusky’s to consider tax laws where the language of
the parties’ settlement agreement makes those laws relevant. But that was not the case here.
The decision of the United States Court of Appeals for the Second Circuit in Duse v. Int’l Bus.
Mach. Corp., 252 F.3d 151 (2d Cir. 2001), provides an instructive comparison. In Duse, the
plaintiff alleged that International Business Machine Corporation (“IBM”) breached a settlement
agreement by issuing an IRS Form 1099 reporting the amount of the settlement payment as
income to the plaintiff. The settlement did not expressly prohibit IBM from filing a Form 1099.
However, it did provide that the settlement payment was “not subject to withholding taxes” and,
more importantly, that IBM would not disclose the amount of the settlement “except as may be
required by law or business necessity.” Id. at 153-54 (emphasis added). Following the
settlement, IBM issued a Form 1099 to Duse and the IRS. Duse sued IBM, claiming that the
company breached the non-disclosure provision of the settlement agreement.
The Second Circuit affirmed the entry of summary judgment against Duse. The court
conducted a careful analysis of the relevant provisions of the Internal Revenue Code and
controlling tax-related decisions of the United States Supreme Court. Based on that analysis, the
court concluded that IBM did not breach the agreement by filing the Form 1099 because the
company had a good faith basis to believe that it was “required by law” to file the form.
Critically, the court reviewed the tax laws and decisions because the plain language of the
parties’ settlement agreement expressly tied IBM’s authority to disclose the settlement payment
to the requirements of the “law,” including, of course, federal tax law. In sharp contrast to the
settlement agreement in Duse, the Settlement Order contained no language tying Century Bank’s
authority to report the settlement payment to federal tax law. Thus, unlike in Duse, there was no
basis here to resolve McClusky’s contract claim by reference to federal tax law.
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No. 14-3419
Henry McClusky v. Century Bank, FSB
In sum, because the plain language of the Settlement Order did not prohibit Century Bank
from reporting its transaction with McClusky to the IRS, Century Bank did not breach the order
by filing the McClusky 1099. Accordingly, Century Bank, not McClusky, was entitled to
summary judgment on McClusky’s breach of contract claim.3
IV. Conclusion
For all of the reasons discussed above, we REVERSE and REMAND for entry of
judgment in favor of Century Bank.
3
We express no view on whether the $159,478.87 that Century Bank reported on the
McClusky 1099 constituted “income” to McClusky under federal tax law.
- 10 -
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938 F.2d 1578
60 USLW 2190, 33 Fed. R. Evid. Serv. 1524
In re FEDERAL GRAND JURY PROCEEDINGS 89-10 (MIA).
Nos. 91-5258, 91-5281.
United States Court of Appeals,Eleventh Circuit.
Aug. 23, 1991.
Aubrey B. Harwell, Jr., Neal & Harwell, James G. Thomas, Delta Anne Davis, Nashville, Tenn., for appellant.
Allan J. Sullivan, Asst. U.S. Atty., Linda Collins Hertz, Harriett R. Galvin, Lynne W. Lamprecht, Miami, Fla., for appellee.
Appeals from the United States District Court for the Southern District of Florida.
Before ANDERSON and DUBINA, Circuit Judges, and ESCHBACH*, Senior Circuit Judge.
ANDERSON, Circuit Judge:
1
In these consolidated cases, Intervenor-Appellant ("Appellant") appeals from two orders of the district court permitting certain grand jury inquiry into his financial activities.1 In Case No. 91-5258, Appellant appeals from the district court's order granting the government's motion to compel testimony from his former attorney ("Attorney") and two other witnesses. In Case No. 91-5281, Appellant appeals from the district court's refusal to grant his motion to protect certain memoranda from disclosure pursuant to a grand jury subpoena.2
FACTS
2
Appellant is the former chief executive officer and chairman of the board of a federally insured savings and loan association ("Bank"). The Resolution Trust Corporation ("RTC") took control of Bank in late 1989. The government subsequently initiated a grand jury investigation of Appellant's activities in connection with Bank. The grand jury focused its investigation on certain financial transactions effected by Appellant between October 29, 1990, and November 6, 1990, particularly whether any of these transactions violated an administrative cease and desist order issued by the Office of Thrift Supervision ("OTS"). The OTS's order forbade Appellant from transferring funds in excess of $5,000 out of the country.
3
The grand jury sought to obtain information regarding these financial transactions through the testimony of Attorney, another member of Attorney's law firm, and a law firm employee. The grand jury also sought access to certain communications in the form of memoranda between Appellant and Attorney and between Attorney and other lawyers. Attorney and his law firm had represented Appellant in connection with other matters involving Bank. Appellant directed the witnesses to assert the attorney-client privilege in response to questions or document requests calling for the disclosure of arguably privileged communications. After Attorney and the other witnesses complied with Appellant's instructions, the government filed motions to compel the testimony and document production.
PRIOR PROCEEDINGS
4
The district court, after conducting the requisite in camera review of materials submitted ex parte by Appellant and the government, issued two orders requiring the testimony and document production before the grand jury. Appellant sought emergency stays of both orders in the district court and in this court. In Case No. 91-5258, Appellant sought an emergency stay of the district court's March 25, 1991 order compelling the testimony. Both the district court and this court denied Appellant's application for an emergency stay. In the absence of a stay, the witnesses proceeded to testify before the grand jury. Appellant now suggests that Case No. 91-5258 is moot as a result of the witnesses' compliance with the district court's order.
5
Appellant's application for an emergency stay of the district court's April 5, 1991 order compelling the production of documents before the grand jury, Case No. 91-5281, eventually was granted by this court on motion for rehearing. This case involves 11 documents identified by Attorney's counsel as responsive to the grand jury subpoena duces tecum. These documents, submitted to this court in camera, are the memoranda exchanged between Appellant and Attorney and between Attorney and other lawyers. The district court declined to protect these documents from disclosure, except for the first paragraph of "Exhibit 3."
DISCUSSION
6
A. Case No. 91-5258: The Grand Jury Testimony
7
Appellant suggests that this case is moot because Attorney and others testified before the grand jury after this court denied an emergency stay pending appeal. The government disagrees, arguing that this case falls within the "capable of repetition yet evading review" exception to mootness, see Weinstein v. Bradford, 423 U.S. 147, 148-49, 96 S.Ct. 347, 348, 46 L.Ed.2d 350 (1975), because the issue of whether this testimony consists of privileged attorney-client communications may recur in a future trial or other proceeding. We reject the government's argument,3 and we hold that this case is moot.
8
In United States v. First Am. Bank, 649 F.2d 288 (5th Cir. Unit B 1981),4 the court was faced with an analogous situation. Before the appellate court had a chance to rule on the merits of the bank's resistance to an IRS summons requesting bank records, the IRS obtained the records. Adopting the reasoning from a line of cases beginning with Lawhon v. United States, 390 F.2d 663 (5th Cir.1968), the former Fifth Circuit rejected the argument that the case was not moot because the issue of the summons' validity might recur at a possible future criminal or civil trial. First Am. Bank, 649 F.2d at 289. Quoting from Lawhon, 390 F.2d at 663, the First Am. Bank court stated:
9
This motion [for reconsideration], in effect, seeks to have this court give an advisory opinion as to the admissibility in evidence of the records or their product in the event of a subsequent criminal trial. Such event may not occur. This court passes no judgment on the question whether, if the mooted records are used in a subsequent prosecution of the taxpayers, if there be one, their introduction would be forbidden as violating the constitutional rights of the defendants.
10
First Am. Bank, 649 F.2d at 289. See also In re Grand Jury Proceedings (Rabin), 904 F.2d 1498 (11th Cir.1990) (en banc) (case dismissed as moot after witness complied with identical grand jury subpoena); In re Grand Jury Proceedings (Klayman), 760 F.2d 1490, 1491-92 (9th Cir.1985) (fact that attorney-client privilege issue would come up again at trial did not make issue "capable of repetition yet evading review" because issue was "not likely to escape review" and to hold otherwise would be "in total disregard of Article III").
11
In light of this precedent, we hold that Case No. 91-5258 is moot. Accordingly, we vacate the judgment of the district court and remand with instructions to dismiss the case as moot.
12
B. Case No. 91-5281: The Document Production
13
Because we granted a stay in Case No. 91-5281, the memoranda, which have been submitted to this court in camera, have not been disclosed to the government. Thus, unlike Case No. 91-5258, this case presents issues appropriate for resolution on the merits. As mentioned above, except for the first paragraph of Exhibit 3, the district court declined to shield the memoranda from the grand jury subpoena. With respect to the rest of Exhibit 3 and the remaining documents, the district court ruled that they are not privileged communications either because they are within the crime-fraud exception to the attorney-client privilege, or because they "do not represent legal advice, legal opinions, or formulations of legal strategy protectible [sic] under the attorney-client or work product privileges." The district court reasoned that the crime-fraud exception applies because the memoranda merely memorialize communications that are themselves not privileged under the crime-fraud exception. After carefully reviewing the documents submitted in camera, however, we cannot agree with the district court's rationale or conclusion.
14
The attorney-client privilege protects communications between attorney and client from disclosure where:
15
(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is [the] member of a bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.
16
In re Grand Jury Proceedings (Jones), 517 F.2d 666, 670 (5th Cir.1975) (quoting United States v. United Shoe Machinery Corp., 89 F.Supp. 357, 358-59 (D.Mass.1950)). See also 4 J. Moore, Moore's Federal Practice Sec. 26.60, at 26-193 (1989).
17
However, "[t]he attorney-client privilege does not protect communications made in furtherance of a crime or fraud." In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir.1987). A determination of whether the crime-fraud exception applies involves application of a two part test:
18
First, there must be a prima facie showing that the client was engaged in criminal or fraudulent conduct when he sought the advice of counsel, that he was planning such conduct when he sought the advice of counsel, or that he committed a crime or fraud subsequent to receiving the benefit of counsel's advice. Second, there must be a showing that the attorney's assistance was obtained in furtherance of the criminal or fraudulent activity or was closely related to it.
19
Id.5 Furthermore, as the government concedes, the crime-fraud exception does not operate to remove communications concerning past or completed crimes or frauds from the attorney-client privilege. See In re Sealed Case, 754 F.2d 395, 402 (D.C.Cir.1985); In re Grand Jury Subpoena Duces Tecum (Marc Rich & Co.), 731 F.2d 1032, 1041-42 (2d Cir.1984); United States v. Dyer, 722 F.2d 174, 177 (5th Cir.1983); Garner v. Wolfinbarger, 430 F.2d 1093, 1102 (5th Cir.1970).6
20
In the instant case, there is no question that the documents were created after completion of the alleged crime or fraud. The government essentially concedes this point by arguing that the crime or fraud continued only until January 16, 1991. Even if this were true, all of the memoranda were created after that date. The government's argument, which was also the district court's primary rationale, is that the documents in question merely memorialize communications that occurred during or before the alleged crime or fraud. The government contends that such memorialized communications are no more privileged than the earlier communications themselves. However, even assuming that the memoranda merely memorialize past communications and that such earlier communications were not privileged under the crime-fraud exception,7 we reject the government's argument.
21
"[T]he attorney-client privilege protects communications rather than information...." Marc Rich & Co., 731 F.2d at 1037. Thus, although communications otherwise covered by the attorney-client privilege lose their privileged status when used to further a crime or fraud, post-crime repetition or discussion of such earlier communications, made in confidence to an attorney, may still be privileged even though those earlier communications were not privileged because of the crime-fraud exception. In other words, it is generally the context, rather than the content, of a communication that allows invocation of the attorney-client privilege. Furthermore, the fact that information in an attorney-client communication might be discoverable by other means does not mean that the communication is not privileged, provided that the communication was intended to be confidential. Id. See also United States v. Cunningham, 672 F.2d 1064, 1073 n. 8 (2d Cir.1982), cert. denied, 466 U.S. 951, 104 S.Ct. 2154, 80 L.Ed.2d 540 (1984) ("[W]e do not suggest that an attorney-client privilege is lost by the mere fact that the information communicated is otherwise available to the public. The privilege attaches not to the information but to the communication of the information."). Our in camera review of the documents indicates that they were fully intended to be confidential, otherwise meet all criteria for application of the privilege, and were not created during or before the commission of a related crime or fraud. We conclude that the documents in question are privileged even to the extent that they merely memorialize information that may be discoverable by other means under the crime-fraud exception.
22
Disclosure of the documents on the basis urged by the government would seriously undermine the purpose of the attorney-client privilege, which is to encourage "full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). Applying the government's "mere memorialization" approach, a client, once he committed a crime or fraud furthered by earlier communications with counsel, could never again engage in full and frank discussion with counsel regarding the past crime or fraud. The client's ability to defend against charges in connection with the past crime or fraud would accordingly be severely hampered, if not rendered impossible.
23
Although the government concedes the irrefutable nature of this logic, it nevertheless argues that it applies only where an attorney other than the one connected with the crime or fraud is consulted after the crime or fraud. However, our research has not uncovered any authority for distinguishing between post-crime communications with the same or a different attorney. In fact, the court in In re Sealed Case, 754 F.2d 395, 402 (D.C.Cir.1985), held that communications with attorneys who had been involved with the client's past crimes, to the extent that the communications related to the past crimes, remained privileged. Moreover, the government's attempted distinction is especially without merit in the instant case where, as the district court noted, "nothing before the court indicate[s] that the attorneys' assistance was anything other than innocent and rendered in good faith."8
24
Although we cannot discuss application of the attorney-client privilege on a document-by-document basis in light of the in camera nature of the submissions, we are satisfied that all of the memoranda represent privileged communications. Accordingly, we reverse the district court's ruling in Case No. 91-5281.
25
Case No. 91-5281 is REVERSED.
26
In Case No. 91-5258, the judgment of the district court is VACATED and the case is REMANDED with instructions to dismiss the case as moot.
*
Honorable Jesse E. Eschbach, Senior U.S. Circuit Judge for the Seventh Circuit, sitting by designation
1
This opinion eliminates any reference to the parties or facts that would compromise the sealed nature of this case
2
The district court did protect from disclosure the first paragraph of "Exhibit 3." The government does not appeal this ruling
3
We also reject the government's argument that Case No. 91-5258 is not moot because the merits of the two consolidated cases are intertwined
4
Cases decided by the former Fifth Circuit prior to the close of business on September 30, 1981, are binding precedent under Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981)
5
For purposes of discussion, we will assume without deciding that the government has met its burden of showing that a crime or fraud has been committed
6
See also McCormick on Evidence Sec. 95 (3d ed. 1984) (quoting Gebhardt v. United Railways Co., 220 S.W. 677, 699 (Mo.1920)) ("The privileged communications may be a shield of defense as to crimes already committed, but it cannot be used as a guard or weapon of offense to enable persons to carry out contemplated crimes against society.")
7
We expressly do not decide whether any information memorialized in the memoranda which may have already been disclosed to the grand jury through Attorney's testimony is within the attorney-client privilege or excepted from the privilege by the crime-fraud doctrine. Rather, we hold only that the memoranda constitute privileged attorney-client communications even if the content may have been disclosed earlier and regardless of whether the memoranda refer to earlier communications that were themselves discoverable under the crime-fraud exception
8
We express no view on whether the government's argument would be correct in a situation where the attorney participates with the client in illegal activity
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116 F.3d 417
97 Cal. Daily Op. Serv. 4861, 97 Daily JournalD.A.R. 7952UNITED STATES of America, Plaintiff-Appellee,v.Bertha NORIEGA-SARABIA, aka Maria de los AngelesGarcia-Salazar, Defendant,andDolores Roque, Appellant.
No. 96-50394.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted June 4, 1997.Decided June 24, 1997.
John Lanahan, San Diego, CA, for Appellant.
Timothy D. Coughlin, Assistant United States Attorney, San Diego, CA, for Plaintiff-Appellee.
Appeal from the United States District Court for the Southern District of California; Marilyn L. Huff, District Judge, Presiding. D.C. No. CR-93-00810-2-MLH.
Before: HUG, Chief Judge, and FERNANDEZ and RYMER, Circuit Judges.
FERNANDEZ, Circuit Judge:
1
Dolores Roque agreed to act as surety on a bail bond for Maria de los Angeles Garcia-Salazar, who was prosecuted in this action as Bertha Noriega-Sarabia. When Garcia failed to appear for sentencing after she had pled guilty, the district court entered "Judgment on Default" on the bail bond. In so doing, the district court rejected Ms. Roque's claims that technical defects in the execution of the bond or changes after it was signed invalidated it. This appeal followed. We affirm.
BACKGROUND
2
Ms. Roque agreed that she would act as a surety on a bail bond for Garcia, a person who was neither a friend nor a relative. Garcia was charged with narcotics offenses--conspiracy to possess cocaine with the intent to distribute it and actual possession with intent to distribute it. Bail was set at $100,000. Ms. Roque signed an "Appearance Bond," which obligated her in that amount. She also signed an "Affidavit of Sureties" which indicated that she had a net worth of $60,000 contained in the equity in her home, and she signed a deed of trust on her home to secure the $100,000 bond. She did not sign a "Justification of Sureties" form which appeared on the reverse side of the Appearance Bond, but the pertinent information did appear in the Affidavit of Sureties.
3
Magistrate Judge Ruben B. Brooks then held a hearing for the purpose of examining the proposed sureties, including Ms. Roque and her husband, Armando Roque. The magistrate judge was concerned about the fact that neither Ms. Roque nor Mr. Roque knew Garcia, so he carefully explored that and explained the dangers of acting as a surety. They assured him that they understood what they were doing and that they were undertaking that obligation because Mr. Roque felt beholden to a relative of Garcia. The relative had once signed on as a surety for a bail bond for Mr. Roque.
4
At the hearing, it also developed that Mr. Roque thought that the equity in the home was actually much more than $60,000, and Ms. Roque indicated that the equity was closer to $70,000. At any rate, the bond amount was left at $100,000, and the magistrate judge indicated to Ms. Roque that she could be personally pursued for any difference between the equity in the home and the bond. Ms. Roque said that she understood that.
5
Thereafter, Garcia pled guilty to the cocaine conspiracy charge, and a sentencing date was set. However, before she was actually released on bond, Mr. Roque spoke to a pretrial services officer and indicated that he had thought that Garcia was going to be subject to electronic monitoring. He indicated that he, and presumably Ms. Roque, were not willing to be sureties unless that condition did exist. The district court then imposed the condition, and Garcia was released. Unfortunately she absconded, and as of the date of the Judgment on Default on the bond, she had not been found.
JURISDICTION AND STANDARD OF REVIEW
6
The district court had jurisdiction pursuant to 18 U.S.C. §§ 3231 & 3142. We have jurisdiction pursuant to 28 U.S.C. § 1291.
7
The issues presented to us all deal with the legal validity of the bond. We review those questions of law de novo. See United States v. Toro, 981 F.2d 1045, 1047 (9th Cir.1992).
DISCUSSION
8
Ms. Roque's first set of attacks on the bond proceed from her claim that there were certain technical defects, which made the bond void ab initio. Her second set deals with changes in Garcia's situation after the bond was executed--the requirement of electronic monitoring and the guilty plea. Neither set can be successful.
9
A. Legal Sufficiency.
10
Ms. Roque asserts that the bond was invalid because she did not sign the justification of sureties form, because her net worth was not the full amount of the bond, and because she did not sign the bond at the same time as Garcia signed it. None of these assertions is fruitful.
11
There can be no doubt that the bail statute provides that a "surety shall have a net worth which shall have sufficient unencumbered value to pay the amount of the bail bond." 18 U.S.C. § 3142(c)(B)(xii). Moreover, the Federal Rules of Criminal Procedure provide that a surety "shall justify by affidavit" and that "[n]o bond shall be approved unless the surety thereon appears to be qualified." Fed.R.Crim.P. 46(d). It is upon those provisions that Ms. Roque founds her claim that the bond in this case was void as to her.
12
We have previously reserved the issue of whether technical defects can serve to void a surety bond and, thus, release the surety. See United States v. Figuerola, 58 F.3d 502, 504 n. 3 (9th Cir.1995) (per curiam); cf. United States v. Frias-Ramirez, 670 F.2d 849, 851 & n. 1 (9th Cir.1982) (equity of $185,000 allowed to be pledged for $250,000 surety bond, but no single surety had anything close to that amount). We now confront that question and agree with the Fifth Circuit that the answer is no. See United States v. Skipper, 633 F.2d 1177, 1180 (5th Cir.1981). In Skipper, the magistrate judge had not required the securities to justify by affidavit. That violated the demands of Rule 46(d), and the sureties claimed that they were, therefore, released from the bond. The court said:
13
Little has been written about the justification requirement, but the case law makes clear that sureties must reveal their property resources so that the government can be assured of their financial ability and so that the court can be satisfied that they have an incentive and purpose to secure the defendant's presence at trial. Since Rule 46(d) was designed to protect the government, the appellants cannot avail themselves of the magistrate's failure to follow its mandate.
14
Id. (citations omitted); cf. United States v. Nebbia, 357 F.2d 303, 304 (2d Cir.1966) (the purpose of the bond is to assure that the defendant appears for trial).
15
That is a most sensible reading of the law. It may be rather risky to allow a defendant free on bail when the sureties have not sworn to their own net worth, or when their net worth is not sufficient to cover the whole amount of the bond. But if it is risky, the danger is to those who are supposed to be assured that the defendant will appear. The court, the government, and the public may be doubly disappointed when a defendant flees, if the sureties cannot, or will not, abide by their promises. On the other hand, the sureties do remain personally liable, and courts often feel that the income from their jobs is an additional resource, even though that income is not a part of their net worth. In fact, in this case the magistrate judge explained to Ms. Roque that she would remain liable, even if her home equity did not fully cover the bond amount in case the defendant fled. We do not say that looking to possible future income complies with the net worth requirement. We do say that a surety cannot complain because he has failed to actually swear to a sufficient net worth, or because a lesser net worth might mean that the full amount of the bond will never be recovered. A default by the surety cannot logically redound to his own benefit. He will not, in any event, be required to do more than he promised to do; he might wind up doing much less. That brings us to Ms. Roque's own situation.
16
Her assertion that she did not justify by affidavit is a bit puzzling. While it is true that she never signed the form entitled "Justification of Sureties" on the back of the Appearance Bond, she did sign a separate affidavit in which she swore to the value of the property, the encumbrances against it, and her resulting net worth. Moreover, at the justification hearing she and Mr. Roque gave sworn testimony regarding the value of the property and their equity in it. That actually indicated that their net worth may have been even higher than the amount shown in the affidavit. The claim that a form entitled "Justification of Sureties" was not signed cannot free her from her obligation. Even less efficacious is the argument that Ms. Roque did not sign at the same time and place as Garcia. Neither the law nor the rules require that she do so, and the Appearance Bond does not indicate that she did.
17
Moreover, the mere fact that Ms. Roque's net worth was not up to the amount of the bond does not help her case. It is true that in some formal sense the magistrate judge made the government more insecure when he accepted sureties whose net worth was lower than the amount of the bond. But everyone in the courtroom, including the government, was unconcerned about the possibility that the assets themselves might not cover the full amount of the bond, as long as Ms. Roque remained personally liable upon it. Mr. Roque thought that the property value would cover because he believed that the appraisal was far too low. The magistrate judge was not entirely satisfied with that and explained with great clarity that Ms. Roque would remain liable "to make up the full $100,000." He then asked, "And you're still willing to do this?" Ms. Roque said "Yes," as did Mr. Roque. If anyone suffers from an unavailability of assets to cover the bond, it will be the government.
18
Finally, to the extent that Ms. Roque suggests that she did not understand what she was doing or that she did not intend to be a surety, the record clearly belies those claims. This is not a case where it could be said that, due to language barriers or the like, the surety misunderstood the obligation. Cf. Figuerola, 58 F.3d at 503-04. Nor could it be said that no intent to be bound was evinced or that the bond was not signed, so that there was no intent to become a surety. Cf. United States v. Jackson, 465 F.2d 964, 965-66 (10th Cir.1972). Rather, this is a case where the magistrate judge followed procedures we have commended and, with great sensitivity, assured that Ms. Roque did understand the nature of the risk. See Frias-Ramirez, 670 F.2d at 852. It is a case where the surety signed the bond, an affidavit, and even a deed of trust on her home for the purpose of securing the bond. It is a case where the magistrate judge even asked, "Why would you put up your home for a stranger?" Mr. Roque gave a reason, and Ms. Roque remained unfazed. She did not demur. She cannot now complain that the obligations and risks were unknown to her.
19
B. Changed Conditions.
20
Ms. Roque asserts that when electronic monitoring was imposed upon Garcia, the conditions of release changed. That, she says, should be enough to release her from her bond. She relies upon two of our cases for that proposition. See United States v. LePicard, 723 F.2d 663 (9th Cir.1984); United States v. Galvez-Uriarte, 709 F.2d 1323 (9th Cir.1983). Neither is apposite because in each of those cases the surety's risk was substantially increased by a change in conditions.
21
In one of them, after the bond was signed the district court had added the condition that the defendant " 'break no laws,' " and the government sought to have bail forfeited because the defendant had broken laws while on bail. LePicard, 723 F.2d at 665. As we said, the sureties had bonded "the defendant's appearance before the court, not his good conduct." Id. at 666. In the other, the condition when the bond was given provided that the defendant "could not leave California without permission of the court." Galvez-Uriarte, 709 F.2d at 1324. The United States then encouraged him to leave the country without the benefit of a court order. Id. at 1325. That, we said, was a "material breach of the Government's implied covenant," which released the surety when the defendant did not return. Id.; see also United States v. Aguilar, 813 F.Supp. 727, 729 (N.D.Cal.1993) (bond conditions provided that defendant could not travel outside of the Northern District of California; when government had the defendant do so, the risk was increased).
22
Here, no increase in the dangers faced by the sureties occurred. At the behest of Mr. Roque, an additional condition was added, which helped assure that Garcia would appear when she had to. That could only have made the surety more secure and did not serve to release her from the bond.
23
Ms. Roque fares no better with her claim that as soon as Garcia pled guilty the conditions changed and she was released from the bond. She cites no authority for that proposition, and we have found none. No doubt it would come as a surprise to the government to discover that bail bonds are automatically cancelled as soon as a defendant pleads or is found guilty.
24
At any rate, we need not consider whether there could be conditions under which a surety was released as soon as a guilty plea was entered. For example, a bond could be written that way. Suffice it to say that this was not such a case. Indeed, the bond specifically assured that the defendant would "abide any judgment by surrendering ... to serve any sentence." That was a clear indication that the bond could even continue beyond the sentencing date itself. Lest there be any doubt, the bond went on to provide that it was "a continuing bond (including any proceeding on appeal or review) which shall continue in full force and effect until such time as the undersigned are duly exonerated." Again, that makes it clear that Ms. Roque agreed to continue as surety beyond the date of any conviction or plea. She is bound by that contract. See Toro, 981 F.2d at 1047 (general contract principles govern bail bonds).
CONCLUSION
25
Ms. Roque, at the behest of Mr. Roque, agreed to become surety for a defendant whom she did not know and for whom she placed her home in jeopardy. When the defendant fled, bail was forfeited. Ms. Roque is understandably horrified by the result of her kindness, but she cannot avoid her bond obligation based on the technical defects that she has pointed to--her failure to sign a document entitled "Justification of Sureties," and her failure to have a net worth as high as the face amount of the Appearance Bond. Nor did the government or the district court do anything to increase her risk beyond that contemplated at the time she became a surety.
26
Thus, while we do hear her monody, there is nothing we can now do to palliate her pain. The bond was and remains valid.1
27
AFFIRMED.
1
We emphasize that this is not an appeal from a request for remission. See Fed.R.Crim.P. 46(e)(4). Nothing in this opinion is intended to preclude Ms. Roque from pursuing any right to remission which she may have, or from arguing any of her equities at that time. See United States v. Amwest Surety Ins. Co., 54 F.3d 601, 603-05 (9th Cir.1995)
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68 F.3d 472
Cajun Electricv.Gulf States Utility
NO. 95-30087
United States Court of Appeals,
Fifth Circuit.
Sept 29, 1995
Appeal From: M.D.La., No. 91-CV-1091-B
1
AFFIRMED.
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833 F.2d 1007
U.S.v.Nelson*
NO. 87-2099
United States Court of Appeals,Fifth Circuit.
OCT 26, 1987
1
Appeal From: S.D.Tex.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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543 U.S. 829
TURNERv.LAMARQUE, WARDEN, ET AL.
No. 03-10268.
Supreme Court of United States.
October 4, 2004.
1
C. A. 9th Cir. Certiorari denied. Reported below: 84 Fed. Appx. 866.
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190 P.3d 491 (2008)
221 Or. App. 465
STATE of Oregon, Plaintiff-Respondent,
v.
Isaac James TILTON, Defendant-Appellant.
200521681; A131245.
Court of Appeals of Oregon.
Submitted on May 2, 2008.
Decided August 6, 2008.
Isaac Tilton filed the brief pro se.
Hardy Myers, Attorney General, Mary H. Williams, Solicitor General, and Jamie K. Contreras, Assistant Attorney General, filed the brief for respondent.
Before LANDAU, Presiding Judge, and SCHUMAN, Judge, and ORTEGA, Judge.
LANDAU, P.J.
Defendant pleaded guilty to one count of possession of a controlled substance (PCS), former ORS 475.992 (2003), renumbered as ORS 475.840 (2005); and was found guilty by a jury of two counts of second-degree robbery, ORS 164.405; and one count of first-degree burglary, ORS 164.225. On *492 the robbery convictions, the trial court sentenced him to two consecutive 70-month prison terms, based on the trial court's finding that the convictions involved two separate victims. On the burglary and PCS convictions, the trial court sentenced him to concurrent terms of 22 months and 6 months, respectively.
Defendant appeals, advancing three assignments of error. First, he contends that the trial court erred in denying his motion to suppress evidence discovered after police officers stopped and, subsequently, searched him. Second, he contends that the trial court erred in instructing the jury on the robbery counts. Third, he contends that the trial court erred in imposing consecutive sentences based on facts not found by a jury or admitted by him, contrary to Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), and Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). According to defendant, he did not raise either of the latter two issues below; he requests that we review them as plain error. ORAP 5.45.
As to defendant's first assignment of error, the state responds that the police officers had reasonable suspicion that defendant was involved in a reported crime and, after they stopped defendant, the officers developed probable cause to arrest him and search his vehicle; accordingly, the trial court correctly denied defendant's motion to suppress the resulting evidence. As to defendant's second assignment, the state responds that the error, if any, is not plain and, in any event, is harmless in light of the evidence at trial. As to defendant's third assignment, contrary to defendant's own concession, the state concedes that defendant preserved the issue. On the merits, the state points out that the two robbery counts in the indictment expressly named different victims, the trial court instructed the jury that each count involved a different victim, and the jury found defendant guilty as to both counts. The state argues that the jury therefore necessarily found that the two robbery convictions involved two different victims; accordingly, the trial court did not err in imposing consecutive sentences on those convictions pursuant to ORS 137.123(5)(b), providing for consecutive sentences where a crime "caused or created a risk of causing loss, injury or harm to a different victim than was caused or threatened by the other offense."
We reject defendant's first and second assignments of error without discussion, writing to address only his third assignment. As an initial matter, we agree with the state that defendant preserved the issue. At trial, defendant argued that, consistently with Blakely, he was entitled to a jury finding as to whether the robbery convictions involved separate victims.
We turn to the merits. After the trial in this case and after defendant filed his opening brief, the Oregon Supreme Court decided State v. Ice, 343 Or. 248, 170 P.3d 1049 (2007), cert. granted, ___ U.S. ___, 128 S.Ct. 1657, 170 L.Ed.2d 353 (2008). In that case, the defendant was convicted of six crimes arising out of two separate incidents; each incident gave rise to convictions for one burglary and two sex offenses. Id. at 250, 170 P.3d 1049. The trial court first found that the incidents were separate for the purposes of ORS 137.123(2), thereby permitting consecutive sentences as between the two groups of convictions. It also found that the multiple convictions within each incident reflected the defendant's willingness to commit more than one offense for the purposes of ORS 137.123(5)(a) and that one of the individual convictions within each incident caused greater or qualitatively different harm to the victim than another of the offenses within the same incident for the purposes of ORS 137.123(5)(b). It therefore imposed consecutive sentences on one burglary conviction and one sexual abuse conviction within each of the two separate incidents, resulting in a total of four consecutive and two concurrent sentences. Id. at 252-53, 170 P.3d 1049.
The Supreme Court remanded for resentencing, concluding that the Sixth Amendment right to jury trial extended to the factual findings supporting the consecutive sentences. The court noted that it was "self-evident" that a defendant who is ordered to serve his or her sentences consecutively rather than concurrently is "exposed to *493 greater punishment." 343 Or. at 266, 266 n. 5, 170 P.3d 1049. It also noted that, at least with respect to offenses that arise out of the same continuous and uninterrupted course of conduct as provided in ORS 137.123(5), a jury's issuance of multiple guilty verdicts supports only concurrent sentences. Id. at 265, 170 P.3d 1049. The court reasoned that, under Apprendi and its progeny, the right to a jury trial applies to any factor that a legislature identifies as permitting the enhancement of an otherwise statutorily limited sentence and that, accordingly, the jury trial right applied to the factors permitting the imposition of consecutive sentences in that case. Id. at 266-67, 170 P.3d 1049.
Notwithstanding the general principle enunciated in Ice, the Supreme Court more recently has concluded that a trial court's imposition of a consecutive sentence based on a fact not found by a jury specifically for sentencing purposes does not necessarily require reversal in all cases. In State v. Zweigart, 344 Or. 619, 637, 188 P.3d 242 (2008), the trial court imposed a consecutive sentence on the defendant's conviction for solicitation to burglarize a grocery store based on the trial court's finding that the offense involved a "separate, distinct victim" from the victims of the defendant's convictions for solicitation to commit aggravated murder. On appeal, the Supreme Court explained that, where the defendant was convicted of solicitation to commit burglary for soliciting his cell mate to enter and commit theft in a Safeway store and he was convicted of solicitation to commit aggravated murder for soliciting his cell mate to kill each of three named individuals, the fact that the "victim" of the former conviction was separate from the victims of the latter convictions was "inherent in the indictment and in the jury's verdicts on those counts." Id. at 639, 188 P.3d 242. The court concluded that, because "the jury necessarily found beyond a reasonable doubt that [the solicitation to commit burglary count] involved a different victim than the victims involved in [the solicitation to commit aggravated murder counts]," the trial court did not err in imposing a consecutive sentence on the burglary conviction. 344 Or. at 639-40, 188 P.3d 242.
Zweigart resolves the consecutive sentence issue here. As the state points out, in this case, the two robbery counts in the indictment named different victims, the trial court instructed the jury that each count involved a different victim, and the jury found defendant guilty of both counts. We agree with the state that, under those circumstances, the trial court did not err in imposing consecutive sentences on those convictions.
Affirmed.
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324 S.W.3d 462 (2010)
C & W SPREADERS, L.L.C., a.k.a. CW Spreaders, L.L.C., Plaintiff-Respondent,
v.
Daniel WOSOBA, Defendant-Appellant.
No. SD 30204.
Missouri Court of Appeals, Southern District, Division One.
October 28, 2010.
*463 J.D. Baker, Baker Law Firm, Osceola, MO, for Appellant.
Kendall R. Vickers, The Vickers Law Firm, Nevada, MO, for Respondent.
GARY W. LYNCH, Judge.
Daniel Wosoba appeals from a $20,587.45 judgment in favor of CW Spreaders, L.L.C. ("the L.L.C."). He claims that $13,987.55 of that amount, which the trial court awarded as damages for breach of contract as a result of his interference with the L.L.C.'s business relationship with a supplier, was in error because the contract at issue did not prohibit interference with a business relationship. We agree and reverse that part of the trial court's judgment.
Factual and Procedural Background
We view the evidence in the light most favorable to the trial court's judgment. Estate of Thompson v. Hicks, 148 S.W.3d 32, 35 (Mo.App.2004). Furthermore, as neither party requested that the trial court make written findings of fact and conclusions of law, "[a]ll fact issues upon which no specific findings are made shall be considered as having been found in accordance with the result reached." Rule 73.01(c).[1] Taken in that context, the following evidence was adduced at trial.
William Cary had been a friend of Floyd Wosoba and his son, Daniel, for several years.[2] While Cary was "riding around somewhere" with Floyd, the two began discussing the use of poultry litter as fertilizer, and Floyd, a long-time farmer and fixture in the trucking industry, expressed his desire for Daniel, then eighteen years old, to get involved in the industry and have a steady income. Later on, all three men sat down to discuss setting up a business partnership between Cary and Daniel. In an attempt to assist in that planning, Floyd made multiple unreturned calls to George's of Missouri ("George's"), a poultry company located in Springdale, Arkansas. Cary, however, was eventually able to get in touch with Kendall Pendergrapha long-time friend of Floyd's and the general manager of George'sand *464 Cary, Daniel, and Floyd later met with Pendergraph. Out of that meeting came an arrangement for George's to supply the new business venture with chicken litter.
Pendergraph agreed that George's would sell the L.L.C. up to six loads of chicken litter per week at a price to be set by Pendergraph. The initial price was $6.00 per ton. Later, Pendergraph raised it to $8.00 per ton. Each load contained approximately 23 tons of litter. Other businesses in the area priced their chicken litter anywhere from $18.00 to $25.00 per ton. Pendergraph was willing to sell litter so cheaply because "it was not really a business deal for him[,]" and he just wanted "a reliable source" to haul away his litter. Pendergraph refused to put the arrangement in writing but told Cary and Daniel that he would honor the arrangement for five years. The L.L.C. was not the only company hauling away George's litter.
After solidifying George's as a supplier, in August 2007 Cary and Daniel created a limited liability company they named CW Spreaders, L.L.C.[3] Cary's wife drafted the operating agreement, which specified that, for purposes of managerial decision making, Cary would have a fifty-one percent interest in the company, while Daniel would have a forty-nine percent interest; the profits, however, would be split equally.
Following its creation, the L.L.C. purchased a spreader truck and trailer to use for the business. The truck was destroyed in an accident on May 23, 2008. The insurance proceeds more than covered the remaining loan on the vehicles, and the surplus was split evenly between Cary and Daniel. After the accident, the L.L.C. arranged in the short term for other individuals to truck the litter from George's back to the L.L.C.'s base of operations but eventually began using a converted truck belonging to Daniel's father. Floyd did not want compensation for the L.L.C.'s use of the truck, but the L.L.C. paid for the truck's maintenance and fuel. The L.L.C. also rented a trailer to use for hauling.
In addition to the initial purchase of the spreader truck and trailer, the L.L.C. also purchased a loader and a bi-directional tractor, as well as another loader truck for parts, two buckets and a grapple for the tractor, and various other "odds and ends mechanical pieces."
On August 19, 2008, Daniel told Cary that he no longer wanted to be involved with the L.L.C. Daniel asked Cary to "price the physical equipment" and Daniel would decide if he wanted to sell his share to Cary or purchase Cary's share. Cary priced the L.L.C.'s equipmenta tractor, litter bed, loader truck, and GPS unitat $10,000.00, plus the $22,000.00 owed in debt. Daniel chose to pay Cary $10,000.00, assume the $22,000.00 debt, and take possession of the L.L.C.'s equipment. Before approaching Cary about withdrawing from the business, Daniel had already purchased another spreader truck. Around that same time, Daniel purchased the trailer that the L.L.C. had been renting and using to haul litter.
In preparation for obtaining a loan to pay off the debt, Daniel asked Cary to write a letter he could give to the bank. The first document Cary prepared listed the items to be transferred and included a statement by Cary agreeing to "release [his] interest in the above items to Daniel Wosoba" for the agreed-upon price. The bank, however, found this document insufficient, *465 and Daniel asked Cary to write a second letter and to include the serial numbers for the equipment that would be transferred to Daniel. In addition to listing each piece of equipment with its accompanying serial number and selling price, including the assumption of debt, the second letter included the following statement:
I agree to settle all remaining accounts of customers to date and turn over all monies to C & W Spreaders LLC as per our partnership agreement. I further agree not to interfere with C & W Spreaders LLC business or any contracts they currently hold (verbal or in writing) or in any way act as doing business as C & W Spreaders, or C & W Spreaders LLC etc. As per our agreement I will turn over to you the remaining parts of the wet kit removed from the wrecked 1999 Mack truck.
(Emphasis added). There was no mention of any of the L.L.C.'s other assets in the letter. Daniel signed the letter on August 25, 2008, and Cary acknowledged receipt of the letter that same day.
The next day, Cary withdrew $12,000.00 from the L.L.C.'s bank account and deposited the money in his own personal bank account. Shortly thereafter, Daniel withdrew the remaining money, $3,889.44, from the L.L.C.'s account and closed the account.
Following his withdrawal from the L.L.C. on August 25, 2008, Daniel began hauling litter from George's the next week under the name "DW Farms." From that time through the time of trial, he hauled from George's on a fairly regular basis. Daniel continued to pay George's $8.00 per ton of chicken litter. George's allowed him to haul as many as fifteen loads per week. Floyd, under the name "Wosoba Trucking," also hauled litter from George's following Daniel's withdrawal, mostly for his own personal use.
During the first week of October, Cary personally traveled to George's in Springdale to arrange a meeting with Pendergraph, explain the situation to him, pick up a load of chicken litter, and continue with the litter-hauling arrangement. When he arrived Pendergraph told him that would be the last load George's sold to the L.L.C.
Although the letter agreement was signed on August 25, 2008, consummation was not attempted until October 10, when Cary contacted the Wosobas to initiate exchange of the equipment and money at a neutral site. Cary expected Daniel to bring the $10,000.00 mentioned in the letter agreement, the money Daniel had collected from various outstanding accounts, and the wet kit for the truck. Daniel had already obtained financing for repayment of the loan. When he arrived, however, Daniel brought a copy of checks showing Cary's withdrawal of funds from the L.L.C.'s account and attempted to give Cary a check for $4,000.00; Daniel explained his belief that half of the money Cary withdrew was his and should be applied as a credit toward the $10,000.00 he owed the L.L.C. for the equipment. Cary refused Daniel's tender and asked for the full $10,000.00. When they reached an impasse, Cary attempted to leave with the equipment. Daniel and Floyd moved their vehicles and blocked Cary in, at which point Cary called the police. The responding law enforcement officers would not let Cary leave with the equipment, and everyone left without exchanging any money or property. At some point thereafter, Daniel took possession of the equipment.
Although he was unable to purchase litter from George's, Cary continued operating the L.L.C. and hauling litter, albeit on an irregular basis. From the time of Daniel's withdrawal from the L.L.C. through *466 the time of trial, Cary bought and sold a total of 724.31 tons of poultry litter. Cary calculated that, had he been able to purchase the litter from George's at the previously agreed-upon rate of $8.00 per ton, he would have made an additional $13,987.55 during that time period.
The L.L.C. filed suit against Daniel on November 26, 2008. In its petition, the L.L.C. set forth six counts alleging that: Daniel had taken possession of the truck, tractor, and accompanying accessories without tendering the $10,000.00 owed to the L.L.C. (Count I); Daniel "wrongfully converted to his own use" $18,964.04 from customers of the L.L.C. (Count II); Daniel wrongfully withdrew $3,889.44 from the L.L.C.'s checking account (Count III); after his withdrawal from the L.L.C., Daniel used the rental "end dump trailer" from mid-August 2008 through the end of September 2008 even though the L.L.C. had already paid rent on the trailer for that time period (Count IV); Daniel interfered with the "contract" between George's and the L.L.C. and, as a result, caused the L.L.C. to lose approximately $15,000.00 in profits (Count V); and Daniel wrongfully retained possession of the "wet kit" following his withdrawal from the L.L.C. (Count VI).
Daniel denied the allegations in his answer but at trial admitted that he owed the L.L.C. a total of $2,559.71, an amount which took into account the remaining outstanding accounts receivable, the L.L.C.'s liquid assets, and the purchase of the L.L.C.'s equipment.
Following a bench trial, the trial court entered judgment in favor of the L.L.C. and against Daniel in the amount of $20,587.45, which included $13,987.55 for the L.L.C.'s lost profits under Count V of its petition. The trial court specifically found in its judgment that "[Daniel], through his father, acting as [Daniel's] agent, did violate the terms of the August 25, 2008, letter agreement for the withdrawal of [Daniel] from the LLC, by interfering with [the L.L.C.'s] ongoing business relationship with George's of Arkansas [sic], to [the L.L.C.'s] damages [sic] in the amount of ... ($13,987.55)." This appeal timely followed.
Standard of Review
As this was a court-tried case, we will affirm the trial court's judgment "unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law." Mihlfeld & Assocs., Inc. v. Bishop & Bishop, L.L.C., 295 S.W.3d 163, 170 (Mo.App.2009).
Discussion
Daniel presents four points for our review; his first point, however, is dispositive. In his first point relied on, Daniel contends that
[t]he trial court erred in finding that [Daniel] materially breached an agreement with the [L.L.C.] by interfering with an ongoing business relationship with George's because the trial court improperly construed the contract provisions between [Daniel] and [the L.L.C.] and erroneously applied the law of contracts by giving effect to its erroneous interpretation in that the trial court construed the agreement between [Daniel] and [the L.L.C.] to restrict [Daniel] from interfering with a business relationship when the agreement between [Daniel] and [the L.L.C.] restricted interference with `contracts' only.
Daniel's argument on this point initially focuses on the L.L.C.'s contention in its petition and at trial that the arrangement between the L.L.C. and George's was a "contract," the interference with which by Daniel was prohibited by the letter agreement's *467 express prohibition as to "contracts." The L.L.C.'s abandonment of that position on appeal and its adoption of the trial court's characterization of that arrangement as a "business relationship" rather than a contract, however, has shifted the resolution of this point to Daniel's secondary argument that the phrase "C & W Spreaders LLC business," as used in the letter agreement creates an ambiguity in the letter agreement that should be construed against the L.L.C. and in his favor.
"The question of whether a contract is ambiguous and the interpretation of the contract itself are issues of law[.]" Executive Bd. of Mo. Baptist Convention v. Carnahan, 170 S.W.3d 437, 447 (Mo.App. 2005); see also Royal Banks of Missouri v. Fridkin, 819 S.W.2d 359, 361 (Mo. banc 1991). We review issues of law de novo. Pierce v. BSC, Inc., 207 S.W.3d 619, 621 (Mo. banc 2006). We must thus examine, de novo, the withdrawal agreement to determine what, exactly, the parties agreed to with regard to Daniel's actions following his withdrawal from the L.L.C.
Interpreting a contract requires that "[t]he plain, ordinary, and usual meaning of a contract's words are used, and the whole document is considered." Jackson County v. McClain Enters., Inc., 190 S.W.3d 633, 640 (Mo.App.2006). "A contract is ambiguous only if its terms are susceptible of more than one meaning so that reasonable men may fairly and honestly differ in their construction of the terms." Helterbrand v. Five Star Mobile Home Sales, Inc., 48 S.W.3d 649, 658 (Mo. App.2001). Any ambiguity "must appear from the four corners of the contract[;] extrinsic evidence cannot be used to create an ambiguity[,]" Erwin v. City of Palmyra, 119 S.W.3d 582, 585 (Mo.App.2003), and any ambiguity will be construed against the drafter of the contract. Triarch Indus., Inc. v. Crabtree, 158 S.W.3d 772, 776 (Mo. banc 2005).
While alleging in its petition and arguing at trial that the L.L.C.'s arrangement with George's was a contract, the L.L.C. now abandons that position and concedes on appeal in its responding brief that it was not a contract. Thus, according to the L.L.C., the only issue before us "is whether this arrangement is `business' of [the L.L.C.'s] that [Daniel] interfered with by doing business on his own with George's after he severed his ties with [the L.L.C.]." The relevant sentence of the letter agreement reads, "I further agree not to interfere with C & W Spreaders LLC business or any contracts they currently hold (verbal or in writing) or in any way act as doing business as C & W Spreaders, or C & W Spreaders LLC etc." (Emphasis added).
In order to support its findings on this issue in its judgment, the trial court implicitly concluded as a matter of law that the term "business" as used in this sentence is broad enough to include Daniel's interference with others who are in a "business relationship" with the L.L.C. The L.L.C. assumes such a meaning in its argument on this point, spending the majority of this section in its responding brief discussing why the arrangement with George's, even though not a contract, constituted a business relationship. While this is a reasonable construction of the meaning of "business" as used by the parties in their letter agreement, it is not the only reasonable construction.
The word "business" has a variety of meanings, two of which apply in the context of the letter agreement. On the one hand, "business" can mean "the purchase and sale of goods in an attempt to make a profit." RANDOM HOUSE DICTIONARY 283 (2d ed.1987). Such a definition includes the interaction between the L.L.C. *468 and others in the purchase and sale of goods and, thus, encompasses the trial court's broad interpretation as prohibiting Daniel from interfering with the business relationships of the L.L.C. On the other hand, however, "business" can also mean "a person, partnership, or corporation engaged in commerce, manufacturing, or a service[.]" Id. Thus, "business" can also more narrowly mean the L.L.C.'s engagement in commerce, which by definition includes the L.L.C.'s actions but not the actions of others who may be in a business relationship with the L.L.C. This meaning logically falls within the scope of the letter agreement as a reasonable interpretation of "business" with which Daniel was not to interfere. It does not, however, support the trial court's broad inclusion of business relationships within that prohibition.
The reasonableness of the narrower meaning of "business" is illustrated by Daniel's testimony. When asked what he believed he was promising when he signed the withdrawal letter, Daniel stated, "I was not to interfere with C & W, as far as business, and I didn't." Daniel's statement indicates that he perceived the withdrawal agreement as prohibiting his interference with the engagement of the L.L.C. in commerce, not as prohibiting his interference with any "business relationships" the L.L.C. might have had with others. Given the narrower dictionary definition of "business" supporting that view, we cannot say that Daniel's perception is an unreasonable construction of the letter agreement's reference to "C & W Spreaders LLC business."
While we are required to construe the letter agreement considering only the language actually used by the parties, it is interesting to note, and the ambiguity is highlighted by the fact that, the drafter could have differentiated between these two meanings with just a slight change in wording depending upon his intent. For instance, if the drafter intended the broader meaning he could have used the possessive so that the letter agreement read "I further agree not to interfere with C & W Spreaders LLC's business[.]" Similarly, if the drafter intended the narrower meaning he could have inserted the article "the" so that it read, "I further agree not to interfere with the C & W Spreaders LLC business[.]"
Reading only from the four corners of the letter agreement, however, this Court finds it impossible to discern which meaning of the word "business" the parties intended to employ, as reasonable men could fairly and honestly differ in their construction of the "business" with which Daniel was not to interfere. See Helterbrand, 48 S.W.3d at 658. Therefore, the term "business" as used in the context of the letter agreement creates an ambiguity that must be resolved.
As stated supra, any ambiguity must be construed against the drafter of the contract at issue, Triarch Industries, Inc., 158 S.W.3d at 776; in this case, Cary admitted that he drafted the withdrawal agreement on behalf of the L.L.C. We must therefore construe the term "business" against the L.L.C., rejecting the trial court's broad interpretation of that term and accepting the narrower meaning of "business" that does not include business relationships.
Construing the ambiguity in the letter agreement against the L.L.C. and in Daniel's favor means that even if Daniel continued to do business with George's after he withdrew from the L.L.C. or Daniel's agent contacted and urged George's to discontinue selling to the L.L.C., such actions were not prohibited by the letter agreement and, thus, did not constitute a breach of contract. Daniel's first point is granted.
*469 Decision
That part of the trial court's judgment against Daniel awarding the L.L.C. damages in the amount of $13,987.55 for lost profits under Count V of the L.L.C.'s petition is reversed. In all other respects, the trial court's judgment is affirmed.
BARNEY, P.J., and BURRELL, J., concur.
NOTES
[1] All rule references are to Missouri Court Rules (2010).
[2] Due to shared last names, for clarity we may sometimes refer to individuals by their first names. No familiarity or disrespect is intended.
[3] Originally, the L.L.C. was named "C & W Spreaders, L.L.C.," but the name was later changed to remove the ampersand.
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111 B.R. 836 (1990)
In re Thomas R. CALDWELL and Marianne Caldwell dba Caldwell Goodyear Service, Debtors.
SANWA BANK CALIFORNIA, a California corporation, Plaintiff,
v.
Thomas R. CALDWELL and Marianne Caldwell dba Caldwell Goodyear Service and the State Board of Equalization, Defendants.
Bankruptcy No. SA 88-06853 JR, Adv. No. SA 89-0518 JR.
United States Bankruptcy Court, C.D. California.
February 16, 1990.
Carol H. Rehm, Jr., Deputy Atty. Gen., Los Angeles, Cal., for the State Bd. of Equalization.
Alban P. Silva, Irvine, Cal., for debtors.
JOHN E. RYAN, Bankruptcy Judge.
Plaintiff Sanwa Bank of California (the "Bank") initiated this adversary proceeding when faced with the conflicting claims of debtors and the State Board of Equalization (the "Board") as to funds in an account at the Bank in the name of debtors (the "Account"). In its complaint, the Bank interplead the funds in the Account (the "Funds") and sought declaratory relief to determine who had the superior claim to the Funds. The Bank, by stipulation of the parties, deposited the Funds with the Registry of the Court and was discharged from any further liability. Faced with the task of resolving these competing claims, I took the matter under submission on November 22, 1989.
JURISDICTION
This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. § 1334(a) (the district courts shall have original and exclusive jurisdiction of all cases under Title 11), 28 U.S.C. § 157(a) (authorizing the district courts to refer all Title 11 cases and proceedings to the bankruptcy judges for the district) and General Order No. 266, dated October 9, 1984 (referring all Title 11 cases and proceedings to the bankruptcy judges for the Central District of California. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A).
STATEMENT OF FACTS
The Funds amount to $7,481.74. The Board claims that debtors owe sales and use taxes including interest and penalties for January 1, 1978 through June 30, 1986 totaling approximately $826,426. In order to facilitate the resolution of this matter, debtors and the Board stipulated to the following facts:
1. At all relevant times debtors were indebted to the State of California for delinquent sales and use taxes in an amount in excess of the amount of the Funds.
2. On April 9, 1987, the Board issued to debtors a jeopardy determination of taxes to be collected and paid to California.
*837 3. On April 10, 1987, the Board filed a Notice of State Tax Lien against debtors' personal property with the Secretary of State for California.
4. On April 14, 1987, the Board filed a Notice of State Tax Lien against the debtors' real property with the Recorder for Orange County, California.
5. On November 7, 1988, the Board served its Notice of Levy upon the Bank.
6. On November 17, 1988, debtors filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code.
7. On August 25, 1989, this court entered an order directing the Bank to deposit the Funds into the Registry of the Court.
DISCUSSION
Debtors argue that the automatic stay provision of 11 U.S.C. § 362 controls the outcome of this case. Section 362 provides in pertinent part that all entities are stayed from pursuing any action against a debtor "[T]hat was or could have been commenced before the commencement of the case. . . ." This provision applies, however, only to proceedings taken "[A]gainst the debtor or against property of the estate. . . ." Section 362 has no application to property that debtors ceased to have an interest in prior to the filing of the bankruptcy petition.
The issue before me is whether the service of the Notice of Levy caused debtors' right, title and interest to the Funds to transfer to the Board.
Section 541(a)(1) of the Bankruptcy Code defines in part the "estate" as "all legal or equitable interests of the debtor in property as of the commencement of the case." The scope of this provision is very broad. It includes all kinds of property, including tangible or intangible property and various causes of action. United States v. Whiting Pools, Inc., 462 U.S. 198, 205 n. 9, 103 S.Ct. 2309, 2313 n. 9, 76 L.Ed.2d 515 (1983); 4 Collier on Bankruptcy ¶ 541.01 at 541-5 (15th ed. 1988).
To determine the boundaries of these "interests", it is necessary to look to nonbankruptcy law. As Collier's states:
[T]he existence and nature of a debtor's interest in property, and of his debts, are determined by nonbankruptcy law. Neither the Code nor the Bankruptcy Act provides any rules for determining whether the debtor has an interest in property or whether he owes a debt. Determination of these issues, therefore, requires resort to nonbankruptcy law.
4 Collier on Bankruptcy ¶ 541.02, at XXX-XX-XX (15th ed. 1988). In discussing § 541(a)(1), the Ninth Circuit in In re Farmers Market, Inc., 792 F.2d 1400 (9th Cir.1986), supports this view stating: "That provision merely defines what interests of the debtor are transferred to the estate. It does not address the threshold questions of the existence and scope of the debtor's interest in a given asset. Under both the Act and the Code, we resolve these questions by reference to nonbankruptcy law." Id. at 1402. In determining, therefore, whether the Funds are part of the estate, I must look to California law.
California Revenue and Taxation Code § 6757(a) provides:
If any person fails to pay any amount imposed under this part [sales and use taxes] at the time it becomes due and payable, the amount thereof, including penalties and interest, together with any costs in addition thereto, shall thereupon be a perfected and enforceable state tax lien. . . .
Section 6757 also states that these amounts become "due and payable" when the notice of the Board's finding, in the form of a jeopardy assessment, is mailed or issued. The stipulated facts clearly show that debtors were issued a jeopardy assessment on April 9, 1987. Accordingly, under state statutory law, the Board obtained a perfected and enforceable state tax lien as of April 9, 1987.
Although debtors' failure to pay the sales and use taxes created a perfected and enforceable lien, debtors still owned the Funds subject to the Board's interest. As the Supreme Court held in Whiting, there is no requirement that a debtor hold a possessory interest in the property at the commencement of the reorganization. 462 *838 U.S. at 206, 103 S.Ct. at 2314. Debtors, therefore, retained an interest in the Funds even though the Funds were held by the Bank and the Board had a lien for unpaid taxes. Debtors' interest in the Funds would only terminate if ownership of the Funds transferred to the Board before commencement of the case. Id. at 209, 103 S.Ct. at 2315.
Before the bankruptcy filing, the Board issued its Notice of Levy pursuant to California Revenue and Taxation Code § 6703. Section 6703 provides:
[T]he board may by notice of levy, served personally or by first-class mail require all persons having in their possession, or under their control, any credits or other personal property belonging to a retailer or other person liable for any amount under this part to withhold from such credits or other personal property the amount of any tax, interest, or penalties due from such retailer or other person or the amount of any liability incurred by them under this part, and to transmit the amount withheld to the board at such times as it may designate. The notice of levy shall have the same effect as a levy pursuant to a writ of execution.
Section 6703 was amended on January 1, 1988 to provide that a notice of levy is equivalent to a levy. A levy transfers ownership in property.[1] This usually takes place when a law enforcement officer seizes the property. Under § 6703, the Bank in effect becomes the executing officer for the benefit of California. See Del Riccio v. Superior Court, 115 Cal.App.2d 29, 30, 251 P.2d 678 (1952).[2]
In conclusion, the Board issued a jeopardy determination on April 9, 1987. Under § 6757, the Board perfected its lien. On November 7, 1988, the Board served its Notice of Levy on the Bank in accordance with § 6703. This resulted in a levy extinguishing debtors' property interest in the Funds. In other words, the Notice of Levy transferred ownership of the Funds from debtors to the Board. Accordingly, when debtors filed their bankruptcy petition on November 17, 1988, debtors had no interest in the Funds. The Funds, therefore, never became part of the bankruptcy estate subject to the automatic stay provisions of § 362.
Accordingly, the Funds shall be paid to the Board plus any accrued interest less appropriate court fees.
*839 Separate findings of fact and conclusions of law with respect to this ruling are unnecessary. This memorandum opinion shall constitute my findings of fact and conclusions of law.
NOTES
[1] There are two cases which have dealt with these issues. In In re Paul, 85 B.R. 850 (Bankr. E.D.Cal.1988), a debtor owed the Board $13,000 for unpaid taxes. The Board served notices of levy on two banks pursuant to § 6703. Two days after service of these notices, the debtor filed bankruptcy under Chapter 13. The debtors sought turnover of the funds held by the bank.
Even though the amendment providing that a notice of levy is equivalent to a levy was not in effect, the court concluded that funds in the accounts were not property of the estate. Rather, the court found that "the notice of levy served upon the two banks prior to the filing of the debtors' Chapter 13 petition transferred ownership of the funds to the Board." Id. at 853.
In In re Cross Electric Co., Inc. v. United States, 664 F.2d 1218 (4th Cir.1981), the Fourth Circuit, while examining Federal law, addressed the question whether a tax levy divests the debtor of ownership rights. In Cross, the Internal Revenue Service (the "IRS") filed liens against the debtor for unpaid FICA taxes. The debtor owed the IRS approximately $40,000. The debtor, in turn, was owed approximately $5,000 by a construction company for work he performed as a subcontractor. The IRS levied upon the account receivable requiring the general contractor to pay the IRS instead of debtor. About one month after the notice of levy was filed, the debtor filed a Chapter 11 petition.
The issue before the Cross court was whether the IRS notice of levy on the account receivable effected a levy so that the funds never became property of the estate within the meaning of § 541. Id. at 1219. The court concluded that the "[L]evy operated as `virtually a transfer to the government of the indebtedness'". Id. at 1220.
[2] In contrast to other sections of the California Revenue and Taxation Code, a debtor has no right to redemption under § 6703. Redemptive rights normally allow a debtor to pay the taxes and retain the property. Without the right of redemption, a levy under § 6703 terminates any and all interests a debtor may have in the property. California Civil Procedure Code § 700.140(c) lends further support to this view. It provides that once a levy on an account occurs, the bank cannot honor any checks or requests for the withdrawal of money from the account. This prohibition extends to all amounts on deposit in the bank at the time of execution.
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516 F.3d 357 (2008)
UNITED STATES of America, Plaintiff-Appellee,
v.
Juan GONZALEZ-TERRAZAS, also known as Juan Gonzalez-Derasas, Defendant-Appellant.
No. 07-50375.
United States Court of Appeals, Fifth Circuit.
February 1, 2008.
*358 *359 Joseph H. Gay, Jr., Asst. U.S. Atty., Mara A. Blatt, San Antonio, TX, for U.S.
M. Carolyn Fuentes, Henry Joseph Bemporad, Fed. Pub. Def., San Antonio, TX, for Defendant-Appellant.
Before GARZA, STEWART and OWEN, Circuit Judges.
EMILIO M. GARZA, Circuit Judge;
The defendant Juan Gonzalez-Terrazas appeals his sentence of 57 months imprisonment based on his guilty-plea conviction for unlawful reentry of an alien after removal in violation of 8 U.S.C. § 1326. Gonzalez argues that the district court committed plain error in applying a 16-level sentencing enhancement pursuant to United States Sentencing Guidelines (U.S.S.G.) § 2L1.2(b)(1)(A)(ii) for Gonzalez's alleged commission of a "crime of violence" based on his prior conviction under California law for residential burglary, CAL.PENAL CODE § 459 (West 1999). For the following reasons, we VACATE the sentence and REMAND for RESENTENCING.[1]
Gonzalez was removed from the United States in February 2005. In 2006, he was found in El Paso, Texas. He did not have permission to reenter the United States. Gonzalez was charged with and pleaded guilty to one count of illegal reentry following removal in violation of 8 U.S.C. § 1326. Prior to his removal, Gonzalez *360 was convicted of residential burglary in violation of California Penal Code § 459. Because of that conviction, Gonzalez's presentence report (PSR) recommended a 16-level crime-of-violence enhancement under U.S.S.G. § 2L1.2(b)(1)(A). This enhancement resulted in a guideline range of 57 months to 71 months imprisonment. The district court adopted the recommendation and sentenced Gonzalez to 57 months imprisonment. Gonzalez appeals.
Gonzalez argues that the district court plainly erred in applying the 16-level enhancement because, under this court's decision in United States v. Ortega-Gonzaga, 490 F.3d 393 (5th Cir.2007), a conviction under California Penal Code § 459 for residential burglary does not constitute a crime of violence for the purposes of U.S.S.G. § 2L1.2(b)(1)(A).
We review the district court's application and interpretation of the sentencing guidelines de novo and its factual findings for clear error. United States v. Juarez Duarte, ___ F.3d ___, 2008 WL 54791, at *3 (5th. Cir. Jan. 4, 2008); United States v. Villegas, 404 F.3d 355, 358 (5th Cir.2005). As Gonzalez concedes, because Gonzalez failed to object to the district court's imposition of the 16-level crime-of-violence enhancement, we review this issue for plain error. See United States v. Garza-Lopez, 410 F.3d 268, 272 (5th Cir.2005). Plain error occurs when; "(1) there was an error; (2) the error was clear and obvious; and (3) the error affected the defendant's substantial rights." Villegas, 404 F.3d at 358 (citing United States v. Olano, 507 U.S. 725, 732-37, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)). If each of these conditions is satisfied, we may exercise our discretion to correct the error only if "the error seriously affects the fairness, integrity, or public reputation of judicial proceedings." Garza-Lopez, 410 F.3d at 272 (internal quotation marks omitted).
Applying the plain error analysis, we must first determine whether there was an error. Section 2L1.2(b)(1)(A)(ii) provides for a 16-level sentencing enhancement for a defendant deported after committingamong other thingsa "crime of violence." The Application Notes to § 2L1.2 define "crime of violence" to include "burglary of a dwelling" or any felony that "has as an element the use, attempted use, or threatened use of physical force against the person of another." See Ortega-Gonzaga, 490 F.3d at 394. The only question here is whether Gonzalez's conviction under California law for residential burglary constituted the enumerated offense of "burglary of a dwelling" under the categorical approach. See id. Under this court's decision in Ortega-Gonzaga, it is clear that it did not.
In Ortega-Gonzaga, this court analyzed the California offense of residential burglary under California Penal Code § 459, applying the categorical approach, and concluded that it did not constitute the enumerated offense of burglary of a dwelling under U.S.S.G. § 2L1.2. Id. at 394-96. In answering the question, the court "look[ed] to the `generic, contemporary' meaning of burglary of a dwelling, employing a `common sense approach.'" Id. at 394 (quoting United States v. Santiesteban-Hernandez, 469 F.3d 376, 378-79 (5th Cir.2006)). The court reasoned that the California offense of residential burglary was not equivalent to the enumerated offense of burglary of a dwelling under U.S.S.G. § 2L1.2 because burglary of a dwelling, as defined in the guidelines, requires an unprivileged or unlawful entry, while the California offense simply requires proof of an entry, even a lawful entry. Id. at 395. As such, because the burglary offense under California Penal *361 Code § 459 is not the "burglary of a dwelling," and because the Government concedes that § 459 does not have as an element "the use, attempted use, or threatened use of physical force," a § 459 offense does not constitute a crime of violence.
Acknowledging this court's decision in Ortega-Gonzaga, the Government concedes that the burglary offense defined by California Penal Code § 459 does not constitute the enumerated offense of burglary under U.S.S.G. § 2L1.2 because, on its face, the California offense does not require that entry into the residence be without consent. Nonetheless, the Government argues that the criminal complaint against Gonzalez modified the "entry" element of § 459 by including an allegation that Gonzalez did "willfully and unlawfully enter an inhabited dwelling house. . . ." (emphasis added). According to the Government, the state complaint's allegation that Gonzalez willfully and unlawfully entered the dwelling narrowed his California conviction to activity within the definition of the enumerated offense of burglary under U.S.S.G. § 2L1.2. Therefore, the Government contends that Gonzalez's prior burglary conviction was in fact a crime of violence under § 2L1.2.
The Government's argument fails for two reasons. First, the Government has not demonstrated that this case falls within that "narrow range of cases" in which a district court may look beyond the elements of an offense to classify that offense for sentence enhancement purposes. This court uses a categorical approach to determine whether an offense qualifies as an enumerated offense for sentence enhancement purposes under § 2L1.2. See United States v. Mendoza-Sanchez, 456 F.3d 479, 482 (5th Cir.2006) (citing Taylor v. United States, 495 U.S. 575, 600-02, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990)); Garza-Lopez, 410 F.3d at 273. Using this approach, "a district court looks to the elements of a prior offense, rather than to the facts underlying the conviction, when classifying a prior offense for sentence enhancement purposes." Garza-Lopez, 410 F.3d at 273. However, in a "narrow range of cases" the district court may go beyond the elements of the offense to make this determination. Id. Specifically, "if the statute of conviction contains a series of disjunctive elements, this court may look to the indictment and, if necessary, the jury instructions, for the limited purpose of determining which of a series of disjunctive elements a defendant's conviction satisfies." Mendoza-Sanchez, 456 F.3d at 482 (citing United States v. Calderon-Pena, 383 F.3d 254, 257 (5th Cir.2004) (en banc)). We have referred to this latter approach, looking beyond the elements of the offense, as the "modified categorical approach." See, e.g., United States v. Castillo-Morales, 507 F.3d 873, 876 n. 2 (5th Cir.2007).
In Ortega-Gonzaga, this court noted that we use the "`modified categorical approach' only to determine of which subsection of a statute a defendant was convicted." 490 F.3d at 396 n. 5. Regarding the California burglary offense at issue in this case, the court noted that "[California Penal Code] § 459 has no subsection requiring 'unlawful entry.'" Id. In this way, the court in Ortega-Gonzaga recognized that the modified categorical approach, as applied by this circuit, does not apply to the "entry" element of California Penal Code § 459.[2]
*362 The Government attempts to dismiss the court's discussion of this point as dictum because the court went on to conclude that "Din any event, `unlawful' entry was not a part of Ortega's indictment or conviction." Id. The footnoted language, however, was not dictum; it was one of two alternative holdings, and each is binding. See United States v. Wright, 496 F.3d 371, 375 n. 10 (5th Cir.2007) ("[I]t's well-settled that alternative holdings are binding, they are not dicta.").
In light of Ortega-Gonzaga, the district court erred in applying the 16-evel crime-of-violence enhancement based on the defendant's prior conviction under California Penal Code § 459.
Second, even assuming that it were appropriate in this case to look beyond the elements of the state offense, the Government's argument that Gonzalez's California conviction for residential burglary constitutes a "crime of violence" under U.S.S.G. § 2L1.2 nonetheless fails. The Government bears the burden of establishing that this sentence enhancement applies. See United States v. Torres-Diaz, 438 F.3d 529, 535 (5th Cir.2006). The Government did not meet this burden.
The Government's argument that Gonzalez's California burglary conviction is equivalent to the generic offense of burglary of a dwelling is based on, what appears to be, the initial criminal complaint in the state case. The complaint was filed only four days after the alleged burglary occurred and contains a discovery request to defense counsel. Although the complaint accuses Gonzalez of "willfully and unlawfully" entering "an inhabited dwelling house" there is nothing in the record to suggest that Gonzalez pled guilty to this particular complaint or, more specifically, to the particular allegations in the complaint that went beyond the bare elements of the offense.
All the Government offers to establish Gonzalez's prior conviction for burglary is a California abstract of judgment. The abstract of judgment, however, is not even the abstract for Gonzalez's prior burglary conviction. Instead, it is an abstract of judgment for a probation revocation, which incidentally lists the prior burglary conviction. California abstracts of judgment are of questionable reliability. See United States v. Gutierrez-Ramirez, 405 F.3d 352, 359 (5th Cir.2005) ("[C]onsidering the low level of reliability associated with abstracts of judgment in California, we are satisfied they should not be added to the list of documents Shepard authorizes the sentencing judge to consult."). Although the abstract may be sufficient to establish the mere fact that there was a *363 prior burglary conviction, the abstract offers no clue as to the circumstances of the plea, such as to which document the defendant actually pleaded or to which facts related to the underlying offense the defendant admitted.
Because there is no evidence from which we can determine whether the defendant actually pleaded to "wilfully and unlawfully" entering the dwelling house, the Government failed to establish that Gonzalez was convicted of a burglary offense that satisfies the crime-of-violence definition in U.S.S.G. § 2L1.2. The district court's contrary finding was error.
Thus, the district court erred in applying the 16-level crime-of-violence enhancement.
Turning to the second prong of the plain error analysis, we must determine whether the error was clear and obvious. We conclude that this error was clear and obvious in light of our decision in Ortega-Gonzaga. Although Ortega-Gonzaga was decided after Gonzalez was sentenced, the error need only be plain at the time of appellate consideration. See Johnson v. United States, 520 U.S. 461, 468, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997); see also United States v. Martinez-Vega, 471 F.3d 559, 561 (5th Cir.2006) ("[T]he Supreme Court has made clear that we determine whether the error was plain at the time of appellate considerationnot at the time of trial.").
Finally, applying the last prong of the plain error analysis, we conclude that the error affected the defendant's substantial rights because there is "a reasonable probability that, but for the district court's misapplication of the Guidelines, [Gonzalez] would have received a lesser sentence." Garza-Lopez, 410 F.3d at 275. With the erroneous enhancement, Gonzalez faced a guideline range of 57 to 71 months imprisonment. Without the enhancement, Gonzalez faced a guideline range of 24 to 30 months. This significant disparity in guideline ranges based on the erroneous enhancement is sufficient to establish that Gonzalez's substantial rights were affected. See id. (substantial rights affected where the defendant received a seventy-seven month term of imprisonment, but absent plain error, the defendant's guideline range would have been at most thirty-three to forty-one months); Villegas, 404 F.3d at 364 ("In the absence of [the error], Villegas's sentencing range would have been reduced from between twenty-one and twenty-seven months to between ten and sixteen months. Because these two sentencing ranges do not overlap, the district court's error necessarily increased Villegas's sentence and thus affected his substantial rights."). Therefore, the district court's application of the 16-level crime-of-violence enhancement constitutes plain error.
In light of this substantial disparity, this plain error also affects the fairness of the judicial proceedings and warrants the exercise of our discretion to correct the error. See Garza-Lopez, 410 F.3d at 275 (concluding that the imposition of a sentence that was substantially greater than the guideline range affected the defendant's substantial rights "and the fairness of the judicial proceedings"). For these reasons, we VACATE Gonzalez's sentence and REMAND for RESENTENCING.
NOTES
[1] Gonzalez also challenges on appeal, as he did below, the constitutionality of § 1326(b)'s treatment of prior felony and aggravated felony convictions as sentencing factors. As Gonzalez properly concedes, this argument is foreclosed by Almendarez-Torres v. United States, 523 U.S. 224, 235, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998), and he raises the argument only to preserve it. See United States v. Ortega-Gonzaga, 490 F.3d 393, 394 n. 1 (5th Cir.2007). This argument is "fully foreclosed from further debate." United States v. Pineda-Arrellano, 492 F.3d 624, 625 (5th Cir. 2007).
[2] This court's decision in United States v. Murillo-Lopez, 444 F.3d 337 (5th Cir.2006), which neither party cites, is not to the contrary. There, the court applied the modified categorical approach to California Penal Code § 459, but only where the defendant "[did] not argue that the district court improperly considered the criminal complaint in determining whether his burglary conviction constituted a `crime of violence.'" Id. at 341. Because the defendant conceded that the modified categorical approach was appropriate in that case, the court was not confronted with the threshold question of whether to apply that approach. In addition, the court did not apply the categorical approach to the "entry" element of § 459, as the district court did here; instead, the court applied the approach to a different part of the statute, which' contained disjunctive elements, a part of the statute defining the various structures encompassed within the offense of burglary under § 459. Id. at 340, 344. This approach is consistent with the principle that when a statute refers to burglaries of several different types of structures, this court may look to charging papers to see which of the various statutory alternatives (structures) are involved in the particular case. See United States v. Torres-Diaz, 438 F.3d 529, 534 (5th Cir.2006). In any event, by failing to cite or mention Murillo-Lopez, the Government has abandoned any argument based on Murillo-Lopez that the rule in Ortega-Gonzaga somehow does not or should not apply. See Yohey v. Collins, 985 F.2d 222, 224-25 (5th Cir.1993) (issues and arguments not briefed adequately are waived).
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421 U.S. 200 (1975)
GURLEY, DBA GURLEY OIL CO.
v.
RHODEN, CHAIRMAN, TAX COMMISSION OF MISSISSIPPI.
No. 73-1734.
Supreme Court of United States.
Argued March 18, 1975.
Decided May 12, 1975.
CERTIORARI TO THE SUPREME COURT OF MISSISSIPPI.
*201 Charles R. Davis argued the cause for petitioner. With him on the briefs was Walter A. Armstrong, Jr.
Hunter M. Gholson argued the cause for respondent. With him on the brief was William G. Burgin, Jr.
MR. JUSTICE BRENNAN delivered the opinion of the Court.
Mississippi imposes a 5% sales tax upon the "gross proceeds of the retail sales" of tangible personal property, including gasoline. Miss. Code Ann. § 27-65-17 (Supp. 1974).[1] Petitioner operates as a sole proprietorship from West Memphis, Ark. He owns and operates five gasoline service stations in Mississippi and also sells gasoline at four other stations in Mississippi on a consignment basis. He purchases his gasoline tax free *202 from sources in Tennessee and Arkansas. He transports the gasoline to his Mississippi stations in his own trucks. He holds a Mississippi distributor's permit and is also federally licensed because he is a "producer" within the meaning of the Internal Revenue Code as one who sells gasoline bought tax free from other "producers."[2] He adds to his pump prices the amount of a Mississippi gasoline excise tax, now nine cents per gallon, Miss. Code Ann. § 27-55-11 (Supp. 1974), and a federal gasoline excise tax of four cents per gallon, 26 U. S. C. § 4081 (a).[3] The State computes his gross proceeds of retail sales "without any deduction for . . . taxes of any kind . . . ." Miss. Code Ann. § 27-65-3 (h) (Supp. 1974).[4] Petitioner contends that the denial of a deduction *203 of the amount of the excise taxes added to his pump prices in the computation of his "gross proceeds of the retail sales" of gasoline, and the resultant application of the 5% sales tax to so much of his pump prices as reflects the amount of the taxes, are unconstitutional. He therefore paid the sales taxes to that extent under protest, and sued for a refund in Mississippi Chancery Court, Hinds County. Respondent cross-claimed for unpaid sales taxes accruing after the filing of the suit.[5] After trial, the Chancery Court dismissed petitioner's suit and entered judgment for respondent on the cross-claim. The Supreme Court of Mississippi affirmed. 288 So. 2d 868. We granted certiorari, 419 U. S. 1018 (1974). We affirm.
I
Petitioner's principal argument is that he acts as a mere collector of the taxes for the two governments because the legal incidence of both excise taxes is upon the purchaser-consumer. Upon that premise, he argues: "Consequently, to impose the Mississippi sales tax upon amounts so received by [petitioner] would be to tax him upon gross receipts which are not his gross receipts, but rather the gross receipts of [the two governments]. This would not only violate the fundamental conception of right and justice, but it would be taking [petitioner's] property without due process of the Fourteenth Amendment. . . ." Brief for Petitioner 37. He cites in support the statement in Hoeper v. Tax Comm'n, 284 U. S. 206, 215 (1931), that "any attempt by a state to measure the tax on one person's property or income by reference to the property or income of another is contrary to due process of law as guaranteed by the Fourteenth Amendment."
*204 Also, petitioner advances an alternative argument limited to the denial of the deduction of the amount of the federal excise tax. He contends that the denial results to that extent in "a state tax on . . . monies held in trust by [petitioner] as agent for the United States [and] is, in essence, a tax upon the United States . . . [that] . . . is clearly unconstitutional" as violating the constitutional immunity of the United States and its property from taxation by the States. M`Culloch v. Maryland, 4 Wheat. 316 (1819). Brief for Petitioner 48.
Petitioner's arguments can prevail, as he apparently concedes, only if the legal incidence of the excise taxes is not upon petitioner, but upon the purchaser-consumer. Our task therefore is to determine upon whom the legal incidence of each tax rests.
II
The economic burden of taxes incident to the sale of merchandise is traditionally passed on to the purchasers of the merchandise. Therefore, the decision as to where the legal incidence of either tax falls is not determined by the fact that petitioner, by increasing his pump prices in the amounts of the taxes, shifted the economic burden of the taxes from himself to the purchaser-consumer. The Court has laid to rest doubts on that score raised by such decisions as Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218 (1928); Indian Motorcycle Co. v. United States, 283 U. S. 570 (1931); and Kern-Limerick, Inc. v. Scurlock, 347 U. S. 110 (1954), at least under taxing schemes, as here, where neither statute required petitioner to pass the tax on to the purchaser-consumer. See Alabama v. King & Boozer, 314 U. S. 1 (1941); Lash's Products Co. v. United States, 278 U. S. 175 (1929); Wheeler Lumber Co. v. United States, 281 U. S. 572 (1930); First *205 Agricultural Nat. Bank v. Tax Comm'n, 392 U. S. 339 (1968); American Oil Co. v. Neill, 380 U. S. 451 (1965).
A majority of courts that have considered the question have held, in agreement with the Mississippi Supreme Court in this case, that the legal incidence of the federal excise tax is upon the statutory "producer" such as petitioner and not upon his purchaser-consumer. Martin Oil Service, Inc. v. Department of Revenue, 49 Ill. 2d 260, 273 N. E. 2d 823 (1971); People v. Werner, 364 Ill. 594, 5 N. E. 2d 238 (1936); Sun Oil Co. v. Gross Income Tax Division, 238 Ind. 111, 149 N. E. 2d 115 (1958); State v. Thoni Oil Magic Benzol Gas Stations, Inc., 121 Ga. App. 454, 174 S. E. 2d 224, aff'd, 226 Ga. 883, 178 S. E. 2d 173 (1970). Contra, see Tax Review Board v. Esso Standard Division, 424 Pa. 355, 227 A. 2d 657 (1967); cf. Standard Oil Co. v. State, 283 Mich. 85, 276 N. W. 908 (1937); Standard Oil Co. v. State Tax Comm'r, 71 N. D. 146, 299 N. W. 447 (1941). Our independent examination of the federal statute and its legislative history persuades us also that the legal incidence of the federal tax falls upon the statutory "producer" such as petitioner.
The wording of the federal statute plainly places the incidence of the tax upon the "producer", that is, by definition, upon federally licensed distributors of gasoline such as petitioner. Section 4082 (a) provides that "[a]ny person to whom gasoline is sold tax-free . . . shall be considered the producer of such gasoline," and § 4081 (a) expressly imposes the tax "on gasoline sold by the producer . . . ." (Emphasis added.) The congressional purpose to lay the tax on the "producer" and only upon the "producer" could not be more plainly revealed. Persuasive also that such was Congress' purpose is the fact that, if the producer does not pay the tax, the Government cannot collect it from his vendees; the statute has *206 no provision making the vendee liable for its payment.[6]First Agricultural Nat. Bank v. Tax Comm'n, supra, at 347.
It is true that the purchaser-consumer who buys gasoline for use on his farm, 26 U. S. C. § 6420 (a), or for other nonhighway purposes, § 6421 (a), or for a local transit system, § 6421 (b), can recover payment of all or part of the amount of the tax passed on by the "producer." But this is not proof that Congress laid the tax upon the purchaser-consumer. Rather, since the proceeds of this tax go not into the general treasury, but into a special fund used to defray the cost of the federal highway system, S. Rep. No. 367, 87th Cong., 1st Sess. (1961), the refunds authorized simply reflect a congressional determination that, because the economic burden of such taxes is traditionally passed on to the purchaser-consumer in the form of increased pump prices, farmers and other off-highway users should be relieved of the economic burden of the cost of the highway program, and that the cost should be borne entirely by motorists who use gasoline to drive on the highways. Martin Oil Service, Inc. v. Department of Revenue, supra, at 265, 273 N. E. 2d, at 827.
Petitioner cites references by President Johnson to the tax as a "user tax" as proving that it is not and never was intended that the tax be imposed upon the "producer," but rather upon the purchaser-consumer. *207 President Johnson's message to Congress of May 17, 1965, on the subject of reform of the excise tax structure stated that such "reform . . . will . . . leave . . . excises on alcoholic beverages, tobacco, gasoline, tires, trucks, air transportation (and a few other user-charge and special excises) . . . ." H. R. Doc. No. 173, 89th Cong., 1st Sess., 3 (1965). (Emphasis added.) Petitioner relies also on the report of the House Committee on Ways and Means accompanying H. R. 8371, H. R. Rep. No. 433, 89th Cong., 1st Sess., 12-13 (1965). It states: "Taxes such as those on gasoline . . . are user taxes. . . . A tax on gasoline taxes users of the highways in rough proportion to their use of the service." (Emphasis added.) These references obviously were not made in the context of consideration of the legal incidence of the gasoline tax but merely as recognition that the reality is that users bear the economic burden of the tax. These references were rejected in Martin Oil Service, Inc., supra, by the Illinois Supreme Court as irrelevant to the question whether the tax must be considered as one whose incidence rests on the purchaser-consumer. We agree with, and adopt, that court's analysis:
"We consider the references to the tax as a `user tax' were not intended to be descriptive of the legal incidence of the gasoline tax. It is not disputed that the ultimate economic burden of the tax rests upon the purchaser-consumer. A practical nontechnical description of the tax as a `user tax' is explainable, consistently with the legal incidence of the tax being on the producer. The economic burden of the tax has no relevance to the issue before us." 49 Ill. 2d, at 264, 273 N. E. 2d, at 826.
We therefore hold that the Mississippi Supreme Court, which relied upon Martin Oil Service, Inc., see 288 So. 2d, at 873, properly concluded that the federal excise tax is *208 imposed solely on statutory "producers" such as petitioner and not on the purchaser.
III
The Mississippi Supreme Court held that the legal incidence of the Mississippi excise tax also falls upon petitioner. It is true of course that this Court is the final judicial arbiter of the question where the legal incidence of the federal excise tax falls. But a State's highest court is the final judicial arbiter of the meaning of state statutes, Alabama v. King & Boozer, 314 U. S., at 9-10, and therefore our review of the holding of a state court respecting the legal incidence of a state excise tax is guided by the following: "When a state court has made its own definitive determination as to the operating incidence, our task is simplified. We give this finding great weight in determining the natural effect of a statute, and if it is consistent with the statute's reasonable interpretation it will be deemed conclusive." American Oil Co. v. Neill, 380 U. S., at 455-456.
This is manifestly a case in which the holding of the Mississippi Supreme Court that the legal incidence of the state excise tax falls upon petitioner should be "deemed conclusive." Mississippi Code Ann. § 27-55-11 (Supp. 1974), provides that the tax "attaches on the distributor or other person for each gallon of gasoline brought into the state . . ." in the case of distribution of gasoline by distributors, such as petitioner, who bring gasoline into Mississippi "by means other than through a common carrier." The Mississippi Supreme Court relied primarily upon this provision in reaching its conclusion, and we cannot say that its conclusion is not "consistent with the statute's reasonable interpretation."
Our determination is buttressed by the holding of a three-judge District Court in United States v. Sharp, 302 *209 F. Supp. 668 (SD Miss. 1969). The United States sought a declaratory judgment that the Mississippi tax was invalid with respect to gasoline purchased by the Federal Government, its agencies, and personnel when used on Mississippi highways on Government business. The three-judge court held that the legal incidence of the state tax was upon the distributor-vendor and not upon the purchaser United States, and dismissed the action. The court stated:
"We do not quarrel with the contention that a statute's practical operation and effect determines where the legal incidence of the tax falls. We simply agree that the tax burden in the Mississippi statute falls plainly and squarely on the distributor to whom the state looks for the payment of the tax, albeit the amount of the tax may ultimately be borne by the vendee, in this case the federal government." Id., at 671.
Petitioner argues, however, that the decision of the Mississippi Supreme Court is foreclosed by this Court's decision in Panhandle Oil Co. v. Knox, 277 U. S. 218 (1928). The argument is without merit. In that case Mississippi sued Panhandle Oil Co. to recover gasoline excise taxes imposed by Chapter 116 of the 1922 Laws of Mississippi, as amended, a predecessor to the present Miss. Code Ann. § 27-55-11. The taxes claimed were on account of sales made by Panhandle to the United States for the use of its Coast Guard Fleet in service in the Gulf of Mexico, and of its Veterans' Hospital at Gulfport, Miss. The Court, over the dissents of Justices Holmes, Brandeis, Stone, and McReynolds, held that the tax as applied was invalid as a tax upon the means used by the United States for governmental purposes. The dissenters' view was that it was not a tax upon means used by the United States, but that Panhandle merely *210 shifted the economic burden of the tax to its vendees by adding it to the price of the gasoline.
The Court's Panhandle opinion did not focus upon whether the Mississippi statute laid the legal incidence of the tax upon the distributor. Rather, the rationale was that the tax was bad because, if laid upon distributors, the distributors were able to shift its burden to the purchaser. The Court has since expressly abandoned that view, and has accepted the analysis of the dissent. In Alabama v. King & Boozer, 314 U. S., at 9, the Court held: "So far as a different view has prevailed, see Panhandle Oil Co. v. Knox . . . , we think it no longer tenable."
IV
Finally, petitioner argues that even if the legal incidence of the two taxes is on him rather than on the consumer, the provision of § 27-65-17 denying the deduction of the taxes in the computation of his "gross proceeds of . . . retail sales" is invalid for two reasons.
First, he argues: "Since [petitioner] sells only to the ultimate consumer, the excise tax attaches simultaneously with the sale and with the sales tax; therefore, there can be no sales tax upon the excise tax." Brief for Petitioner 47. In other words, his argument is that the liability for the excise taxes, state and federal, and the liability for the sales tax arise simultaneously, and in that circumstance, one should not be included in computing the other. We read the opinion of the Mississippi Supreme Court to reject this argument and to hold that the taxes fall on the "producer at a time prior to the point of retail sale or other consumer transaction. . . ." 288 So. 2d, at 870. That interpretation of the Mississippi statutes is, of course, binding on us as respects the state excise tax; indeed, the interpretation is not merely "reasonable," but seems obvious in light of the express provision of *211 § 27-55-11 that in cases of distributors, like petitioner, bringing gasoline into Mississippi in their own trucks the tax "attaches . . . at the time when and at the point where such gasoline is brought into the state." Further, we agree with the Mississippi court that the federal tax also attaches prior to the point of the retail sale. However, even if the liability for the excise taxes did arise simultaneously with the sales tax, we cannot see any legal distinction, constitutional or otherwise, arising from that circumstance. The Illinois Supreme Court also addressed this contention when made in Martin Oil Service, Inc., supra, as to the federal excise tax, and rejected it for the following reasons, with which we agree.
"The legal incidence of the Federal gasoline tax is on the producer, who is under no legal duty to pass the burden of the tax on to the consumer. If he does pass on the burden of the tax it is simply done by charging the consumer a higher price. This higher price is the result of the added cost, because of the burden of the Federal tax, to the producer in selling his gasoline. It is no different from other costs he incurs in bringing his product to market, including the costs of raw material, its processing and its delivery. All these costs are includable in his `gross receipts' or the `consideration' he receives for his gasoline. No reason has been given . . . why the cost of the gasoline tax should be regarded differently from the other costs of the producer-retailer and we perceive none." 49 Ill. 2d, at 268, 273 N. E. 2d, at 828.
Second, petitioner argues that "since other independent oil dealers in those states which do not include the federal excise tax as a part of the sales tax base would not be forced to pay such tax [e. g., Pennsylvania, see Tax Review Board v. Esso Standard, supra], then the arbitrary *212 imposition of such tax upon [petitioner] and those other independent oil dealers in his class (who have to pay a sales tax on federal excise tax) would deprive [petitioner] of the Fourteenth Amendment's guarantee to equal protection of the laws." Brief for Petitioner 21. The contention is patently frivolous. The prohibition of the Equal Protection Clause is against denial by the State, here Mississippi, as between taxpayers subject to its laws. Petitioner makes no claim of unconstitutional discrimination by Mississippi in the application of its sales tax Act to taxpayers subject to that tax.
Affirmed.
MR. JUSTICE DOUGLAS took no part in the consideration or decision of this case.
NOTES
[1] Section 27-65-17 provides in pertinent part:
"Upon every person engaging or continuing within this state in the business of selling any tangible personal property whatsoever, there is hereby levied, assessed and shall be collected a tax equal to five percent (5%) of the gross proceeds of the retail sales of the business, except as otherwise provided herein. . . ."
[2] 26 U. S. C. § 4082 (a), n. 3, infra.
[3] Mississippi Code Ann. § 27-55-11 provides:
"Any person in business as a distributor of gasoline . . . shall pay for the privilege of engaging in such business . . . an excise tax equal to [specified] cents per gallon on all gasoline . . . sold . . . in this state for sale [or] use on the highways . . . .
.....
"With respect to distributors . . . who bring . . . into this state gasoline by means other than through a common carrier, the tax accrues and the tax liability attaches on the distributor . . . at the time when and at the point where such gasoline is brought into the state."
Title 26 U. S. C. § 4081 (a) provides:
"In general. There is hereby imposed on gasoline sold by the producer or importer thereof, or by any producer of gasoline, a tax of 4 cents a gallon."
Title 26 U. S. C. § 4082 (a) provides in pertinent part:
"Producer. . . . Any person to whom gasoline is sold tax-free under this subpart shall be considered the producer of such gasoline."
[4] Section 27-65-3 (h) provides in pertinent part:
" `Gross proceeds of sales' means the value proceeding or accruing from the full sale price of tangible personal property . . . without any deduction for . . . taxes of any kind except those expressly exempt . . . ."
[5] Petitioner sought refunds of $62,782.57, and respondent cross-claimed for $29,131.19.
[6] Act of June 8, 1966, c. 645, Miss. Gen. Laws 1343, 1347, in effect during some of the tax years involved, but since repealed, provided only that the excise tax "may be passed on to the ultimate consumer . . . ." (Emphasis added.) In contrast, the Massachusetts sales tax law before us in First Agricultural Nat. Bank. v. Tax Comm'n, 392 U. S. 339 (1968), expressly provided that the tax " `shall be paid by the purchaser,' " and that the vendor " `shall add to the sales price and shall collect from the purchaser the full amount of the tax imposed.' " Id., at 347.
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544 U.S. 914
IN RE DOOSE.
No. 04-7432.
Supreme Court of United States.
March 7, 2005.
1
543 U. S. 1048. Petitions for rehearing denied.
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806 F.2d 1147
42 Fair Empl.Prac.Cas. 908,42 Empl. Prac. Dec. P 36,718, 6 Fed.R.Serv.3d 930
The HISPANIC SOCIETY OF the NEW YORK CITY POLICE DEPARTMENTINC., Luis A. Salgado, William Morales, Manuel Torres,Valentin Neves, Jr., Individually and on behalf of all thosesimilarly situated, the Guardians Association of the PoliceDepartment of the City of New York Inc., Gregory S.Williams, Robert McNair, Timothy Pearson, Individually andon behalf of all those similarly situated, Plaintiffs-Appellees,v.The NEW YORK CITY POLICE DEPARTMENT, Department of Personnelof the City of New York and the City of New York,Defendants-Appellees,Robert Hyman, Dennis Gallagher, Thomas Biscione, TimothyMcCarthy, David Kondrup, Thomas Cody, Anthony Tesu, JamesLatuda, Richard Milla, Emerald Society of the Police Dept.of the City of New York Inc., Columbia Association of thePolice Dept. of the City of New York Inc., Shomrim Societyof the New York City Police Department Inc., St. PaulSociety of the New York City Police Department Inc., SteubenAssociation of the Police Dept. of the City of New YorkInc., Francis Shields, Michael Ward, Helene Rinaldi,Ferdinand Guerra and Peter Mahon, as President of SergeantsBenevolent Association and Sergeants Benevolent Association,Defendants-Intervenors-Appellees,v.Wayne COSTELLO, John Lanigan, Barbara Pichler, ChristopherMatejov, Alan Fisher, Ron Mazone, Thomas Collins, ThomasMcManus, William Lucas, Mary Donnelly, Gennaro J. Aiello,Anthony M. Lombardo, John Galvin, Phillip McNerney, JamesMuranelli, Richard Wojno, Guliano Schiozzi, Thomas E. Quinn,Dennis Casavillo, Charles Hart, David Veraja, John Houston,Patrick Castoro, James Collins, Lawrence Praino, MichaelSiedel, Richard Frick, James Healy, Frank Gaetani, JamesLien, Mark Eisenberg, William Moen, Wilson Padilla, EvelynMarino, Arthur J. Rotella, Thomas Ruskin, John Russo,Patrick Russo, Barney Ryan, Thomas J. Ryan, Michael Ryder,Warren Sam, John Sassano, Mel Schwartz, Herbert Seigal,James Smith, Ann Sowinski, William Spisak, Stanley Tatar,Dennis Terminello, Jill Tomczak, Charles Torano, CatherineVolpe, Walter P. Voss, Robert Wagner, William J. Zazeckie,Thomas Moss, Theodore McHugh, Joseph Nicolosi, KennethOtten, Louis Pioli, Tadgh D. McNamee, Terrance McCabe, DavidPanetta, Christopher Haggerty, James G. Schneider, Thomas P.Kelly, Florence Ciaffone, Kevin Sweeney, Howard Allen, GaryBerman, Steven Cairo, Joseph Concannon, Michael Conolly,Maurice Devito, Arthur Flynn, Raymond Gallagher, KevinGrassing, James C. Kelly, Kevin Kubick, Robert B. Langer,Henry Mahncke, John Marcone, John Mazzocchi, PatrickMcGinnis, Sergio Mikulus, Kenneth Nilsen, Alan R. Ostoits,Henry Palayo, Anthony Reitano, Robert A. Sowinski, JosephTorragrosa, Richard Severi, Rubin Rivera, Alan May, MarcWolf, William Saunier, Anthony P. Contento, DominickPetrucelli, Frederick Termini, Kevin Ryan, Morton Adler,Richard J. Angley, Robert Als, Albert Ascolese, Pompeo J.Basile, Lawrence G. Blumenthal, Kevin Boshell, KeithBrinkmann, Daniel Buckley, John J. Carney, Joseph Casella,Harvey Charym, Robert Chille, Gerald Chirico, John Connolly,Frank Corselli, Gary Davis, Edmond J. Decio, Alexander A.DeFrancis, Nicholas Dimuro, James Donohue, William Erdogan,Nathan Fishman, Philip Franchina, Calire Gallagher, CarlGandolfo, John P. Gerrish, Daniel Graser, Ronald V. Greco,Geoffrey Hart, John Holze, Richard Hoover, Robert Iovino,John Johnson, Craig Judge, Kevin Kaufman, Kieran Kelly,Daniel Kelly, Timothy Kelly, Patrick J. Kenny, Kevin Kirby,Fran Kripinski, Francis X. Lavelle, Anthony Longhitano,James Luongo, Dennis McCabe, John J. McCann, Kevin L.McDonald, Thomas McDonald, Stanley Meltzer, RalphMarchitelli, Evelyn Mooney, George Moran, James Moreink,Kevin Mullen, Michael D. Nemoyten, Daniel P. O'Neill, JosephOppromala, Frank R. Paganucci, Edmund Pederson, JosephPicarello, Ronald Polis, Gerald Pope, Alan Prescott, RobertPyetel, Ronald W. Rodman, William Romano, John E. Rivers,George S. Reynolds, Samuel P. Reiver, Eileen Regan, AngeloGraniero, Robert Edwards, Thomas J. Gulotta, Ricky Carpen,Kevin Keenan, David Chong, William Dwyer, Edward Harvey,Benjamin Conforto, Anthony Pauline, Gary M. Katz, George J.Meyer, Barry Goldblatt, Robert Tobuck, James Martin, FrankMandile, Mary Maruffi, James O'Reilly, Gilbert Eaton, ThomasKennedy, Ellen Hale, Daniel Boylan, Richard Miltenberg,Kevin O'Keefe, Robin Birnbaum, Frank Forte, Michael Pasuale,Martin Roddini, Anthony Celano, Charles Martin, SalvatoreBuscemi, Robert Ahern, Stephen Broady, Chris Athanasopolos,Billie Rivera, Michael Demarfio, Karen Robino, RaymondMardiney, John Holub, John Toledo, John Wynne, MichaelFiscina, Robert Spitzer, Kenneth Roberts, Richard E. Lagrua,Victor Galante, Brendan Dolan, Fred Schwartz, RobertMulligan, Walter O'Keefe, Brian O'Reilly, Kevin Fitzpatrick,James Morris, Richard Baebler, Michael McGarvey, MichaelArcardi, Joseph Averso, Angela Amato, Gennaro Aiello, FrankBergstol, Joseph Balnck, Joseph Brousseau, Joseph Buffolino,William Buryk, Nicholas Bulzomi, Ronald Bradley, DouglasBrandt, Christopher Buckley, Ronald Betterly, EdwardBrajczewski, Nicholas Battista, Diane Broccoli, DarrylBerger, Domenick Canale, Paul Calandro, Thomas Callahan,Roland Capuano, Robert Clancy, William Casey, MartinConnolly, Louis Curcuruto, A.P. Casano, James Curry, FrancisCush, Michael Campbell, Daniel Collins, Guy Castellano,William Coyne, James Ciaccia, James Christopher, Jr.,Timothy Connolly, Robert Dean, Raymond Dufresne, BrianDailey, Douglas Brandt, Norman Donoghue, William Dunphy,John English, Mark Eisenberg, Harvey Feit, Dennis Emperor,John Feeney, Todd Fisher, Andrew Foppiano, Stephen Fajfer,John Fitzgerald, Vincent Giammusso, Richard Gwillym, HarveyGrape, Vincent Giantasio, Fr. Michael Glasser, John Geary,Joseph Giacoppo, Michael Giacoppi, Henry Gross, JohnGurtowski, Karl Garbrielsen, Brien Hogan, Thomas Hatch,Thomas Iacopelli, Geoffry Jahn, David Kaiser, Michael Kelly,Stephen Kurz, Edward Kulesa, Richard Kleiner, GeorgeKoehler, Daniel Kornblum, John Kloepping, Arthur Kaplan,William Kinzler, Nicholas Limoncelli, Robert Lynch,Christine Legrottaglie, Edith Linn, Anthony Lombardo, JamesMood, Thomas Moss, John Melillo, Thomas McGovern, Michael R.McGovern, William McNamara, Edward Paroulek, Arthur Peaslee,Roy Popple, Robert Peters, Robert Peyer, Frank Panareese,Joseph Pastorino, Harold Robinson, Robert Renolds, ConniePhelan, Michael Pasquale, Edward Scolavino, John Scolaro,Donald Skuza, Edward Solomonik, Ronald Shindel, AndrewSovia, Edward Smith, Jerry Salzman, Joseph Stabile, WilliamSeychell, Michael Trimis, Robert Tarigo, Robert Toohey, GariTibaldi, Louis Vingelli, Bernard Wahlen, Jerry Wojcik,Robert Willmarth, Theodore Wess, John Yuknes, John Murphy,Joseph K. Monahan, Warren Molino, Randall Mayer, PeterMalvasio, Robert Napolitano, John Nickels, Stephen Epstein,Louis Greco, Appellants.
No. 220, Docket 86-7507.
United States Court of Appeals,Second Circuit.
Argued Oct. 16, 1986.Decided Dec. 8, 1986.
Ronald Podolsky, New York City, for appellants.
Kenneth Kimberling, New York City (Linda Flores, Puerto Rican Legal Defense & Education Fund, Inc., New York City, of counsel), for plaintiffs-appellees Hispanic Society.
Robert David Goodstein, Goodstein and West, New Rochelle, N.Y., of counsel, for plaintiffs-appellees Guardians Ass'n.
Frederick A.O. Schwarz, Jr., Corp. Counsel, June A. Witterschein, Elizabeth Dvorkin, New York City, of counsel, for defendants-appellees.
Richard K. Walker, Bishop, Lieberman, Cook, Purcell & Reynolds, Washington, D.C., of counsel, for defendants-intervenors-appellees.
Before FEINBERG, Chief Judge, and WINTER and MAHONEY, Circuit Judges.
WINTER, Circuit Judge:
1
This appeal is from an order approving the settlement of a classwide claim of employment discrimination. It was argued at the same time as a companion case, Marino v. Ortiz, 806 F.2d 1144 (2d Cir.1986), which has also been decided this day. The underlying action, brought pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. Secs. 2000e-2 et seq. (1982), challenged a sergeants' examination administered by defendant-appellee New York City Police Department ("NYCPD"). The plaintiffs alleged that the examination had a disparate impact upon black and Hispanic candidates for promotion to the position of sergeant. The settlement approved by the district court called for the successive promotion of blacks and Hispanics who had taken the examination until the alleged disparate impact was eliminated. The appellants, who challenge the settlement as a violation of the fourteenth amendment, are said to be police officers who did not score high enough to be eligible for promotion but did as well or better than the blacks and Hispanics who have been promoted pursuant to the consent decree. Because the appellants are not parties to this litigation, we dismiss their appeal.
BACKGROUND
2
During June 1983 and April 1984, the NYCPD administered Civil Service Examination No. 2548 to 11,899 candidates for promotion to the rank of sergeant. After scoring the exam, the NYCPD set a cut-off point that produced a list of 1,041 police officers eligible for promotion. The racial/ethnic composition of the group taking the exam was 79.0% white, 12.3% black, and 8.7% Hispanic; the breakdown of the eligible list derived from the test scores was 93.47% white, 2.31% black, and 4.23% Hispanic.
3
In late 1984, the Hispanic Society, representing Hispanic police officers, and the Guardians Association, representing black officers, filed separate actions in the Southern District against NYCPD and various city officials, alleging employment discrimination in violation of Title VII and other provisions.1 The complaints alleged that the examination had a disparate impact on black and Hispanic applicants and was not job related. Three groups were permitted to intervene in both cases as codefendants: the Sergeants Benevolent Association ("SBA"), representing over 500 officers on the eligible list who had obtained provisional appointments as sergeants; the Sergeants Eligibles Association ("SEA"), representing officers who were on the eligible list but had not received provisional appointments; and various white ethnic societies and other individual officers (the "Schneider Intervenors"). On June 14, 1985, the district court certified plaintiffs in Hispanic Society as representatives of a class of all Hispanic candidates who had taken Examination No. 2548, pursuant to Fed.R.Civ.P. 239(a) and (b)(2).
4
After discovery, the parties began several months of settlement negotiations. A proposed settlement agreed to by the plaintiffs, the defendants, SEA, and SBA was submitted to the district court on February 7, 1986. The settlement provided that at least 1,000 police officers on the eligible list would be promoted to sergeant. Black and Hispanic police candidates not on the list were to be added until the racial/ethnic composition of the group of newly promoted sergeants was approximately the same as the racial/ethnic composition of the group of candidates taking the test. Additional black and Hispanic officers would be promoted in rank order on the basis of their raw scores on the technical knowledge portion of the exam.2
5
The settlement also proposed consolidation of the Hispanic Society and Guardians Association actions and the certification of three additional classes: (1) the plaintiffs in Guardians Association as representatives of a class of all black candidates who had taken the examination; (2) SBA as the representative of a class of all officers on the eligible list who had been provisionally appointed to the rank of sergeant; and (3) SEA as the representative of all other officers on the eligible list.
6
The settlement was conditionally approved on February 7, 1986, and a hearing was scheduled for April 17, 1986. Notice of the proposed settlement and the hearing date was sent to all plaintiffs and intervenors, and posted in all precinct stations. The Schneider Intervenors, who had not signed the proposed agreement, were the only parties to the action to oppose the settlement.
7
Objections were also filed by officers who were not on the original eligible list but who claimed to have received scores equal to or higher than the black and Hispanic officers to be promoted pursuant to the settlement. The same counsel who represents the appellants in the instant case was allowed to speak at the hearing and argued that the proposed settlement violated the rights of such officers to equal protection of the laws. He filed a "Request for Modification" on behalf of his clients seeking to have the consent decree modified to provide that they be put on the eligible list and promoted.
8
Judge Carter approved the settlement on June 16, 1986, specifically rejecting the argument made by appellants' counsel. Hispanic Society of the New York City Police Dep't v. New York City Police Dep't, 40 Empl.Prac.Dec. (CCH) p 36,385, at 43,654-55 (S.D.N.Y.1986). The Schneider Intervenors filed notices of appeal. Approximately 350 other officers (a considerably larger group than filed objections), also filed notices of appeal. The Schneider Intervenors withdrew their appeal, however, leaving the appeal of the 350 officers as the only remaining challenge to the settlement of the case.
DISCUSSION
9
Appellants, the 350 officers, argue that the settlement agreement violates the fourteenth amendment because it requires the promotion of minorities over nonminorities who achieved the same or better scores on the sergeants' examination. We cannot consider this argument on the merits, however. Because appellants never moved to intervene in these proceedings, they are not parties to this litigation, and their appeal must be dismissed.
10
As a general rule, only a party of record in a lawsuit has standing to appeal from a judgment of the district court. United States ex rel. Louisiana v. Jack, 244 U.S. 397, 402, 37 S.Ct. 605, 607, 61 L.Ed. 1222 (1917); Martin-Trigona v. Shiff, 702 F.2d 380, 385 (2d Cir.1983); United States v. McFaddin Express, Inc., 310 F.2d 799, 801 (2d Cir.1962). Parties of record include the original parties and those who have become parties by intervention, substitution, or third-party practice. 9 J. Moore, Moore's Federal Practice p 203.06, at 3-20 (1986).
11
There are exceptions to this general rule, but none is relevant to the present matter. The primary exception is when the nonparty has an interest that is affected by the trial court's judgment. E.g., Martin-Trigona v. Shiff, 702 F.2d at 385-86 (permitting nonparty trustee to appeal from order granting debtor's habeas corpus petition against bankruptcy judge.) See also United States v. LTV Corp., 746 F.2d 51, 53-54 & nn.5-6 (D.C.Cir.1984); 9 Moore's Federal Practice p 203.06, at 3-23. In this case, appellants were not on the original eligible list, they have no right to promotion under state law, and they do not allege that the examination discriminated against them. Even if the settlement were invalidated, therefore, they would not be entitled to promotion. Accordingly, they cannot appeal from the settlement as nonparties with an interest in the order below.
12
Appellants claim to have standing as parties, and to that end point to a "Definition" in the settlement agreement. That definition states:
13
The "New York City defendants" shall mean and refer to the City of New York, the New York City Police Department, the New York City Department of Personnel, and all officers, employees or agents, whether elected or appointed, of the City of New York, but not including the Hispanic Society plaintiffs, the Guardians Association plaintiffs, the intervenor-defendants or any individuals or groups represented by the Hispanic Society plaintiffs, the Guardians Association plaintiffs, or intervenor-defendants.
14
Appellants assert that they fall within this definition because they are police officers employed by the City of New York. However, the definitions in the settlement, by their very terms, delineate the parties to the agreement, not the parties to the litigation. For example, the settlement defines "intervenor-defendants" to mean the SBA and the SEA. By appellants' logic, the Schneider Intervenors would be divested of party status because they are not included in that definition. Yet, the Schneider Intervenors are intervenor-defendants, and were omitted from the settlement definition because they were not signatories to the settlement. Just as the settlement cannot divest a plaintiff or defendant of party status in the litigation, it cannot confer party status on a nonparty.
15
Further, viewed in context, the definition of "New York City defendants" does not make appellants either parties to the settlement or parties defendant in their individual capacities. This provision of the settlement simply binds them to comply with its terms in their official capacities as employees of the defendants, and does not give them standing to raise their current objections to the settlement as violative of their individual rights.
16
In Bender v. Williamsport Area School District, --- U.S. ----, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986), the Supreme Court rejected on jurisdictional grounds a similar attempt to appeal. In that case, high school students brought an action against a school district, members of the school board, and school administrators, challenging certain restrictions on the use of public school premises under the first amendment. The trial court found in favor of the plaintiffs, but granted no relief against any of the school board members in their individual capacities. When the school district decided not to appeal the adverse decision, board member Youngman decided to prosecute the appeal himself. The Supreme Court, acting sua sponte, held that because the judgment was against Youngman only in his official capacity, he had no standing to appeal in his individual capacity. Id. 106 S.Ct. at 1332 (citing Kentucky v. Graham, 473 U.S. 159, 105 S.Ct. 3099, 3106 n. 14, 87 L.Ed.2d 114 (1985); Brandon v. Holt, 469 U.S. 464, 105 S.Ct. 873, 877, 83 L.Ed.2d 878 (1985)). Moreover, Youngman's status as a board member did not "permit him to 'step into the shoes of the Board' and invoke its right to appeal." Bender, 106 S.Ct. at 1333. The Court also denied Youngman's claim that he could prosecute the appeal based on his status as a parent, stating, "Since Mr. Youngman was not sued as a parent in the District Court, he had no right to participate in the proceedings in that court in that capacity without first filing an appropriate motion or pleading setting forth the claim or defense that he desired to assert." Id. at 1335 (footnote omitted).
17
The lack of jurisdiction is even more obvious in the present case because, unlike Youngman, appellants were never parties in the district court in any capacity. They were included only in the settlement agreement, along with all other employees of the City of New York, merely to ensure that they would be bound by its terms in their official capacities. See Bender, 106 S.Ct. at 1332; Brandon, 105 S.Ct. at 877 ("The course of proceedings ... make[s] it abundantly clear that the action against [defendant] was in his official capacity and only in that capacity."). See also Alexander v. Todman, 361 F.2d 744, 746 (3d Cir.1966) ("A person who sues or is sued in his official capacity is, in contemplation of law, regarded as a person distinct from the same person in his individual capacity and is a stranger to his rights or liabilities as an individual."). Appellants' argument that the settlement agreement made them parties defendant in their individual capacities is thus without merit.
18
Appellants also claim that filing written objections to the settlement and appearing at the hearing gave them status as parties to the litigation. The fact that appellants were permitted to object to the settlement in the district court does not make them parties, or enable them to appeal from the approval of the settlement. See United States v. LTV Corp., 746 F.2d at 53; Moten v. Bricklayers, Masons & Plasterers International Union, 543 F.2d 224, 227 (D.C.Cir.1976).
19
Appellants' predicament results from their steadfast refusal to comply with the requirements for intervention set forth in Fed.R.Civ.P. 24. In dismissing the appeal in Bender, the Supreme Court emphasized the importance of this rule:
20
Because his status as a parent was obviously different from his official status as a member of the Board, in order to participate as a parent in the District Court litigation it was incumbent upon Mr. Youngman under Rule 24 of the Federal Rules of Civil Procedure to make "timely application" by an appropriate motion "stat[ing] the grounds" for intervention and "setting forth the claim or defense for which intervention is sought." Fed.Rule Civ.Proc. 24(a), (c). No such pleading was filed in either of the courts below. It is particularly important to observe these requirements in cases in which the interest of the litigant seeking to appeal diverges from the interest of the party to the suit.
21
106 S.Ct. at 1335 n. 9 (emphasis added). The need for formal intervention is thus as great as the need for named plaintiffs or defendants to state a well-pleaded claim or defense. See Sanders v. John Nuveen & Co., 463 F.2d 1075, 1082 (7th Cir.) (pleading that accompanies intervention motion must satisfy Fed.R.Civ.P. 7(a) so that "all parties understand the position, claims and nature of relief sought by the prospective intervenors"), cert. denied, 409 U.S. 1009, 93 S.Ct. 443, 34 L.Ed.2d 302 (1972); 3B Moore's Federal Practice p 24.14.
22
The present appeal, however, is based on factual assertions that are nowhere set forth in sworn pleading. Although approximately 350 appellants are named, the record contains no affidavits or other sworn allegations describing their individual status as police officers or as candidates for sergeant. (We note that a considerably smaller number filed objections to the settlement.) Because the requirements for intervention as a party have been ignored, the people pursuing this appeal have no more standing than individuals selected at random from a telephone book. Cf. Kentucky Home Mutual Life Insurance Co. v. Duling, 190 F.2d 797, 803 (6th Cir.1951) (holding intervention petition insufficient under Rule 24(c) when it did not state cause of action against defendant but merely stated that intervenors had insurance under the group policy in question). Other individual police officers and white ethnic societies, the Schneider Intervenors, intervened as parties and vigorously pursued their interests. We perceive no reason why appellants could not have done the same.
23
Consequently, appellants lack standing to prosecute this appeal, and we have no jurisdiction. We therefore dismiss the appeal. We deny appellees' motion for sanctions under Fed.R.App.P. 38. We note, however, that any doubt as to the means by which objectors to class settlements should proceed in the future has been eliminated by this opinion.
1
The case filed by the Hispanic Society was Hispanic Society v. New York City Police Dep't, No. 84-6628 (S.D.N.Y. filed Sept. 14, 1984), and the action filed by the Guardians Association was Guardians Ass'n. v. New York City Police Dep't, No. 84-8504 (S.D.N.Y. filed Nov. 26, 1984). The two actions were consolidated in 1986 when the court approved the settlement. See infra
2
The examination had two components, a written technical knowledge test and a video job sample test. The entire exam could not be used to rank the minority candidates because video equipment had been defective at some testing locations
| {
"pile_set_name": "FreeLaw"
} |
but his wife did not open the door. Chavez then forced the victim down
the stairs, hit him with the gun, and punched him. The victim ran away
and called the police after Chavez dropped the gun. Chavez's own
statements to the police indicated that he wished to scare the victim with
the gun. Chavez did not have a concealed weapons permit. We conclude
that the jury could reasonably infer from the evidence presented that
Chavez was carrying a concealed weapon and used that weapon to commit
assault, coercion, and battery. See NRS 202.350(1)(d)(3); NRS 200.471;
NRS 207.190; NRS 200.481. The verdict will not be disturbed on appeal,
where, as here, substantial evidence supports Chavez's convictions. See
Bolden v. State, 97 Nev. 71, 73, 624 P.2d 20, 20 (1981). Therefore, we
ORDER the judgment of conviction AFFIRMED.
Hardesty
LAat I Pa J.
Douglas
---
C
Cherry
J.
cc: Hon. Michael Villani, District Judge
Clark County Public Defender
Attorney General/Carson City
Clark County District Attorney
Eighth District Court Clerk
SUPREME COURT
OF
NEVADA
2
101 1947A cer,
| {
"pile_set_name": "FreeLaw"
} |
34 Cal.Rptr.3d 677 (2005)
133 Cal.App.4th 419
Colmore RINEHART, IV, a Minor, etc., Plaintiff and Appellant,
v.
BOYS & GIRLS CLUB OF CHULA VISTA, Defendant and Respondent.
No. D045507.
Court of Appeal, Fourth District, Division One.
September 21, 2005.
*679 Don D. Hiney, Hiney & Trestick, San Diego, CA, for Plaintiff and Appellant.
Lindsay Robert Brack, Brack & Mason, San Diego, CA, for Defendant-Respondent.
*678 HUFFMAN, J.
Plaintiff Colmore Rinehart, IV, a minor, by and through his guardian ad litem Angela Combs, appeals from a judgment entered against him and in favor of the defendant Boys and Girls Club of Chula Vista (BGCCV or Club), after the trial court granted BGCCV's motion for summary judgment on plaintiff's amended complaint alleging personal injury based on both premises liability and negligence. Plaintiff essentially claimed that BGCCV was responsible for Rinehart's head injuries resulting from a rock thrown by a nonmember of the Club from a hillside to the playground below because BGCCV "violated applicable laws and regulations in numerous ways by negligently failing to protect and ensure [his] safety ..., failing to provide adequate supervision, and failing to enforce the rules and regulations necessary for his safety."
Plaintiff contends the trial court erred in granting BGCCV's summary judgment motion because it found there were no disputed material facts as to the supervision on the Club's playground at the time of the incident, incorrectly categorized the incident as a "criminal act" thereby improperly utilizing the third-party criminal assault duty analysis of Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 25 Cal.Rptr.2d 137, 863 P.2d 207 (Ann M.) to find the incident was not foreseeable, and incorrectly utilized the reasoning of Noble v. Los Angeles Dodgers, Inc. (1985) 168 Cal.App.3d 912, 214 Cal.Rptr. 395 (Noble) as determinative of causation rather than applying the body of law pertinent to public school supervision cases. We affirm.
FACTUAL AND PROCEDURAL SUMMARY
The unverified first amended complaint filed January 16, 2004, against BGCCV alleged it owned and operated an "after school program" in Chula Vista, California. On information and belief, Rinehart alleged in the first cause of action for premises liability that he was enrolled in BGCCV's program on April 9, 2002, and that "[a] group of boys had been throwing sticks and rocks at children on the playground for a period of five to ten minutes when [he] was struck in the head with a rock thrown at him by a boy standing on the hill in the playground area of [BGCCV's] property. There were no supervisors on the playground area at the time of the incident. [BGCCV was] in a loco parentis relationship with [Rinehart] thereby owing him a higher duty of care. Had a supervisor been on duty and on the playground, the injury to [Rinehart] would not have occurred."
In his second cause of action for general negligence, Rinehart essentially realleged the above and added allegations he was 10 years old at the time of the rock throwing incident which occurred while he was playing on the playground at the rear of BGCCV's facility and that such caused him serious injuries. He further alleged BGCCV was "an operator of a licensed daycare program for minor children. As such, it is required to abide by certain statutory regulations including the California Code of Regulations, Health & Safety Code and Welfare & Institutions Code." *680 He also alleged "that had the facility been adequately staffed and a supervisor present at the time, the incident would not have occurred and [he] would not have sustained injury. [BGCCV] violated applicable laws and regulations in numerous ways by negligently failing to protect and ensure [his] safety ..., failing to provide adequate supervision, and failing to enforce the rules and regulations necessary for his safety." Rinehart alleged the failure to have a supervisor present on the playground was a breach of [BGCCV's] duty of care and that as a result of such breach or negligence BGCCV caused him to sustain serious injuries.
BGCCV moved for summary judgment, arguing there were no triable issues of material fact regarding foreseeability and causation and that without Rinehart being able to establish such elements, neither of his causes of action against BGCCV could be proven. BGCCV also argued that even if it had owed a duty to Rinehart and had breached that duty, Rinehart could not prevail on either cause of action because he cannot show the breach "bore a causal connection to his injury." BGCCV claimed it was entitled to judgment as a matter of law because the acts of Rinehart's assailant were unforeseeable and he could not establish BGCCV's alleged negligence was an actual, legal cause of his injuries.
Declarations and discovery submitted in support of the motion revealed that BGCCV "is a non-profit organization which offers after school recreation programs to boys and girls who may otherwise be unsupervised" and that Rinehart was enrolled in such a program at BGCCV from April 2000 through April 2002. The Club's playground area was located at the base of a hill just below Greg Rodgers Park, a public park with baseball fields. A fence ran across the top of the hill, dividing the area into the park on one side and the hill and the Club on the other. The City of Chula Vista leased the hill adjacent to the playground to BGCCV. Club members were not allowed to play on the hill. The Club also had rules that members were not to throw sand or objects outside.
On April 9, 2002, Rinehart was struck in the head with a rock which a young, unidentified male on the hill next to the Club's playground area had thrown at him as he was playing outside on the Club playground. Before the incident, Rinehart had seen non-Club members walk across the top of the hill, but he had never seen any nonmember stop while on the hill or throw rocks from the hill. Rinehart's sister, who also was a Club member, had seen nonmembers "go through the ... fence in the back" to hang out with their member friends, but had never seen anybody throw rocks. Although Rinehart had seen some members throwing rocks about five times before the incident, a supervisor had told them to stop, and they had not thrown the rocks from the hill or at another person.
On the afternoon of the incident, Rinehart was outside playing cards and talking with some friends as they sat in tires that had been placed on the Club's playground. At some point, Rinehart noticed two or three rocks come down the hill. When he looked up he saw two boys about 14 years old near the top of the hill throwing rocks. Rinehart told his friends the boys were throwing rocks and that they should move. As Rinehart stood up and began to move his tire he was hit by a rock and fell. Rinehart did not remember the rock throwing boys or his friends saying anything either before or after he was hit. Rinehart believed the boys had thrown a total of four rocks, including the one that hit him, and a log type object that landed in the bushes. Although Rinehart believed he had seen his assailant before the incident *681 at the baseball field above the Club and that he would be able to identify him if he saw him again, he had never seen him again.
Neither John Clingan, the president and CEO of BGCCV, nor employees Henry Steven Cross (Henry) or Briana Joy Baker had ever seen nonmembers throw rocks from the hill. Although Rinehart and his sister do not recall seeing a supervisor in the playground area the day of the incident, Baker testified she was in the vicinity of the sidewalk near the playground, possibly playing a game with some girls, when she saw Rinehart and his friends on the tires playing in the sand. Henry confirmed that Baker had been assigned to supervise the outdoor activities on the playground that afternoon and that from the sidewalk vicinity she would have had an unobstructed view of Rinehart and his friends. Approximately 5 to 10 minutes before the incident, Baker had walked around the playground to make sure there were no children behind some trailers on the Club's property or up on the hill, and to "make sure that everyone [was] playing fair and well with each other." Baker did not see any boys on the hill, on the baseball field, or near the fence, or hear anyone yell before she saw Rinehart lying on the ground after he was hit and she ran over to him. No one had come to Baker to report any rock throwing on the hill before Rinehart was hit with the rock and his assailant fled. The boy who threw the rocks was never apprehended and his identity is unknown.
An incident report prepared by employee Sally Cross (Sally) indicated Baker was outside at the time of the accident, and noted Baker had stated she had not seen or heard anything. The report also noted that two of the boys with Rinehart at the time of the incident told Sally "there were some big boys on top of the hill and they were hiding behind the bushes and one came out and threw the rock and took off running."
Rinehart opposed the summary judgment motion, claiming BGCCV had a duty to supervise its facility to provide a safe place for him "to learn and grow with supervision" as promoted in its rules and regulations and that its failure to adequately do so caused his injuries. In support of these claims, Rinehart submitted copies of the Club's policy and procedure manual, representations made by the Club in its advertising and membership information form, excerpts of depositions and the declaration of Alison Vredenburgh, Ph.D., CPE, a retained "human factors and safety expert."
In her declaration, Vredenburgh stated she had read all the depositions taken in this case, had conducted a site inspection of the Club's property, had read all the policy and procedure manuals before concluding the rock throwing incident was foreseeable and BGCCV had "failed to provide adequate and effective barriers, both physical and administrative, to prevent the subject incident." Vredenburgh opined that the physical presence of a supervisor would have served as a deterrent to aggressive behavior of both members of the Club and nonmembers and that BGCCV failed to provide continual supervision as required by its own stated policies and by state law regulating child care facilities. She also provided photographs she had taken of the premises, noting the fence did not fully enclose the Club's property as testified to by Clingan.
BGCCV filed reply documents, raising evidentiary objections to statements in Rinehart's separate statement and points and authorities, and to Vredenburgh's declaration. The Club also filed a portion of Baker's deposition stating there were no holes in the fence at the time of the incident *682 like those depicted in Vredenburgh's photos which were take two years after the incident.
On September 2, 2004, the court issued a tentative ruling granting BGCCV's summary judgment motion, finding "[t]he incident was too unforeseeable to impose a duty on the Club to take affirmative measures to prevent non-members from throwing rocks from the hill, and there is no evidence that the Club's actions were a substantial factor in causing plaintiff's injuries." In doing so, the court relied upon the law in Ann M., supra, 6 Cal.4th 666, 25 Cal.Rptr.2d 137, 863 P.2d 207 with regard to the issues of duty and foreseeability, stating:
"`A duty to take affirmative action to control the wrongful acts of a third party will be imposed only where such conduct can be reasonably anticipated.' ... In this, as in other areas of tort law, foreseeability is a crucial factor in determining the existence of duty.' [Citing Ann M., supra, 6 Cal.4th at pp. 675, 676, 25 Cal.Rptr.2d 137, 863 P.2d 207.] ... [¶] Based on the evidence presented, plaintiff cannot show the rock-throwing incident was foreseeable such that the Club owed a duty to take measures to prevent such incidents. In general, the greater the burden of imposing a duty, the greater the level of foreseeability is required. [Citation.] The requisite degree of foreseeability can rarely be proven in the absence of prior similar incidents. [Citation.] Here, there is no evidence that the Club should have been aware that nonmembers would enter the property and throw rocks. While there is some evidence that nonmembers traversed the hill, nobody stopped and threw objects towards the playground. The few rock-throwing incidents that occurred were by members on the playground. The Club has rules prohibiting rock-throwing, and a supervisor acted to stop such conduct when it occurred."
Regarding the issue of causation, the court relied on Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395, Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143 (Saelzler), and Thompson v. Sacramento City Unified School Dist. (2003) 107 Cal.App.4th 1352, 132 Cal.Rptr.2d 748 (Thompson) to find that Rinehart had not raised a triable issue of fact regarding this element of his causes of action. The court specifically stated:
"Plaintiff's contention that the incident might not have occurred had the Club placed more supervisors on the playground or repaired the fence is speculative. Plaintiff's argument is similar to that in [Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395] where the plaintiff was injured in a post-game altercation in the parking lot of the Dodger's Stadium. Plaintiffs' theory in that case was `purely and simply that the Dodgers were negligent in failing to effectively deter any and everyone from acting in such a manner.' [Citation.] The court rejected a security expert's opinion that there should have been seven more individuals employed by the Dodgers for security purposes and that the personnel should have been deployed differently than they were. The court noted the expert could not say that the additional seven persons or a different deployment pattern would have prevented the plaintiff's injury. [¶] Here, plaintiff's safety expert, Dr. Vredenburgh[,] opines the Club failed to provide adequate physical and administrative barriers to prevent the incident. She states the fence and supervisors were inadequate and ineffective, but does not specifically indicate what the Club could have done to prevent the incident from occurring. She suggests the presence of a supervisor *683 would serve as a deterrent to aggressive behavior by members and non-members, but there was a supervisor on the playground (Ms. Baker). Plaintiff cannot say that additional supervisors or a better fence would likely have deterred the unknown person from throwing rocks. One is left to guess how many additional supervisors would have been needed. Further, the fence borders a public park and it is just as possible that the assailant would have thrown rocks from over the fence if he could not walk across the hill."
The court sustained BGCCV's objections to Vredenburgh's declaration, but declined to rule on objections to statements in Rinehart's pleadings stating such were not evidence.
Following oral argument on September 3, 2004, the tentative ruling became the order of the court and a formal written order granting BGCCV's summary judgment motion and judgment in its favor was filed September 20, 2004. Notice of entry of judgment in BGCCV's favor was filed September 23, 2004, and this appeal followed.
DISCUSSION
Because plaintiff appeals from the judgment entered after the trial court granted BGCCV's summary judgment motion, we review the court's ruling on the motion de novo. (Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal.App.4th 807, 819, 44 Cal.Rptr.2d 56.) In doing so we "apply the same rules and standards that govern a trial court's determination of a motion for summary judgment. [Citation.]" (Distefano v. Forester (2001) 85 Cal.App.4th 1249, 1258, 102 Cal.Rptr.2d 813.) Summary judgment should be granted if "all the papers submitted show that there is no triable issue of material fact and ... the moving party is entitled to judgment as a matter of law." (Code Civ. Proc., § 473c, subd. (c).)
To satisfy this burden, a moving defendant is not required to "conclusively negate an element of the plaintiff's cause of action.... All that the defendant need do is to `show [] that one or more elements of the cause of action ... cannot be established' by the plaintiff. [Citation.]" (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853, 107 Cal.Rptr.2d 841, 24 P.3d 493 (Aguilar).) Once this defendant's burden is met, the "burden shifts to the plaintiff ... to show that a triable issue of one or more material facts exists...." (Code Civ. Proc., § 437c, subd. (p)(2).) In opposing the motion, "[t]he plaintiff ... may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists...." (Ibid.; Brundage v. Hahn (1997) 57 Cal.App.4th 228, 234, 66 Cal.Rptr.2d 830.)
In performing our de novo review, we view the evidence in the light most favorable to the plaintiff, liberally construing the plaintiff's submissions while strictly scrutinizing the defendant's showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor. (Saelzler, supra, 25 Cal.4th at p. 768, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) We are not bound by the trial court's stated reasons for its ruling on the motion, as we only review the ruling and not its rationale. (Muller v. Automobile Club of Southern California (1998) 61 Cal.App.4th 431, 438-439, 71 Cal.Rptr.2d 573; disapproved on another point in Colmenares v. Braemar Country Club, Inc. (2003) 29 Cal.4th 1019, 1031, fn. 6, 130 Cal.Rptr.2d 662, 63 P.3d 220.) "Summary judgment will be upheld when, viewed in such a light, the evidentiary submissions conclusively negate a necessary element of *684 plaintiff's cause of action, or show that under no hypothesis is there a material issue of fact requiring the process of a trial, thus defendant is entitled to judgment as a matter of law. [Citation.]" (Thompson, supra, 107 Cal.App.4th at pp. 1360-1361, 132 Cal.Rptr.2d 748.)
Here, Rinehart's position on appeal is that there are disputed material facts as to the presence and level of supervision of the playground of BGCCV at the time of the incident which are critical to his actions against the Club. He claims the court erred in finding it was undisputed there was a supervisor on the playground when he and his sister testified they did not see one there that afternoon. Rinehart further claims the trial court improperly utilized the duty and foreseeability analysis of Ann M., supra, 6 Cal.4th 666, 25 Cal.Rptr.2d 137, 863 P.2d 207 because the incident was not a "criminal act," and failed to use the law applicable to the special relationship between a school district and its students which requires a duty to supervise at all times because BGCCV's stated policies essentially had created such relationship with its members. Rinehart argues that because it was foreseeable an inadequately supervised playground area by BGCCV combined with easy access to the area by nonmembers "would permit those non-members to endanger the safety of its members," BGCCV had a duty under the school district supervision cases to adequately supervise its members and facility on the day of the incident.
In addition, Rinehart contends the Club's breach of its duty to exercise due care in its supervision on its premises proximately caused his injuries under the rational of the school district cases and that the court erred in utilizing the reasoning of Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395, Saelzler, supra, 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143, and Thompson, supra, 107 Cal.App.4th 1352, 132 Cal.Rptr.2d 748 to determine the absence of causation.
As BGCCV points out in its respondent's brief, Rinehart fails to appreciate that even assuming it owed and breached a duty of care to him, he has not, and cannot show that the harm was reasonably foreseeable because the actions of the rock thrower were clearly criminal, and even if those actions were only negligent, he cannot show additional supervision would have prevented the incident. As we explain, the trial court correctly determined upon the competent evidence presented in this case that, similar to the situations presented in Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395 and Saelzler, supra, 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143, Rinehart could not establish the causation element of his causes of action based on principles of negligence and premises liability, and accordingly, properly granted BGCCV summary judgment.
I
PERTINENT GENERAL PRINCIPLES
It is well established that to succeed on a claim based on negligence, it must be shown "that the defendant owed the plaintiff a legal duty, that the defendant breached the duty, and that the breach was a proximate or legal cause of injuries suffered by the plaintiff. [Citations.]" (Ann M., supra, 6 Cal.4th 666, 673, 25 Cal.Rptr.2d 137, 863 P.2d 207.) "In the case of a landowner's liability for injuries to persons on the property, the determination of whether a duty exists, `involves the balancing of a number of considerations; the major ones are the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection *685 between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, the policy of preventing future harm, the extent of the burden to the defendant and consequences to the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved.' [Citations.]" (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1145, 12 Cal.Rptr.3d 615, 88 P.3d 517 (Wiener).)
When, as here "children are the focus of care, the landlord's duty is to protect the young from themselves and guard against perils that are reasonably foreseeable. [Citation.] `The determination of the scope of foreseeable perils to children must take into consideration the known propensity for children to intermeddle.' [Citation.] The existence of a duty and foreseeability, when analyzed to determine the scope of a duty, is a question of law that an appellate court will determine de novo. [Citation.]" (Wiener, supra, 32 Cal.4th at pp. 1145-1146, 12 Cal.Rptr.3d 615, 88 P.3d 517.)
Generally, "landowners [are required by law] to maintain land in their possession and control in a reasonably safe condition. [Citations.] In the case of a landlord, this general duty of maintenance, which is owned to tenants and patrons, has been held to include the duty to take reasonable steps to secure common areas against foreseeable criminal acts of third parties that are likely to occur in the absence of such precautionary measures. [Citations.]" (Ann M., supra, 6 Cal.4th at p. 674, 25 Cal.Rptr.2d 137, 863 P.2d 207.) However, "a duty to take affirmative action to control the wrongful acts of a third party will be imposed only where such conduct can be reasonably anticipated." (Id. at p. 676, 25 Cal.Rptr.2d 137, 863 P.2d 207.)
Our Supreme Court has reevaluated the scope of a landowner's duty to protect persons from random, criminal conduct several times in the recent past. In general, the court has stressed the necessity of balancing the foreseeability of the harm against the burden of the duty to be imposed. Where the burden of prevention is great, a high degree of foreseeability is usually required; whereas where there are strong public policy reasons for preventing the harm, or the harm can be prevented by simple means, a lesser degree of foreseeability may be required. (Ann. M., supra, 6 Cal.4th at pp. 678-679, 25 Cal.Rptr.2d 137, 863 P.2d 207.) Thus, duty is determined by balancing the foreseeability of the criminal acts against the "`burdensomeness, vagueness, and efficacy'" of the proposed security measures, or as here, the supervision measures. (Id. at p. 679, 25 Cal.Rptr.2d 137, 863 P.2d 207.)
Although the Supreme Court has observed that "random, violent crime is endemic in today's society[, and i]t is difficult, if not impossible, to envision any locale open to the public where the occurrence of violent crime seems improbable" (Ann M., supra, 6 Cal.4th at p. 678, 25 Cal.Rptr.2d 137, 863 P.2d 207), the court has also reiterated that landowners are not insurers of public safety and will have no duty to provide highly burdensome measures of protection absent a showing of a high degree of foreseeability of the particular type of harm, which normally requires evidence of prior similar incidents of violent crime on the premises. (Id. at pp. 677-679, 25 Cal.Rptr.2d 137, 863 P.2d 207.) In other words, "[t]he dispositive issue remains the foreseeability of the criminal act. Absent foreseeability of the particular criminal conduct, there is no duty to protect the plaintiff from that particular *686 type of harm." (Alvarez v. Jacmar Pacific Pizza Corp. (2002) 100 Cal.App.4th 1190, 1212, 122 Cal.Rptr.2d 890.)
For example, in holding that a violent attack in an underground parking garage was not sufficiently foreseeable to support a requirement that the owner of the garage secure the parking garage area against that crime, our Supreme Court in Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 91 Cal.Rptr.2d 35, 989 P.2d 121 (disapproved on another ground in Aguilar, supra, 25 Cal.4th at p. 853, fn. 19, 107 Cal.Rptr.2d 841, 24 P.3d 493) stated, "It is difficult to quarrel with the abstract proposition that the provision of improved lighting and maintenance, operational surveillance cameras and periodic walk-throughs of the tenant garage owned and operated by defendants might have diminished the risk of criminal attacks occurring in the garage. But absent any prior similar incidents or other indications of a reasonably foreseeable risk of violent criminal assaults in that location, we cannot conclude defendants were required to secure the area against such crime." (Sharon P., supra, at p. 1199, 91 Cal.Rptr.2d 35, 989 P.2d 121.)
In addition, in Saelzler, our Supreme Court held, in the context of evaluating causation where duty had been conceded, that an apartment owner who had provided nighttime security guards in a large complex with a history of serious violent crime would not be liable for its failure to provided daytime security guards and failure to maintain functioning locked gates without an actual causal link showing that the additional security measures would have prevented the assault on the plaintiff. (Saelzler, supra, 25 Cal.4th at pp. 770, 775-777, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) The court found the plaintiff's argument that increased security might have prevented the harm was speculative, observing that crime can occur despite the highest level of security. (Id. at p. 777, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) The court recognized its decision requires the balancing of two important and competing concerns: "society's interest in compensating persons injured by another's negligent acts, and its reluctance to impose unrealistic financial burdens on property owners conducting legitimate business enterprises on their premises." (Id. at p. 766, 107 Cal.Rptr.2d 617, 23 P.3d 1143.)
The court in Saelzler, supra, 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143, in holding that a "plaintiff must establish, by nonspeculative evidence, some actual causal link between the plaintiff's injury and the defendant's failure to provide adequate security measures [citations]," (id. at p. 774, 107 Cal.Rptr.2d 617, 23 P.3d 1143), relied upon and cited Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395 with approval, as well as several other Court of Appeal cases. (Saelzler, supra, 25 Cal.4th at pp. 773-775, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) It also relied upon the Restatement Second of Torts, hornbook law and additional cases to support its conclusion a plaintiff must show that a defendant's act or omission was a "substantial factor" in bringing about the injury, that the "mere possibility of such causation is not enough," and a plaintiff must show that more likely than not defendant's conduct was cause in fact of the result. (Saelzler, supra, at pp. 775-778, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) The bottom line for the court in Saelzler was that "[n]o matter how inexcusable a defendant's act or omission might appear, the plaintiff must nonetheless show the act or omission caused, or substantially contributed to, [his or] her injury." (Id. at p. 780, 107 Cal.Rptr.2d 617, 23 P.3d 1143.)
Further, in Thompson, supra, 107 Cal.App.4th 1352, 132 Cal.Rptr.2d 748, where a *687 high school student had brought a negligence action against a school district for injuries he sustained when he was attacked by another student, the court, relying on the reasoning of Saelzler, supra, 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143, regarding the issue of causation, found the injured student had failed to establish the allegedly negligent supervision proximately caused his injuries. (Thompson, supra, at pp. 1371-1373, 132 Cal.Rptr.2d 748.) The court in Thompson acknowledged that the school district, while not considered the insurer of the physical safety of students, had a legal duty imposed on it under California law to "`supervise at all times the conduct of the children on the school grounds and to enforce those rules and regulations necessary to their protection [citation],' [and thus,] `[e]ither a total lack of supervision [citation] or ineffective supervision [citation] may constitute a lack of ordinary care on the part of those responsible for student supervision.' [Citation.]" (Id. at p. 1370, 132 Cal.Rptr.2d 748.) The court found that in such situations "[w]hen an injury occurs despite a defendant's efforts to provide security or supervision ... [f]or analysis purposes, courts assume duty and breach and focus upon causation." (Ibid.)
Turning to the causation issue, the court in Thompson, supra, 107 Cal.App.4th 1352, 132 Cal.Rptr.2d 748 noted a student was not exempt from proving the traditional elements of actionable negligence, including causation, and relied on the same cases cited by our high court in Saelzler, supra, 25 Cal.4th 763, 107 Cal.Rptr.2d 617, 23 P.3d 1143, to emphasize that "[t]o establish [the element of] causation, plaintiff must demonstrate that a particular omission caused the injury." (Thompson, supra, at pp. 1370-1371, 132 Cal.Rptr.2d 748.) The court found that the plaintiff there had not supported his claim of ineffective supervision by competent proof of causation because the declarations of his experts merely criticized the defendant's security measures and handling of the matter, and opined that plaintiff would not have been attacked if there had been effective supervision or intervention. (Id. at pp. 1372-1373, 132 Cal.Rptr.2d 748.) "[W]hile expert criticism of the defendant's security measures may establish abstract negligence, an expert's speculative and conjectural conclusion that different measures might have prevented an injury cannot be relied upon to establish causation. [Citations.]" (Id. at p. 1373, 132 Cal.Rptr.2d 748.)
II
ANALYSIS
Guided by the above principles, we turn to the evidence in this case after making several preliminary observations. According to the membership information form which BGCCV had all member families review and sign before a child was granted membership at the Club, BGCCV was not, as claimed by Rinehart, a licensed child care agency as defined by the California Education Code. Although BGCCV would appear to have a duty to Rinehart as a minor due to his membership via its representations in advertising and manuals to provide him and other children a safe place to be after school with a certain amount of supervision, such relationship and duty does not by itself create liability. (See Rodriguez v. Inglewood Unified School District (1986) 186 Cal.App.3d 707, 723, 230 Cal.Rptr. 823.) Nor, as Rinehart contends, do the public school district supervision cases which base tort liability for governmental entities upon statute and constitutional principals generally apply. (Hoff v. Vacaville Unified School District (1998) 19 Cal.4th 925, 932, 80 Cal.Rptr.2d 811, 968 P.2d 522; Ramirez v. Long Beach *688 Unified School District (2002) 105 Cal.App.4th 182, 188, 129 Cal.Rptr.2d 128.) Rather we review the matter, as the trial court did, under Ann M., supra, 6 Cal.4th 666, 25 Cal.Rptr.2d 137, 863 P.2d 207 as it relates to BGCCV, the landowner here.
Contrary to Rinehart's characterization of the rock throwing, the conduct of the rock thrower who tossed rocks at Rinehart and his friends from the top of the hillside by a nonmember was clearly criminal, constituting both assaults and a battery. (Pen.Code, §§ 240, 242.) However, even if there is some speculative basis for finding the rock thrower was merely negligent, i.e., the act of throwing rocks and other objects at Rinehart and his friends was not intentional, the evidence presented by BGCCV showed the harm was not reasonably foreseeable.
As noted above, the undisputed evidence showed that BGCCV was only aware of several rock throwing incidents on the playground by members of the Club who had tossed stones at the basketball hoop or some other object before the incident involving Rinehart. The evidence also showed that nonmembers sometimes walked across the top of the hill above the playground area or had been admitted to the Club as guests of members. Rinehart's sister had seen some nonmembers go through a fence in the back of the playground before the rock assault. These incidents, however, did not indicate any prior "similar" incidents of serious assaultive conduct with rocks or other objects which were thrown by a member or nonmember at another child on the playground, or incidents when anything had ever "rolled" down the hill at the children on the playground in a similar fashion as the rocks and logs in this case. No Club employee or the Club's owner/CEO had any knowledge of injuries suffered from rock throwing incidents of any type before the incident in this case. Nor had any Club staff or supervisor seen any non-member roll or toss anything from the hillside onto the playground or at the children there. Based on the above evidence considered in light of recent holdings regarding a landowner's duties in the context of current societal conditions, and balancing the burden of requiring BGCCV to have additional supervisors on the playground to watch the children and inspect the fence and property for possible nonmembers, we find that the prior incidents of rock tossing by members on the playground and of nonmembers walking across the top of the hill above the playground did not make the foreseeability of a rock throwing incident by nonmembers sufficiently high for purposes of imposing a duty on the Club to have taken such additional protective and supervisory measures against future third party crime before Rinehart incurred his injuries.
In other words, even though BGCCV had a duty via its rules and regulations to maintain its playground area in a reasonably safe condition and to provide a supervisor on the playground, absent any evidence of any prior similar acts of rocks and logs coming down the hill at children playing on the Club's playground, either intentionally or negligently, there would generally be no duty on the Club's part to take action to control nonmembers on the hill from throwing rocks or objects when such conduct could not reasonably be anticipated. (See Ann M., supra, 6 Cal.4th at pp. 674-676, 25 Cal.Rptr.2d 137, 863 P.2d 207.)
However, even assuming such conduct was foreseeable and BGCCV breached its duty to effectively supervise members and nonmembers on its property, or failed to keep its fence repaired, Rinehart has not shown that additional supervision or more effective supervision and *689 upkeep of the Club's fence would have prevented the incident. Similar to the situations in Saelzler and Thompson where the plaintiffs relied on the declarations of an expert, the declaration of Rinehart's safety expert merely opines additional supervisors on the playground and a better fence would have prevented the incident. (Saelzler, supra, 25 Cal.4th at pp. 776-777, 107 Cal.Rptr.2d 617, 23 P.3d 1143; Thompson, supra, 107 Cal.App.4th at p. 1373, 132 Cal.Rptr.2d 748.) Because BGCCV does not have a statutory duty to have one-on-one supervision at all times, it is pure speculation that a supervisor closer to where Rinehart was on the playground or who made rounds of the playground or the fenced property more frequently would have prevented what appears to be a criminal act by an unknown assailant. Aside from the increased expense of providing additional supervisors and fence repairs, it is entirely conjecture that such added personnel and repairs if needed would prevent all assaults or negligent acts which can occur despite the highest level of supervision. (Saelzler, supra, 25 Cal.4th at p. 777, 107 Cal.Rptr.2d 617, 23 P.3d 1143.)
Rinehart simply has not shown, and cannot prove any omission by BGCCV in its supervision or upkeep of its premises was a "substantial factor" in causing his injuries. (Saelzler, supra, 25 Cal.4th at pp. 778-781, 107 Cal.Rptr.2d 617, 23 P.3d 1143; see also Leslie G. v. Perry & Associates (1996) 43 Cal.App.4th 472, 481, 50 Cal.Rptr.2d 785.) The evidence merely shows the speculative possibility that additional supervisors on the Club's playground while children are present or repairs in the fence surrounding the premises might have deterred the rock attack from the top of the hill. Because the identity of the assailant is unknown, Rinehart's expert's opinion regarding causation is too tenuous to create a triable issue whether the lack of or inadequate supervision on the Club's playground, or a fence in disrepair was an actual or legal cause of his assault and battery. (Saelzler, supra, 25 Cal.4th at p. 781, 107 Cal.Rptr.2d 617, 23 P.3d 1143.) As the court in Noble, supra, 168 Cal.App.3d at page 916, 214 Cal.Rptr. 395, noted, "a plaintiff, in order to establish liability, must prove more than abstract negligence unconnected to the injury." Rinehart has failed to show a causal link between his injuries and any negligent failure to supervise by BGCCV.
In sum, contrary to Rinehart's contentions, our independent review shows the trial court properly applied the law under Ann M., supra, 6 Cal.4th 666, 25 Cal.Rptr.2d 137, 863 P.2d 207 and Noble, supra, 168 Cal.App.3d 912, 214 Cal.Rptr. 395 in this case, and found Rinehart cannot establish either foreseeability of the non-member rock throwing incident or that the failure of BGCCV's supervision on the playground or its failure to repair its fence was the actual, legal cause of his injuries. Therefore, the trial court properly granted BGCCV's summary judgment motion and entered judgment in its favor.
DISPOSITION
The judgment is affirmed. Costs are awarded BGCCV on appeal.
BENKE, Acting P.J., and IRION, J., concur.
| {
"pile_set_name": "FreeLaw"
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This opinion was filed for rec:ord
at B'·<PAm on F.pb, 2~.7I)!5
~
Ronald R. Carpenter
Supreme Court Clerk
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
In the Matter of the Disciplinary ) No. 201,327-9
Proceeding Against )
)
MATTHEW FRANKLIN PFEFER, ) En Bane
)
an Attorney at Law. )
) Filed FEB 2 6 2015
JOHNSON, J.-This is a disciplinary proceeding against attorney Matthew
Franklin Pfefer, admitted to practice in 2001. Pfefer was hired to represent his
client in her personal injury suit. Delay and a lack of diligence characterized his
representation. He delayed filing his client's suit until only a few days before the
statute of limitations expired. He did not perform discovery. He did not prepare
potential witnesses for testimony. He did not comply with court deadlines. He did
not tell his client that her case had been dismissed because of his failure to comply
with those court deadlines. He did not tell his client that opposing counsel made a
settlement offer. He did not give his client notice of his withdrawal, which he made
effective immediately. In short, he did nothing to meet his basic responsibility to
In re Disciplinary Proceeding Against Pf~fer, No. 201,327-9
protect his client's interest, with the result that a viable settlement offer lapsed and
her claim is now barred by the statute of limitations.
Rather than challenge the factual basis of the Washington State Bar
Association's (WSBA) three-count complaint, Pfefer's brief to this court raises
arguments about due process and unconstitutional vagueness. He does not cite to
any testimony, evidence, or argument that the events of his representation did not
occur exactly as the hearing officer found. Our own review of the record shows the
same-a knowing disregard of fundamental professional duties owed to his client
and an indifference to making restitution. The WSBA Disciplinary Board (Board)
unanimously recommended that Pfefer be suspended from the practice of law for
six months and pay restitution to his former client in the amount of unaccepted
settlement offer. We affirm, suspend Pfefer for six months, and condition his return
to practice on the payment of restitution of $5,834.15 to his former client and the
payment of costs and expenses to the WSBA.
FACTUAL HISTORY AND MISCONDUCT
In February 2006, Ana Ortiz and her minor daughter were injured in an
automobile accident. Ortiz hired Pfefer to represent her and her daughter. On
February 10, 2009, six days before the statute of limitations would run, Pfefer filed
a complaint on behalf of Ortiz and her daughter in King County Superior Court.
2
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
The court set a trial date of July 26, 2010, a deadline of July 21, 2010 for filing a
confirmation ofjoinder, and a deadline of April19, 2010 for moving to change the
trial date. On the day of the April 19 deadline, Pfefer moved to continue the trial,
which was reset to March 21, 2011. The amended order required that
settlement/mediation be completed by February 22, 2011 and a joint confirmation
ofreadiness for trial be filed by February 28,2011. A February 8, 2011 court order
reminded both parties of the deadlines.
Pfefer did little before these deadlines passed. He did not conduct discovery,
disclose witnesses, submit the case to mediation (or move to waive it), or exchange
exhibits with defense counsel. He did not meet with Ortiz or other witnesses to
prepare for trial. Although reminded by a personal phone call from the superior
courtjudge's bailiff, he also did not file the joint confirmation of trial readiness by
the February 28, 2011 deadline. Because Pfefer did not file the joint confirmation,
the case was not sent to trial. Pfefer did not inform Ortiz that her case was not
proceeding to trial. On March 21, 2011, Ortiz appeared at the King County
courthouse, unaware that her case had not been sent to trial. Pfefer did not appear;
he was evidently in Spokane where he maintained his office. The court dismissed
Ortiz's cas,e that same day because Pfefer had failed to meet the court's deadlines.
3
In re· Discipl{naty ProCeeding Against Pjefer, No. 201,327-9
On March 24, 2011, opposing counsel offered to settle Ortiz's case for
$6,580.06. Pfefer did not communicate this offer to Ortiz.
On March 31, 2011, Pfefer filed a motion for reconsideration. The court
granted the motion, and Ortiz's case was set for a new trial date of June 13, 2011.
On May 5, 2011, Pfefer filed a notice of immediate withdrawal, "effective
immediately." Ass~n's Ex. A-132, at 1. Pfefer informed Ortiz of his withdrawal by
leaving a phone message with one of Ortiz's friends and mailing her a copy of the
notice. Ortiz attempted to file an objection in court to Pfefer's withdrawal, but it
was struck for lack of proof of service. On May 19, 2011, her case was dismissed.
The statute of limitations on her claim then expired.
PROCEDURAL HISTORY
The WSBA filed a complaint with the Board under the Rules for
Enforcernent of Lawyer Conduct (ELC) 10.3, charging Pfefer with three counts of
misconduct, and the case proceeded to a hearing. The hearing officer found all
thr~e counts were proved: count one, that Pfefer violated Rules of Professional
Conduct (RPC) 1.3 and RPC 3.2 by failing to comply with dates and deadlines set
out in the May 18, 2~10 and February 8, 2011 orders and by failing to meet with
Ortiz in preparation for trial; count two, that Pfefer violated RPC 1.2(a) and/or
RPC 1.4 by failing to consult Ortiz regarding the settlement offer and failing to
4
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
advise her that her.case had been dismissed; and count three, that Pfefer violated
RPC 1.16(c) and.( d) for making his withdrawal effective immediately in violation
of court rules.
The hearing officer applied the American Bar Association's Standards for
Imposing Lawyer Sanctions (1991 & Supp. 1992) to determine the appropriate
sanction. For all counts, the hearing officer determined that Pfefer acted
knowingly. In weighing aggravating or mitigating factors, the hearing officer
found that aggravating factors in ABA Standards std. 9.22(d) (multiple offenses)
and std. 9.22(j) (indifference to making restitution) applied. He also found that
mitigating factors in ABA Standards std. 9.32(a) (absence of prior disciplinary
record) and std. 9 .32(b) (absence of a dishonest or selfish motive) applied. Finding
that the aggravating and mitigating factors were in equipoise, the hearing officer
recommended a six-month suspension on each count.
The ~earing officer also concluded that Pfefer should pay in restitution
$6,580.06, the amount of the uncommunicated settlement offer. The Board, by
unanimous decision, adopted the hearing officer's findings, conclusions, and
recommendation of a six-month suspension. The Board reduced the amount of
restitution to $5,834.15, the "amount of the uncommunicated settlement offer less
5
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
costs directly attributable to Ortiz's case." Decision Papers (DP) at 30. It also
assessed costs and expenses under ELC 13.9. Pfefer appeals to this court.
ANALYSIS
This court gives considerable weight to the hearing officer's findings of fact.
Unchallenged findings of fact are considered verities on appeal, while challenged
findings are upheld so long as they are supported by substantial evidence.
Conclusions of law are reviewed de novo and are upheld if supported by the
findings of fact. In re Disciplinary Proceeding Against Marshall, 160 Wn.2d 317,
330, 157 P.3d 859 (2007). An attorney must present arguments why specific
findings are not supported by the record and cite to the record in support of that
argument. Simply arguing an alternative version of events or an alternative
explanation will not suffice to overturn the hearing officer's conclusions. Marshall,
160 Wn.2d at 331. Sanctions recommended to this court by a unanimous board will
be upheld unless there is a clear reason for departure. In re Disciplinary
Proceeding Against Sanai, 177 Wn.2d 743, 760, 302 P.3d 864 (2013), cert. denied,
i • . •
. ~----U.S. ____ , 134 S. Ct. 1324, 188 L. Ed. 2d 307 (2014).
6
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
·,
!!l'ti[er 's Dut; Process !.fzguments Lack Merit
Pfefer_, rather than challenging the· factual findings that support his sanction,
argues that his right to due process was violated by the hearing examiner.
According to Pfefer, the hearing examiner improperly considered his own (the
hearing offlcer' s) knowledge and experience without the support of expert
testimony in concluding that Pfefer's conduct violated the RPC. Because the
hearing officer's "secret opinion" was incapable of cross-examination, Pfefer
asserts he was denied due process. Resp't-Lawyer's Br. Opposing Disciplinary
Bd. 's Decision at 28. ~n essen~e, Pfefer argues that expert testimony is required to
establish the violations of thy RPC. We disagree .
.In Burtch, we held that a hearing officer may properly refuse to qualify
witnesses as experts if those witnesses lack the ability to assist the trier of fact. In
re Disciplinary Proceeding Against Burtch, 162 Wn.2d 873, 890, 175 P.3d 1070
(2008). In that case, we hel~ that the hearing officer did not err in limiting the
questioning of two attorney-witnesses because there was no showing that either
"lawyer had a specialty in ethics or any other specialty that would assist the trier of
fact in. this case, the hearing officer, also a lawyer." Burtch, 162 Wn.2d at 890.
Pfe±~r fails to understand that hearing officers are capable of determining the facts
.'
and applying; the ±1:tcts and evidence of the case to the RPC and concluding whether
7
In r~DisciplindryProceeding Against P.fefer, No. 201,327-9
an attorney's conduct met the standards established by the rules. The record here
contains simple documentary evidence and testimony from witnesses about the
history of Ortiz's case, from which the hearing officer determines the facts and
draws reasonable inferences in light of the overall testimony and evidence. See In
re Disabili~y Proceeding Against Diamondstone, 153 Wn.2d 430,440, 105 P.3d 1
(2005); In re Disciplinary Proceeding Against VanDerbeek, 153 Wn.2d 64, 82,
101 P.3d 88 (2004). We find no due process or unfairness concerns with this
procedure.
Pfefer also alleges that he was denied due process when the hearing officer
ruled that Pfefer's law partner, Robert Caruso, could not serve both as a fact
witness andas co-counsel at the disciplinary hearing. Pfefer argues that RPC 3.7 1
does not apply at disciplinary hearings because the language of the rule states that
it applies only "at a trial." See Resp't-Lawyer's Br. Opposing Disciplinary Bd. 's
Decision at 17. We disagree. The comments to RPC 3. 7 state that the purpose of
1
"(a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a
necessary witness unless:
"(l) the testimony relates to an uncontested issue;
"(2) the testimony relates to the nature and value of legal services rendered in the case;
"(3) disqualification ofthe lawyer would work substantial hardship on the client; or
"(4) the lawyer has been called by the opposing party and the court rules that the lawyer
may continue to act as an advocate.
"(b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer's firm
is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9."
8
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
the rule is to protect the "tribunal" from prejudice and confusion. RPC 3.7 cmt. 3.
''Tribunal,'' as defined under the RPC, "denotes a court, an arbitrator in a binding
arbitration proceeding or legislative body, administrative agency or other body
acting in an adjudiCative capacity," evidenced "when a neutral official, after the
presentation of evidence or legal argument by a party or parties, will render a
binding legal judgment directly affecting a party's interests in a particular matter."
RPC l.O(m). The plain language ofRPC l.O(m) and RPC 3.7 support application
ofRPC 3.7 to disciplinary hearings.
More fundamentally, Pfefer fails to show on this record that the hearing
officer disqualified Caruso at all. Rather, he gave Pfefer a choice: either Caruso
could act as advocate and cross-examine two of the WSBA's witnesses (including
Ortiz) or he could testify as a fact witness. Pfefer chose the latter. The hearing
officer ruled that Pfefer had the opportunity to testify in the narrative, subject to
objection, and Caruso was permitted to sit at counsel's table and advise Pfefer
throughout the hearing. Because the record shows that the hearing officer did not
disq~Jalify Caruso from assisting Pfefer at the disciplinary hearing, we find no
error.
9
In r.e. Disciplinary Proceeding Against Pfefer, No. 201,327-9
Substantial Evidence Supports the Findings o[Fact
Unchallenged findings of fact are treated as verities on appeal, and we give
great weight to the hearing officer's determination of credibility and veracity of
witnesses. Marshall, 160 Wn.2d at 330. Pfefer challenges only two of the hearing
officer's findings of fact. After a full review of the record, we find that the findings
of fact are supported by substantial evidence.
Under count one, the evidence establishes that Pfefer failed to diligently
pursue his client's case, in violation ofRPC 1.3 2 and RPC 3.2. 3 He waited over a
year after the beginning of representation to file Ortiz's suit, during which time he
performed little or no investigation or discovery. After the case was filed, Pfefer
failed to comply with any of the deadlines established in the court's February 8,
2011 order requiring completion of the joint confirmation and that the case be
submitted to mediation. Despite being reminded by both his paralegal and the
superior court's bailiff, he failed to file the joint confirmation by the deadline of
February 28, 2011 and because of this the case was dismissed. Pfefer challenges
the hearing officer's finding of fact that he found it not credible that Pfefer's
reason for failing to file the joint confirmation was due to some confusion about
2
"A lawyer shall act with reasonable diligence and promptness in representing a client."
3
"A lawyer shall make reasonable efforts to expedite litigation consistent with the
interests of the client."
10
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
local King County rules. Clerk's Papers (CP) at 201. We agree that Pfefer's
conduct was not the product of confusion. Rather, the record amply demonstrates a
knowing failure by Pfefer to show reasonable care in Ortiz's case by complying
with simple court deadlines. We agree with the hearing officer's conclusion that
Pfefer violated RPC 1.3 and RPC 3.2.
Under count two, we find substantial evidence that Pfefer violated RPC
1.2(a)4 and RPC 1.4 5 by failing to consult Ortiz about the dismissal of her case and
for failing to consult her regarding the settlement offer. Pfefer testified that he
believed that the offer was ineffective or a sham, and for that reason he did not
communicate the offer to Caruso. The hearing officer found his explanation was
4
"Subject to paragraphs (c) and (d), a lawyer shall abide by a client's decisions
concerning the objectives of representation and, as required by Rule 1.4, shall consult with the
client as to the means by which they are to be pursued. A lawyer may take such action on behalf
of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a
client's decision whether to settle a matter. In a criminal case, the lawyer shall abide by the
client's decision, after consultation with the lawyer, as to a plea to be entered, whether to waive
jury trial and whether the client will testify."
5
"(a) A lawyer shall:
"(1) promptly inform the client of any decision or circumstance with respect to which the
client's informed consent, as defined in Rule 1.0(e), is required by these Rules;
"(2) reasonably consult with the client about the means by which the client's objectives
are to be accomplished;
"(3) keep the client reasonably informed about the status of the matter;
"(4) promptly comply with reasonable requests for information; and
"(5) consult with the client about any relevant limitation on the lawyer's conduct when
the lawyer knows that the client expects assistance not permitted by the Rules of Professional
Conduct or other law.
"(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the
client to make informed decisions regarding the representation."
11
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
not credible. CP at 202. Pfefer challenges this finding. We agree with the hearing
examiner. RPC 1.4 requires communication of settlement offers to clients. The
"effectiveness" of such an offer is immaterial in regard to an attorney's obligation
to inform the client on his or her case. Pfefer informed Ortiz neither of the
substance nor the existence of the settlement offer, nor does the record show that
Ortiz previously indicated that she would not accept a settlement in the amount
offered. Pfefer had provided no evidence or justification in not communicating the
offer to Ortiz.
Similarly, Pfefer proffers no justification for not informing Ortiz that her
case had been dismissed. RPC 1.4 requires an attorney to communicate with his or
her client, and no excuse or reason was established for this lapse. We have
previously addressed this situation and affirmed disciplinary action against an
attorney who failed to honestly inform the client of the reason the court dismissed
the client's case. In re Disciplinary Proceeding Against Starczewski, 177 Wn.2d
771, 780, 306 P.3d 905 (2013) (attorney failed to inform client that case had been
dismissed on procedural grounds and later told client that case had been dismissed
on the merits). Pfefer's conduct violates the requirements of the RPC because he
failed to inform his client that her case was dismissed at all. We agree with the
hearing officer's conclusion that Pfefer violated RPC 1.2(a) and RPC 1.4.
12
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
We also uphold the charges under count three, that Pfefer violated RPC
1.16(c)6 and RPC 1.16(df by withdrawing from Ortiz's representation "effective
immediately." RPC 1.16(c) permits withdrawal following notice to or permission
of a tribunal but only if the lawyer "compl[ies] with applicable law.'' In this case,
·that "applicable law" is Superior Court Civil Rule (CR) 71(c)(l), which mandates
that "[t]he attorney shall file and serve a Notice of Intent to Withdraw on all other
parties in the proceeding. The notice shall specify a date when the attorney intends
to withdraw, which date shall be at least 10 days after the service of the Notice of
Intent to Withdraw." Before this 10-day period can begin to run, however, notice
must first be served on the client. CR 71 (c)(2).
Pfefer's notice of withdrawal, given to the court "effective immediately,"
violated CR 71 (c)( 1) because it failed to permit the 10-day period following filing,
a period that itself cannot begin to run until service is effective, and proof of
service filed, in accordance with CR 71(c)(2). The hearing officer's unchallenged
6 "A lawyer must comply with applicable law requiring notice to or permission of a
tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall
continue representation notwithstanding good cause for terminating the representation."
7
"Upon termination of representation, a lawyer shall take steps to the extent reasonably
practicable to protect a client's interests, such as giving reasonable notice to the client, allowing
time for employment of other counsel, surrendering papers and property to which the client is
entitled and refunding any advance payment of fee or expense that has not been earned or
incurred. The lawyer may retain papers relating to the client to the extent permitted by other
law."
13
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
findings established that Pfefer informed Ortiz of his withdrawal only by leaving a
message with a friend and mailing a copy of the notice. Pfefer argues that if he did
violate CR 71, he was nonetheless in substantial compliance. Immediate
withdrawal is not substantial compliance with a procedure that requires, at a
minimum, 10 days' notice, especially here where Ortiz's case was facing dismissal
based on Pfefer's lack of diligence in complying with the court's scheduling orders
and where the statute of limitations would expire shortly after the case was
dismissed.
This evidence also supports the conclusion that Pfefer failed to protect
Ortiz's interests in violation ofRPC 1.16(d). His immediate withdrawal, filed May
5, 2011, left his client with little chance to pursue her case. Ortiz tried to object in
court, but the objection was stricken for lack of proof of service. Ortiz's case was
dismissed on May 19, and the statute of limitations ran six days later. It was
Pfefer' s conduct and his withdrawal "effective immediately" that caused her legal
claim to be barred. We agree with the hearing officer's conclusion that Pfefer
violated RPC 1.16(c) and RPC 1.16(d).
Sanctions Analysis
We affirm the hearing officer's and unanimous Board's recommended
sanctions against Pfefer. This court applies the ABA Standards in all lawyer
14
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
discipline cases. In re Disciplinary Proceeding Against Halverson, 140 Wn.2d
475, 492, 998 P.2d 833 (2000). Under this two-step process, the presumptive
standard is first determined by considering ( 1) the ethical duty violated, (2) the
lawyer's mental state, and (3) the extent of actual or potential harm caused by the
misconduct. The next step is to consider the application of any mitigating or
aggravating factors. In re Disciplinary Proceeding Against Dann, 136 Wn.2d 67,
77, 960 P .2d 416 (1998) (citing In re Disciplinary Proceedings Against Johnson,
118 Wn.2d 693, 701, 826 P.2d 186 (1992)). This court reviews sanctions de novo
but will uphold a unanimous recommendation by the Board unless there is a clear
reason for departure. In re Disciplinary Proceeding Against Behrman, 165 Wn.2d
414,422, 197 P.3d 1177 (2008). Pfefer has shown no reason for departure.
In his sanctions analysis, the hearing officer concluded that Pfefer acted
knowingly under all three counts and caused injury to Ortiz's interests and that of
the legal system. We agree. Pfefer's knowing failure to diligently prosecute Ortiz's
claim caused her case to be dismissed (twice) and subsequently barred by the
statute of limitations. His failure to communicate the settlement offer prevented her
from considering acceptance. And his means of withdrawal left his client's
interests unprotected.
The presumptive sanction for Pfefer's misconduct is suspension. The
15
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
hearing officer determined that ABA Standards std. 4.4 applied to counts one and
two. ABA Standardsstds. 4.42(a) and (b) state that suspension is generally
appropriate when "a lawyer knowingly fails to perform services for a client and
causes injury or potential injury to a client" or "a lawyer engages in a pattern of
neglect and causes injury or potential injury to a client." The hearing officer also
determined that ABA Standards std. 7.0 applied to count three. Under that
standard, "[s]uspension is generally appropriate when a lawyer knowingly engages
in conduct that is a violation of a duty owed to the profession, and causes injury or
potential injury to a client, the public, or the legal system." ABA Standards std.
7 .2. We agree with this determination.
The second step under the ABA Standards is to consider any mitigating or
aggravating factors. The hearing officer found two aggravating factors 8 and two
mitigating factors 9 present. We agree with this determination. Pfefer does not argue
that his sanction is disproportionate, nor would we find it to be so in this case.
Pfefer also argues that the amount of restitution should be reduced to reflect
his firm's costs but fails to support his argument with any explanation on why such
costs are borne by his firm and not by Ortiz. The Board, based on the evidence and
8
ABA Standards std. 9.22(d) (multiple offenses), (j) (indifference to making restitution).
9
ABA Standards std. 9.32(a) (absence of prior disciplinary record), (b) (absence of
dishonest or selfish motive).
16
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
argument from Pfefer, reduced the amount of restitution from $6,580.06 to
$5,834.15 in order to reflect costs attributable to Ortiz's case. We find that no
further reduction is appropriate and affirm restitution in the amount of $5,834.15.
WSBA Costs
Finally, Pfefer objects to the costs and expenses assessed against him by the
chair of the disciplinary board (Chair) under ELC 13.9(a). The WSBA filed a
statement of costs and expenses, as required under ELC 13.9(d), listing five
headings and the costs associated with each. 10 Pfefer had 20 days from the date of
service to file exceptions. ELC 13.9(d)(4). Two days before the deadline, Pfefer
filed a blanket objection "to all costs stated by disciplinary counsel as no
documentation supports any of these costs." DP at 98. The WSBA had 10 days to
reply. ELC 13.9(d)(5). Although not strictly required by the rules, the WSBA
provided detailed receipts of all charges. Ten days later the Chair entered the costs
under ELC 13.9(e), finding the costs and expenses appropriate.
The day after the Chair entered the costs, Pfefer filed a supplemental
10
(1) "Court reporter charges for attending and transcribing depositions or hearing" in the
amount of$4,463.15, (2) "Necessary travel expenses ofhearing officers, disciplinary counsel,
investigators, adjunct investigative counsel, adjunct trial counsel or witnesses for both
investigation and prosecution" in the amount of$1,254.67, (3) "Special mail or delivery charges"
in the amount of $10.07, (4) "Other: translation services and court records" in the amount of
$1,102.90, and (5) "Expenses under ELC 13.9(c)" in the amount of$3,000. DP at 97. The total
claimed is $9,830.79.
17
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
objection. His supplemental objections challenged virtually every expense,
objecting to, for example, mileage reports for disciplinary counsel, 11 lunch
expenses, parking, the use of in person questioning of witnesses at the disciplinary
hearing instead of performing the hearing telephonically, document fees, and
interpreter's services. The Chair did not consider Pfefer's supplemental objections,
concluding they were too late.
We agree with the WSBA that Pfefer's supplemental objections were
untimely. Independently, we have reviewed the costs and expenses assessed
against Pfefer and find that all costs were "reasonably and necessarily incurred" by
the WSBA pursuant to ELC 13.9(b).
CONCLUSION
The record amply demonstrates that Pfefer knowingly failed to provide his
client with the representation required by the RPC, resulting in injury to his client.
Clients expect, and RPC establish, due diligence by attorneys: Pfefer showed little.
We adopt the Board's unanimous recommendation, suspend Pfefer from the
practice of law for six months, and condition his reinstatement on his payment of
11
Pfefer's supplemental motion to take judicial notice of the distance between the cities
of Burien and Seattle is denied.
18
In re Disciplinary Proceeding Against Pfefer, No. 201,327-9
restitution to Ortiz for $5,834.15 and the costs and expenses assessed against him
under ELC 13.9.
WE CONCUR:
-~~ l c --+·CJ_;;__.-
/
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19
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993 F.2d 887
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Harry VELTMAN, III, Defendant-Appellant.
No. 92-50402.
United States Court of Appeals, Ninth Circuit.
Submitted May 6, 1993.*Decided May 11, 1993.
Before: KOZINSKI, SUHRHEINRICH** and T.G. NELSON, Circuit Judges.
1
MEMORANDUM***
2
The district court was correct in not grouping the counts on which Veltman was convicted. Counts are grouped only when they "involv[e] substantially the same harm." U.S.S.G. § 3D1.2. Receiving obscene or threatening letters on several occasions is more offensive or frightening than receiving them only once. Here, each new letter constituted a new harm, even though all the letters involved the same victim and were part of the same scheme. Cf. U.S.S.G. § 3D1.2 app. note 4 example (5).
3
The district court also didn't clearly err in finding Veltman hadn't accepted responsibility for his behavior. Veltman expressed regret about his conduct, see, e.g., G.E.R. 117, but he also denied it was criminal, see, e.g., G.E.R. 116. The district court's judgment about a defendant's acceptance of responsibility "is entitled to great deference on review," U.S.S.G. § 3E1.1 app. note 5, and we see no reason to overturn it.
4
Finally, the district court didn't err in departing upward for more than minimal planning. A district court may depart if it finds an aggravating circumstance that wasn't adequately considered by the Sentencing Commission. United States v. Lira-Barraza, 941 F.2d 745, 746 (9th Cir.1991) (en banc); U.S.S.G. § 5K2.0. The presence of more than minimal planning is indeed an aggravating circumstance; the more deliberate and premeditated the execution of the crime, the more culpable and dangerous we consider the offender to be. See, e.g., U.S.S.G. § 2A6.1(b)(2). And though the Commission considered the possibility that some threatening communications may be less deliberate than the typical one, see id., it didn't consider the possibility of threatening communications that are substantially more deliberate than the norm. The "extraordinary steps and ... extraordinary lengths," RT 6/1/92 at 61, Veltman went to in carrying out his scheme--such as his willingness to fly to Colorado just to deliver his letters--bespeak an unusual level of premeditation and commitment to his criminal enterprise. They indeed constitute more planning than is normally involved in committing the offense, see U.S.S.G. § 1B1.1 app. note 1(f), and a 2-level departure for this was well within the bounds of reason. See Lira-Barraza, 941 F.2d at 751.1
5
AFFIRMED.
*
The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
The Honorable Richard F. Suhrheinrich, United States Circuit Judge, United States Court of Appeals for the Sixth Circuit, 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
1
The fact that "more than minimal planning" is specifically given as a reason for an enhancement in some guidelines but not in U.S.S.G. § 2A6.1 is not relevant to this analysis. See U.S.S.G. § 5K2.0
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154 Ariz. 468 (1987)
743 P.2d 1386
STATE of Arizona, Appellee,
v.
John Thomas CARR, Appellant.
No. CR-86-0083-AP.
Supreme Court of Arizona, En Banc.
October 1, 1987.
Robert K. Corbin, Atty. Gen. by William J. Schafer, III, Galen H. Wilkes, Asst. Attys. Gen., Phoenix, for appellee.
Ross P. Lee, Maricopa County Public Defender by James H. Kemper, John W. Rood, III, Deputy Maricopa County Public Defenders, Phoenix, for appellant.
MOELLER, Justice.
John Thomas Carr was tried and convicted for the first degree murder of Brent Laliberte. The trial judge found that life imprisonment, rather than death, was the appropriate sentence. Defendant appeals his conviction, contending that the trial court made two erroneous rulings on evidentiary issues. Each issue involves the admissibility of out-of-court statements, one by the defendant and one by a witness. Each statement was offered on the theory that it was admissible as an excited utterance. The trial court ruled that the witness's statement was admissible and the defendant's was not. We have jurisdiction pursuant to Ariz.Const. art. 6, § 5(3) and A.R.S. § 13-4031. Since we find no error, we affirm.
FACTS
A knowledge of certain basic facts is necessary in order to determine the admissibility of the two alleged excited utterances. On July 13, 1984, four days before the murder, Carr (defendant) was visiting a *469 friend at The Elms, a two-story apartment complex in Mesa, Arizona. Kevin Zufelt, another resident of The Elms, and one of his friends became involved in a heated argument with Laliberte, the murder victim, who was also a resident at The Elms. This argument arose over the use of the apartment's swimming pool. Defendant and others got involved in the confrontation. Defendant was overheard to say that he would get the victim, Laliberte, "some day, some way," or "one way or another."
Four days later, defendant again visited The Elms. The victim invited Zufelt and defendant to smoke some marijuana. The three men sat in front of the victim's ground-floor apartment until an argument erupted between defendant and the victim. Defendant stormed up to the second-floor balcony overlooking the victim's apartment. Zufelt followed him in an attempt to calm him down. While doing so, Zufelt unfortunately returned a buck knife to defendant from whom he had earlier borrowed it. Within minutes, this buck knife became the murder weapon. While Zufelt was trying to get defendant calmed down, defendant accused Zufelt of "kissing his [Laliberte's] ass."
Witnesses Tommy Masterson and Linda Bennett were also on the second-floor balcony where they had been watching an incoming storm. Defendant told them in a loud voice that the victim had accused Masterson of breaking some glass and not cleaning it up. Witness Masterson also tried unsuccessfully to calm the defendant. About this time, the victim, who was downstairs within earshot of defendant's loud accusations, challenged the defendant to come down to where he was and repeat his accusations. At that point, defendant said, "That's it," said he was going to "kill that s.o.b." and headed downstairs.
The victim was standing in front of his apartment with nothing in his hands and no weapon on his person. When defendant reached the victim, they began arguing, and the victim "poked" defendant in the chest one or more times. Masterson, Bennett and Zufelt then saw the defendant "swing" at the victim, who then grabbed his own neck and began falling away from the defendant. Defendant then stabbed the victim in the back. One witness heard the defendant state: "That will teach you," as he pulled the knife out of the victim's back.
An autopsy showed that the victim died as a result of stab wounds to the neck that slashed the carotid artery and completely severed the jugular vein. Another stab wound nearly fifteen inches long ran vertically from the back of his head through his shoulder blades and down his back. There were also defensive stab wounds on the victim's wrist and right forearm and additional stab wounds in his back.
Defendant immediately fled from the apartment complex after the attack. Numerous people, including Masterson and another Elms' resident, Greg Scyrkels, ran to help the victim. As Masterson and Scrykels futilely tried to staunch the massive flow of blood gushing from the victim's mortal neck wounds, Scyrkels heard Masterson say, "He (the defendant) said earlier when he was upstairs, that he was going to come down and kill him (the victim)." The admission of this statement as an excited utterance by Masterson constitutes the first alleged error raised by the defendant.
About forty minutes after the attack, the defendant returned to the apartment complex. Seeing that police officers and fire trucks were present, he concluded he had "messed up real bad" and fled again. However, the police officers gave chase and defendant was apprehended as he tried to hide under a nearby fence. While being transported to the police station, defendant contends he told one or more of the officers that the victim had threatened him with a shotgun. The trial court found this statement by defendant was not an excited utterance and refused to admit evidence of it. This is the basis for defendant's second assignment of error.
After arrival at the police station, defendant gave a statement after being "Mirandized." He said he went to the apartment complex to visit a friend and had a few harsh words with the victim. He said *470 the victim summoned him, began poking him in the chest, and told him he was going to "kick his ass." Defendant admitted he took the knife from its sheath and "took one slash at Brent [the victim] horizontally with his right hand."
In his trial testimony, defendant, who is black, claimed that he was afraid of the victim because he had seen the victim two or three weeks before the attack holding a shotgun and saying that it was for "nigger season." Defendant said he only attacked because he thought the victim was going to draw a weapon.
THE STATEMENT OF THE WITNESS
The first claimed error concerns the admission into evidence of the statement Masterson made to Scyrkels immediately after the attack as the two of them were trying to save the victim's life. Scyrkels testified that the "tall guy with curly hair" [Masterson] stated at that time that the defendant had said "earlier when he was upstairs, that he was going to come down and kill him [Laliberte]." Over a hearsay objection, the statement was admitted under the excited utterance exception. Ariz.R.Evid. 803(2).
Masterson was available as a witness and testified. Masterson did not deny making the statement attributed to him by Scyrkels, but he testified that he had no memory of making the statement. However, even when the declarant is available as a witness, Rule 803(2) excludes from the hearsay rule any "statement relating to a startling event or condition made while the declarant was under the stress of excitement caused by the event or condition." In reviewing fact situations involving the excited utterance exception, both before and after the formal adoption of it by promulgation of Rule 803(2), this court has used the three-part test laid out by Wigmore. State v. Rivera, 139 Ariz. 409, 678 P.2d 1373 (1984); State v. Ritchey, 107 Ariz. 552, 490 P.2d 558 (1971). First, there must be a startling event. Second, the words must be spoken soon after the event so that the declarant will not have time to fabricate the declarations. Third, the words spoken must relate to the startling event. 6 Wigmore, Evidence § 1750 (Chadbourn rev. 1976).
The basic facts outlined above certainly show that a startling event occurred. Further, the statement related to the event and was made during it. The startling event began with the sudden eruption of a loud confrontation between the defendant and the victim. The startling event was still in progress a few minutes later when a statement about it was made by a witness who was desperately trying to staunch the massive flow of blood from the dying victim. The statement has all the indicia of reliability which has led to acceptance of the excited utterance rule. We will not reverse a trial court's ruling under the excited utterance exception absent a clear abuse of discretion. State v. Rivera, 139 Ariz. at 410, 678 P.2d at 1374; State v. Dale, 113 Ariz. 212, 216, 550 P.2d 83, 87 (1976). There was no such abuse of discretion here.
However, our inquiry does not end with our holding that the trial court did not err in holding the statement to be an excited utterance. Defendant's principal argument is not that the statement is not an excited utterance, but that the statement should nevertheless have been excluded under the rationale of State v. Cruz, 128 Ariz. 538, 627 P.2d 689 (1981). Defendant cites Cruz for the proposition that even hearsay which is admissible through one of the enumerated exceptions should be excluded if it "goes directly to the appellant's guilt on the charge of premeditated murder."
In Cruz, the defendant was charged with the murder of a fellow high school student. At trial, the defendant's sister testified. On cross-examination, she denied that she had told Rosemary Santana, the victim's girlfriend, that the defendant had told her he was going to shoot the victim. For the purpose of impeaching that denial, the state called Ms. Santana, who testified that the defendant's sister told her that the defendant "was going to shoot Leonard [the victim] and get it over with."
In Cruz the court stated that this testimony was not hearsay for two reasons. *471 The defendant's out-of-court statement was a non-hearsay admission by a party opponent. The testimony of the victim's girlfriend was impeachment testimony admissible under Ariz.R.Evid. 801(d)(1) as a prior inconsistent statement which is also not hearsay under the Arizona Rules of Evidence.
We went on to say, however:
Yet, in the present case, we have a statement which does more than merely impeach the witnesses' statement; rather, it relates directly to the guilt of the defendant. This presents a situation where the possibility of prejudice is inordinately high and the reliability of the statement requires resolution of a swearing contest between the declarant and the person to whom the statement was allegedly made. United States v. Cunningham, 446 F.2d 194, 198 (2nd Cir. 1971), cert. denied, 404 U.S. 950, 92 S.Ct. 302, 30 L.Ed.2d 266. Here, the alleged statement made by Viviana Cruz [defendant's sister] was especially prejudicial due to the fact that it contained an alleged admission by the appellant which, if believed by the jury, established the appellant's guilt.
128 Ariz. at 540, 627 P.2d at 691.
We also noted in Cruz that all rules of evidence, including those favoring the admission of evidence, are counterbalanced by Rules 102 and 403.
Rule 102 provides:
These rules shall be construed to secure fairness in administration, elimination of unjustifiable expense and delay, and the promotion of growth and development of the law of evidence to the end that the truth may be ascertained and proceedings justly determined.
Rule 403 provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
Applying the balancing tests inherent in Rules 102 and 403 we concluded that the alleged prior inconsistent statement should have been excluded.
Unlike Cruz, the statement in the instant case was admitted as an excited utterance, not as a prior inconsistent statement of a witness. The excited utterance exception is based upon the settled belief that excited utterances are reliable because they are uttered spontaneously at times of great excitement or stress and without time to contemplate or fabricate. See, e.g., Stephen A. Saltzburg and Kenneth R. Redden, Federal Rules of Evidence Manual 829 (4th ed. 1986) ("When a declarant makes a statement under the stress of excitement, and the statement relates to the exciting event or condition, the statement is not excluded because of the hearsay rule. It is said that spontaneity gives rise to trustworthiness"). In contrast, the prior inconsistent statement in Cruz carried no such indicia of reliability. Arizona's prior inconsistent statement rule, Ariz.R.Evid. 801(d)(1)(A), is a broad exception to the hearsay rule. It is based upon a belief that a jury ordinarily should be permitted to consider a prior inconsistent statement in determining credibility. It is not, however, based upon any belief or finding that the person asserting the alleged prior inconsistent statement possesses any particular badge of reliability. In contrast, Fed.R. Evid. 801(d)(1)(A) states that to be admissible in federal court the prior statement must not only be inconsistent with the present testimony but must also have been given under oath subject to the penalty of perjury at a trial, hearing, other proceeding or deposition.
In Cruz, the application of the balancing standards contained in Rules 102 and 403 to the proffered testimony required the exclusion of the testimony. The testimony went directly to the issue of defendant's guilt, carried no independent indicia of reliability, was offered to impeach the testimony of a non-party, and was facially admissible only because of an extremely broad exception for prior inconsistent statements.
In the instant case, the proffered testimony was an excited utterance with all the indicia of reliability which has led to the *472 creation of a narrow exception to the rule against hearsay. If the statement was impeaching at all (although not offered as impeachment), it was only marginally so because Masterson never denied making the excited utterance attributed to him. His testimony was that he was "not sure" he had made the statement and he also acknowledged that he had said he didn't remember the defendant saying he was going to kill the victim. In applying the balancing tests of Rules 102 and 403 to this excited utterance, the trial court was well within its discretion in admitting it. In making this determination, the trial court could consider the fact that witness Linda Bennett had already testified that she heard the defendant make the exact statement attributed to him in Masterson's excited utterance. There was no error in the admission of the statement by the witness.
THE STATEMENT OF THE DEFENDANT
The second issue raised by defendant also involves the application of Ariz.R. Evid. 803(2). Defendant testified in his own defense and related his version of the incident and the events leading up to it, including his contention that the victim had threatened him with a shotgun. However, he also contends that a statement he allegedly made to the arresting officers shortly after his arrest is admissible as an excited utterance. According to defendant, he told the arresting officers that the victim had threatened him with a .12 gauge shotgun. Defendant contends that he was young, scared, and under tremendous stress and, therefore, his statement qualifies as an excited utterance. The trial court disagreed, and made the following findings:
The Court makes a finding that the excited utterance exception to the hearsay rule does not apply under these circumstances, that the Detective testified, and I have to go back to my notes with respect to the time periods that I made a note of, that he arrived at the scene at around 10:20, that Mr. Carr was arrested approximately 30 to 40 minutes later, and these statements that were exculpatory in nature were made thereafter, apparently on the way on the way to the Mesa Police Department.
The Court does not find that this comes within the exception of being an excited utterance. It was on that basis that I precluded you from asking about these statements or from even asking whether or not conversation took place that would have made reference to such statements.... I do agree with you [defense counsel], that the circumstances may change from case to case, and that some circumstances may result in excited utterances being made, even in periods of time much longer than an hour; however, the Court has to make a determination under the circumstances as to whether or not an individual making exculpatory statements had time to fabricate.
And the Court finds under the circumstances of this case that these statements were not made in the nature of excited utterances.
As stated earlier, Rule 803(2) requires there to be a startling event, a declaration spoken soon after the event so that the declarant does not have time to fabricate, and a relation between the declaration and the startling event. Since defendant has been found to have premeditated the event, the event may have been less startling to him than it would be to a bystander or to the victim. Assuming, however, that the event was fully as startling to defendant as it was to Masterson, the trial court found that the second element was absent here. The trial court found that the defendant had time and opportunity to fabricate. Certainly he had motivation to do so.
In State v. Rivera, we examined the excited utterance doctrine and the stress-of-excitement requirement in particular. We noted that the time between the event and the declaration was probably the best indication of whether the declarant was still under the stress of excitement and therefore without the opportunity to engage in reflective thought. We also noted that the time element cannot be applied in a mechanical fashion in order to determine admissibility. 139 Ariz. at 411, 678 P.2d at 1375. See State v. Barnes, 124 Ariz. 586, *473 589-90, 606 P.2d 802, 805-06 (1980) ("If the totality of the circumstances indicates that the statement was made in a state of shock ... it is admissible, even though not made immediately after the event."). We also explained that the question of admissibility was left largely to the discretion of the trial court. Rivera, 139 Ariz. at 410, 678 P.2d at 1374.
In this case, both sides made colorable arguments to the trial court on the issue of whether the defendant's statement should be admitted as an excited utterance. The state argues that defendant not only had time for reflective thought but actively engaged in such thought:
Here, after slashing Brent with his buck knife, appellant fled the complex. Appellant ran several blocks and then sat down by a building. After a period of time, he returned to the complex to see "what was going on." When he reached the complex and observed the fire trucks, police, and "a whole bunch of people," he concluded that he "must have messed up real bad." It was after appellant's realization that he "messed up" that the "chase" occurred and appellant was placed under arrest. It was not until appellant was on his way to jail that appellant made the statements in issue. By this time, appellant had had the opportunity to contemplate his past deeds and fashion a "story" to justify his criminal acts.
The trial court agreed with the state, and made the specific finding that the exculpatory statement was not admissible under the excited utterance doctrine because defendant had the opportunity to fabricate. The trial judge considered precisely the elements the cases required him to consider. His findings are not clearly erroneous; therefore, we affirm. See State v. Yslas, 139 Ariz. 60, 676 P.2d 1118 (1984); State v. Jeffers, 135 Ariz. 404, 661 P.2d 1105, cert. denied, 464 U.S. 865, 104 S.Ct. 199, 79 L.Ed.2d 174 (1983).
CONCLUSION
The trial court was correct in the two challenged evidentiary rulings. We have also reviewed the record for fundamental error pursuant to A.R.S. § 13-4035 and Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967), and have found none. Defendant's conviction and sentence are affirmed.
GORDON, C.J., FELDMAN, V.C.J., and CAMERON and HOLOHAN, JJ., concur.
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T.C. Memo. 2004-133
UNITED STATES TAX COURT
SAID M. KARARA, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7748-02L. Filed June 2, 2004.
Said M. Karara, pro se.
D’Aun E. Clark, for respondent.
MEMORANDUM OPINION
GERBER, Chief Judge: Respondent moved for summary judgment
on the question of whether he may proceed with the collection of
petitioner’s 1993 and 1994 tax liabilities. Respondent contends
that all section 63301 prerequisites have been met and that he
should be allowed to proceed with collection. Petitioner filed a
1
All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
- 2 -
cross-motion for summary judgment, raising several arguments as
to why respondent should not be permitted to proceed with
collection. A hearing on the summary judgment motions was held
at Miami, Florida.
Background
Petitioner resided in Naples, Florida, at the time his
petition was filed. Petitioner’s 1993 and 1994 tax returns were
examined, and respondent determined an income tax deficiency for
each year. Petitioner petitioned this Court with respect to both
years, and on July 29, 1999, this Court filed a memorandum
opinion in Karara v. Commissioner, T.C. Memo. 1999-253,
sustaining respondent’s determinations. A decision was entered,
and petitioner filed an appeal to the Court of Appeals for the
Eleventh Circuit.
On December 12, 1999, because of petitioner’s failure to
file a bond while the appeal was pending, respondent assessed the
1993 and 1994 income tax deficiencies. Approximately 5 months
later on May 5, 2000, the Court of Appeals for the Eleventh
Circuit affirmed this Court’s decision without published opinion.
Karara v. Commissioner, 214 F.3d 1358 (11th Cir. 2000). On
July 10, 2000, the Court of Appeals denied rehearing.
On July 29, 2000, about 2 weeks following the Court of
Appeals’ denial of rehearing, respondent mailed to petitioner a
Final Notice-–Notice of Intent to Levy and Notice of Your Right
to a Hearing for the 1994 tax year. Four days later, on August
- 3 -
2, 2000, the Court of Appeals stayed issuance of the mandate
pending petitioner’s petition for writ of certiorari to the U.S.
Supreme Court. On August 8, 2000, petitioner timely requested a
hearing for his 1994 tax year by submitting Form 12153, Request
for a Collection Due Process Hearing. During subsequent
conversations with respondent, petitioner consented to the
inclusion of his 1993 tax year, in addition to his 1994 tax year,
for purposes of the section 6330 hearing.
On October 6, 2000, petitioner filed a petition for writ of
certiorari with the Supreme Court. Respondent had the option to
file a response to the petition, but declined to do so.
Therefore, in accordance with Supreme Court rules, the Solicitor
General timely filed a waiver of the right to respond on behalf
of respondent. Approximately 3 weeks later, on November 6, 2000,
the Supreme Court denied petitioner’s petition for writ of
certiorari. Karara v. Commissioner, 531 U.S. 980 (2000).
On September 24, 2001, respondent applied an overpayment of
tax by petitioner in the amount of $300 toward his 1993 tax
liability.
Petitioner and the Appeals officer engaged in telephone
conferences on September 5 and October 4 and 5, 2001. During
these conferences, respondent notified petitioner that the
assessments were valid and subject to collection because of
petitioner’s failure to post a bond while his appeals were in
progress. See sec. 7485. In response, petitioner raised the
- 4 -
argument that respondent, in waiving the right to respond to the
petition for writ of certiorari, had also waived opposition to
the issues presented in the petition. Petitioner also argued
that because of respondent’s waiver petitioner is entitled to a
$300 refund.
On April 17, 2002, respondent issued a Notice of
Determination Concerning Collection Actions(s) Under Section 6320
and/or 6330 determining to proceed with collection of
petitioner’s 1993 and 1994 tax liabilities.
Discussion
Respondent moved for summary judgment on the question of
whether he may proceed to collect petitioner’s 1993 and 1994
income tax liabilities. Summary judgment is intended to expedite
litigation and avoid unnecessary trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). A motion for summary
judgment may be granted if there is no genuine issue as to any
material fact. See Rule 121(b); Elec. Arts, Inc. v.
Commissioner, 118 T.C. 226, 238 (2002). The moving party bears
the burden of showing that there is no genuine issue of material
fact, and factual inferences will be read in a manner most
favorable to the party opposing summary judgment. Bond v.
Commissioner, 100 T.C. 32, 36 (1993); Dahlstrom v. Commissioner,
85 T.C. 812, 821 (1985). This case is ripe for summary judgment
with respect to petitioner’s 1994 tax year. Genuine issues of
- 5 -
material fact exist, however, with respect to petitioner’s 1993
tax year.
I. Section 6330 Hearing Prerequisites
If a taxpayer neglects or refuses to pay a Federal tax
liability within 10 days of notice and demand, the Secretary is
authorized to collect such liability by levy on the taxpayer’s
property. Sec. 6331(a). Pursuant to section 6330(b), a taxpayer
has a right to a hearing before the Commissioner may levy. We
first address whether respondent met the hearing prerequisites of
section 6330 with respect to petitioner’s 1993 and 1994 tax
years.
Section 6330(b) provides that administrative hearings be
held by an impartial officer of the Internal Revenue Service
Office of Appeals. If dissatisfied with the Appeals Office
determination, a taxpayer may seek judicial review of the
decision in this Court or a District Court of the United States
as applicable. Sec. 6330(d).
The matters to be considered at the hearing are specified by
section 6330(c), which provides: (1) The Appeals officer shall
obtain verification that the requirements of applicable law and
administrative procedure have been met; (2) certain issues may be
heard, including spousal defenses, appropriateness of collection
activities, and collection alternatives; and (3) a challenge to
the underlying liability may be raised if the taxpayer did not
- 6 -
receive a statutory notice of deficiency or otherwise receive an
opportunity to dispute the liability. Sec. 6330(c).
Petitioner and an impartial Appeals officer conducted an
administrative hearing comprising three separate telephone calls.
For purposes of the hearing, petitioner and respondent agreed to
place petitioner’s 1993 and 1994 tax years at issue. Because
this Court had previously entered a decision, the merits of
petitioner’s underlying tax liability were not at issue at the
administrative hearing and are not at issue here. Therefore, we
review respondent’s administrative determination to proceed with
collection for an abuse of discretion. Sec. 6330(c)(2)(B); Sego
v. Commissioner, 114 T.C. 604, 610 (2000). Because petitioner
was not entitled to question the underlying tax liability, his
administrative hearing was limited to collection issues,
including spousal defenses, the appropriateness of respondent’s
intended collection action, and collection alternatives.
Petitioner raises two issues with respect to the appropriateness
of respondent’s collection actions.2
Respondent assessed petitioner’s 1993 and 1994 tax
liabilities on December 12, 1999. On July 29, 2000, respondent
issued to petitioner a Final Notice-–Notice of Intent to Levy and
Notice of Your Right to a Hearing for his 1994 tax year. On
2
Petitioner does not challenge his underlying tax
liability, but rather challenges respondent’s ability to collect.
Petitioner contends that there was a waiver or some form of
estoppel connected with respondent’s waiver of respondent’s right
to respond to petitioner’s petition for writ of certiorari.
- 7 -
brief and at the summary judgment hearing, petitioner argued that
during an August 7, 2000, telephone conversation, he and a
Department of Justice attorney agreed to stay further collection
activity with respect to petitioner’s 1993 and 1994 tax
liabilities until the decision of the Tax Court in his deficiency
suit became final. Petitioner further contends that he raised
this issue at the administrative hearing and that it was an abuse
of discretion that the Appeals officer did not consider it.
Respondent acknowledges the agreement to stay collection and
maintains that there was compliance with its terms.
Section 6330(e)(1) precludes the Commissioner from
proceeding with a proposed levy that is the subject of a hearing
while the hearing and any related appeals are pending. See Craig
v. Commissioner, 119 T.C. 252, 258 (2002). Therefore, as of
August 14, 2000, the date that respondent received petitioner’s
request for a hearing, respondent was precluded from proceeding
with levy actions pending the outcome of this appeal. See Boyd
v. Commissioner, 117 T.C. 127, 130-131 (2001). In that respect,
respondent has not pursued enforced collection since issuing the
Final Notice-–Notice of Intent to Levy and Notice of Your Right
to a Hearing on July 29, 2000. Accordingly and irrespective of
the agreement to stay collection, since August 14, 2000,
respondent has otherwise been precluded from proceeding with levy
activity.
- 8 -
There is no indication in the summary judgment documents as
to whether petitioner raised the collection stay agreement issue
in the administrative hearing. Moreover, it appears that
respondent complied with its terms. The Supreme Court's denial
of the petition for writ of certiorari on November 6, 2000,
finalized the decisions of the Tax Court and the Court of Appeals
for the Eleventh Circuit. In accordance with the agreement,
respondent did not resume any collection activity until
approximately 10 months after the Supreme Court’s denial of
petitioner’s petition for writ of certiorari.3
Petitioner makes a second argument as to why respondent
should be precluded from proceeding with collection. The essence
of petitioner’s argument is that respondent failed or waived the
right to respond to petitioner’s petition for writ of certiorari.
Petitioner further contends that the waiver of the right to
respond constitutes a waiver or bar to respondent with respect to
petitioner’s position that he owes no tax for 1993 and 1994.
Petitioner bases his position on rule 15 of the Rules of the
Supreme Court, which, among other provisions, sets forth
procedures for waiver of the right to respond to a petition for
writ of certiorari. Specifically, petitioner contends that the
waiver of the right to respond foreclosed respondent from taking
collection action against petitioner. Petitioner’s reliance on
3
Respondent’s resumed collection activity, offsetting
against petitioner’s 1993 liability an overpayment from another
period, was unrelated to a levy on petitioner’s property.
- 9 -
rule 15 of the Rules of the Supreme Court is misplaced and
without substance. The rule’s purpose relates solely to
procedural requirements for filing briefs in opposition, reply
briefs, and supplemental briefs with respect to petitions for
writs of certiorari. The rule has no bearing on petitioner’s
underlying tax liability or on whether respondent may proceed
with collection activity.4 Respondent’s waiver was not a
concession with respect to petitioner’s tax liabilities.
Respondent provided petitioner with an opportunity for a
hearing pursuant to section 6330(b). The Appeals officer
properly considered and met the section 6330 hearing requirements
with respect to petitioner’s 1993 and 1994 tax years.
II. Section 6330 Notice Requirements
The next issue we consider is whether respondent met the
notice requirements of section 6330(a) for petitioner’s 1993 and
1994 tax years. Before proceeding with a levy, the Secretary
must meet several notice requirements. Section 6330(a)(1)
provides that no levy may be made on any property of a taxpayer
unless the Secretary, before proceeding with the levy, has
notified the person in writing of the right to a hearing.
Section 6330(a)(2) specifies that such notice be: (1) Given in
person; (2) left at the taxpayer’s dwelling or usual place of
business; or (3) sent by certified or registered mail to the
4
On brief, in addition to taking the rule completely out of
context, petitioner distorted its text by omitting relevant
phrases and adding language.
- 10 -
taxpayer’s last known address. Further, such notice must be
furnished at least 30 days before the first levy action. See
sec. 6330(a)(2).
Petitioner received timely written notice of respondent’s
intent to levy and petitioner’s right to request a hearing for
his 1994 tax year. However, the record does not reflect, one way
or the other, whether a notice of intent to levy was issued with
respect to petitioner’s 1993 tax year. Petitioner raised this
issue with respondent before his administrative hearing. For
simplicity, petitioner and respondent agreed to and held a
hearing with respect to both the 1993 and 1994 tax liabilities.
However, the plain meaning of section 6330(a)(1) is that no levy
may be made without proper notice to a taxpayer. Petitioner’s
agreement to include his 1993 tax year cannot substitute for the
explicit notice requirements of section 6330(a)(2). Respondent
may not proceed with a levy with respect to petitioner’s 1993 tax
liability without satisfying these requirements.
Sufficient evidence was not produced for us to ascertain
whether respondent issued to petitioner a Final Notice-–Notice of
Intent to Levy and Notice of Your Right to a Hearing for his 1993
tax year. This is a genuine issue of material fact, and
accordingly, the cross-motions for summary judgment with respect
to this issue are denied. Apart from this single flaw,
respondent met all of the section 6330 prerequisites with respect
to petitioner’s 1993 and 1994 tax years. The Appeals officer
- 11 -
verified that respondent had complied with all legal and
procedural requirements pertaining to the proposed levy. In
addition, the Appeals officer balanced the need to efficiently
collect tax with concerns that the means of collection be no more
intrusive than necessary. Finally, because of a lack of viable
collection alternatives, the Appeals officer concluded that the
proposed levy was legally and procedurally correct.
Accordingly, we hold that respondent’s determination to
proceed with collection of petitioner’s 1994 tax liability was
not an abuse of discretion.
To reflect the foregoing,
An order will be issued
granting in part and denying in
part respondent’s motion for
summary judgment and denying
petitioner’s cross-motion.
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70 B.R. 416 (1987)
In re MUSHROOM TRANSPORTATION CO., INC. Debtor.
MUSHROOM TRANSPORTATION CO., INC. Plaintiff,
v.
CONTINENTAL BANK
and
Transport Insurance Company Defendants.
Bankruptcy No. 85-02575G, Adv. No. 86-1007G.
United States Bankruptcy Court, E.D. Pennsylvania.
February 20, 1987.
*417 Thomas M. Jackal, Pincus, Verlin, Hahn & Reich, Philadelphia, Pa., for debtor/plaintiff, Mushroom Transportation Co., Inc.
Bonnie Glantz Fatell, Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for defendant, Continental Bank.
Raymond T. Cullen, Morgan, Lewis & Bockius, Philadelphia, Pa., for defendant, Transport Insurance Company.
MEMORANDUM
BRUCE FOX, Bankruptcy Judge:
On March 24, 1986, this court entered an order authorizing the debtor to employ Deric Associates, Inc. ("Deric") to assist the debtor in collecting monies allegedly due the debtor from Transport Insurance Group. The order authorized the compensation of Deric on a 10% contingent fee basis as to all funds collected from the insurance company. Subsequently, on August 26, 1986, the debtor commenced this adversary proceeding.
Defendant Transport Insurance Co. ("Transport") has filed a motion in limine to preclude the debtor from calling Deric as a witness at trial on the ground that the contingent fee arrangement bars Deric from testifying as an expert. Transport also requests that the court preclude Deric from assisting in the preparation of any witness' trial testimony and deny the debtor the right to use at trial any documents prepared by Deric.
For the reasons set forth below, the motion will be granted in part and denied in part.
The main thrust of Transport's argument is that Code of Professional Responsibility expressly forbids contingent fee arrangements for witnesses.[1]See Code of Professional Responsibility DR 7-109(C), EC 7-28. Such arrangements have been criticized with respect to expert witnesses in particular. E.g., Gediman v. Sears, Roebuck & Co., 484 F.Supp. 1244 (D.Mass.1980). Contra Comment, Why Not Contingent Fees for Expert Witnesses?, 39 U.Pitt.L.Rev. 511 (1978). The debtor counters by pointing out that Deric was not hired on a contingent fee basis to be an expert witness at trial. Rather, according to the debtor, his testimony is merely a consistent and logical part of his overall court-approved role as an insurance professional collecting money allegedly due to the estate. The debtor also points out that Transport has cited no case in which a witness' testimony has actually been *418 barred because his compensation was governed by a contingent fee agreement.
While the parties have not addressed the issue, it appears that this evidentiary issue should be determined in accordance with Pennsylvania law. See Fed. R.Evid. 601 (when state law supplies the rule of decision in a case, the competency of a witness shall be determined in accordance with state law).[2] In Pennsylvania, the leading appellate decision has expressed the traditional view that contingent witness fees inevitably tend to bias the witness and encourage perjury. Belfonte v. Miller, 212 Pa.Super. 508, 243 A.2d 150 (1968). Belfonte involved an action by the expert witness against the party for whom he testified to enforce his contingent fee arrangement. Based upon policy concerns, the Superior Court held the fee agreement invalid and refused to enforce the contract. However, the court's reasoning persuades me that if the state court were aware of the contingent fee agreement prior to the witness' testimony, the court would bar the testimony.
In addition, the court in Belfonte rejected the same distinction offered by the debtor here: between a contingent fee contract to serve as a witness and a more general services contract which may incidentally lead the expert to serve as a witness only after providing other services. The court concluded, on the facts before it, that use of the expert in judicial proceedings was the parties' immediate motivating factor when they made their agreement. Here, it is more likely than not that the debtor and Deric at least contemplated litigation when they obtained court approval for Deric's employment.[3]
My reading of Belfonte and the Code of Professional Responsibility[4] leads me to conclude that the contingent fee agreement renders Deric incompetent to testify at trial at this time. It does not follow, however, that the defect is irremediable, as Transport suggests. See Transport's Memorandum at 5-6. If the method of compensation were altered, there would be no apparent bar to the testimony; the witness' stake in the litigation would be eliminated, thereby significantly meeting the policy concerns expressed in Belfonte. Of course, the witness would still be subject to impeachment on the ground of bias with respect to evidence prepared and opinions formulated during the period in which the witness labored under the contingent fee agreement.[5]
In reaching this conclusion, I exercise my discretion consistent with the policy of Fed.R.Evid. 601 which favors the allowance of testimony. See Fed.R.Evid. 601, Advisory Committee Note. The debtor has also pointed out that the fee arrangement was judicially approved and that this case involves a technical area of insurance law requiring the use of expert testimony. It appears that the debtor would be severely prejudiced if it had to go to trial without any expert testimony. In these circumstances, it is appropriate to grant the debtor leave prior to trial to seek court approval of a modification of the *419 order authorizing Deric's employment as a professional and compensation.[6]
An order consistent with this opinion shall be entered.
ORDER
AND NOW, this 20 day of February, 1987, upon consideration of defendant Transport Insurance Co.'s Motion in Limine to Preclude Debtor from Calling Deric Associates, Inc. As an Expert Witness At Trial and the debtor's response thereto, it is ORDERED that:
1. Deric Associates, Inc. ("Deric") is incompetent to testify at trial at this time due to Deric's contingent fee agreement with the debtor. See Fed.R.Civ.P. 601.
2. In all other respects, the motion is DENIED.
3. This order is without prejudice in that the debtor may renew its offer of Deric's testimony in the event that the fee agreement is modified prior to trial.
4. Trial is scheduled for March 26, 1987, at 2:00 P.M. in Bankruptcy Court Room No. 1 (Room 3714).
NOTES
[1] Transport also argues that the contingent fee agreement prevents Deric from being a disinterested person as required by the Bankruptcy Code and that the anticipated testimony requires activities which exceed the scope of the court authorized employment. I reject the argument that a contingent fee agreement renders Deric an interested person. See 11 U.S.C. § 328(a). Nor has Transport convinced me that Deric's activities have exceeded the scope of his authorized employment. Even if these assertions were correct, it would not necessarily follow that the rules of evidence would bar the proffered testimony.
[2] Again, while the parties have not specifically addressed the point, I have gleaned from the joint pretrial statement that the case appears to involve Pennsylvania insurance law.
[3] This opinion is limited to the evidentiary issue presented and I express no opinion whatsoever with respect to any matters under the Code of Professional Responsibility.
[4] I note that the Pennsylvania Supreme Court has stated that disciplinary rules do not provide a basis for altering substantive law, or, (in dictum), rules of evidence. In re Estate of Pedrick, 505 Pa. 530, 542-43, 482 A.2d 215, 221 (1984). In this case, however, I do not perceive the disciplinary rules as altering a rule of evidence. Rather, DR 7-109(C), enacted in 1974, is a more recent expression of the policy concerns set forth in Belfonte. Since these concerns relate to the integrity of the fact-finding process at trial, the Code of Professional Responsibility is relevant in evaluating how the Pennsylvania courts would rule on the issue of a witness' competency to testify.
[5] Similarly, if Deric does not testify, any pretrial assistance rendered to other witnesses may be raised by Transport as grounds for impeachment of those witnesses. Therefore, I will not bar Deric from assisting the debtor's trial preparation.
[6] Alternatively, the debtor may wish to obtain a different expert witness.
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593 N.W.2d 383 (1999)
1999 ND 94
Tony HAFF, Plaintiff and Appellant,
v.
Damon HETTICH, Defendant. and
Farmers Insurance Exchange, Defendant and Appellee
No. 980229.
Supreme Court of North Dakota.
May 19, 1999.
*384 David A. Tschider, Tschider & Smith, Bismarck, N.D., for plaintiff and appellant.
Jason R. Vendsel, McGee, Hankla, Backes & Dobrovolny, Minot, N.D., for defendant and appellee.
*385 SANDSTROM, Justice.
[¶ 1] Tony Haff appealed from a judgment ordering Farmers Insurance Exchange to pay him $19,158.74 in underinsured and basic no-fault benefits. We hold an original tortfeasor is not liable under N.D.C.C. § 32-03.2-02 for damages caused by medical malpractice in treating the original injury; N.D.C.C. § 32-03.2-02 does not violate substantive due process; and under N.D.C.C. ch. 26.1-41, bodily injury arising out of a motor vehicle accident includes negligent medical treatment of personal injuries sustained in a motor vehicle accident. We affirm in part, reverse in part, and remand with instructions.
I
[¶ 2] Haff initially sued Hettich for personal injuries incurred in a 1991 motor vehicle accident. At trial, Hettich claimed Haff's injuries were caused, in part, by negligent post-accident treatment by Haff's chiropractors, who were not named as parties in the action. Haff requested a jury instruction following Polucha v. Landes, 60 N.D. 159, 233 N.W. 264 (1930), which recognized an original tortfeasor was liable for aggravation of an original injury caused by the negligence of a physician reasonably selected by the injured person. The trial court decided the modified comparative fault provisions of N.D.C.C. § 32-03.2-02 effectively overruled Polucha and refused to give Haff's requested instruction. The court, instead, instructed the jury to apportion fault among those parties and other persons who were at fault for Haff's injuries. The court instructed the jury on the standard of care for Haff's chiropractors. The court also instructed the jury Hettich was not liable for damages proximately caused by the negligence of Haff's chiropractors, and Hettich had the burden of proving Haff's chiropractors were negligent.
[¶ 3] The jury found Hettich's negligence proximately caused serious injury to Haff and other persons' negligence also proximately caused injury to Haff. The jury apportioned forty percent of the fault to Hettich and sixty percent of the fault to others. The jury decided Haff incurred $161,000 in non-economic damages for past and future pain, discomfort, and mental anguish, and $29,000 in economic damages for past and future medical expenses and loss of productive time.
[¶ 4] Haff informed Farmers Insurance Group, his underinsured and no-fault carrier, of a proposed settlement under N.D.C.C. § 26.1-40-15.5(2) with Hettich and Heritage Mutual Insurance Company, Hettich's insurance carrier. Haff subsequently settled with Hettich for $50,000, the liability limit of Hettich's policy with Heritage.
[¶ 5] Farmers, Haff, and Hettich then stipulated to allow Farmers to intervene in Haff's action against Hettich to decide Farmers' liability to Haff for underinsured and no-fault benefits. Farmers, Haff, and Hettich stipulated to dismiss Hettich from the action with prejudice. The parties agreed, however, Haff would appeal the decision in Haff v. Hettich for a ruling on whether N.D.C.C. § 32-03.2-02 overruled Polucha and whether Farmers was obligated for either forty percent, or all of Haff's damages, less the amount paid by Heritage. Their stipulation provided:
Unless otherwise ordered by the North Dakota Supreme Court or the District Court in Haff v. Hettich, with respect to all damage issues, Farmers and Haff agree that both and each shall be fully and finally bound by a final post appeal judgment in the Haff v. Hettich case. It will not be necessary for Tony Haff to relitigate liability or damage issues in a second action against Farmers, the underinsured and no-fault carrier.
[¶ 6] Haff amended his complaint to allege a claim directly against Farmers for $110,000 in underinsured benefits for his non-economic damages and $29,000 in no-fault benefits for his economic damages.[1] Farmers answered, alleging it was obligated for no-fault benefits totaling forty percent of Haff's $29,000 in economic damages and underinsured *386 benefits representing forty percent of Haff's $161,000 in non-economic damages, minus the $50,000 paid by Heritage. Haff and Farmers both moved for summary judgment. Haff also moved for a new trial, contending the trial court erred in failing to instruct the jury under Polucha and seeking a new trial solely on the issue of whether Haff utilized reasonable care in selecting his chiropractors.
[¶ 7] The trial court denied Haff's motion for summary judgment and for a new trial, ruling N.D.C.C. § 32-03.2-02 effectively overruled Polucha. The court granted Farmers' motion for summary judgment, concluding Farmers was obligated for forty percent of Haff's damages minus amounts previously paid. The court decided Farmers owed Haff $14,400 for underinsured benefits, which represented forty percent of the $161,000 in non-economic damages minus the $50,000 previously paid by Heritage. The court also concluded Farmers owed Haff $4,758.74 for no-fault benefits, which represented forty percent of the $29,000 in economic damages minus $6,841.26 previously paid by Farmers. Judgment was entered ordering Farmers to pay Haff $19,158.74, and Haff appealed the judgment.
[¶ 8] The trial court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. Haff's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-01.[2]
II
[¶ 9] We review this appeal under our standards for summary judgment, which is a procedure for promptly and expeditiously disposing of a controversy without a trial if either party is entitled to judgment as a matter of law, if no dispute exists as to either the material facts or the inferences to be drawn from undisputed facts, or if resolving disputed facts will not alter the result. Diegel v. City of West Fargo, 546 N.W.2d 367, 370 (N.D.1996). In considering a motion for summary judgment, the evidence must be viewed in the light most favorable to the party opposing the motion, who must be given the benefit of all favorable inferences that reasonably can be drawn from the evidence. Id. Questions of law are fully reviewable on appeal. State Farm Mut. Auto. Ins. Co. v. Estate of Gabel, 539 N.W.2d 290, 292 (N.D.1995). The interpretation of a statute is a question of law, which is fully reviewable. Estate of Thompson, 1998 ND 226, ¶ 6, 586 N.W.2d 847.
III
[¶ 10] Haff argues Farmers, as his underinsured carrier, is responsible for all non-economic damages proximately caused by Hettich's negligence and not paid by Heritage, which, under Polucha, 60 N.D. 159, 233 N.W. 264 (1930), includes the damages attributable to the negligence of Haff's chiropractors. Haff thus argues Farmers is obligated for underinsured benefits for the sixty percent fault attributable to his chiropractors. Farmers responds N.D.C.C. § 32-03.2-02 effectively overruled Polucha and requires several apportionment of fault and damages among all persons who contributed to Haff's injuries.
A
[¶ 11] In Polucha, 60 N.D. at 162-63, 233 N.W. at 265, an employee injured his ankle during the course of his employment. The employee received workers compensation benefits for his ankle injury and thereafter sued his physician for malpractice in treating the ankle injury. Id. at 162-63, 233 N.W. at 265. The physician defended, contending the employee's claim had been paid by the workers compensation bureau and the bureau was subrogated to the employee's rights against the physician. Id. at 163, 233 N.W. at 265-66.
*387 [¶ 12] The Court reversed a damage award to the employee and dismissed his malpractice action against the physician, concluding the employee was entitled to workers compensation benefits for the aggravation of his work injury by medical malpractice, and ruling the employee's receipt of workers compensation benefits transferred the employee's action against the physician to the bureau under the subrogation provisions of the workers compensation law. Polucha, 60 N.D. at 168-74, 233 N.W. at 268-71. The Court recognized the common law rule that an original tortfeasor was liable for aggravation of original injuries caused by the malpractice of a physician reasonably selected by the injured person, and stated the aggravation of the original injury was foreseeable and was not an independent, intervening act that broke the chain of causation between the original injury and the ultimate result. Id. at 164, 233 N.W. at 266. Under Polucha, an original tortfeasor's acts are the proximate cause of damages from aggravation of the initial injury by the malpractice of a physician reasonably selected by the injured person.
B
[¶ 13] In 1987, the Legislature enacted the modified comparative fault provisions of N.D.C.C. ch. 32-03.2. See 1987 N.D. Sess. Laws ch. 404. When Haff was injured, N.D.C.C. § 32-03.2-02[3] provided:
Modified comparative fault. Contributory fault does not bar recovery in an action by any person to recover damages for death or injury to person or property unless the fault was as great as the combined fault of all persons who contribute to the injury, but any damages allowed must be diminished in proportion to the amount of contributing fault attributable to the person recovering. The court may, and when requested by any party, shall direct the jury to find separate special verdicts determining the amount of damages and the percentage of fault attributable to each person, whether or not a party, who contributed to the injury. The court shall then reduce the amount of such damages in proportion to the amount of fault attributable to the person recovering. When two or more parties are found to have contributed to the injury, the liability of each party is several only, and is not joint, and each party is liable only for the amount of damages attributable to the percentage of fault of that party, except that any persons who act in concert in committing a tortious act or aid or encourage the act, or ratifies or adopts the act for their benefit, are jointly liable for all damages attributable to their combined percentage of fault. Under this section, fault includes negligence, malpractice, absolute liability, dram shop liability, failure to warn, reckless or willful conduct, assumption of risk, misuse of product, and failure to avoid injury. Under this section, fault does not include any product liability, including product liability involving negligence or strict liability or breach of warranty for product defect.
[¶ 14] The modified comparative fault provisions significantly revised tort liability in North Dakota and shifted the focus from traditional tort doctrines to the singular inclusive concept of "fault." See Hurt v. Freeland, 1999 ND 12, ¶ 20, 589 N.W.2d 551; Stewart v. Ryan, 520 N.W.2d 39, 45 (N.D. 1994); Champagne v. United States, 513 N.W.2d 75, 79 (N.D.1994); Erickson v. Schwan, 453 N.W.2d 765, 768 (N.D.1990). "Fault" is specifically defined to include negligence and malpractice, see N.D.C.C. § 32-03.2-02, and the failure to exercise reasonable care to mitigate damages. N.D.C.C. § 32-03.2-01. Under the modified comparative fault provisions, the "[l]egal requirements of causal relation apply both to fault as the basis for liability and to contributory fault." N.D.C.C. § 32-03.2-01. Except for "in concert" action, N.D.C.C. § 32-03.2-02 replaces joint and several liability with several allocation of damages attributable to the percentage of fault of persons who contributed *388 to the injury. See Reed v. University of North Dakota, 1999 ND 25, ¶ 34, 589 N.W.2d 880; Hurt, 1999 ND 12, ¶ 20, 589 N.W.2d 551; Stewart, at 45; Target Stores v. Automated Maintenance Serv., Inc., 492 N.W.2d 899, 902 (N.D.1992); Kavadas v. Lorenzen, 448 N.W.2d 219, 223-24 (N.D.1989).
C
[¶ 15] In construing our modified comparative fault statutes, our primary duty is to ascertain the Legislature's intent, which initially must be sought from the statutory language. See Stewart, 520 N.W.2d at 45. We construe statutory provisions as a whole to give meaning to each word, phrase, clause, and sentence, if possible. Id.
[¶ 16] Section 32-03.2-02, N.D.C.C., unambiguously requires apportionment of fault and damages according to the percentage of fault attributable to each "person, whether or not a party, who contributed to the injury." Section 32-03.2-02, N.D.C.C., goes on to impose several liability on "two or more parties" who contributed to an injury. Section 32-03.2-02, N.D.C.C., thus distinguishes between "persons" and "parties."
[¶ 17] Citing the terms "persons" and "parties," Haff argues several allocation of fault and damages is necessary only when two or more "parties" are found to have contributed to an injury, and here only one "party" was found to have contributed to his injuries. Haff's argument ignores the plain language of N.D.C.C. § 32-03.2-02 requiring allocation of fault and damages to "persons" and renders meaningless the general rule for several allocation of damages except for "in concert" action. In Reed, 1999 ND 25, ¶¶ 32-34, 589 N.W.2d 880, we recently said "in concert" action required a common plan or design, and we declined to broadly construe the phrase, because a broad construction would render meaningless the general rule for several liability. When read together to give meaning to each word and phrase, the several allocation of damages to "parties" clearly recognizes liability in a lawsuit may be imposed only against parties, while fault and damages may be apportioned to any "person, whether or not a party, who contributed to the injury."
D
[¶ 18] Haff argues subsequent improper medical treatment is a direct and proximate consequence of an original tortfeasor's acts under Polucha. His argument ignores the significant revision of tort liability under the modified comparative fault provisions. We decline to construe the "[l]egal requirements of causal relation" in N.D.C.C. § 32-03.2-01 to impose liability on an original tortfeasor for an intervening cause like medical malpractice that the original tortfeasor was deemed to foresee under common law, because that interpretation would render meaningless the language for determining the percentage of fault and damages attributable to each person and for allocating several liability to each party for the amount of damages attributable to the percentage of fault of that party. See Reed, 1999 ND 25, ¶ 34, 589 N.W.2d 880 (declining to broadly construe "in concert" language of N.D.C.C. § 32-03.2-02 to render meaningless the general rule for several liability).
E
[¶ 19] Haff argues an injured party's duty to mitigate carries the original tortfeasor's implied consent, ratification, or adoption of the injured party's mitigation, including malpractice by a reasonably selected medical care provider. Section 32-03.2-01, N.D.C.C., specifically defines fault to include the failure to exercise reasonable care to mitigate damages, which manifests a legislative intent the duty to mitigate does not carry an implied ratification or consent to malpractice by a physician selected by the injured person. Haff's argument effectively seeks to impose joint and several liability under N.D.C.C. § 32-03.2-02 for "in concert" action. We reject Haff's argument an injured party's duty to mitigate damages evidences an original tortfeasor's ratification or adoption of a subsequent medical care provider's negligence. See Reed, 1999 ND 25, ¶ 34, 589 N.W.2d 880.
F
[¶ 20] Haff's reliance on Holden v. Balko, 949 F.Supp. 704 (S.D.Ind.1996), is misplaced. *389 In Holden at 710-14, a federal district court ruled Indiana's Comparative Fault Act, Ind. Code 34-4-33-1 et seq., did not modify or supersede the common law rule imposing liability on an original tortfeasor for aggravation of a victim's injury by a physician's negligent treatment of the injury. See also Edwards v. Sisler, 691 N.E.2d 1252, 1254-55 (Ind.App.1998) (adopting rationale of Holden ).
[¶ 21] Under Indiana law, however, medical malpractice actions are specifically excluded from Indiana's Comparative Fault Act. See Holden, 949 F.Supp. at 707. N.D.C.C. § 32-03.2-02 expressly defines fault to include malpractice. Because our modified comparative fault statutes specifically define fault to include malpractice, we are not persuaded the rationale of Holden applies to the interpretation of our law.
G
[¶ 22] Haff raises several policy reasons he claims support his interpretation of our modified comparative fault provisions, including his argument a contrary interpretation would undermine the physician-patient relationship for physicians who treat persons injured in accidents. We have often said the Legislature is much better suited than courts to identify the public policy in this state. See Martin v. Allianz Life Ins. Co., 1998 ND 8, ¶ 20, 573 N.W.2d 823.
H
[¶ 23] When N.D.C.C. § 32-03.2-02 is construed as a whole to give meaning to each word and phrase, we believe the shift in focus from traditional tort doctrines to the singular inclusive concept of fault and the change in allocation of damages from joint and several to several liability in proportion to the percentage of fault attributable to each party has changed the tort principles underlying Polucha. We conclude N.D.C.C. § 32-03.2-02, when read as a whole, requires apportionment of damages based on the percentages of fault attributable to the original tortfeasor and medical care providers who negligently treat the original injury. We therefore hold the trial court correctly applied N.D.C.C. § 32-03.2-02 to Haff's claim for non-economic damages.
IV
[¶ 24] Haff argues N.D.C.C. § 32-03.2-02 violates federal and state guarantees of substantive due process.
[¶ 25] In City of Fargo v. Stensland, 492 N.W.2d 591, 594 (N.D.1992), the Court recognized it had never abandoned substantive due process as a state constitutional standard. See Arneson v. Olson, 270 N.W.2d 125, 132 (N.D.1978); Johnson v. Elkin, 263 N.W.2d 123, 127-28 (N.D.1978). In Stensland at 594 (quoting Menz v. Coyle, 117 N.W.2d 290, 299 (N.D.1962)), the Court said:
When reviewing substantive due process arguments not involving fundamental rights, we look to see if the State acts in an arbitrary or unreasonable manner in exercising its police power.... To declare a statute unconstitutional on substantive due process grounds, "it must appear that the Legislature had no power to act in the particular matter or, having power to act, that such power was exercised in an arbitrary, unreasonable, or discriminatory manner and that the method adopted had no reasonable relation to attaining the desired result."
See also Nebbia v. New York, 291 U.S. 502, 537, 54 S.Ct. 505, 78 L.Ed. 940 (1934) (stating standard for evaluating federal due process claim requires law to have reasonable relation to a proper legislative purpose and to be neither arbitrary nor discriminatory).
[¶ 26] Haff concedes North Dakota has a legitimate governmental interest in apportioning liability among those responsible for a victim's injuries and damages. He argues, however, N.D.C.C. § 32-03.2-02 is not rationally related to accomplishing the legitimate governmental interest.
[¶ 27] In Kavadas, 448 N.W.2d at 222-24, the Court considered a state equal protection challenge to the classification in N.D.C.C. § 32-03.2-02, which eliminated joint and several liability except for "in concert" tortious acts. The Court concluded the classification of joint and several versus several liability was not a limitation on the authority of an *390 injured party to bring an action against a tortfeasor, was not patently arbitrary, and had a rational relationship to a legitimate governmental purpose under the rational basis standard of review:
We believe that a statutory scheme which makes a tortfeasor's liability for damages dependent upon the degree of fault of that tortfeasor and not upon the degree of solvency of other tortfeasors is not patently arbitrary and bears a rational relationship to the legitimate legislative goal of improving "the method of determining and fixing responsibility for and paying of damages." Moreover, in our view, this legislative classification, which eliminates joint and several liability unless two or more tortfeasors act in concert in committing a tortious act or aid or encourage the act, is also rationally related to "fixing responsibility for and paying of damages." The difference in degree and type of conduct necessary to trigger the benefits of joint and several liability is rationally related to the imposition of the broader responsibility of joint and several liability for that conduct.
Kavadas, at 223.
[¶ 28] We are not persuaded Haff's substantive due process argument requires a different analysis. We reject the rationale of Plumb v. Fourth Jud. Dist., 279 Mont. 363, 927 P.2d 1011, 1019-21 (1996), and Newville v. State Dep't of Family Servs., 267 Mont. 237, 883 P.2d 793, 803 (1994), which held different versions of Montana's comparative fault law violated substantive due process because they failed to afford procedural safeguards to injured parties and nonparties. In both cases, the court concluded Montana's statutes were not rationally related to the legitimate governmental objective of apportioning liability among those responsible for an injured person's damages, because the statutes permitted apportionment of liability to nonparties without adequate procedural safeguards to ensure the apportionment was an accurate reflection of comparative fault. Plumb, 927 P.2d at 1019-21; Newville, 883 P.2d at 802-03. The court explained the assignment of fault to nonparties without procedural safeguards could result in an inaccurate and unreliable apportionment of fault and could adversely impact both injured parties and nonparties. Plumb at 1020-21; Newville at 802-03.
[¶ 29] In our view, the Montana Supreme Court's application of the rational relation test in those cases is too broad. As Kavadas, 448 N.W.2d at 223, explained in the context of an equal protection challenge, N.D.C.C. § 32-03.2-02 does not infringe upon important substantive rights and is rationally related to the legitimate legislative goal of improving the method of determining and fixing responsibility for fault and damages. N.D.C.C. § 32-03.2-02 directly apportions responsibility for damages based upon fault, and unless persons act in concert, they are responsible only for damages attributable to their percentage of fault. The statute accomplishes its stated purpose of apportioning liability among those responsible for a victim's injuries.
[¶ 30] Although Haff contends apportionment of fault to unnamed parties imposes an unfair burden on him, under our modified comparative fault law the plaintiff is responsible for naming appropriate parties in a lawsuit. See Target Stores, 492 N.W.2d at 904 (holding in absence of claim of concerted action under N.D.C.C. § 32-03.2-02, defendant is not entitled to make third party claim for contribution against additional defendants not named by plaintiff). We conclude N.D.C.C. § 32-03.2-02 bears a reasonable relation to the desired result of apportioning liability and damages among those persons responsible for another person's injuries and is not arbitrary, unreasonable, or discriminatory. We therefore hold N.D.C.C. § 32-03.2-02 does not violate substantive due process.
V
[¶ 31] Haff argues N.D.C.C. § 32-03.2-02 does not affect Farmers' obligation to pay him basic no-fault benefits for injuries arising out of the operation of a motor vehicle. Farmers responds North Dakota's Auto Accident Reparations Act, N.D.C.C. ch. 26.1-41, provides no-fault benefits for injuries arising out of the operation of a motor vehicle, *391 but not for injuries from medical malpractice.
[¶ 32] Farmers is Haff's no-fault insurer, required by N.D.C.C. § 26.1-41-06, to "pay basic no-fault benefits without regard to fault for economic loss resulting from ... [a]ccidental bodily injury sustained ... by the owner of the motor vehicle." Basic no-fault benefits are benefits for economic loss resulting from accidental bodily injury and may not exceed $30,000 for any one person. N.D.C.C. § 26.1-41-01(2). Accidental bodily injury means "bodily injury ... arising out of the operation of a motor vehicle." N.D.C.C. § 26.1-41-01(1). Economic loss means "medical expenses, rehabilitation expenses, work loss, replacement services loss, survivors' income loss, survivors' replacement services loss, and funeral, cremation, and burial expenses." N.D.C.C. § 26.1-41-01(2).
[¶ 33] Our no-fault statutes are intended to provide adequate compensation to victims of motor vehicle accidents, see Kroh v. American Fam. Ins., 487 N.W.2d 306, 309 (N.D.1992), Moser v. Wilhelm, 300 N.W.2d 840, 847 (N.D.1980), and to avoid protracted litigation over issues of fault or causation by removing the bulk of motor vehicle accidents from the tort system. See Reisenauer v. Schaefer, 515 N.W.2d 152, 155 (N.D.1994); Weber v. State Farm Mut. Auto. Ins. Co., 284 N.W.2d 299, 301 (N.D.1979). See generally Smith, "North Dakota Auto Accident Reparations Act"North Dakota's No-Fault Insurance Law, 52 N.D.L.Rev. 147 (1975). In Reisenauer, 515 N.W.2d at 155, we explained a key aspect of the no-fault system was to transfer victim compensation from fault-based tort recovery to compulsory no-fault insurance.
[¶ 34] We construe our no-fault statutes in harmony with other statutes. See Kroh, 487 N.W.2d at 310 (construing no-fault statutes in harmony with workers compensation statutes). When there is a conflict between statutes, we construe specific statutes to control general statutes. See N.D.C.C. § 1-02-07.
[¶ 35] The modified comparative fault provisions of N.D.C.C. ch. 32-03.2 generally sketch a fault-based tort system for apportionment of fault and damages, while the no-fault provisions of N.D.C.C. ch. 26.1-41 specifically pertain to personal injuries sustained in motor vehicle accidents. Cf. N.D.C.C. § 32-03.2-02.1 (limiting application of comparative fault for property damage sustained in motor vehicle accident). The plain language of the no-fault statutes specifically requires payment of basic no-fault benefits "without regard to fault." N.D.C.C. § 26.1-41-06. We believe the purpose of the no-fault system to transfer victim compensation for personal injuries arising out of motor vehicle accidents from a fault-based tort recovery to a compulsory no-fault insurance would be seriously undermined if our no-fault statutes applied modified comparative fault principles to medical malpractice in treating personal injuries sustained in a motor vehicle accident.
[¶ 36] We agree with the rationale of Varner v. Nationwide Mut. Ins. Co., 340 Pa.Super. 211, 489 A.2d 918, 920-21 (1985) (citations omitted):
[T]he alleged medical malpractice here, resulting in severe infection, occurred in the treatment of the injuries sustained in a motor vehicle accident. But for the accident and injuries, appellee would not have been subjected to medical treatment, competent or otherwise. It is much more probable that an individual will be hospitalized than assaulted as a result of operating a motor vehicle.
We recognize that the interpretation of "maintenance and use of a motor vehicle" is not easily derived. Where the words of a statute are unclear, we can determine legislative intent by considering the "object to be attained," and the "consequences of a particular interpretation." ... In recognizing the significant effect of motor vehicle transportation on intrastate commerce, the need for "maximum feasible restoration" of all persons injured in motor vehicle accidents, and the need for a prompt, inexpensive and comprehensive system of compensating accident victims, the General Assembly hoped to provide a "Statewide system of prompt and adequate basic loss benefits for motor vehicle accident victims...." ... Extending no-fault benefits to accident victims whose injuries *392 are aggravated by medical malpractice supports this policy particularly in light of the likelihood of medical treatment.
Moreover, the consequences of not extending no-fault benefits in these cases would encourage carriers to protest often and vigorously that injuries were compounded by medical treatment. That could destroy a system designed for prompt, low-cost and "maximum possible restoration."
[¶ 37] We construe "bodily injury ... arising out of the operation of a motor vehicle" to extend basic no-fault benefits to eligible persons under N.D.C.C. § 26.1-41-06 who receive negligent medical treatment for personal injuries sustained in a motor vehicle accident. Under N.D.C.C. § 26.1-41-01(2), basic no-fault benefits for economic loss may not exceed $30,000 for any one person. We hold Farmers' no-fault policy requires it to pay basic no-fault benefits to Haff for all the $29,000 in economic damages awarded by the jury. We reverse the part of the judgment apportioning the economic damage award, and we remand for the trial court to order Farmers to pay the unpaid balance of Haff's $29,000 in economic damages.
VI
[¶ 38] We affirm in part, reverse in part, and remand for entry of judgment consistent with this opinion.
[¶ 39] VANDE WALLE, C.J, and NEUMANN and KAPSNER, JJ., concur.
KAPSNER, Justice, concurring.
[¶ 40] If I thought this court were the appropriate body to announce policy for the state, I would adopt the policy suggested by Justice Maring's dissent that we ought to retain the common law rule imposing liability on the original tortfeasor for the foreseeable intervening negligence of a medical provider. I would do so because I believe the opposite policy has the unfortunate result outlined in paragraph 53 of the dissent. However, since the legislature has included malpractice under the definition of fault in N.D.C.C. § 32-03.2-02 which requires that the burden of fault be allocated, I must concur.
[¶ 41] NEUMANN, J., concurs.
MARING, Justice, concurring in part and dissenting in part.
[¶ 42] I concur in the majority's conclusion N.D.C.C. § 32-03.2-02 does not affect Farmers' obligation to pay no-fault benefits. I dissent from the majority's opinion concluding N.D.C.C. § 32-03.2-02 has superseded the common law rule that a tortfeasor cannot reduce his own liability by showing those who medically treat the injured person were negligent in providing such treatment.
[¶ 43] The majority interprets N.D.C.C. § 32-03.2-02 to not "impose liability on an original tortfeasor for an intervening cause like medical malpractice that the original tortfeasor was deemed to foresee under common law." To reach this interpretation, the majority concludes the statute is unambiguous because N.D.C.C. § 32-03.23-02 includes the term "malpractice" in the definition of "fault" and requires the apportionment of fault and damages according to the percentage of fault attributable to each "person, whether or not a party, who contributed to the injury." In my opinion, however, the Legislature's intent cannot be unambiguously ascertained from this statute's language.
[¶ 44] Our primary purpose in construing a statute is to ascertain the Legislature's intent. Kinney Shoe Corp. v. State, 552 N.W.2d 788 (N.D.1996). When a statute is ambiguous, we look to various extrinsic aids, such as the legislative history, the object sought to be attained, or the circumstances under which the statute was enacted, in our determination of legislative intent. See N.D.C.C. § 1-02-39. Statutes should be considered "as a whole and in relation to other provisions, with each provision harmonized, if possible, to avoid conflicts." Dundee Mutual Ins. Co. v. Balvitsch, 540 N.W.2d 609, 612 (N.D.1995).
[¶ 45] In 1987 the Legislature enacted a number of statutes as "tort reforms." The tort reform movement was intended to reduce "frivolous" litigation and improve the method of allocating responsibility for and *393 paying of damages. See Target Stores v. Automated Maintenance Serv., Inc., 492 N.W.2d 899, 902 (N.D.1992). As a result, joint liability of concurrent tortfeasors was changed to several liability in the absence of "in concert" action. Id.; 1987 N.D. Sess. Laws ch. 404, §§ 2 and 3; N.D.C.C. §§ 32-03.2-02 and 32-03.2-03. This "tort reform" was effective until June 30, 1993, when it was set to expire. 1987 N.D. Sess. Laws ch. 404, § 15. In 1993, the Legislature repealed the sunset provision, repealed N.D.C.C. §§ 9-10-07 and § 32-03-07, and amended and reenacted N.D.C.C. § 32-03.2-02 relating to modified comparative fault and the elimination of joint liability for concurrent tortfeasors. 1993 N.D. Sess. Laws ch. 324, §§ 1, 2, and 5.
[¶ 46] As noted by the majority, the modified comparative fault statutes revised tort liability in our state, shifting the focus from traditional tort doctrines to the singular inclusive concept of "fault." "Fault" is defined in N.D.C.C. §§ 32-03.2-01 and -02:
§ 32-03.2-01. Definition. As used in this chapter, "fault" includes acts or omissions that are in any measure negligent or reckless towards the person or property of the actor or others, or that subject a person to tort liability or dram shop liability. The term also includes strict liability for product defect, breach of warranty, negligence or assumption of risk, misuse of a product for which the defendant otherwise would be liable, and failure to exercise reasonable care to avoid an injury or to mitigate damages. Legal requirements of causal relation apply both to fault as the basis for liability and to contributory fault. (Emphasis added.)
§ 32-03.2-02. Modified comparative fault.
....
Under this section, fault includes negligence, malpractice, absolute liability, dram shop liability, failure to warn, reckless or willful conduct, assumption of risk, misuse of product, failure to avoid injury, and product liability, including product liability involving negligence or strict liability or breach of warranty for product defect. (Emphasis added.)
It is unclear why "malpractice" was included in the definition of "fault" in the modified comparative fault statute but not included in the statute specifically defining the term "fault." The inconsistent definitions of "fault" create an ambiguity and do not enable us to ascertain the clear intent of the Legislature from the plain language of the statute, especially when the effect of that interpretation is to abrogate long held principles of traditional tort doctrine.
[¶ 47] Further ambiguity arises when one considers the common law rulethat original tortfeasors are liable for the foreseeable negligence of reasonably selected medical care providersis premised on principles of proximate causation. In Polucha v. Landes, 60 N.D. 159, 233 N.W. 264, 268 (1930), this Court reasoned "[i]t is, therefore, not such an independent, intervening act of a third party as to break the chain of causation between the primary injury and the ultimate consequence or result." (Emphasis added.) In other words, the original tortfeasor is liable for subsequent negligent medical treatment because such a consequence is foreseeable as a matter of law. The New Mexico Supreme Court aptly summarized the rule:
When a person causes an injury to another which requires medical treatment, it is foreseeable that the treatment, whether provided properly or negligently, will cause additional harm. Ash v. Mortensen, 24 Cal.2d 654, 150 P.2d 876, 877 (1944); see also Keeton et al. § 44, at 309 ("It would be an undue compliment to the medical profession to say that bad surgery is no part of the risk of a broken leg."). Thus, premised upon the concept that the original tort is a proximate cause of the harm attributable to negligent treatment, courts have held the original tortfeasor liable both for the original injury and for the harm caused by negligent medical treatment. (Citations omitted.)
Lujan v. Healthsouth Rehabilitation Corp., 120 N.M. 422, 902 P.2d 1025, 1029 (1995) (emphasis added). In this regard, I do not understand the majority characterizing subsequent negligence by a treating physician to be an "intervening" cause.
*394 [¶ 48] Because the Polucha rule is a principle of proximate causation and N.D.C.C. § 32-03.2-01 provides that the "legal requirements of causal relation apply both to fault as the basis for liability and to contributory fault," I cannot agree the unambiguous intent of the Legislature was to abrogate the Polucha rule when it enacted the modified comparative fault statute. Cf. Stewart v. Ryan, 520 N.W.2d 39, 51 (N.D.1994) (Levine, J., concurring) ("[t]he change from contributory negligence to modified comparative fault had no effect on proximate causation requirements").
[¶ 49] When a statute is ambiguous we look to various extrinsic aids, such as the legislative history, the circumstances under which the statute was enacted, or the object sought to be attained in our determination of legislative intent. See N.D.C.C. § 1-02-39. The legislative history of the 1987 tort reform provisions shed no light on the issue of whether the Legislature clearly intended to abrogate the common law rule that an original tortfeasor is liable for aggravation of original injuries caused by the malpractice of a physician reasonably selected by the injured party. We do know, however, of the Legislature's pressing concern to stem the tide of medical malpractice lawsuits in the late 1980's. See, e.g., N.D.C.C. § 28-01-46 (requiring a claimant to obtain an admissible expert opinion to support allegations of professional negligence within three months of commencement of the action or at a later date upon a showing of good cause or face dismissal of the action); N.D.C.C. § 32-42-03 (requiring an attempt at alternative dispute resolution of the claim prior to commencement of a malpractice action); N.D.C.C. § 28-01-18 (statute of limitations for medical malpractice claims is two years (not six as for other personal injury claims) after the claim for relief has accrued).
[¶ 50] It seems unlikely the Legislature intended, at a time when it was concerned about the number of medical malpractice claims being filed, to abrogate the common law rule that original tortfeasors are liable for the foreseeable negligence of reasonably selected medical care providers when it enacted the modified comparative fault statute. I also do not believe the Legislature intended to foster additional lawsuits. The majority's opinion changes the entire practice of tort law in this area. Instead of an action solely against the original tortfeasor, the injured person will now be under substantial pressure to bring an additional action against the medical provider of negligent treatment in the event the original tortfeasor raises a non-party defense. In addition, because of the shorter statute of limitations for medical negligence claims, plaintiffs will be forced to commence actions for personal injury sooner, to be assured of being able to add the medical provider as a party if the tortfeasor raises the provider's standard of care as a defense.
[¶ 51] Further, it is illogical to compare the fault of the original tortfeasor with the treating physician under these circumstances. This case does not involve one indivisible injury brought about by concurrent negligence, but rather it involves the negligence of a driver resulting in an accident and the subsequent negligence of a physician resulting in malpractice. The accident caused the injury and the malpractice caused enhancement of the injury. The damages should be reduced only by the separate injury attributable to the physician, if at all.
[¶ 52] The majority distinguishes Holden v. Balko, 949 F.Supp. 704 (S.D.Ind.1996) based upon the inclusion of "malpractice" in our statutory language. Based on that distinction and its conclusion our statutory language is unambiguous, it disregards the sound policy reasons underlying the Holden decision. The majority opinion does not cite one jurisdiction that supports its decision. I believe the Holden rationale supports an interpretation of the statute which retains the common law rule imposing liability on the original tortfeasor for the foreseeable negligence of a medical provider. See also Edwards v. Sisler, 691 N.E.2d 1252, 1255 (Ind.Ct.App.1998).
[¶ 53] The Holden court discussed the consequences of interpreting Indiana's comparative fault statute to abrogate this common law rule. The first consequence would be the unfair burden it places on tort victims, who will now be in the "unenviable position" of not only bearing the responsibility of mitigating their damages by utilizing good faith *395 and reasonable care in the selection of medical care providers, but also "second-guessing... physicians in order to determine whether the doctor properly diagnosed the injury." Holden, 949 F.Supp. at 711. Such an interpretation will also have drastic consequences for North Dakota tort law and practice. Our tort law will now allow defendants who are not patients of the doctor to put on trial the quality of the doctor's care of the injured person without the doctor as a party. Id. In many cases, the original tortfeasor will be a stranger to the physician-patient relationship and have only a financial interest in putting to test the physician's standard of care for the victim. Id. The physician-patient relationship will not be spared either; every car accident victim in an emergency room now presents the likely event the treating doctor will eventually be made a party to the lawsuit. The Holden decision accurately prognosticates the unfortunate but inevitable consequences of the majority's decision today; consequences the Legislature surely did not intend when it passed the "tort reform" provisions in 1987.
[¶ 54] Even assuming the statute is unambiguous, our established rules of statutory construction presume the Legislature does not intend unreasonable or unjust results. N.D.C.C. § 1-02-38. Here the result of abrogating this common law rule is that the original tortfeasor, who has the benefit of the law of mitigation of damages, and who places the injured person at risk for treatment, escapes liability for the natural consequences of his original negligence. Also, allowing the defendant to allege medical negligence when the statute of limitations has run for filing a medical malpractice claim, unfairly prejudices the plaintiff's right to a full recovery for his injuries. Moreover, many procedural questions exist such as the necessity for pleading the "non party" defense, the timeliness of expert witness disclosure, compliance with medical malpractice mediation, proper jury instructions, settlement, etc. Doctors and other medical care providers will feel the squeeze of the defendant's demand for financial contribution toward claim resolution and the threat of litigation by the injured person.
[¶ 55] In view of the significance of this issue and the impact it will have on North Dakota tort practice, I cannot conclude the Legislature intended this derogation of existing common law without a clearer statement to that effect. I, therefore, dissent.
[¶ 56] Mary Muehlen Maring
NOTES
[1] Haff's amended complaint sought underinsured benefits for the $161,000 in non-economic damages minus the $50,000 paid by Heritage and no-fault benefits for the entire $29,000 in economic damages.
[2] Farmers paid Haff the $19,158.74 awarded under the judgment, and in August 1998, Haff filed a satisfaction of judgment. A party generally waives the right to appeal from a judgment by knowingly and voluntarily accepting substantial benefits under the judgment. See, e.g., Bangen v. Bartelson, 553 N.W.2d 754, 757 (N.D.1996). Based on the parties' statements to this Court during oral argument and in supplemental filings after oral argument, however, we temporarily remanded to allow Haff to move to withdraw the satisfaction of judgment, and it has been withdrawn.
[3] As originally enacted, 1987 N.D. Sess. Laws ch. 404, §§ 2 and 3, included separate provisions for product liability actions and for other specified types of fault. In 1993, the Legislature combined those separate provisions into N.D.C.C. § 32-03.2-02. See 1993 N.D. Sess. Laws ch. 324, §§ 2, 5.
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846 F.2d 78
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.Harry M. KATZ, Petitioner,v.OFFICE OF PERSONNEL MANAGEMENT, Respondent.
No. 87-3494.
United States Court of Appeals, Federal Circuit.
March 25, 1988.
Before EDWARD S. SMITH, BISSELL and ARCHER, Circuit Judges.
PER CURIAM.
1
The initial decision of the Merit Systems Protection Board (board), which decision became final on June 22, 1987, docket No. SL07318710158, sustained the determination by the Office of Personnel Management that Harry M. Katz was unsuitable for the position of Medical Officer. On the basis of the administrative judge's opinion, dated May 18, 1987, the board's decision is affirmed.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 08-13885 ELEVENTH CIRCUIT
MARCH 5, 2009
Non-Argument Calendar
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 03-00076-CR-FTM-29-SPC
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
FLOYD WILLIAMS,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(March 5, 2009)
Before WILSON, PRYOR and KRAVITCH, Circuit Judges.
PER CURIAM:
Floyd Williams, a federal prisoner convicted of a crack cocaine offense,
appeals pro se the district court’s denial of his 18 U.S.C. § 3582(c)(2) motion for
reduction of sentence based on an Amendment to the Sentencing Guidelines that
lowered the base offense levels applicable to crack cocaine offenses. On appeal, he
argues that the district court erred in finding that it lacked authority to reduce his
sentence under § 3582(c)(2).
“We review a district court’s decision whether to reduce a sentence pursuant
to 18 U.S.C. § 3582(c)(2), based on a subsequent change in the sentencing
guidelines, for abuse of discretion.” United States v. Brown, 332 F.3d 1341, 1343
(11th Cir. 2003) (citation omitted). However, in the § 3582(c)(2) context, “we
review de novo the district court’s legal conclusions regarding the scope of its
authority under the Sentencing Guidelines.” United States v. White, 305 F.3d
1264, 1267 (11th Cir. 2002) (per curiam). We have held that “[p]ro se pleadings
are held to a less stringent standard than pleadings drafted by attorneys and will,
therefore, be liberally construed.” Hughes v. Lott, 350 F.3d 1157, 1160 (11th Cir.
2003) (internal quotation marks and citation omitted).
Under § 3582(c)(2), a district court has discretion to reduce the term of
imprisonment of an already incarcerated defendant if that defendant “has been
sentenced to a term of imprisonment based on a sentencing range that has
subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C.
2
§ 994(o) . . . if such a reduction is consistent with applicable policy statements
issued by the Sentencing Commission.” 18 U.S.C. § 3582(c)(2). Under U.S.
S ENTENCING G UIDELINES M ANUAL § 1B1.10(b), a court calculating a defendant’s
amended guideline range under § 3582(c)(2) “shall substitute only the amendments
listed in [§ 1B1.10(c)] for the corresponding guideline provisions that were applied
when the defendant was sentenced. All other guideline application decisions
remain unaffected.” U.S. S ENTENCING G UIDELINES M ANUAL § 1B1.10, cmt. n.2.
Amendment 706 reduced offense levels in certain crack cocaine cases by
two levels, as reflected in the drug quantity table in U.S. S ENTENCING G UIDELINES
M ANUAL § 2D1.1(c). See U.S. S ENTENCING G UIDELINES M ANUAL App. C, amend.
706. Amendment 713 made Amendment 706 retroactive. U.S. S ENTENCING
G UIDELINES M ANUAL App. C, amend. 713.
A reduction in the term of imprisonment is not consistent with the
Guidelines policy statement, and therefore not authorized by § 3582(c)(2), if “[a]n
amendment listed in subsection (c) does not have the effect of lowering the
defendant's applicable guideline range.” U.S. S ENTENCING G UIDELINES M ANUAL
§ 1B1.10(a)(2)(B). A district court has jurisdiction to reduce a defendant’s
sentence only if a guideline amendment actually lowers his sentencing range. See
United States v. Jones, 548 F.3d 1366, 1368 (11th Cir. 2008) (per curiam); United
3
States v. Moore, 541 F.3d 1323, 1330 (11th Cir. 2008) (holding that a reduction
under § 3582(c)(2) is not authorized when Amendment 706 had reduced the
defendant's base offense level, but did not change his actual sentence range under
the guidelines because he was sentenced as a recidivist under U.S. S ENTENCING
G UIDELINES M ANUAL § 4B1.1). Where a district court lacks jurisdiction to reduce
a defendant’s sentence because a retroactive amendment does not reduce his
guideline range, United States v. Booker, 543 U.S. 220, 125 S. Ct. 738 (2005), does
not constitute an independent jurisdictional basis for the court to reduce the
defendant’s sentence under § 3582(c)(2). Jones, 548 F.3d at 1369.
Here, Amendment 706 does not have the effect of lowering Williams’
applicable guideline range. Williams’ original base offense level under U.S.
S ENTENCING G UIDELINES M ANUAL § 2D1.1 was 38, and the application of
Amendment 706 would reduce his base offense level to 36. See U.S. S ENTENCING
G UIDELINES M ANUAL App. C, amend. 706. Because a district court must leave all
original sentencing decisions not affected by a retroactive guideline amendment
undisturbed, Williams’ base offense level would be increased by four points for
possession of a dangerous weapon and his role in the offense, yielding an amended
total offense level of 40. See United States v. Vautier, 144 F.3d 756, 759-60 (11th
Cir. 1998). Based on an amended total offense level of 40 and a criminal history
4
category of VI, Williams’ amended guideline range would be the same as his
original guideline range– 360 months to life imprisonment. Accordingly,
Amendment 706 does not have the effect of reducing Williams’ guideline range.
Therefore, the district court did not err in finding that Williams was not eligible for
a sentence reduction under § 3582(c)(2).
CONCLUSION
Upon review of the record and the parties’ briefs, we discern no reversible
error. Accordingly, we affirm.
AFFIRMED.
5
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275 S.W.2d 468 (1955)
A. F. ROWSON, Petitioner,
v.
R. E. ROWSON et ux., Respondents.
No. A-4811.
Supreme Court of Texas.
February 2, 1955.
Rehearing Denied March 9, 1955.
*469 Hopkins & Hopkins, Denton, for petitioner.
R. B. Gambill and John L. Sullivan, Denton, for respondents.
CALVERT, Justice.
This suit began as a statutory trespass to try title action by petitioner, as plainiff, against respondents, as defendants, to recover title to and possession of certain real property in Denton County, Texas. By cross-action defendants sought specific performance of an alleged contract for the exchange of real property under the terms of which they were to acquire the title to the Denton County property. A jury trial resulted in a verdict and judgment in favor of defendants on their cross-action and the judgment has been affirmed by the Court of Civil Appeals. 268 S.W.2d 708.
Several questions are raised by the application for writ of error but if we hold, as we do, that the contract is unenforceable under the Statute of Frauds, all other questions become immaterial.
The alleged contract is founded upon an exchange of letters, the first being dispatched by the plaintiff to the defendant, R. E. Rowson, and so far as is material to this inquiry reading as follows:
"Rowson Clinic
"Dr. A. F. Rowson
"6621 Snider Plaza, Dallas 5, Texas
"Phone Lakeside 0668
"March 31, 1951
"Dear Dick:
"I have fully made up my mind to sell the Lake Cottage, as it has been a source of trouble and expense ever since you have been up there.
"Now I am going to do one of the following three things by June 1st, and you can, and should be guided accordingly.
"(1) I will sell you the house and pay off the bank mortgage of $1,500.00 and I will accept as full payment for the cottage the $1,465 that I have of your hand money, plus a clear title to *470 your house at Alamo if you accept this deal I'll stand to lose $6,500.00 but I am ready.
"(2) I will sell to a stranger for what ever the place will bring.
"(3) I will take possession of my Cottage June 1st and give you $1,465 the day you move out, I will also help you finance a new house. Now you must accept one of the above plans by June 1st, if you remain silent I will assume that you are not interested in any of them and I will on that date contact a Denton Real Estate man and have him find a buyer and you can make a deal with the new owner.
* * * * * *
"I am notifying the Lake Dallas Telephone Co. to remove the telephone from my name April 2nd, so if you want the telephone until June 1st, notify them today.
* * * * * *
"Your best bet would be to leave Dallas and return to Kerrville where you have some land, and I will help you get a house up on it, * * *
"/s/ Allen"
To this letter defendant replied, in substance: "We accept your proposition. We are getting too old to be moving around."
The position of the plaintiff is that neither parcel of property involved in the contract of exchange is described with sufficient certainty to meet the requirements of the Statute of Frauds.
Even if under authority of Sanderson v. Sanderson, 130 Tex. 264, 109 S.W.2d 744,[1] 746, we assume the description of defendant's property"your house at Alamo" to be a sufficient description of the house and lot owned by defendants in Alamo, Hidalgo County, Texas, the contract would yet be unenforceable unless the property of the plaintiff was sufficiently described.
The only description of plaintiff's property appearing in the letter is found in the terms "the Lake Cottage", "the house", "the cottage", "my Cottage", and "the Cottage." Extrinsic evidence shows quite clearly that the parties knew and understood that these terms referred to the property involved in this suit and that it consisted of certain lots located on Lake Dallas in Denton County, Texas, acquired by the plaintiff from one J. Leonard Boyd, on which there was a three-bedroom residence occupied at the time of the correspondence by the defendants. But the rule of law is equally clear that resort may not be had to extrinsic evidence to supply the description or location of land required by the Statute of Frauds to be contained in the writing. O'Herin v. Neal, Tex.Civ.App., 56 S.W.2d 1105, writ refused. "* * * resort to extrinsic evidence, where proper at all, is not for the purpose of supplying the location or description of the land, but only for the purpose of identifying it with reasonable certainty from the data in the memorandum." Wilson v. Fisher, 144 Tex. 53, 188 S.W.2d 150, 152.
What the contract itself must contain to be enforceable is thus stated in Wilson v. Fisher: "* * * the writing must furnish within itself, or by reference to some other existing writing, the means or data by which the particular land to be conveyed may be identified with reasonable certainty." This test has become the standard by which this Court measures the sufficiency of a writing. Pickett v. Bishop, 148 Tex. 207, 223 S.W.2d 222, 224; Broaddus v. Grout, 152 Tex. 398, 258 S.W.2d 308, 309.
It is apparent that the writing here does not itself contain a description of the property sufficient to lead to its identity or location with reasonable certainty. It not only contains no metes and bounds description, but gives no information as to locationneither the state, county, survey nor addition where it may *471 be found. But the defendants contend that the writing contains "means or data" by which the land may be identified with reasonable certainty. The reasoning of the defendants in this particular is that since the letter has a Texas dateline it may be presumed that the property is in Texas; since it mentions having a Denton real estate dealer procure a purchaser it may be implied that the property is in Denton County; since it mentions having the Lake Dallas telephone company remove the telephone it may be assumed the property is situated on Lake Dallas; since it speaks of "my cottage" it is obvious it is property owned by the plaintiff; and since it states that the plaintiff will take possession "the day you move out" it infers that it is occupied by defendant. Thus the defendant, through a series of inferences drawn from words used in the letter arrives at last at the conclusion that the property is described with reasonable certainty as a house or cottage owned by the plaintiff situated on Lake Dallas in Denton County, Texas, and then in the occupancy of the defendant.
It has been held that when the writing is datelined in Texas a presumption will be indulged that the property is in Texas, Taylor v. Lester, Tex.Civ.App., 12 S.W.2d 1097, writ refused, but it has also been held that when the dateline contains the name of a city a presumption will arise that the property is located in that city. Krueger v. W. K. Ewing Co., Inc., Tex. Civ.App., 139 S.W.2d 836, no writ history. Thus it appears that if defendants claim the benefit of the presumption that the property is in Texas they are saddled with the further presumption that it is located in Dallas, a presumption fatal to their case. Pierce v. Flippen, Tex.Civ.App., 197 S.W. 2d 366, no writ history.
The bases assigned therefor hardly lead with reasonable certainty to the inferences that the land is in Denton County and is situated on Lake Dallas. On the other hand, if the text of the writing does describe the property as property occupied by the defendant, that description in itself is usually held sufficient to meet the requirements of the statute. Hoover v. Wukasch, 152 Tex. 111, 254 S.W.2d 507, 510; 23 A.L.R.2d 6, 62-64. We find nothing in the letter specifically stating that the property was then occupied by the defendant or describing it as property occupied by the defendant. An inference that the defendant was in possession of the property may be drawn from this sentence: "I will take possession of my Cottage June 1st and give you $1,465 the day you move out, * * *", but an inference that the defendant was then residing in Dallas rather than on the Denton County property arises out of this language: "Your best bet would be to leave Dallas and return to Kerrville where you have some land, * * *."
The description necessary to meet the requirements of the statute cannot be arrived at from tenuous inferences and presumptions of doubtful validity, especially where the same writing gives rise, with equal validity, to conflicting inferences and presumptions that lead away from the subject matter of the contract. It is immaterial that the Denton County property was the property in the contemplation of the parties at the time the letters were written, or even that parol evidence leads the court to believe that the Denton County property was the subject matter of the contract. Unless the description contained in the writing leads to that conclusion with reasonable certainty the contract is unenforceable. Rosen v. Phelps, Tex.Civ.App., 160 S.W. 104, writ refused; Penn v. Texas Yellow Pine Lumber Co., 35 Tex.Civ.App. 181, 79 S.W. 842, writ refused; Matney v. Odom, 147 Tex. 26, 210 S.W.2d 980, 984.
Most of the important decisions of courts of this state illustrative of both sufficient and insufficient descriptions were reviewed by this Court in Wilson v. Fisher, supra, and no good purpose would be accomplished by reviewing them again. Suffice it to say that while the facts in this case are not exactly like those in any of the cases reviewed, they are, in our judgment, more nearly analogous to the facts in those cases *472 in which the description has been held insufficient.
The judgments of the courts below are reversed and the trial court is directed to set aside its former judgment and to enter judgment herein not inconsistent with this opinion.
WILSON, J., dissenting.
NOTES
[1] "the town house and all lots now owned by Mrs. Kelton; said lots and house located in Knox City" was held a sufficient description.
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98 F.3d 1351
Sistema de Seguridadv.Banco de Venezuela Int'l
NO. 94-5009
United States Court of Appeals,
Eleventh Circuit.
Sept 27, 1996
1
Appeal From: S.D.Fla., No. 94-00380-CIV-JLK
2
AFFIRMED.
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423 S.W.2d 916 (1968)
Ex parte F. M. MARCH.
No. 40999.
Court of Criminal Appeals of Texas.
February 14, 1968.
V. F. Knickerbocker, Vern F. Martin, Midland, for relator.
Leon B. Douglas, State's Atty., Austin, for the State.
OPINION
ONION, Judge.
This is an original application for Writ of Habeas Corpus brought by applicant seeking his release from the Texas Department of Corrections. He alleges the order cumulating the sentences by virtue of which he is confined is insufficient. Applicant first presented his habeas corpus application to the convicting court as required by *917 Article 11.07, Vernon's Ann.C.C.P. See Ex parte Young, 418 S.W.2d 824. The Trial Judge, the Hon. Archie S. Brown, has made the writ returnable to this Court.
From the record before us it appears that the applicant was convicted of a felony on January 27, 1954, in Cause No. 53369 in the Criminal District Court of Bexar County, Texas (now the 144th District Court) and assessed a punishment of three years confinement in the penitentiary. Sentence was never imposed and the trial court suspended the imposition of the sentence and the applicant was placed on probation subject to certain conditions and terms.
On September 29, 1955, during the probationary term, applicant was convicted of another felony in Cause No. 54449 in the Criminal District Court of Bexar County, and sentenced to serve not less than two nor more than three years in the penitentiary. On this same date following a hearing pursuant to the state's motion to revoke probation previously granted in Cause No. 53369, the court ordered the probation revoked, and for the first time imposed sentence in Cause No. 53369. In said sentence the court provided for cumulation of the sentence with the sentence imposed in Cause No. 54449.
It is this order of cumulation that the applicant attacks.
The record further reflects that applicant was committed to the penitentiary by virtue of said sentences, later was released on parole, and subsequently became a fugitive parole violator but was arrested and returned to the Texas Department of Corrections on January 1, 1967. It appears from the record that the applicant now has credit in excess of four years in the Texas Department of Corrections and has completed serving the sentence in said Cause No. 54449. It is his contention that he is entitled to release as the cumulation attempted is void and the two three-year sentences must be interpreted as having run concurrently.
Applicant first claims that the trial court was without authority to cumulate the sentences on September 29, 1955. Here, we must be careful to distinguish between the methods available to the trial court in granting probation. Under the provisions of former Article 781b, Sections 1 and 3, V.A.C.C.P., enacted in 1947, and in effect at the time of applicant's probation and on September 29, 1955, the trial court in granting adult probation was authorized to suspend either the imposition or the execution of the sentence. These same provisions were contained in former Article 781d, Sections 1 and 3, V.A.C.C.P., enacted in 1957 repealing Article 781b, supra. See also Article IV, Section 11A, Texas Constitution, Vernon's Ann.St.
Under such statutes when the court suspended the execution of the sentence, the sentence was actually pronounced and imposed, but the execution or carrying out of the sentence was suspended and the defendant released subject to conditions and terms of probation. Upon revocation of probation under this method, the trial court would order the sentence previously imposed to be executed or carried out as if probation had never been granted without the necessity of sentencing or re-sentencing the defendant at that time.
If the other method of granting probation was employed, the court would suspend the imposition of the sentence, and no sentence was ever pronounced or imposed except upon revocation of probation. In other words, when probation was revoked sentence would be imposed for the first time.
In Ex parte Minor, 167 Tex.Cr.R. 170, 319 S.W.2d 114, the trial judge utilized the suspension of the execution of the sentence method of granting probation to Minor in 1954. Upon revocation of probation in 1955 the court attempted to re-sentence the defendant and at that time also attempted to cumulate such sentence with other outstanding sentences imposed while the defendant was on probation.
*918 In holding the cumulation void this Court said:
"When the term of court adjourned at which the 1954 sentence was imposed, the trial court lost all power to alter, change or amend the same, and the only order he could enter was to revoke it. He could not add further conditions to such sentence which were not, and under the facts could not have been, a part of such sentence at the time it was imposed."
See also Ex parte Tucker, 168 Tex.Cr.R. 308, 325 S.W.2d 703; Ex parte Scott, 168 Tex.Cr.R. 353, 328 S.W.2d 190; Ex parte Rutherford, 171 Tex.Cr.R. 302, 350 S.W.2d 31; Ex parte Downey, 171 Tex.Cr.R. 296, 350 S.W.2d 20; Ex parte Hernandez, Tex. Cr.App., 364 S.W.2d 688; Ex parte Green, Tex.Cr.App., 375 S.W.2d 312; Ex parte O'Connor, Tex.Cr.App., 394 S.W.2d 815; Anderson v. State, Tex.Cr.App., 421 S.W.2d 667.
In Ex parte Minor, supra, the Court was careful to point out that we were not dealing with a case where the imposition of the sentence was suspended when probation was granted. When such method is utilized, as in the case at bar, and sentence is imposed for the first time following revocation, the court is free to cumulate the sentence with prior outstanding sentences. See Article 42.08, V.A. C.C.P. Therefore, applicant's first contention is without merit.
It is interesting to observe that under the provisions of Article 42.12, Sections 1 and 3, 1965 Code of Criminal Procedure, the court, in placing a defendant on adult felony probation, is authorized only to suspend the imposition of the sentence. The method of suspending the execution is no longer available to the court. Anderson v. State, supra.
Applicant next contends that even if the trial court had the authority to cumulate, the recitals as to the prior conviction in the order of cumulation were insufficient and the order was therefore ineffective. Citing Ex parte Hamilton, 163 Tex.Cr.R. 283, 290 S.W.2d 673.
The cumulation order contained in the sentence in Cause No. 53369 reads as follows:
"It is further ordered by the court that said punishment herein shall begin and operate after the expiration of the present term of imprisonment which he is now serving in Cause No. 54449."
In Ex parte Hamilton, supra, this Court did point out that any order of cumulation should give.
1. The number of the prior conviction,
2. The correct name of the court in which the prior conviction was had,
3. The date of the prior conviction, and
4. The term of years assessed in the prior case.
See also Ex parte Collier, 156 Tex.Cr.R. 377, 243 S.W.2d 177; Ex parte Richmond, 163 Tex.Cr.R. 321, 290 S.W.2d 909; Ex parte Cox, 29 Tex.App. 84, 14 S.W. 396. Only recently in Ex parte Lewis, Tex.Cr. App., 414 S.W.2d 682, we further observed that it would seem desirable to include in the cumulation order the offense for which the defendant has been previously convicted. See Willson's Criminal Forms, Anno.7thEd., Sections 2930, 2969.
Despite the lack of some of the specific and definite recitals recommended, this Court has held cumulation orders valid when such orders contained two, rather than three or more, details of the prior conviction. Ex parte Lewis, supra; Ex parte Shields, Tex.Cr.App., 371 S.W.2d 395; Ex parte Daffern, 162 Tex.Cr.R. 472, 286 S.W.2d 151; Ex parte Dyess, 161 Tex.Cr.R. 29, 274 S.W.2d 695; Ex parte Bell, 160 Tex.Cr.R. 490, 272 S.W.2d 530; Ex parte Collier, supra; see also Ex parte Pruitt, Tex.Cr.App., 385 S.W.2d 384; Ex parte Isom, 168 Tex.Cr.R. 434, 331 S.W.2d 753.
*919 Further, this Court has held sufficient cumulation orders although reference is made only to the previous cause number provided the order was in the same court as the sentence to which it is made cumulative. Ex parte Lewis, supra; Ex parte Ogletree, 168 Tex.Cr.R. 429, 328 S.W.2d 446; Ex parte Lee, 161 Tex.Cr.R. 398, 278 S.W.2d 137. While such form is certainly not to be recommended, it has been held that the rule of certainty as to the beginning and ending of each sentence is not so strict as it is when the sentences sought to be cumulated are from different courts. Ex parte Hatfield, 156 Tex.Cr.R. 92, 238 S.W.2d 788; Ex parte Johnson, Tex.Cr.App., 218 S.W.2d 200; Ex parte Snow, 151 Tex.Cr.R. 640, 209 S.W.2d 931.
While recognizing the above-stated rule applicant contends it can have no application in the case at bar because, though the sentence containing the cumulation order was entered on the same day and in the same county as the sentence to which it is made cumulative, there is no showing that such sentence was entered in the same court. He points out that on September 29, 1955, Bexar County had a number of District Courts in addition to the Criminal District Court thereof, including a Criminal District Court No. 2. See Article 199-37, V.A.C.S. as amended by Acts 1955, 54th Leg., Chapter 262, p. 730. If the cumulation order was entered in a different court of the same county even on the same day, applicant would be correct in that a different rule applies, and that the cumulation order would be void. See Ex parte Wilkinson, Tex.Cr.App., 415 S.W.2d 426; Ex parte Lewis, supra; Ex parte Whitley, 171 Tex.Cr.R. 280, 347 S.W. 2d 721; Ex parte Cannon, 161 Tex.Cr.R. 447, 278 S.W.2d 850; Ex parte Lucas, 275 S.W.2d 816, 161 Tex.Cr.R. 144; Ex parte McFarland, 160 Tex.Cr.R. 641, 274 S.W.2d 71; Ex parte Coleman, 159 Tex. Cr.R. 48, 261 S.W.2d 351; Ex parte McClain, 158 Tex.Cr.R. 115, 253 S.W.2d 863.
A careful study of the record convinces us that the sentence in Cause No. 54449, the hearing and revocation of probation in Cause No. 53369 and the order thereon, and the sentence in Cause No. 53369 which included the complained of cumulation order were all heard and entered in the Criminal District Court of Bexar County, Texas, on September 29, 1955.
While the sentence in Cause No. 53369, unlike the other instruments referred to, does not clearly reflect on its face in which district court it was pronounced, the record reveals that it was recorded in Volume 15 of the Criminal minutes of the Criminal District Court of Bexar County at Page 202. There is nothing in the record to indicate that this cause was ever transferred to another court or that Cause No. 53369 was heard at any time in another and different court.
We, therefore, reject applicant's contention that cumulation order was insufficient.
The application for writ of habeas corpus is denied.
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261 S.W.3d 454 (2007)
SMITHCO INVESTMENTS OF WEST MEMPHIS, INC. and Smithco of Fort Smith, Inc., Appellants,
v.
MORGAN KEEGAN & CO., INC., Appellee.
No. 07-678.
Supreme Court of Arkansas.
September 6, 2007.
*455 Paul Johnson, Jr., Little Rock, AR, for appellant.
David B. Vandergriff, Ft. Smith, AR, for appellee.
PER CURIAM.
On June 27, 2007, Appellee Morgan Keegan & Co., Inc. (Morgan Keegan), filed a motion to dismiss the appeal of Appellants Smithco Investments of West Memphis, Inc. and Smithco of Fort Smith, Inc. (Smithco) with our court. Morgan Keegan argues that Smithco's appeal should be dismissed because the notice of appeal was signed by Smithco's CEO who is not an attorney. We grant the motion to dismiss appeal.
On May 4, 2007, the Sebastian County Circuit Court entered a judgment in favor of Morgan Keegan. On June 4, 2007, Smithco filed a notice of appeal. Attorney Paul Johnson represented Smithco during the trial in the circuit court. However, the notice of appeal was not signed by an attorney, but rather it was signed by Smithco's CEO, Phil Smith. Morgan Keegan argues that the notice of appeal is a nullity because it was not signed by an attorney, and requests that we dismiss the appeal.
We have held that corporations must be represented by licensed attorneys. See McAdams v. Pulaski County Circuit Court, 330 Ark. 848, 956 S.W.2d 869 (1997); All City Glass & Mirror, Inc. v. McGraw Hill Information Sys. Co., 295 Ark. 520, 750 S.W.2d 395 (1988); Arkansas Bar Assn. v. Union Nat'l Bank, 224 Ark. 48, 273 S.W.2d 408 (1954). Further, we have held that where a party not licensed to practice law in this state attempts to represent the interests of others by submitting himself or herself to jurisdiction of a court, those actions such as the filing of pleadings, are rendered a nullity. See Davidson Properties, LLC v. Summers, 368 Ark. 283, 244 S.W.3d 674 (2006); Davenport v. Lee, 348 Ark. 148, 72 S.W.3d 85 (2002).
Here, Phil Smith is not an attorney and may not represent Smithco in this case. See Abel v. Kowalski, 323 Ark. 201, 913 S.W.2d 788 (1996). Therefore, we hold that the notice of appeal filed by Smith is a nullity. Further, pursuant to Rule 4 of the Arkansas Rules of Appellate Procedure-Civil, a notice of appeal must be filed within thirty days from the entry of judgment. Because no valid notice of appeal was filed within thirty days, we grant the motion to dismiss appeal.
Motion granted.
BROWN, J., not participating.
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85 F.Supp.2d 574 (1999)
CM, a minor, by and through her parents, JM and EM, and on their own behalf, Plaintiffs,
v.
THE BOARD OF EDUCATION OF HENDERSON COUNTY, a/k/a Henderson County Public Schools, Inc., Defendant.
No. CIV. 1:98CV66.
United States District Court, W.D. North Carolina, Asheville Division.
October 12, 1999.
*575 *576 Paul Lawrence Erickson, Asheville, NC, Shelli J. Lewis, Corona, CA, Pauline F. Laubinger, N.C. Governor's Advocacy Council for Persons with Disabilities, Raleigh, NC, for Plaintiff/Petitioner.
Louise Paglen and Ann L. Majestic, Raleigh, NC, for Defendant/Respondent.
MEMORANDUM OF DECISION
THORNBURG, District Judge.
THIS MATTER came on for trial before the undersigned on August 19, 1999. Having considered the arguments of counsel, pleadings submitted and the administrative record, the Court enters the following findings of fact and conclusions of law.
I. PROCEDURAL HISTORY
JM and EM on behalf of CM, their autistic child, initiated this action pursuant to the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. §§ 1400, et seq.[1] 20 U.S.C. § 1401(a)(1)(A)(i). Plaintiffs claim that the Henderson County Board of Education (County) denied a free appropriate public education (FAPE) to their child, as required by the IDEA. 20 U.S.C. § 1401(a)(18).[2] On December 11, 1997, Administrative Law Judge (ALJ) Meg Scott Phipps found that the County had offered to provide the child with a FAPE as required by federal and state law. Plaintiffs filed an administrative appeal and State Review Officer (SRO) Joe Walters affirmed the ALJ's decision on March 4, 1998. Having exhausted their administrative remedies, the parents *577 brought this action pursuant to the IDEA. 20 U.S.C. § 1415(e)(2).
By Order filed June 16, 1999, the undersigned disposed of several matters in this action. Chief ALJ Julian Mann granted partial summary judgment to the County as to Plaintiffs' claim for reimbursement for an independent educational evaluation above the sum of $1,200. He also ruled that all claims prior to the 1996-1997 school year were time-barred. The undersigned affirmed those rulings, finding that Judge Mann's conclusions were supported by a preponderance of the evidence. In addition, the Plaintiffs' claims pursuant to the Rehabilitation Act, the Americans with Disabilities Act, 42 U.S.C. § 1983, and the 14th Amendment to the Constitution as well as all claims asserted against the individual Defendants were dismissed. Plaintiffs' claims for the school years 1997-98 and 1998-99 and for punitive damages were also dismissed. Thus, the only claims remaining relate to the 1996-97 school year: the IDEA claim for declaratory relief and a cause of action pursuant to N.C. Gen.Stat. § 115C-106.[3]See Memorandum and Order, filed June 16, 1999, at 35-37.
II. STANDARD OF REVIEW
Section 1415(e)(2) of Title 20, United States Code, provides in pertinent part that in "any action brought under this [statute] the court shall receive the records of the administrative proceedings, shall hear additional evidence at the request of a party, and, basing its decision on the preponderance of the evidence, shall grant such relief as the court determines is appropriate." The Fourth Circuit has instructed district courts to bear in mind that "the touchstone of IDEA is the actual provision of a free appropriate public education." Sellers by Sellers v. School Bd. of City of Manassas, Va., 141 F.3d 524, 527 (4th Cir.), cert. denied, 525 U.S. 871, 119 S.Ct. 168, 142 L.Ed.2d 137 (1998).
The Supreme Court has held that a proper review of the state's determination requires a twofold inquiry. Board of Educ. of the Hendrick Hudson Central Sch. Dist. v. Rowley, 458 U.S. 176, 201, 102 S.Ct. 3034, 73 L.Ed.2d 690 (1982). The district court must decide: (1) whether the State complied with the IDEA's procedural requirements in developing and implementing the Individualized Education Program (IEP) for the child at issue, and (2) whether the IEP is "reasonably calculated" to enable that child to receive educational benefits. Id., at 206-07, 102 S.Ct. 3034. The Court also instructed reviewing courts to make "independent decision[s] based on a preponderance of the evidence." Id. The Fourth Circuit refined this standard in Doyle v. Arlington County Sch. Bd., 953 F.2d 100 (4th Cir.1991), where it held that findings of fact by ALJ's and hearing officers in IDEA cases "are entitled to be considered prima facie correct, akin to the traditional sense of permitting a result to be based on such factfinding, but not requiring it." Id., at 105. In essence, district courts must "`make an independent decision based on a preponderance of the evidence, giving due weight to state administrative proceedings.'" Board Educ. of Montgomery County v. Brett Y, 155 F.3d 557 (table), 1998 WL 390553 at *5 (4th Cir.1998) (quoting Rowley, 458 U.S. at 206, 102 S.Ct. 3034).
Moreover, the district court may not "substitute [its] own notions of sound educational policy for those of the school authorities." Hartmann by Hartmann v. Loudoun County Bd. Of Educ., 118 F.3d 996, 999 (4th Cir.1997), cert. denied, 522 U.S. 1046, 118 S.Ct. 688, 139 L.Ed.2d 634 (1998). Indeed, the district court must defer to the State reviewing officer's (SRO) credibility determinations. Doyle, supra. And, the SRO must defer to the *578 credibility determinations made by the hearing officer because he or she had the opportunity to hear the testimony. Id., at 104. Finally, the burden of proof of establishing a violation of the IDEA falls on the party challenging the administrative findings. Barnett by Barnett v. Fairfax County Sch. Bd., 927 F.2d 146, 152 (4th Cir.1991).
As to the standard of review applicable to the state law claim, "[n]o distinction is made between federal and pendent state claims if the claims are brought in federal court. Although the North Carolina Administrative Procedure Act limits a state court reviewing an agency decision to substantial evidence review, ... `pertinent federal law ... specifies otherwise.' The district court properly followed federal procedural law in reviewing independently both the federal and state law claims." Burke County Bd. of Educ. v. Denton, 895 F.2d 973, 983 (4th Cir.1990) (citations omitted).
III. FINDINGS OF FACT
A. The IEP for the 1996-97 school year.
Plaintiffs moved from New Hampshire to North Carolina in 1993 for the sole purpose of placing their child in the TEACCH[4] program offered through the state's schools. Volume III, Certified Transcript of Hearing before the Office of Administrative Hearings, at 13 (hereafter, Transcript, Vol. III, at 13.). CM was first enrolled in the County school system in August 1993. Exhibit A, Affidavit of Judy Cook, attached to Respondent's Brief in Support of Summary Judgment, filed in the Office of Administrative Hearings on February 26, 1997. An IEP was developed for her and she was placed in the Helping Hand Center which offered a TEACCH preschool program. Id. However, in November 1993, after only three months in the program, CM's parents withdrew her from the program in order to implement the Lovaas[5] program in their home and to place her in a Montessori preschool. Id.; Respondent's Exhibit 72 before the Office of Administrative Hearings, Letter dated November 23, 1993, from JM to County. The County continued to provide CM with free speech therapy, although not required to do so under state law.[6] Cook Affidavit; Transcript, Vol. XI, at 132.
In September 1994, JM met with Candy Priest, Supervisor of the Exceptional Children's Program for the County, to obtain a copy of CM's file. Id. During that conversation, JM explained CM's progress in the Lovaas program and Ms. Priest volunteered that the County could provide services to CM in her preschool setting. Id., at 144. JM declined, stating that he had not informed the preschool that CM was autistic but had advised only that she had a communication disorder. Id.
However, in December 1994, the Plaintiffs approached the County about paying for the Lovaas therapy they were providing CM in their home. Id., at 144-45. A series of meetings were held in January and February 1995 to develop an IEP for CM. Id., 145-46. Ms. Priest testified,
Over and over again it just kept coming back that that, yes, we were proud of her academic skills, but what she absolutely had to do was use these skills and use her language to communicate functionally.... We were finding that C. could-could respond to a prompt, but that was I mean, every time we saw her, someone had to say, "C., say hello," .... [T]here was always someone there with her, either guiding, moving her or ... it was always a prompt and then *579 expecting a response. And we in education know that's not that's not how we-how we learn or how we progress or how we-how we survive in society.
Id., at 150-51. The County considered four options for CM: the Helping Hand Program, Sharon Burlingame's preschool handicapped classroom, the Lovaas program and the Bruce Drysdale's autistic classroom.[7] Transcript, Vol. VI, at 196. The County concluded the best option for CM was Bruce Drysdale's full-day autistic classroom with some mainstreaming into the regular kindergarten. Id., at 197. By mid-February, the County had completed the IEP for CM but her parents continued to insist that the County fund a Lovaas program. Id., at 204; Cook Affidavit.
There was no further contact from the Plaintiffs until June 1995, when they requested an independent educational evaluation of the child. Cook Affidavit. Because the last evaluation had been completed two years prior to that time, Ms. Cook felt it was necessary to obtain a more recent evaluation. Id. In the event the parents disagreed with that evaluation, they could then pursue an independent evaluation. Id. School personnel evaluated CM in August and September 1995. Transcript, Vol. VIII, at 219-20. Plaintiffs disagreed with the County's evaluation and requested an independent one be performed. Cook Affidavit, supra. Ms. Cook then sent them a letter outlining the procedures, including the $1,200 limit for reimbursement, and listing facilities and agencies competent to perform the evaluation. Id. Plaintiffs responded that four of those suggested were not competent to perform the evaluation, the fifth was rejected by the Plaintiffs as biased, and the sixth had a waiting list. Respondent's Exhibit 117, Letter from JM to Judy Cook, dated January 5, 1996. The parents obtained an evaluation from Dr. Jan Handleman in New Jersey, the full cost of which the County refused to reimburse. Cook Affidavit, supra. The undersigned has previously affirmed the grant of partial summary judgment on this issue by the ALJ on the ground that the parents were unreasonable.
Dr. Handleman issued his report on March 25, 1996, and it was received by the County in April 1996.[8] Respondent's Exhibit 57. He concluded that "[a]pproximately forty hours a week of comprehensive behavioral programming is suggested, which emphasizes individualized and discrete-trial teaching[9].... Altering the current commitment to specialized and individualized programming could negatively impact on the very positive gains that [CM] has made and the momentum she is demonstrating toward future educational accomplishments." Id. Dr. Handleman testified that he did not conduct any standardized tests on CM but reviewed test scores and records provided to him by the Plaintiffs. Video Deposition of Dr. Jan Handleman. He observed CM for two hours while she was with her Lovaas therapist. Id. In addition, he reviewed a video taken of CM by her mother. Transcript, Vol. V, 42. Dr. Handleman admitted that he had relied, in forming his opinion, on information which could have been incomplete. Video Deposition, supra. For example, he was unaware that CM's therapist was a recent college graduate. Id. The videotape showed CM's behavior as *580 stabilized and compliant; but, he admitted that he was unable to assess any behavior which would not have been shown on the tape. Id. And, he admitted he was not provided with any information about the County's program except that given by the parents. Id.
At this point, the only IEP for CM was the one prepared in the fall of 1995. The Plaintiffs had submitted a copy of this IEP to Michael Guiou, their Lovaas consultant, who contested many of the assessments. Respondent's Exhibit 9. When Judy Cook received Dr. Handleman's report, she felt it did not add any substantive information which could be used in drafting a new IEP. Transcript, Vol. VIII, at 224. But, CM's parents and Mr. Guiou contended she had mastered many of the goals on the 1995 IEP and based on Dr. Handelman's report, the County could not assess the validity of that contention. Id.; Transcript, Vol. IX, at 18. Moreover, Dr. Handleman's report contained no information concerning CM's current level of performance; it was simply an observation devoid of the type of information necessary to draft an IEP. Transcript, Vol. IX, at 12. Therefore, because CM's parents were challenging the 1995 IEP as inadequate and inappropriate, Ms. Cook felt an additional evaluation was appropriate, especially in view of the months which had passed. Transcript, Vol. VIII, at 224. As a result, Ms. Cook obtained, with the parents' consent, an informal assessment of CM by Dr. Victoria Shea, an expert on autism. Transcript, Vol. VIII, at 225-28; Vol. XVIII, at 127-41.
Dr. Shea observed CM at her preschool and in her home program for a total of three hours and received and reviewed her records. Id., at 228; Respondent's Exhibit 58.
By report and observation, [CM] demonstrates typical features of autism (i.e. impairments in social and communication skills, and unusual behaviors and interests). At the time of the last standardized assessment (8/95), she demonstrated widely scattered cognitive skills, low average adaptive skills, significant expressive language delays, and minimal fine motor delays. I observed [CM] to be very compliant with verbal directions from her tutors. In the absence of these verbal prompts, however, I observed several instances in which she was confused about what to do, where to go, how long to continue, or what would happen next.... The comments on [the County's] draft IEP by the UCLA consultant [Michael Guiou] indicated that the majority of the proposed objectives had been mastered.... However, there were [] skills described as mastered which I observed [CM] not to have mastered. These included responding to her name without prompting, making a choice between activities (several times when given a choice she said "yes"), washing her hands independently (she need a prompt to stop), and responding accurately to questions (Is Jessica your Daddy? "yes;" Where does Minnie Mouse live? [CM] gave her own address). I also observed that [CM] appeared to have memorized some expressive language that she did not fully understand (when asked the steps involved in washing her face, [CM] began "turn off water, get bathing suit ..." and needed a prompt for "soap" before continuing with logical steps of rinsing, etc.). Since present level of performance is the foundation for development of IEP goals, the question of [CM's] current skill levels is problematic.... The evaluation report by Dr. Handleman (3/96) did not contain specific information about skill levels. Based on my observations, I question the representation by the UCLA consultant that almost all the proposed IEP objectives have been mastered.... A second comment on the [County's] draft IEP is that I think a major focus of [CM's] education should be on the development of independence. Like many students with autism, [CM] has learned to follow directions from adults.... While [CM] *581 can memorize and repeat fairly lengthy sequences of verbal dialogue, her functional use of language is much more limited.... From my observation in the preschool, [CM] already feels comfortable with parallel play near other children, and she accepts social interactions initiated by familiar peers.... I [make] recommendations to increase the emphasis on independence, functional communication, and concepts underlying social interactions.
Respondent's Exhibit 58. Dr. Shea had other reasons for doubting the conclusions reached in Dr. Handleman's report. When she reviewed CM's records and notes from her preschool and therapy, there were reports of tantrums and screaming during the same time period that Dr. Handleman observed CM to be compliant. Transcript, Vol. XVIII, 159-62. In fact, notes from the Lovaas therapy show that in January 1996, CM was "still throwing tantrums quite a bit." UCLA Book 7 (CM's Therapy Log Book), Bates No. 005641-42. In the spring of 1996, her behavior was so bad that her Lovaas therapist reported that if something did not change, CM would be expelled from school. Transcript, Vol. XIV, 238. And, in September and October 1996, CM was still having tantrums, biting and butting her head. UCLA Book 7, Bates Nos. 005607, 005612, 005614.
At the end of CM's preschool for 1996, her mother asked her teachers to respond to a questionnaire concerning her development. Respondent's Exhibit 194. A comparison of their responses to the opinion of the Michael Guiou shows that many of the items he felt were mastered had presented problems in preschool, especially communication skills. And, her preschool teachers' responses showed that most of CM's positive behavior followed prompting by her Lovaas therapist.
In addition to the assessment by Dr. Shea, Ms. Cook had Laurie McDanel, an exceptional children teacher, and Janna Beekman-Forst, a psychologist, visit with CM in May 1996. Respondent's Exhibits 59, 59A. They observed CM during a Lovaas therapy session. Transcript, Vol. X, 169. Although CM could respond to questions such as, "What would you do if ...," she was unable to answer questions such as, "What did you have for lunch?" Id. In between questions, she would engage in unintelligible speech. Id., at 170. Her therapist told her a story and then asked CM to repeat it but she was unable to do so. Id., at 172. She did not independently, or with prompting, engage in imaginative play. Id., at 173. During the breaks which CM was given, she began to play and communicate but was halted and told to go back to work. Id., at 181. This seemed self-defeating to Ms. McDanel, who teaches autistic children in the County system. From her observation of CM, the child was not enjoying herself. Id., at 184. In her professional opinion, the Lovaas therapy
was very intense. I thought that it seemed to ask her to provide lots of things from memory, wasn't eliciting anything spontaneous, but required her to rely upon her rote memory. I thought it was a lot of auditory directions that can be very overpowering to a child with autism and to some adults. I did not feel that what she was able to produce during that time was that what she actually produced, I think, could have been done in less than two hours of time that intense time of constantly going over the same things over and over. And I also thought that many times it was really unclear, because it was unclear to me, whether she actually got the answer right or not. It was either "pretty good" or they kept repeating the same question, and she kept answering the same answer. So I think that's confusing.
Id., at 185. Ms. McDanel also met with CM's mother after this session in order to obtain additional information for use in preparing an IEP. Id., at 186. She was not told during any of these meetings that *582 there were behavioral problems with CM. Id.
Dr. Shea felt that CM's current level of performance was not known and suggested the re-administration of the Brigance test prior to formulating the IEP. Transcript, Vol. IX, at 20-22. The Plaintiffs did not agree to the administration of that test and determined to have private testing done prior to the IEP meeting. Transcript, Vol. V, at 43-45. They chose Dr. Thomas Boyle, a psychologist in New Jersey who in the past had worked with Dr. Lovaas. Id., at 48. Dr. Boyle administered standardized testing but admitted in his report that the standard protocol had to be modified at times in order to allow CM to participate in the task. Respondent's Exhibit 60. Those modifications would have increased her ability to perform well, if they had any impact. Transcript, Vol. XV, at 73. He concluded that if she were placed in a full-day school, she would require 15 to 20 hours per week of one-on-one teaching focusing on her language deficits. Id. Initially, Dr. Boyle included CM's IQ scores in the report; however, her parents asked him to delete them. Transcript, Vol. XV, at 21. When Dr. Boyle prepares an evaluation for a school, it is his normal practice to report the IQ scores. Id., at 95. CM's full scale IQ was 57 which is in the mildly mentally handicapped range. Id., at 94, 113. Her language skills were very poor; and thus, he could not be sure she understood the questions being asked. Id., at 24. He found she was able to respond to some things through rote memory but when a task required understanding the meaning of a sentence, she had difficulty. Id., at 27.
Dr. Boyle was contacted again by the Plaintiffs in early 1997. They wanted him to evaluate CM a second time because they felt her true abilities were not shown in the July report and at the time, her medication was being changed. Id., at 57; Respondent's Exhibit 61. CM's mother asked him to use different standardized tests than had been used in the July testing so that no one would think she had been trained on the test. Transcript, Vol. XV, at 57. In Dr. Boyle's opinion, that was an unusual request because "no one has ever said that to me before. No one has ever expressed that someone might do that. But no one has ever requested a reevaluation that quickly either." Id. The Plaintiffs had a particular concern about CM's IQ scores. Id., at 119-20. Dr. Boyle found that CM's IQ scores had increased but she still had significant deficits in expressive and receptive language skills. Id., at 58-59. He did not alter his recommendation. Dr. Boyle was not told of any behavior problems with CM during either evaluation. Id., at 68.
The Plaintiffs retained a third person to evaluate CM. Dr. Jan Blacher is an education professor in California who observed both CM and the County's autistic classrooms in August 1996. Dr. Blacher provided written observations to the Plaintiffs concerning the TEACCH classrooms which contained scathing criticisms of the teachers, the aides, and the program in general.[10] Respondent's Exhibit 62. Nonetheless, she testified that CM did not need 40 hours per week of Lovaas therapy and should be in a classroom setting part of the time. Transcript, Vol. VIII, at 13.
On August 14, 1996, the parties were finally able to have a meeting concerning CM's IEP for the 1996-97 school year. Respondent's Exhibit 68. The Plaintiffs felt the goals set for CM were very well done. Id. CM's mother expressed her desire that CM be placed in a classroom with "typically developing peers" for half the school day and 20 hours per week of one-on-one instruction. Id. Ms. McDanel stated she was concerned that CM might be unable to adjust and perform in a classroom *583 of 20 children since she had never been with such a large group. Id. At the Plaintiffs' request the meeting was adjourned to a later date when CM's Lovaas consultant would be able to attend. Id.
The second meeting occurred on September 13, 1996, and was attended by Michael Guiou, the Lovaas consultant. Respondent's Exhibit 69. Also present was a kindergarten teacher from a regular kindergarten class since there was a possibility CM would be placed there. Id. The Plaintiffs acknowledged that the draft IEP was "a very good IEP" to which they had made minor changes after consulting with Mr. Guiou. Id. Of primary concern was the distinction between individualized instruction versus one-on-one instruction. Id. Ms. Cook explained the two terms could mean the same thing; but, primarily, individualized instruction is instruction designed to meet the unique needs of a child. Id. There would be no guarantee of one-on-one instruction for a certain period of time each week because the teacher is allowed to use the type of instruction necessary to teach the skill involved. Id. Although agreeing that the IEP goals were good, Mr. Guiou felt CM must have one-on-one instruction. Id. Ultimately, Plaintiffs explained that by one-on-one instruction they meant a "shadow," an aide or teacher, should be available throughout each day to assist CM. If she did not understand what the teacher was teaching, the shadow was to step in to assure CM would grasp the task. Id. Plaintiffs agreed that much of the time this person would not be needed; yet, they insisted such a person be available. Id. It was explained that in the County setting such a person was available but not exclusively for CM. Id. Because it was clear an agreement concerning placement could not be reached, the parties went through the IEP goals. Id. When a discussion of individualized versus one-on-one instruction resumed, it was clear that the difference lay in methodology. This meeting lasted for at least half of the day. Transcript, Vol. IX, at 51. During this and the prior meeting there was no mention that CM was experiencing any behavior problems. Id. This was important information because it should have been addressed in the IEP. Id., 52. The next meeting was scheduled for September 23, 1996.
At that meeting, Ms. Cook presented significant revisions to the IEP based on the last meeting; and again, the parties reviewed the IEP paragraph by paragraph, page by page. Id., at 54. The parties, and their attorneys, reached an agreement on the goals. Id., at 55. The IEP called for CM to receive a full-day program with half of each day in a regular kindergarten class accompanied at all times by an adult (shadow) to assist as needed, one-on-one instruction from Ms. McDanel, the special education teacher, in reading, math and written language for one and a half hours each day, guided instruction for one hour each day in the autism classroom and three hours of speech therapy each week. Respondent's Exhibit 70. The Plaintiffs responded that they did not want CM in the autistic classroom for any portion of the day because she might learn inappropriate behavior. Id. It was explained that while CM was there the other children in that classroom would either be doing their own "mainstreaming" or independent activities, thus reducing the possibility that CM would see inappropriate behavior and learn to imitate it. Id. The Plaintiffs did not agree and continued to insist on their choice of placement. In addition, they asked that the school system pay for the speech therapist to travel to CM's private school to provide therapy because EM, the mother, did not have the time to take CM to the therapist's private office. Id. It was explained that the school system could not send a therapist into a private school. Id.
The IEP drafted for CM for the 1996-97 school year provided for CM to have "one-to-one instruction to learn new academic skills. She needs guided practice with an adult to maintain skills. She needs socialization *584 and communication skills which can best be practiced with typically developing peers. Expanded language goals necessitate additional speech." Respondent's Exhibit 10. As a result, CM was offered a program providing her with five hours per week of guided instruction in the autism classroom, seven and one-half hours of one-on-one instruction, three hours of speech therapy and the remainder of her time in a regular kindergarten classroom accompanied at all times by an adult. Id. The Plaintiffs did not accept the IEP because it did not provide the Lovaas methodology and would have placed CM in the autism classroom for a portion of each day. Id. Both parents testified that the only program they would have accepted was the Lovaas program. Transcript, Vol. VI, at 110. By that, they meant not only a Lovaas shadow with CM at all times, but also the use of discrete trial teaching. Respondent's Exhibit 7. And, they insisted that the shadow be the same person each day. Transcript, Vol. VI, at 115. Moreover, the Plaintiffs did not approve of the method described by Ms. McDanel for dealing with tantrums which occur in the regular classroom because a child having tantrums would be returned to the TEACCH classroom. Transcript, Vol. VI, at 108.
For the 1996-97 school year, CM was placed in the K-2[11] class at the Covenant Academy, a private religious school with six children in the class: four kindergartners, a first-grader and a second-grader. Transcript, Vol. XIV, at 178-79. CM's shadow for the school year was Caroline Dilworth, who had been her Lovaas therapist the prior year. Dilworth, who has a college degree in psychology, began working with CM two months after graduation and without any background in working with autistic children. Id., at 198. Despite the low student ratio, CM's kindergarten teacher, Ms. Salter, did not have a very organized curriculum and was not thought to be a good teacher by Ms. Dilworth. Id. Salter was replaced in February 1997. Id.
In the fall of 1996, CM's mother recorded in her logs that CM had forgotten much of what she had learned, had become lazy and still had not obtained spontaneous language. Id., at 203, 205. Ms. Dilworth, who accompanied CM to school each day, reported in October that CM was not responding to her name or to naturalized statements appropriately. Id., at 288. She required much prompting to participate in class. Id. At the end of October, Ms. Dilworth reported: "Many times prompted today. One time, no prompt. Note: This is an area of growing concern. At times her peers yell her name two or three times before she will or not look their way." Id., at 289. And, CM did not listen when her teacher read stories, although she did do so when Ms. Dilworth read the story. Id., at 292. Ms. Dilworth readily admitted that "it could have been because she has been working with me for two years ...." Id. All through the spring of 1997, CM required frequent prompting. Id., at 208-12. Although present in the classroom as CM's Lovaas shadow, Ms. Dilworth also worked with other children and not exclusively with CM. Id., at 294.
CM continued to have behavior problems in 1996. Id., at 220, 256-63. In fact, during the first months after CM began Covenant Academy, she had significant problems with tantrums. Id., at 263-66. She had tantrums on an almost daily basis, many of which were witnessed by her peers, resulting in problems in her socialization. Id. On one occasion, she had a tantrum while the teacher was out of the room. Ms. Dilworth, who had been left alone with the classroom, could not remove CM from the room and thus, her classmates witnessed a ten minute tantrum. Id., at 266. This occurred on the same day that Michael Guiou, CM's Lovaas consultant, met with the school officials concerning her IEP; yet, no mention was made to them of these problems. Id. This type of *585 behavior continued throughout the fall despite various methods of dealing with them by her therapists. Id., at 267-76. In fact, new behavior problems appeared in October and November of 1996: biting and hair pulling. Id., at 277. In January 1997, CM's tantrums at home were averaging eleven minutes in length and included biting, hair-pulling, screaming and kicking. Id., at 279. And, in mid-January 1997 she had two tantrums at school. Id., at 283. In fact, Ms. Dilworth reported in early 1997 that it was necessary to remove CM from the classroom in order to work with her on academic work. Id., at 285.
B. The methodologies at issue.
The Lovaas methodology was developed by Dr. Ivar Lovaas as a result of a three year study conducted of 19 children who were diagnosed as autistic. Petitioner's Exhibit 14, "Behavioral Treatment of Autistic Children". All of the children were aged three or under and received 40 hours per week of one-on-one instruction in their home. Id. At the end of the study, nine of the children had achieved normal IQ's and were described as indistinguishable from their peers. Eight were placed in aphasic (communication handicapped) classes and the remaining two were in autism or special education classes. Id.
Dr. Jacqueline Wynn is the director of the Lovaas Institute and testified as an expert in the use of Lovaas therapy to treat autistic children.[12] Lovaas therapy is one version of Applied Behavioral Analysis (ABA) which "consists of breaking down activities into discrete individual tasks and rewarding the child's accomplishment. The child eventually learns to integrate the information and associate instruction with a given activity." Mr. X v. New York State Educ. Dept., 975 F.Supp. 546, 548 n. 1 (S.D.N.Y.1997); Transcript, Vol. XIII, at 71. Discrete trial teaching is one aspect of the program and involves a prompt to the child followed rapidly with a consequence based on whether the child gives the appropriate response. Id.; T.H., supra. In the Lovaas program, when a child has negative behavior, the therapist analyzes why and in what context it is happening. Transcript, Vol. XIII, at 27-28. This allows the therapist to determine the reason behind the behavior, such as seeking attention, and to predict when it will occur. Id. Then, the therapist devises an intervention plan, a plan to stop the behavior. Id., at 29. For example, if the behavior is occurring because the child is frustrated by a task, it may be that the task is too difficult and therefore, needs to be broken down. Id., at 30. "[M]any of the original Lovaas techniques are no longer considered appropriate, e.g. using electroshock as an adverse consequence." T.H., 55 F.Supp.2d at 836 n. 8. Another technique originally used was hitting the child if he or she engaged in self-stimulatory behavior. Transcript, Vol. XIII, at 206-07.
The Lovaas program designs a treatment package for the child which begins with 40 hours per week of one-on-one instruction in the child's home. Id., at 45. Later, more and more of the time is spent in a socialization setting of school, peer play and community activities. Id. An essential component of the program is the involvement of the parents in the therapy so that any gains made by the child with his therapist are not lost. Id., at 45-46. The parent is expected to help the child generalize the skills learned during therapy to the everyday world. Id., at 75. According to Dr. Wynn, a major difference between Lovaas therapy and other treatments for autistic children is that intervention in the Lovaas program begins at the preschool versus school age. Id., at 49.
The program also uses a therapy log which provides continuity among the therapists and aides involved. Id., at 96. It is used to record behavior, skills and problem areas. Id. It becomes a record of what a child knows and does not know. Id. The program has an hierarchy of goals in different *586 categories which are to be mastered. Id., at 160. Once a skill is mastered, the child is moved on to a new one. Id., at 102. If he or she regresses, the therapist goes back to the last skill. Id., at 105. The ultimate goal is for the child to generalize the skills learned in therapy. Id., at 103. Thus, drills are used to teach the children. For example, the receptive label drill is designed to make sure the child understands the name of an object, rather than repeating it from rote memory. Id., at 32. This is done to ensure that the child relies on auditory versus visual skills in processing language. Id., at 33. The Lovaas program relies on prompts to ensure that the child acquires a skill and remains successful with it. Id., at 121-22. "But the goal is to start with the prompt and then fade out the prompt and get rid of it so the child is working independently." Id., at 122. Successes are reinforced, usually by physical contact or food. Id., at 37. Eighty percent of the Lovaas program focuses on the development of language skills. Id., at 110. Typically, the program begins around age three and continues until seven or eight. Id., at 135. On cross-examination, Dr. Wynn testified that the TEACCH program also begins at preschool age and relies on heavy parental involvement. Id., at 181.
Dr. Lee Marcus is the clinical director of the TEACCH Center in Chapel Hill, North Carolina. Transcript, Vol. XIX, at 6. The TEACCH program creates a classroom environment for autistic children which is predictable and therefore understandable. Id., at 76. Structure is very important to autistic children because they cannot handle numerous stimuli at once. Id. The physical space of their classroom is arranged in a manner that explains to the child what will happen in different parts of the learning program. Id., at 77. Thus, the autistic child, who has strong visual skills, is able to rely on those skills to feel comfortable with the setting. Id., at 78. The program also relies on structure in the form of a daily schedule because autistic children have difficulty understanding the concept of time. Id., at 79. The daily schedule is presented to the child according to each child's abilities. Id., 80. Thus, some may be written and others may rely on color cues. But the purpose of the schedule is to allow the child to know in detail what will occur at each portion of the day. Id., at 81. This is done because autistic children do not understand the concept of sequencing and become very anxious about what will occur next in their day. Id., at 82. Each child has an individual work system which is designed to help the child become independent in carrying out his assignments. Id., at 83. Within this work system are four questions for each child to integrate during his assignment: What am I supposed to do?; How long will the work last?; How do I know when I am finished?; and What comes next? Id., at 84. The program uses visual cues as well as teacher directives. This increases independence and reduces frustration caused by an inability to understand auditory directives. Id., at 89. Like Lovaas therapy, TEACCH allows the child to learn one task which has been broken into its simplest parts before going on to a more difficult task. Id., at 98.
Another aspect of the program involves teaching language and communication skills because "[w]hat distinguishes children with autism from other language handicapped people is not so much the words, although a lot of kids have great difficulty learning words, it's using those words in a social context to communicate naturally, spontaneously, and meaningfully." Id., at 106. This requires having the child learn and understand that communication involves two or more people since autistic children are self-contained. Id. The first goal is to get communication going in any form as long as there is a connection between the child and the teacher or peers. Id., at 109. This requires an assessment of the child's current skills in order to know how to elicit spontaneous communication. Id., at 111. Usually this is done by involving the child in an *587 activity which interests him, such as a picture exchange in which the child names the object. Id., at 112-13. Dr. Marcus admitted that the TEACCH program is not the only manner in which autistic children may learn but noted that many of the same features of this program are used in others. Id., at 120.
The TEACCH method does not use behavior modification to deal with behavior problems because that method is a consequential approach. Id., at 121. Instead, it uses behavior management which means that, based on the child's individual needs, the environment is structured to prevent problems. Id. If the child, despite these measures, is exhibiting aggressive or self-injurious behavior, a new assessment is done. Id., at 122. It may be that too much is being expected of the child or it may be necessary to use a consequential approach in close proximity to the behavior. Id. Many behavior problems in autistic children, as with normal children, are alternative forms of communication. Id., at 123. They are signs of stress or frustration. Id. For example, rather than placing a child in a "time out" each time he kicks, he will be rewarded each time he does not kick. Id., at 124. But at the root of the solution will be a determination of why the behavior occurs. Id., at 125. Only in this manner can the need for the behavior be eliminated rather than simply suppressing the behavior itself. Id. Tantrums may occur because the child is frustrated at a task, the task has been going on too long, or it is too difficult. Id., at 125-30. Although some people call it a form of task avoidance, one must understand why the child wants to avoid the task in order to understand the cause of the behavior. Id.
Dr. Marcus feels that TEACCH differs from Lovaas philosophically, strategically and in the manner in which success is measured. Id., at 139. The Lovaas methodology views autism as a collection of aberrant behaviors which may be controlled by an intensive behavior/discrete trial teaching approach. Id., at 140. TEACCH views each autistic child as having individual differences. Id., at 142. "[W]hile you can improve on them and help and move people along in some cases to the point that they might be indistinguishable from normal, [TEACCH] doesn't really [ ] accept the notion that everything is fixable and that autism is merely a collection of unusual behavior or behaviors and deficits." Id. Moreover, TEACCH provides a predictable environment to enable the child to become independent by learning. Id., at 145. The Lovaas approach uses the "one-to-one adult-initiated process and because of what autism is, and the fact that people with autism are potentially prompt dependent that what happens is that the person with autism becomes dependent on the adult who is doing the teaching." Id. They become dependent on verbal cues rather than learning to integrate cues by using their visual skills. Id. Lovaas also has a predesigned curriculum which is imposed on the child, rather than a curriculum designed for that specific child. Id., at 147. However, TEACCH uses developmental psychology to ensure that the child "crawls before he walks" rather than teaching the child to walk when he does not understand the concept of crawling. Id., at 151. Another difference between the two programs is the use in the Lovaas program of high school and college graduates as the therapists after they have been trained at the Lovaas Institute. Id., at 154. "This is a very complex disorder, and people who are engaged in a clinical enterprise or an educational enterprise need to have good they need to have a lot of knowledge in a lot of areas. And even then even with that, you need specialized training and ongoing support." Id. It is also important that the learning occur in the classroom, as opposed to the child's home, because "[l]earning must go on in the context in which it can be generalized." Id., at 158. One-on-one instruction is used in the TEACCH classroom but not to the exclusion of other methods of instruction. Many parents become concerned *588 that their child will develop inappropriate behavior from the other children in the class. Id., at 179. However, autistic children have difficulty imitating behavior; therefore, if the child is at such a level of development that she is capable of imitation, there are other methods of working with her to avoid the problem. Id., at 180.
C. The program offered by the County.
The 1996-97 IEP would have placed CM, who was almost seven years old, in Ms. McDanel's classroom for autistic children at the Bruce Drysdale Elementary School. At that time, she had five students in her classroom, one girl and four boys ranging in age from six to eleven years. Transcript, Vol. X, at 18. Another child who is in a regular second grade classroom receives instruction from her one hour each day. Id. A third student who was taught by Ms. McDanel in two previous years is in a regular fifth grade classroom and goes to visit one hour each week as a reward. Id. One day each week, two fourth graders from a regular classroom come into her classroom as a means of reverse mainstreaming in order to teach socialization skills. Id., at 19.
One of the students in her classroom goes to the library each morning where he uses the computer because he is learning to write sentences. Id., at 42-43. Another student begins his day by doing independent work because it helps him settle into the routine. Id., at 44. A third student is in the play area and a fourth is also doing independent work. Id., at 45. Data is kept on each child and when the teacher and aides rotate, they discuss each child's accomplishments and goals. Id., at 50. If a child's IEP requires it, a daily anecdotal log is kept and each child who is mainstreamed into a regular classroom has a daily log. Id., at 54. Each child receives one-on-one instruction with Ms. McDanel each day. Id., at 59. While the students work independently, they are monitored by an aide. Id., at 64. Each morning the children have time on the playground. Id., at 69.
Ms. McDanel feels the environment of the room is important because autistic children are easily distracted. Id., at 150. In addition to independent work time and one-on-one instruction, there are times allotted for communication and social skills development. Id. She finds an area of interest to each child and then begins to build a personal relationship with him based on that interest. Id., at 151. This teaches them to communicate. Id. By having the classroom environment comforting to the children, they are able to adjust to the changes in their daily schedule, making the transition between tasks and different times of the day. Id. This allows them to transfer these skills beyond the classroom. Id., at 152. Also, it frees them from fear and confusion and allows them to learn. Id., at 152-53. Each week in the play area, they introduce different scenes, such as camping sites, to promote interest in the children. Id., at 155. This encourages spontaneous communication. Id. If CM had come into the class, a third teacher's aid would have been hired. Id., at 28, 115.
Ms. McDanel testified that tantrums are the beginning level of communication for autistic children and as soon as they have a system to communicate, the tantrums decrease. Id., at 194. They are allowed to use pictures or other methods to communicate their needs and then the behavior usually ceases. Id. "I rarely have anybody tantrumming, because academically, they're learning." Id. Tantrums are a sign, not that the child is lazy, but that he or she is sick, hungry, tired, or frustrated. Id., at 195. She has never had a child functioning well enough to be mainstreamed into a regular classroom who also is having tantrums. Id.
Ms. McDanel viewed a video of CM functioning in October 1996 in her private preschool. Id., at 191. Based on her observations, the child was not functioning as independently as had been reported and she relied on her therapist for prompting. *589 Id., at 192. CM was not functioning as well as any child in Ms. McDanel's classroom in areas such as learning the day of the week, knowing what was going on during the day and interacting with others. Id. She was unable to sit in a small group or work on something without prompting. Id. During calendar time, she required constant prompting to refocus and she did not respond to other children even when they approached her. Id.
Ms. McDanel was asked several questions about Dr. Blacher's reported observations of her classroom. Although Dr. Blacher reported several students engaged in self-stimulatory behavior, Ms. McDanel testified that only one student, who was absent that day, engages in such behavior. Id., at 213. One student who was described as having been removed from the room due to behavior problems was actually doing an independent work project outside the class at the time. Id., at 214. Dr. Blacher reported that no one checked or monitored the students doing independent work; a description with which Ms. McDanel disagreed. Id. Although Ms. McDanel had invited questions from the doctor concerning the observation, she had none. Id., at 216.
Ms. McDanel explained the progress she has seen in her current students. T began in her classroom when he was five years old and at the time was very confused, had tantrums, and could not focus. Transcript, Vol. X, at 152-53. She began by using pictures to show him what would happen during each portion of the day. Id. When he first came into the class, he had almost no language skills. Id. After working with him, he began to answer "yes" and "no" to questions and then expanded his answers. Id., at 154. The second year in her classroom, he began to have spontaneous communication. Id. "He's able to answer anything. He's able to participate in a group setting in a first grade classroom of 18 kids and listen and answer questions." Id. He understands the questions and gives appropriate answers, not as a result of having practiced with her, but as a result of conceptualizing the language. Id. T has learned to generalize and in his second year with Ms. McDanel is mainstreamed into the first grade classroom. Id., at 35, 37.
M first began with Ms. McDanel in the 1996 school year and at the time was nonverbal. Id., at 29. She did not understand the routine of the classroom but picture schedules were designed for her. Id. She is now able to express her wants and needs and for the first time is able to carry on conversations. Id. She is also able to follow the classroom schedule. Id.
B was originally labeled as learning disabled. Id., at 158. He was evaluated at TEACCH and found to be autistic. Id., at 159. He came into Ms. McDanel's classroom the previous year when he should have been in the fourth grade. Id. In March of that year, he began to move into a regular fourth grade classroom and this year, is in a regular fifth grade classroom. Id. Ms. McDanel feels that having a structured classroom allowed him to learn and become comfortable with oral instructions. Id. As a reward for his behavior in the regular classroom, he comes back to visit once each week for one hour. Id.
S is academically at his grade level but he remains in Ms. McDanel's classroom because he easily becomes distracted. Id., at 45-46. Because of his level of anxiety, he performs well in the structured classroom but would have trouble coping in a regular classroom. Id., at 46-47. However, he has made great progress because at first he had difficulty in the structured classroom. Id.
IV. CONCLUSIONS OF LAW
ALJ Phipps found that "[a]t its core, the dispute between the parties is a debate over a choice of educational methodology for the teaching of autistic children." Final Decision, filed December 11, 1997. She found the County had complied with all procedural and substantive matters required *590 by the IDEA and had offered CM a FAPE. She also found that in order for CM to receive maximum educational benefits, her one-on-one aide should be trained in the Lovaas method of using discrete trial teaching to assist in the transition to the regular classroom. Her findings were affirmed by the SRO. Decision, March 3, 1998.
At oral argument, Plaintiffs' counsel said the issue for resolution in this case is whether the County is obligated to reimburse the Plaintiffs because they did not adopt the Lovaas program for CM. Plaintiffs' trial brief is a recitation of the superiority of the Lovaas program over the TEACCH method. "This case provides the opportunity to address issues related to CM and simultaneously resolve a number of global special education issues that are of concern to the Defendant and the State of North Carolina." Plaintiffs' Trial Brief, filed August 12, 1999, at 8. At the heart of Plaintiffs' contentions is a belief that CM was denied the Lovaas program because it would have been too expensive. That, however, is not the issue at hand.[13] Plaintiffs raise only three legal arguments: the County failed to comply with the procedural requirements of the IDEA because the ALJ and SRO issued their opinions beyond the time requirements; the IEP is vague and ambiguous; and the Plaintiffs are entitled to reimbursement for an aide trained in Lovaas therapy who would have accompanied CM had she been in the regular kindergarten class for the 1996-97 school year.
Federal regulations require that within 45 days after receipt of a request for a due process hearing, the state agency must provide the hearing and issue a final decision. 34 C.F.R. § 300.512(a). When a request for a review of that decision is made, the SRO shall issue the decision within 30 days. 34 C.F.R. § 300.512(b). Extensions of time may be granted by the hearing or review officer on the request of either party. 34 C.F.R. § 300.512(c).
On September 23, 1996, Plaintiffs were on notice that the County's proposed IEP did not meet their requirements. They argue, however, that had ALJ Phipps' decision been timely rendered within 30 days after the conclusion of the hearing in April 1997, CM would have been able to take advantage of a public school education for the 1997-98 school year. The same argument is made concerning SRO Walters' decision. This position is based on the premise that the Plaintiffs would have accepted the IEP as proposed with the implementation of Judge Phipps' suggestion that the aide to accompany CM in the regular classroom would be trained in the Lovaas methodology.
First, the undersigned is unable to conclude from the record that the decisions were in fact issued in an untimely manner because the proceedings were extended by the conduct of both parties. On November 1, 1996, Plaintiffs filed a petition for a contested hearing pursuant to the North Carolina Administrative Procedures Act, N.C. Gen.Stat. §§ 150B-1, et seq.[14] Petition, included in Official Record. On that same date, Plaintiffs moved to *591 consolidate findings by Judge Mann with this petition and on November 14, 1996, that request was granted and the matter was continued. Order for Consolidation, filed November 14, 1996. A consent order was filed on December 2, 1996, which set the hearing for March 3, 1997. Response to Respondent's Motion to Continue, filed February 21, 1997. On February 14, 1997, the County moved for partial summary judgment which was granted on March 24, 1997. Order Granting Partial Summary Judgment, filed March 24, 1997. Plaintiffs moved for reconsideration and sanctions. Motions, filed March 11, 1997. In February 1997, the County moved for a continuance of the hearing which was granted and the hearing was scheduled to begin on March 17, 1997. Scheduling Order, filed March 14, 1997. The hearings began on March 17 and concluded on April 16, 1997. Thus, any argument by Plaintiffs that the hearing did not occur in a timely manner is defeated by the extensions of time given both by consent and on motion.
The transcripts from the lengthy hearing were not completed until July 30, 1997. Order, filed July 30, 1997. The parties were given, in accordance with the North Carolina Administrative Procedures Act, until September 19, 1997, to submit proposed findings of fact and conclusions of law. Id.; N.C. Gen.Stat. § 150B-36. On November 19, 1997, Judge Phipps notified the parties she had reached a decision and requested the County's attorneys to submit revised findings of fact and conclusions of law. Letter dated November 19, 1997 from Judge Phipps to counsel. The decision then issued on December 11, 1997.
Plaintiffs filed a request for review which was received in the office of the State Superintendent of Public Schools on December 20, 1997. Letter from E. Lowell Harris to Dr. Joe D. Walters, dated January 12, 1998. Dr. Joe Walters was appointed SRO on January 12, 1998. Id. On January 26, 1998, Dr. Walters notified the parties that the transcripts and records of the proceedings below had not yet been received and therefore, "without waiting for a request from either of the parties, the Review Officer hereby extends the time for completion of the review." Request for Written Arguments and Extension of Time, dated January 26, 1998. Written arguments were to be filed on or before February 19, 1998. Id. Within 30 days of the submission of those arguments, the SRO issued his decision. Decision, filed March 3, 1998.
Assuming arguendo that the decisions were not issued in compliance with the federal regulations, the undersigned concludes the Plaintiffs are not entitled to relief. The Fourth Circuit has
previously held that the failure to comply with IDEA's procedural requirements, such as the notice provision, can be a sufficient basis for holding that a government entity has failed to provide a free appropriate public education. However, to the extent that the procedural violations did not actually interfere with the provision of a free appropriate public education, these violations are not sufficient to support a finding that an agency failed to provide a free appropriate public education.
Gadsby by Gadsby v. Grasmick, 109 F.3d 940, 956 (4th Cir.1997) (citing Hall by Hall v. Vance County Bd. of Educ., 774 F.2d 629, 635 (4th Cir.1985)). Plaintiffs' contention is that if the decisions had issued earlier, "the inability to resolve the key issue of the aide should have precluded the break down that resulted in CM being unable to attend Defendant's school for the 1997/98 and subsequent school years." Trial Brief, at 16. However, the Plaintiffs admitted that the only program they would have accepted was the Lovaas program and that is not what the IEP provided. Contrary to the assertion in the brief, this was not the only reason the Plaintiffs rejected the IEP. They were adamant that CM should not spend any portion of the day in the autistic classroom. They did not agree that if CM was experiencing tantrums in the regular classroom she *592 should be returned to the TEACCH classroom until she had progressed sufficiently to handle the distraction of the regular class. And, they insisted that CM be instructed only by use of the discrete trial teaching method to the exclusion of TEACCH methods and receive such instruction 15 to 20 hours per week. Moreover, they insisted that her shadow in the regular classroom be the same person all the time which was contrary to the IEP's goal of having CM become less dependent on one person. Thus, whether they had known that ALJ Phipps would have recommended a Lovaas trained aide to be with CM while she was in the regular classroom is of no moment. They rejected not simply the lack of a Lovaas shadow but the fact that Ms. McDanel would have used TEACCH methods in a TEACCH classroom with one-on-one instruction which would occur for fewer hours per week than the Plaintiffs wanted. Thus, even if there were procedural violations, they did not actually interfere with CM's receiving a FAPE education. Gadsby, supra.
Plaintiffs argue the 1996-97 IEP was so vague and ambiguous that it violated IDEA's procedural requirements for the development of an educational plan. They claim it is impossible to ascertain where within the school the services would be provided, whether CM would be placed in a kindergarten or first grade class, who would be providing the services and at what times and places.
IDEA provides that an IEP means a written statement for the child developed at a meeting with the school officials and the parents which shall include a statement of the child's present levels of educational performance, a statement of annual goals and "a statement of the specific educational services to be provided to such child, and the extent to which such child will be able to participate in regular educational programs." 20 U.S.C. § 1401(a)(20). Here, the IEP specified that CM would receive 12.5 hours per week of one-on-one and guided instruction with 3 hours of speech services occurring in the TEACCH classroom. Respondent's Exhibit 10, at 1, 2, 5. It specified that she would be in a regular kindergarten class for library, music, art, lunch, assemblies, physical education, recess, centers, circles, free play and snack accompanied at all times by a teacher or aide and set forth the percentage of the time to be spent there. Id., at 2. It was signed by both the TEACCH teacher, Ms. McDanel, and the kindergarten teacher, Michele Alexander. Id., at 5. Throughout the discussion of goals for CM references are made to instruction in the regular classroom versus the TEACCH classroom. Moreover, during the meeting with the Plaintiffs on September 23, 1996, these matters were fully discussed and explained. Brett Y., supra, at *10-11 (quoting Lenn v. Portland Sch. Comm., 998 F.2d 1083, 1086 (1st Cir.1993) (IDEA requires "an adequate, rather than an optimal, IEP" and noting parents' agreement at IEP development meeting that the goals were appropriate)); Doe By and Through Doe v. Defendant I, 898 F.2d 1186, 1190-91 (6th Cir.1990) (where the information claimed to be absent from the IEP was known to all parties, technical violation harmless); J.S.K. By and Through J.K. v. Hendry County Sch. Bd., 941 F.2d 1563, 1571 (11th Cir.1991) (argument that IEP failed to include teacher's day-to-day activities and thus, ambiguous, rejected).
Plaintiffs' final contention is that they prevailed below because the ALJ and SRO determined that CM should be accompanied by a Lovaas trained aide while she was in the regular kindergarten class. As a result, they seek reimbursement for the cost of having their Lovaas therapist available to CM in her private school during the 1996-97 school year. However, reimbursement would be proper only if the County failed to offer CM a FAPE. School Committee of Town of Burlington, Mass. v. Dept. of Educ., 471 U.S. 359, 372-74, 105 S.Ct. 1996, 85 L.Ed.2d 385 (1985); Sellers, *593 141 F.3d at 526. Thus, the issue is not whether the Plaintiffs prevailed, but whether the 1996-97 IEP as offered would have provided a FAPE.[15]
It is first noted that both the ALJ and SRO found the IEP as drafted was appropriate.
[T]he IDEA[] recogni[zes] that federal courts cannot run local schools. Local educators deserve latitude in determining the individualized education program most appropriate for a disabled child. The IDEA does not deprive these educators of the right to apply their professional judgment. Rather it establishes a "basic floor of opportunity" for every handicapped child. States must provide specialized instruction and related services "sufficient to confer some educational benefit upon the handicapped child," but the Act does not require "the furnishing of every special service necessary to maximize each handicapped child's potential."
Hartmann, 118 F.3d at 1001 (quoting Rowley, 458 U.S. at 199, 201, 102 S.Ct. 3034).
ALJ Phipps ruled that the proposed IEP for the 1996-97 school year "was appropriate; however, in order for the IEP to provide the maximum educational benefit to her" the aide should be trained in the Lovaas method. Decision, supra. This went beyond what was required under the statute. Nonetheless, the educational placement must be "likely to produce progress, not regression or trivial educational advance." Hall by Hall, 774 F.2d at 636.
The sequence of events occurring from the fall of 1995 through the spring of 1997 show that the County offered a FAPE. In fact, it may well be that the education offered by the County would have benefitted CM far more than continued Lovaas therapy. Contrary to the Plaintiffs' contention that placement of CM in the TEACCH classroom would have caused her to regress, CM's behavior regressed from 1995 through 1997 while she was in Lovaas therapy. And, in the fall of 1996 she exhibited negative behaviors not previously shown, i.e., biting and hair-pulling. In the spring of 1996, Ms. Dilworth reported to CM's mother they were in danger of being expelled from school because of CM's behavior. Yet, Plaintiffs failed to disclose this regression to any expert or to the County.
The County's experts and teachers noted the intensity of concentration of the Lovaas program on behavior modification and rote learning to the exclusion of developing spontaneous language skills. Ms. McDanel noted that when CM began to play and use spontaneous language during breaks, she was pulled back into therapy. She described CM as a child who was not enjoying herself. The Plaintiffs' experts admitted that at this point, CM no longer needed 40 hours per week of Lovaas therapy. Dr. Blacher said 40 hours was too much; CM should be in a classroom setting. Dr. Boyle recommended between 15 and 20 hours per week of one-on-one instruction, not specifying Lovaas therapy. Ms. Dilworth admitted that CM had become dependent on her and in the spring of 1997 had to be prompted repeatedly.
All of the experts testified that autistic children engage in inappropriate behavior as a means of communicating that something is wrong; i.e., the child is tired, frustrated, sick, hungry, or having too much expected of her. CM's mother described her in the fall of 1996 as having become lazy and having forgotten what she had learned. During the same time, CM's behavior deteriorated. Ms. McDanel testified that autistic children do not engage in behavior problems because they are lazy but because something is wrong which they are unable to communicate. The behavior itself is the beginning of communication and the teacher must use pictures to help the child express herself. As soon as *594 the child is able to communicate, the behavior improves. Yet three years into the program, CM's parents continued to enforce the Lovaas therapy which focused on behavior modification or "extinction" despite the fact that CM's behavior was regressing. What the Court is compelled to note is that by 1997 when she was seven years old, CM had been literally working approximately 40 hours per week since the age of three without any time to simply be a child. Her behavior regression is therefore, according to the experts, not surprising.
Plaintiffs strenuously objected to CM having any time in the autistic classroom out of fear she might learn inappropriate behavior. This argument is disingenuous in view of CM's deteriorating behavior during the same time frame. Moreover, it was to her detriment. Ms. Dilworth testified to numerous occasions when CM's classmates in the private school witnessed her tantrums, to the point that it impacted her socialization. On one occasion, CM tantrummed for ten minutes in front of her peers. The damage done to her self-image and ability to socialize by these incidents seems far greater than any experience she would have had in Ms. McDanel's classroom.
In addition, the Plaintiffs felt it essential that CM have an aide available to her at all times. This was a primary reason for rejecting the IEP because there was no guarantee that the same person would always be in the regular classroom with CM. Yet, Ms. Dilworth testified that she worked with other children at CM's private school. Indeed, the reason CM's classmates witnessed one of her tantrums was because Ms. Dilworth had been left in charge of the class and therefore could not leave to remove CM.
The County's teachers and experts testified that, first and foremost, autistic children need a structured environment in which they feel secure before learning is imposed on them. And, once this is accomplished, independence is the ultimate goal so that the child can function in the real world. The IEP was designed to give CM the opportunity to do both: she would be in the structured classroom or a room adjacent thereto for academic one-on-one instruction and she would have time in a regular classroom with an aide for socialization and communication skills. Ms. Dilworth testified that by the spring of 1997, CM had to be removed from her private school classroom for any academic work to be accomplished. CM would not listen to stories read by her teacher; but when Ms. Dilworth read them, CM could answer questions. By all accounts, CM was not becoming independent but rather more dependent on her therapist.
Moreover, Dr. Boyle's testing in February 1997 showed that CM was not making the dramatic progress that her parents reported. Although her IQ scores increased some, her language and communication skills had not improved significantly and she still was unable to generalize that which she had learned. Dr. Boyle reported CM as having significant expressive and receptive language skills. He reported her as mildly retarded and depending on rote memorization rather than generalizing learning.
These findings corroborated those of the County's experts and teachers. Consistently, the school authorities could not find objective evidence of the progress which the Plaintiffs claimed on CM's behalf. The skills reported to have been mastered were not recognized by her private preschool teachers, individuals who had absolutely no stake in the litigation. And, the reports of Dr. Shea, Ms. Forst, and Ms. McDanel echoed Dr. Boyle's conclusion that CM remained unable to generalize the skills learned in therapy beyond that setting.
Yet while CM remained at Covenant Academy with a teacher her therapist described as below average, Ms. McDanel's children made progress in the TEACCH classroom. M went from being completely *595 nonverbal to having the ability to express her needs and wants. T was main-streamed into the first grade and receiving one-on-one instruction. B had gone in less than a year from the TEACCH classroom into a regular classroom.
Of course, there is no evidence that CM would have prospered in the TEACCH setting because she has yet to be exposed to it. However, it is clear that the Plaintiffs have, understandably, acted with some sense of desperation in connection with their child's condition. After three months in the TEACCH program in 1993, they removed CM for the Lovaas therapy, a program described as achieving recovery before kindergarten. When CM was placed in a private preschool, no one was told she was autistic. Dr. Boyle was instructed to remove her IQ from his evaluation for the school. And, the Plaintiffs never told anyone evaluating CM that she was experiencing behavior problems. Nonetheless, the County did everything within reasonable limits to accommodate the Plaintiffs' desires for their child's education. In 1994, they offered to provide services in CM's private preschool. They provided speech services throughout free of charge. The Plaintiffs were reimbursed the sum of $1,200 in connection with Dr. Handleman's evaluation, a report which ultimately was useless. The County allowed the Plaintiffs to use Dr. Boyle's services instead of having certain tests readministered by the school authorities. Finally, in the third meeting for the 1996-97 school year, the County basically offered the Plaintiffs everything they had requested: CM would go into a regular classroom despite Ms. McDanel's misgiving that she could handle the size of the class. She would receive one-on-one and guided instruction for a total of 12.5 hours per week, a figure close to the 15 hours suggested by Dr. Boyle. Her speech services would be increased. And, an aide would accompany CM at all times while she was in the kindergarten class.
"The IDEA does not promise perfect solutions to the vexing problems posed by the existence of learning disabilities in children and adolescents. The Act sets more modest goals: it emphasizes an appropriate, rather than an ideal, education ...." Lenn, 998 F.2d at 1086. "The IDEA does not require, however, that a school system fund the best possible placement for a child. `The [IDEA] requires only that the child be able to benefit from the instruction that [she] receives, not that [she] be able to maximize [her] potential commensurate with the opportunity provided nonhandicapped children.'" Brett Y., supra, at *14 (quoting Denton, 895 F.2d at 980). Nor does the IDEA create a cause of action for educational malpractice. Sellers, 141 F.3d at 527. The fact that the Lovaas program may be better than TEACCH or provide the maximum opportunity for CM's development does not mean that the IEP offered would not have provided a FAPE.
The undersigned finds the Plaintiffs have failed to carry their burden of establishing a violation of the IDEA. The preponderance of the evidence supports the findings of fact and conclusions of law of the ALJ and SRO.[16]
Plaintiffs also alleged a claim pursuant to N.C. Gen.Stat. § 115C-106(b) which provides in pertinent part that it is "policy of the State [ ] to provide a free appropriate publicly supported education to every child with special needs. The purpose of this Article is to ... bring State law, regulations and practice into conformity with relevant federal law." The language of the statute indicates that the standard for such an education should the same as the federal standard under the IDEA. However, "North Carolina apparently does require more than the [IDEA]. The special education program must provide *596 the child with an equal opportunity to learn if that is reasonably possible, ensuring that the child has an opportunity to reach her full potential commensurate with the opportunity given other children." Burke County, 895 F.2d at 983. Nonetheless, this higher standard does not require a school district to develop a "utopian educational program" for the student with special needs any more so than would be required if the student were not handicapped. Harrell v. Wilson County Schools, 58 N.C.App. 260, 293 S.E.2d 687 (1982). To the extent reasonably possible, the student with special needs should be given an equal opportunity to learn. Id. For the reasons stated infra, the Court finds the decisions of the ALJ and SRO supported by a preponderance of the evidence and the Plaintiffs were offered an educational program which would have provided CM an equal opportunity to reach her full potential commensurate with the opportunity given other children.
V. ORDER
IT IS, THEREFORE, ORDERED that this action be dismissed by way of Judgment filed herewith.
NOTES
[1] The disorder of autism is defined as a "preoccupation with inner thoughts, ... egocentric, subjective thinking lacking objectivity and connection with reality." Dorland's Medical Dictionary (28th ed.1994).
[2] That section defines the term "free appropriate public education" as "special education and related services that (A) have been provided at public expense, under public supervision and direction, and without charge, (B) meet the standards of the State educational agency, (C) include an appropriate preschool, elementary, or secondary school education in the State involved, and (D) are provided in conformity with the individualized education program required under section 1414(a)(5) of this title."
[3] "The policy of the State is to provide a free appropriate publicly supported education to every child with special needs."
[4] Treatment and Education of Autistic and Related Communication Handicapped Children program.
[5] Dr. Ivar Lovaas developed a form of treatment for autistic preschoolers.
[6] In fact, at the time of the hearing in 1997 the County continued to provide speech services to the child. Transcript, Vol. XI, at 142.
[7] Within the County is located the Bruce Drysdale School at which a classroom for autistic children was in existence.
[8] Interestingly, before the County could review Dr. Handleman's report, the Plaintiffs had already reported to CM's preschool that she would be attending a small private school during the coming year. Respondent's Exhibit 188.
[9] "Discrete trial teaching (DTT) is one component of the Lovaas type of [applied behavioral analysis] and involves a directive followed rapidly with a consequence based on whether the student gives the correct response." T.H. v. Board of Educ. of Palatine Community Consol. Sch. Dist. 15, 55 F.Supp.2d 830, 836 n. 8 (N.D.Ill.1999).
[10] Ms. McDanel, the teacher whom Dr. Blacher observed, strenuously contested the comments made.
[11] A class encompassing children from kindergarten through the second grade.
[12] She was not accepted as an expert in the disease of autism.
[13] The trial brief raises such issues as: the County did not initiate the Lovaas program because then it would have had to provide it to other children; "Maybe in this case we are confronted with the belief that this problem should not fall on the school districts at all;" how should funding be provided for the Lovaas program; will the Court have the integrity to "serve its function of independently reviewing the case from a global perspective" since it "has already shown its ability to provide accolades for the TEACCH program;" this case should be the impetus for new legislation to support Lovaas in the state schools; the TEACCH program results in a lifetime of disability; a decision in favor of CM will motive school districts to lobby the legislature to provide Lovaas programming; "How many lives need to be ruined while we deny the truth?" Plaintiffs' Trial Brief at 7, 11, 14.
[14] The state act provides for different mechanisms and time periods than the federal regulations. Because the undersigned finds the Plaintiffs have not been prejudiced in any event, the issue of waiver is not addressed.
[15] The Court concludes that by raising this argument Plaintiffs have conceded that the IEP as modified by the use of a Lovaas trained aide would have provided a FAPE.
[16] The Court has considered arguments raised below but not addressed in the Plaintiffs' brief and finds the decisions below supported by a preponderance of the evidence.
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Alex Rodriguez v. State of Texas
IN THE
TENTH COURT OF APPEALS
No. 10-01-137-CR
No. 10-01-138-CR
No. 10-01-139-CR
     ALEX RODRIGUEZ,
                                                                         Appellant
     v.
     THE STATE OF TEXAS,
                                                                         Appellee
From the 232nd District Court
Harris County, Texas
Trial Court Nos. 839,356, 840,278, and 839,307
                                                                                                               Â
                                                                                                        Â
O P I N I O N
                                                                                                               Â
      Twenty-nine year-old Alex Rodriguez pled guilty without a plea bargain to three separately-indicted felonies which occurred on different dates over a four-week period. The court convicted
him of all three crimes and assessed punishment at fifty years for aggravated sexual assault, twenty
years for aggravated assault, and twenty years for attempted aggravated kidnaping. The sentences
are to run concurrently.
      Rodriguez complains on appeal that his pleas of guilty were not made freely and voluntarily.
He says he did not understand the consequences of his pleas because:
      1.   He was mentally unstable;
Â
      2.   he is uneducated; and
Â
      3.   the court did not properly admonish him at the plea hearing.
      âThe constitutional key to validity of a guilty plea is that it be voluntary and intelligently made
and, if upon advice of an attorney, that counsel be reasonably competent and render effective
assistance.â Meyers v. State, 623 S.W.2d 397, 401 (Tex. Crim. App. 1981) (citing inter alia
McMann v. Richardson, 397 U.S. 759, 766, 90 S.Ct. 1441, 1446, 25 L.Ed.2d 763 (1970)). âThe
overriding concern is whether a defendant has been deprived of due process and due course of
law.â Id. at 401 (citing Ex parte Lewis, 587 S.W.2d 697, 700 (Tex. Crim. App. 1979)).
âVoluntarinessâ includes whether or not the defendant âwas made fully aware of the direct
consequencesâ of the plea. State v. Jimenez, 987 S.W.2d 886, 888 (Tex. Crim. App. 1999)
(citing Brady v. United States, 397 U.S. 742, 755, 90 S.Ct. 1463, 1472, 25 L.Ed.2d 747 (1970)).
âIn considering the voluntariness of a guilty plea, the [appeals] court should examine the record
as a whole.â Martinez v. State, 981 S.W.2d 195, 197 (Tex. Crim. App. 1998); see Brady, 397
U.S. at 749, 90 S.Ct. at 1469 (the court should examine âall of the relevant circumstances
surroundingâ the plea).
      To ensure compliance with these constitutional principles, article 26.13 of the Code of
Criminal Procedure requires the trial judge to admonish the defendant concerning a number of
important consequences of the plea and to determine that the plea is made freely and voluntarily.
Tex. Code Crim. Proc. Ann. art. 26.13(a), (b) (Vernon Supp. 2001 & Vernon 1989); Ex parte
Morrow, 952 S.W.2d 530, 534 (Tex. Crim. App. 1997). The purpose of admonishments was
discussed in McCarthy v. United States, 394 U.S. 459, 465-66, 89 S.Ct. 1166, 1170-71, 22
L.Ed.2d 418 (1969):
First, although the procedure embodied in [Federal] Rule 11 has not been held to be
constitutionally mandated, it is designed to assist the district judge in making the
constitutionally required determination that the guilty plea was truly voluntary. Second,
the rule is intended to produce a complete record at the time the plea is entered of the
factors relevant to the voluntariness determination. Thus the more meticulously the rule
is adhered to, the more it tends to discourage, or at least to enable more expeditious
disposition of, the numerous and often frivolous post conviction attacks on the
constitutional validity of guilty pleas . . . [.] A defendant who enters a guilty plea
simultaneously waives several constitutional rights, including his right to confront his
accusers. For this waiver to be valid under the Due Process Clause, it must be "an
intentional relinquishment of a known right or privilege." Johnson v. Zerbst, 304 U.S.
458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). Consequently, if a defendant's guilty plea
is not equally knowing and voluntary, it has been obtained in violation of due process and
is therefore void. Moreover, because a guilty plea is an admission of all the elements of
a formal criminal charge, it cannot be truly voluntary unless the defendant possesses an
understanding of the law in relation to the facts.
       art. 26.13(d) (Vernon 1989). Substantial compliance with the required admonishments
is adequate unless the defendant affirmatively shows he was not aware of the consequences of his
plea and that he was misled or harmed by the admonishments. Id. art. 26.13(c) (Vernon 1989).
If the record shows the defendant was admonished, even if incompletely, on the issue he claims
renders his plea unknowing and involuntary, there is a âprima facie showing of a knowing and
voluntary plea of guilty.â E.g., Ex parte Gibauitch, 688 S.W.2d 868, 871 (Tex. Crim. App.
1985); Martinez, 981 S.W.2d at 197. Then âthe burden shifts to the defendant to demonstrate that
he did not fully understand the consequences of his plea such that he suffered harm.â Id. The
admonishments are not of constitutional proportion, and if not properly given, the error is
reviewed under a non-constitutional standard. Carranza v. State, 980 S.W.2d 653, 656 (Tex.
Crim. App. 1998); Tex. R. App. P. 44.2(b).
      Rodriguez points out that he had only a fourth-grade education, and also that his lawyer
requested and obtained a mental examination for Rodriguez because there were âserious issuesâ
about his past and present mental state. However, the results of the mental examination are not
in the record, and the examination was not discussed at the sentencing hearing.
No mention of
any intellectual or psychological difficulties affecting Rodriguezâs understanding of the
proceedings was made at the sentencing hearing, at which Rodriguez and his cousin testified.
There is no direct evidence in the record that, due to psychological or educational deficiencies,
Rodriguez did not fully understand the consequences of his pleas.
      Rodriguez also complains that the record does not sufficiently show the court admonished him
at the plea hearing as required by law. Therefore, he maintains the record does not demonstrate
that he had a full understanding of the consequences of his pleas, and that his pleas were given
freely and voluntarily. Tex. Code Crim. Proc. Ann. art. 26.13(a), (b). The record in each case
contains a document called âPlea of Guiltyâ and another document containing a list of
admonishments. Both documents in each case were signed by Rodriguez, his attorney, the
assistant district attorney, and a deputy district clerk. However, Rodriguez points out that the
signature lines for the judge on the six documents were left blank. He says this makes the record
uncertain that he was properly admonished.
      The two documents in each case, signed by Rodriguez and his attorney, contain all the
necessary article 26.13 admonishments and also satisfy art. 26.13(d). This creates a prima facie
showing that Rodriguezâs pleas were freely and voluntarily given. Gibauitch, 688 S.W.2d at 871.
Pointing out the simple fact that the judge did not sign the documents does not rebut that showing.
See id.
      Furthermore, the plea-admonishment document in each case contains the statement: âI am
mentally competent, I understand the charge against me, and I understand the nature of these
proceedings. I am entering my guilty plea freely and voluntarily. I have read the admonishments
set out above. I understand the consequences of my plea.â In addition, the docket sheet in each
case contains an entry that at the plea hearing, âDefendant pleads guilty and appearing to the Court
to be sane, is admonished by the Court of the consequences of said plea.â Finally, the judgment
in each case states âthe Defendant was admonished by the Court as required by law. It appearing
to the Court that the Defendant is mentally competent to stand trial, that the plea is freely and
voluntarily made, and that the Defendant is aware of the consequences of his plea; the plea is
hereby received by the Court and entered of record.â
      Considering the totality of the record, as well as the prima facie showing, we find that
Rodriguez has not established that he was not properly admonished or that his three pleas were
not made freely and voluntarily. The judgment in each case is affirmed.
                                                                   BILL VANCE
                                                                   Justice
Before Chief Justice Davis,
      Justice Vance, and
      Justice Gray
Affirmed
Opinion delivered and filed November 14, 2001
Do not publish
[CRPM]
persedeas since the purpose is
to prevent further filings by the inmate.
[3]
I note that subsequent to the trial
courts order in the TDCJ-ID suit, Simmonds filed a number of post judgment
documents with the trial court clerk, including a notice of appeal. All these
documents were filed by the trial court clerk in the TDCJ-ID suit after the
trial court clerk had notified Simmonds that due to the frivolous suit
determination and dismissal, he could not file anything else in that office.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 17-2220
____________
D. RICHARD TONGE; JUST NEW HOMES, INC.,
Appellants
v.
STATE OF NEW JERSEY;
NEW JERSEY REAL ESTATE COMMISSION
____________
On Appeal from the United States District Court
for the District of New Jersey
(D.N.J. No. 3-16-cv-01319)
District Judge: Honorable Peter G. Sheridan
____________
Submitted Under Third Circuit L.A.R. 34.1(a)
September 7, 2018
Before: HARDIMAN, KRAUSE, and BIBAS, Circuit Judges.
(Filed: September 11, 2018)
____________
OPINION*
____________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.
D. Richard Tonge and Just New Homes, Inc. (collectively, Tonge) appeal the
District Court’s order dismissing their complaint for lack of subject matter jurisdiction.
Because Tonge’s claims are barred by the Eleventh Amendment, we will affirm.
I
Tonge was licensed as a real estate broker in New Jersey. He attracted customers
by offering incentives that apparently ran afoul of New Jersey law. The New Jersey Real
Estate Commission initiated disciplinary action in 2005, and five years later entered a
final order revoking Tonge’s real estate license and imposing a fine of $123,500. The
Appellate Division of the New Jersey Superior Court affirmed, and the Supreme Court of
New Jersey declined to hear Tonge’s case.
In 2016, Tonge filed this suit against the Commission and the State of New Jersey
in the United States District Court for the District of New Jersey. He asserted several
causes of action, each of which rested on one basic claim. Tonge had argued to the
Commission that New Jersey regulators had already approved his practices as part of an
earlier settlement agreement. But the Commission found no such agreement or approval
ever existed. The Appellate Division deemed this finding supported by the “undisputed
record,” Supp. App. 44, but Tonge’s federal complaint alleged the Commission had
procured that result by fraudulently “misrepresenting, denying, omitting or concealing the
existence of a settlement agreement . . . confirm[ing] that [Tonge’s] . . . business operated
lawfully.” App. 744 (Am. Compl. ¶ 1).
2
The District Court dismissed Tonge’s initial complaint for lack of subject matter
jurisdiction but granted leave to amend. Tonge did so, but the Court found his amended
complaint did not differ materially from his first effort, and again dismissed his case, this
time with prejudice. Ruling from the bench, the District Court determined it lacked
jurisdiction under both the Rooker-Feldman doctrine and the Eleventh Amendment to the
United States Constitution. This appeal followed.
II1
We agree that the Eleventh Amendment deprived the District Court of jurisdiction
over Tonge’s suit. The Eleventh Amendment “bar[s] all private suits against non-
consenting States in federal court.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018)
(quoting Lombardo v. Pa. Dep’t of Pub. Welfare, 540 F.3d 190, 194 (3d Cir. 2008)).
“[W]here . . . the Eleventh Amendment precludes a suit, the court in which the plaintiff
filed the action lacks subject matter jurisdiction.” Baltimore Cty. v. Hechinger
Liquidation Tr. (In re Hechinger Inv. Co. of Del., Inc.), 335 F.3d 243, 249 (3d Cir. 2003)
(citing Seminole Tribe v. Florida, 517 U.S. 44, 64 (1996)).
This means New Jersey is amenable to private suit in federal court only to the
extent it has waived or Congress has abrogated its immunity, neither of which occurred
here. Tonge suggests he can vindicate his rights under the Fourteenth Amendment, but
1
In the District Court, Tonge asserted jurisdiction under 28 U.S.C. § 1331. We
have appellate jurisdiction under 28 U.S.C. § 1291. Since this case comes to us on a
motion to dismiss, we accept as true Tonge’s well-pleaded factual allegations, and
“review de novo the legal grounds underpinning [Defendants’] claim of . . . [Eleventh
Amendment] immunity.” Karns v. Shanahan, 879 F.3d 504, 512 (3d Cir. 2018) (citations
omitted).
3
the ratification of that amendment did not itself open the States up to suit. Rather, Section
5 of the Fourteenth Amendment empowered Congress to abrogate New Jersey’s Eleventh
Amendment immunity, but it has not done so with respect to Tonge’s claims. See Karns,
879 F.3d at 519 (citations omitted) (noting that States are not “persons” for purposes of
42 U.S.C. § 1983).
Nor may Tonge sue the Commission in federal court. In addition to States
themselves, the Eleventh Amendment also protects “those entities that are so intertwined
with them as to render them ‘arms of the state.’” Id. at 512–13 (citation omitted). We
have little trouble concluding that the Commission, a division of the New Jersey
Department of Insurance—the members of which are appointed and removable by the
Governor of New Jersey, N.J. STAT. ANN. § 45:15-5, and the surplus revenues of which
flow to the state treasury, id. § 45:1-3—is an arm of the State of New Jersey for Eleventh
Amendment purposes. See Karns, 879 F.3d at 512–19.
Finally, Tonge contends he should have been allowed to amend his complaint a
second time to add claims against Commission officials in their individual capacities. It is
settled law that a District Court does not abuse its discretion in denying leave to amend
where the plaintiff makes a cursory request without providing a proposed amended
complaint. Ramsgate Court Townhome Ass’n v. West Chester Borough, 313 F.3d 157,
161 (3d Cir. 2002). Tonge requested a second chance to replead only in passing at oral
argument, stating that “an amendment is not futile, because we could add the state
officials.” Supp. App. 69. Absent more, the Court “had nothing upon which to exercise
4
its discretion,” and we will not disturb its decision to deny leave to amend. Ramsgate,
313 F.3d at 161.
* * *
Because we will affirm the dismissal of Tonge’s complaint on Eleventh
Amendment grounds, we do not reach the separate question of whether it was also barred
by Rooker-Feldman.
5
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-7157
LEON PARRISH MARSHALL,
Petitioner - Appellant,
versus
GENE M. JOHNSON, Director of the Virginia
Department of Corrections,
Respondent - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Norfolk. Rebecca Beach Smith, District
Judge. (2:06-cv-00515-RBS)
Submitted: October 11, 2007 Decided: October 18, 2007
Before MICHAEL and SHEDD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Leon Parrish Marshall, Appellant Pro Se. Rosemary Virginia Bourne,
OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Leon Parrish Marshall seeks to appeal the district
court’s order accepting the recommendation of the magistrate judge
and denying relief on his 28 U.S.C. § 2254 (2000) petition. 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 any
assessment of the constitutional claims by the district court is
debatable or wrong and that any dispositive procedural ruling by
the district court is likewise debatable. Miller-El v. Cockrell,
537 U.S. 322, 336-38 (2003); Slack v. McDaniel, 529 U.S. 473, 484
(2000); Rose v. Lee, 252 F.3d 676, 683-84 (4th Cir. 2001). We have
independently reviewed the record and conclude that Marshall has
not made the requisite showing. Accordingly, we deny a certificate
of appealability and dismiss the appeal. 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 -
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5 F.3d 1369
UNITED STATES of America, Plaintiff-Appellant,v.Larry D. RICHARDS, Defendant-Appellee.
No. 92-4197.
United States Court of Appeals,Tenth Circuit.
Sept. 23, 1993.
Wayne T. Dance, Asst. U.S. Atty. (David J. Jordan, U.S. Atty., with him on the briefs), Salt Lake City, UT, for plaintiff-appellant.
Loni F. DeLand, McRae & DeLand, Salt Lake City, UT, for defendant-appellee.*
Before MOORE, ANDERSON, and BALDOCK, Circuit Judges.
STEPHEN H. ANDERSON, Circuit Judge.
1
The United States appeals the grant of Larry D. Richards' motion to correct his sentence pursuant to 28 U.S.C. Sec. 2255. The government argues on appeal that Richards' motion was procedurally barred for his failure to raise the issue on direct appeal or in an earlier Sec. 2255 motion, and that the original sentence was correctly determined. Because we agree that Richards' motion is an abuse of the writ, we reverse without deciding the other issues presented by this appeal.
BACKGROUND
2
Richards pled guilty to possession of 1 kilogram or more of a mixture containing a detectable amount of methamphetamine, with intent to manufacture methamphetamine in powder form, in violation of 21 U.S.C. Sec. 841(a). He was sentenced to 188 months of imprisonment and five years of supervised release. United States v. Richards, No. 89-CR-168A (D.Utah Aug. 9, 1990). Richards subsequently filed a Sec. 2255 motion that was denied. Richards v. United States, No. 90-CV-1079A (D.Utah Dec. 11, 1991).
3
Richards then filed a second Sec. 2255 motion, claiming that the court had misapplied the federal sentencing guidelines by including the weight of unmarketable and unusable waste water along with the weight of extractable methamphetamine in determining the base offense level. The district court granted Richards' motion and subsequently resentenced Richards to 60 months of imprisonment and five years of supervised release. Richards v. United States, 796 F.Supp. 1456. (D.Utah 1992). The government filed a timely notice of appeal.
DISCUSSION
4
The abuse of the writ doctrine prohibits Richards' second Sec. 2255 motion unless he excuses his failure to raise the issue earlier by showing "cause for failing to raise it and prejudice therefrom" or by showing that a "fundamental miscarriage of justice would result from a failure to entertain the claim." McCleskey v. Zant, 499 U.S. 467, ----, ----, 111 S.Ct. 1454, 1465, 1470, 113 L.Ed.2d 517 (1991). The government adequately pleaded abuse of the writ in response to Richards' second motion. See id. 499 U.S. at ----, 111 S.Ct. at 1470.
5
Richards offers as cause the lack of a reasonable basis for his claim until after he filed his first Sec. 2255 motion. See Reed v. Ross, 468 U.S. 1, 16, 104 S.Ct. 2901, 2910, 82 L.Ed.2d 1 (1984) ("[W]here a constitutional claim is so novel that its legal basis is not reasonably available to counsel, a defendant has cause for his failure to raise the claim...."). He contends that he did not have a reasonable basis for his claim that the weight of waste products should not be included until similar claims were upheld in several circuit court decisions following Chapman v. United States, --- U.S. ----, 111 S.Ct. 1919, 114 L.Ed.2d 524 (1991). The district court agreed, concluding that Richards was not barred from raising this issue in a second motion because "there would have been no viable legal basis" for the argument until after these decisions. Richards, 796 F.Supp. at 1458 n. 4.
6
The mere fact that others had not raised this issue first is not sufficient cause. "[T]he question is not whether subsequent legal developments have made counsel's task easier, but whether at the time of the default the claim was 'available' at all." Smith v. Murray, 477 U.S. 527, 537, 106 S.Ct. 2661, 2667, 91 L.Ed.2d 434 (1986). Although Chapman itself did not change the law regarding inclusion of waste products in a drug mixture, several circuits have relied on its market-oriented perspective in ruling that the weight of waste products should not be included. See, e.g., United States v. Jennings, 945 F.2d 129, 136-37 (6th Cir.1991), modified, 966 F.2d 184 (6th Cir.1992). Chapman 's market-oriented explanation of federal sentencing for drug crimes was not new, however. In fact, this circuit had given the same explanation before Richards filed his first motion. See United States v. Mendes, 912 F.2d 434, 439 (10th Cir.1990). Furthermore, at least one case had accepted a similar argument long before Richards was convicted. See United States v. Miller, 680 F.Supp. 1189 (E.D.Tenn.1988) (concluding that Congress's market-oriented approach "necessarily assumes that the substance or mixture ... is in some form that is readily marketable" and thus not including the weight of marijuana stalks), aff'd, 870 F.2d 1067 (6th Cir.1989). Both the argument and the principle on which it rests therefore were available to Richards. His belief that it was unlikely to succeed does not excuse his failure to raise the issue. See Engle v. Isaac, 456 U.S. 107, 130, 102 S.Ct. 1558, 1573, 71 L.Ed.2d 783 (1982).
7
Richards also argues that failure to consider his claim would be a fundamental miscarriage of justice because it is not proportionate to his culpability. A "fundamental miscarriage of justice" in this context, however, means only that the petitioner is actually innocent of the offense. See Murray v. Carrier, 477 U.S. 478, 495-96, 106 S.Ct. 2639, 2649, 91 L.Ed.2d 397 (1986). Richards does not claim to be actually innocent of the offense for which he was convicted; he claims only that he should have received a lesser sentence. A person cannot be actually innocent of a noncapital sentence, however. See Sawyer v. Whitley, --- U.S. ----, ---- - ----, 112 S.Ct. 2514, 2519-20, 120 L.Ed.2d 269 (1992) (explaining that "[i]n the context of a noncapital case, the concept of 'actual innocence' is easy to grasp" because it simply means the person didn't commit the crime); Estrada v. Witkowski, 816 F.Supp. 408, 414 (D.S.C.1993). But see Jones v. Arkansas, 929 F.2d 375, 381 & n. 16 (8th Cir.1991) (suggesting that one might be actually innocent of a sentence in some circumstances).
8
Even if innocence of a noncapital sentence were a "fundamental miscarriage of justice," Richards' abuse of the writ would not be excused on this ground. The law in this circuit has not changed. We have consistently held that the weight of waste products from the drug manufacturing process should be included in computing the base offense level under section 2D1.1 of the federal sentencing guidelines. See United States v. Dorrough, 927 F.2d 498, 502 (10th Cir.1991); United States v. Callihan, 915 F.2d 1462 (10th Cir.1990). Although several circuits did change their law following Chapman, Chapman itself did not contradict our previous decisions and compel a change in the law of this circuit. That decision did not deal with the elements involved in the drug manufacturing process, nor did it identify any elements of a mixture that should not be included in computing total mixture weight. Chapman simply explained why Congress rationally included the weight of the carrier medium along with the weight of the drug. Chapman, --- U.S. ----, 111 S.Ct. 1919. Richards therefore would be innocent of his sentence only if we changed our law in ruling on his motion. A petitioner may not use the fundamental miscarriage of justice exception to challenge existing law on the theory that if the court agrees and changes the law, the petitioner would then be actually innocent. Otherwise a petitioner could freely bring successive petitions arguing that the law should be changed in such a way, without any excuse for failing to challenge the law earlier. This would stretch the miscarriage of justice exception far beyond its "narrow scope" of "actual as compared to legal innocence." Sawyer, --- U.S. at ----, 112 S.Ct. at 2519.1
9
We therefore vacate the district court's order granting Richards' Sec. 2255 motion and reinstate the sentence originally imposed by the district court.
*
Appellant presented oral argument to the court. Appellee moved to submit on the briefs. The court granted appellee's motion and ordered the case submitted on the briefs
1
We also reject Richards' suggestion that this appeal is moot because a proposed amendment to the sentencing guidelines will retroactively apply to exclude the weight of the waste products in determining his sentence. The amendment is not yet in effect, nor has the U.S. Sentencing Commission decided whether to apply the amendment retroactively pursuant to U.S.S.G. Sec. 1B1.10. If the amendment does become effective and the Sentencing Commission does apply it retroactively, Richards may have a remedy under 18 U.S.C. Sec. 3582(c)(2). The pending amendment does not affect our decision on this appeal
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969 F.2d 705w
59 Fair Empl.Prac.Cas. (BNA) 614,59 Empl. Prac. Dec. P 41,616, 61 USLW 2143
Fred BROWN, Appellee,v.STITES CONCRETE, INC., Appellant.Fred BROWN, Appellant,v.STITES CONCRETE, INC., Appellee.Fred BROWN, Appellee,v.STITES CONCRETE, INC., Appellant.
Nos. 91-2581, 91-3057 and 91-3139.
United States Court of Appeals,Eighth Circuit.
Submitted Feb. 13, 1992.Decided July 15, 1992.
1
NOTE: THE COURT HAS WITHDRAWN THIS OPINION. SEE 994 F.2d 553.
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59 F.Supp. 748 (1944)
ERIE R. CO. et al.
v.
UNITED STATES.
Civ. No. 768.
District Court, S. D. Ohio, E. D.
March 24, 1944.
*749 Leo P. Day, of Chicago, Ill., and Samuel P. Delisi, of Pittsburgh, Pa., for plaintiffs.
Robert L. Pierce, Sp. Asst. Atty. Gen., for the Government.
Nelson Thomas, of Washington, D. C., for Interstate Commerce Commission.
G. M. Stephen, of Chicago, Ill., for Summer & Co.
Before ALLEN, Circuit Judge, and UNDERWOOD and DRUFFEL, District Judges.
PER CURIAM.
On October 15, 1943, plaintiffs herein filed their bill of complaint "on behalf of themselves and such other parties who may have an interest herein." Thereafter, an answer was filed on behalf of defendant, The United States of America, and one also on behalf of the Interstate Commerce Commission, as an intervening defendant.
The cause came on for hearing before this statutory three-judge court, on the issues made by the pleadings, on November 15, 1943. It was agreed, in the record, that this was to be a "final hearing" and that the cause should be, and therefore, it is, "finally submitted" for consideration and determination.
The case involves the question of the legality of an order of the Interstate Commerce Commission (hereinafter referred to as the Commission) requiring reductions in certain rates for the transportation of scrap iron between specified points of origin in Indiana and Michigan on the one hand and destinations in Ohio on the other in proceedings before it known as Docket No. 28813, Summer & Company v. Erie R. R. Co. et al. The complainant is a scrap iron broker incorporated under the laws of Ohio, with its residence in the City of Columbus.
The suit is brought by plaintiffs under the Urgent Deficiencies Act, Jud.Code §§ 24 (27), (28), 208, 209, 211, 28 U.S.C.A. §§ 41 (27), (28), 45, 46, 48; 28 U.S.C.A. §§ 42, 43, 44, 47. At the hearing before this court, plaintiffs offered, and without objection there was admitted in evidence, a certified copy of the complete record of the hearing before the Commission.
The grounds upon which plaintiffs attack the Commission's order are twofold, (1) the order is not sustained by any evidence, and (2) the Commission erred in failing to decide the case on the evidence properly before it.
As bearing upon the first ground relied upon by plaintiffs, the following statements appear in the "Report of the Commission." * * * "Complainant relies entirely on the many proceedings wherein the 70 percent basis was prescribed, or reparation was awarded to that basis. * * * The assailed rates compare favorably with other rates between points similarly situated. * * * When we have so clearly indicated that in our opinion rates in excess of the seventy-percent basis in official territory are unreasonable, carriers should not be permitted to refuse to adjust their rates to that basis until they are ordered so to do. * * * Upon the facts of record in the instant proceeding, no other conclusion is warranted. * * * We find that the rates assailed were unreasonable to the extent that they exceeded. * * *" Commissioner Miller dissented, stating his views, referred to later.
At the hearing before this Court, the following statements were made by counsel: Mr. Day: (of Counsel for Plaintiffs) * * * "The complainant before the Commission is a corporation and a scrap iron broker with residence here in Columbus. The grounds upon which the plaintiffs ask the Court to set aside and annul the order of the Commission is that it was made without any evidence to support it; * * * Judge Nevin: Do you mean by that there was no evidence taken at all or do you mean there was evidence taken but nevertheless it was not sufficient to sustain the order? Mr. Day: There was no evidence introduced tending to show unreasonableness in these rates. Judge Allen: *750 None whatever? Mr. Day: None whatever, and the Commission's report states: `Complainant relies entirely on the many proceedings wherein the 70 per cent basis was prescribed.' * * * Mr. Pierce: (Counsel for the Government) The only question here presented is as to the validity of the Commission's order prescribing rates for the future, as the plaintiff's counsel has pointed out, for the plaintiffs' carriers as to the scrap iron, after the Commission had found that the present rates were unreasonable. * * * The report of the Commission I must admit is not a masterpiece. * * * As to rates for the future on scrap iron (the Commission) indicated that the rates generally in official territory above the 70 percent basis would be unreasonable, the Commission then stated: `Upon the facts of record in the instant proceedings no other conclusion is warranted.' * * * Judge Nevin: What were the facts of record, because of which no other conclusion is warranted? Mr. Pierce: The facts of record were these previous cases. Judge Nevin: Isn't that the question before us? * * * Mr. Pierce: I think that is the principal question before you. Judge Allen: Then you are conceding that the Commission decided this case purely based upon a line of decisions in other cases? Mr. Pierce: That is right."
Upon a consideration of the whole of the record, the briefs and arguments of counsel and the applicable law, the court is in accord with the views expressed by Commissioner Miller in his dissenting opinion above referred to. Commissioner Miller stated: "My views respecting proceedings of this natureinvolving rates on scrap iron and steel between points in official territoryare set forth by Commissioner Mahaffie in his dissenting expression in Midvale Co., v. Wheeling & L. E. Ry. Co., 231 I.C.C. 734, in which I concurred, and in my dissent in Kasle Iron & Metal Co., v. Wheeling & L. E. Ry. Co., 251 I.C.C. 544. The rates here assailed were and are below sixth class, and the record is replete with evidence showing their reasonableness. The report gives no consideration to this evidence, but, like some of the prior decisions on which it relies, condemns the assailed rates simply because they exceeded or exceed the so-called 70 percent basis. Thus, the long-established sixth-class basis of rates on this important traffic throughout official territory has been, and is being effectively supplanted by another basis, the reasonableness of which has never been determined by an appropriate proceeding dealing with the rates throughout the entire territory and in which all interested shippers and carriers would have had an opportunity to be heard. I submit that the basis here approved is without proper support."
In his dissenting opinion in Kasle Iron & Metal Co. v. Wheeling & L. E. Ry. Co., 1942, 251 I.C.C. 544, Commissioner Miller made the following statement: "* * * The question of defendants' liability for reparation in this case should be determined from a consideration of the evidence presented upon this record. They should not be foreclosed by the mere citation of past decisions based upon other records. This record clearly shows that the rates charged were not unreasonable and that the complaint should be dismissed."
We think that the foregoing conclusion of Commissioner Miller is applicable in the instant case.
It has been many times decided that administrative orders, quasi-judicial in character, are void if a hearing was denied; if that granted was inadequate or manifestly unfair; if the finding was contrary to the "indisputable character of the evidence;" or if the facts found, do not, as a matter of law, support the order made. Interstate Commerce Commission v. Louisville & N. R. R. Co., 227 U.S. 88, 91, 33 S.Ct. 185, 187, 57 L.Ed. 431. In the foregoing case, on page 91 of 227 U.S., at page 186 of 33 S.Ct., 57 L.Ed. 431, the Supreme Court further stated (referring to the statute there under consideration) that "the statute gave the right to a full hearing, and that conferred the privilege of introducing testimony, and at the same time imposed the duty of deciding in accordance with the facts proved. A finding without evidence is arbitrary and baseless."
We think the statement of Commissioner Mahaffie in his dissenting opinion in the case of Midvale Co. v. Wheeling & L. E. Ry. Co. et al., 1939, 231 I.C.C. 734, at pages 739, et seq., is pertinent and applicable here; that is, that "it is doubtful whether the test of the `rudimentary requirements of fair play' defined in Morgan v. United States, 298 U.S. 468 [56 S.Ct. 906, 80 L.Ed. 1288; Id.], 304 U.S. 1 [58 S.Ct. 773, 999, 82 L.Ed. 1129]" can be met by the Commission proceeding as in the instant case.
*751 In the Morgan case, on its second appearance before the Supreme Court, that court, 304 U.S. 1 at page 22, 58 S.Ct. 773, at page 778, 82 L.Ed. 1129, said: "the maintenance of proper standards on the part of administrative agencies in the performance of their quasijudicial functions is of the highest importance and in no way cripples or embarrasses the exercise of their appropriate authority. On the contrary, it is in their manifest interest."
Certain evidence was introduced on behalf of the plaintiffs before the Commission, and the defendants herein contend that this evidence taken in conjunction with the decisions of the Commission upon which the defendants rely establish as a matter of fact that the rates were unreasonable. However, a careful consideration of the record shows that as conceded by counsel for the Commission at the hearing in this court, no evidence was introduced which tends to establish the unreasonableness of the rates. On the contrary, the decision of the Commission recognizes that the evidence establishes that the rates are reasonable; but on the basis of its decisions in other cases, it held that the rates were unreasonable. This constituted prejudicial error. A decision which is not grounded on evidence fails to apply the standard of "full hearing" set by Congress as a guide to the Commission in the performance of its quasi-judicial duties., Title 49 U.S.C. § 15 (1), 49 U.S.C.A. § 15 (1). Here it is impossible to say that the legislative standard has been properly applied. Cf. United States v. Carolina Freight Carriers Corporation, 315 U.S. 475, 62 S.Ct. 722, 86 L.Ed. 971.
Upon the record here presented, the court finds that the order of the Commission is not sustained by any evidence. Since an essential finding has been made without supporting evidence, the action of the Commission was arbitrary and must be reversed. Interstate Commerce Commission v. Louisville & Nashville Rd. Co., supra.
The court further finds and concludes that so much of the prayer of plaintiffs' Bill of Complaint as reads as follows: "That upon final hearing of this cause, a permanent injunction shall be issued, decreeing that said order of the Commission, as aforesaid, is null and void and is set aside, annulled and suspended, and that its enforcement, execution and operation shall be forever enjoined, and that the United States of America shall be restrained from taking any steps or instituting or prosecuting any proceedings to enforce the said order," should be, and it is, granted.
The plaintiffs are directed to present findings of fact and conclusions of law in accordance with this opinion.
An order may be drawn and submitted accordingly.
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76 So.3d 304 (2011)
JOHNSON
v.
STATE.
No. 3D11-2809.
District Court of Appeal of Florida, Third District.
December 2, 2011.
DECISION WITHOUT PUBLISHED OPINION
Appeal dismissed.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
AUG 16 1999
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee, No. 98-3331
v. (D.C. Nos. 93-20048-04-JWL
and 96-3421-JWL)
EDWARD DRYDEN, (District of Kansas)
Defendant-Appellant.
ORDER AND JUDGMENT *
Before BRORBY, EBEL and LUCERO, Circuit Judges.
Defendant-Appellant Edward Dryden (“Dryden”), a twenty-five year
veteran of the Kansas City, Kansas police force, was convicted of conspiracy to
distribute crack cocaine and sentenced to 360 months’ imprisonment. This court
affirmed his conviction and sentence. See generally United States v. Williamson,
53 F.3d 1500 (10th Cir. 1995). The district court, thereafter, granted Dryden’s
*
After examining appellant’s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the
determination of this appeal. See Fed. R. App. P. 34(a)(2) and 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.
motion for a reduction of his sentence based on favorable amendments to the
United States Sentencing Guidelines made retroactive to his case, and thus
modified Dryden’s sentence to 292 months’ imprisonment. See United States v.
Dryden, No. 93-20048-04, 1996 WL 227786, at *1 (D. Kan. Apr. 23, 1996).
Dryden next filed a pro-se motion to vacate, set aside, or correct his
conviction and/or sentence pursuant to 28 U.S.C. § 2255, asserting inter alia, that
his trial lawyer provided constitutionally ineffective assistance of counsel in
several respects, which the district court denied. See United States v. Dryden,
No. Civ. 96-3421-JWL, 1997 WL 94238, at *1-*2, *5 (D. Kan. Feb. 26, 1997).
This court reversed as to Dryden’s claim that “his counsel acted ineffectively by
failing affirmatively to inform him that it was Dryden’s decision whether or not to
testify on his own behalf.” United States v. Dryden, No. 97-3280, 1998 WL
930582, **1-**2 (10th Cir. Apr. 22, 1998). We, therefore, remanded the case to
the district court “to hold an evidentiary hearing on the ineffective counsel issue.”
Id. at **2.
On June 23, 1998, the district court held an evidentiary hearing on the
specific issue of whether Dryden’s trial lawyer provided constitutionally
ineffective assistance of counsel in failing to inform Dryden of his right decide
whether to testify in his own behalf. The district court found that Dryden’s
lawyer adequately informed Dryden of his right to decide whether to testify, and
-2-
therefore did not provide deficient performance, and that any arguable deficient
performance on the part of Dryden’s lawyer did not prejudice Dryden. (See
United States v. Dryden, No. 96-3421, at 3 (D. Kan. Aug. 20, 1998)
(unpublished).)
On April 15, 1999, Dryden filed, before this court, a motion for leave to
proceed on appeal in forma pauperis and an application for certificate of
appealability (“COA”). Because Dryden has failed to make a “substantial
showing of the denial of a constitutional right,” as required under 28 U.S.C. §
2253(c), we deny his application for a COA. We also deny Dryden’s motion for
leave to proceed in forma pauperis.
The mandate shall issue forthwith.
ENTERED FOR THE COURT
David M. Ebel
Circuit Judge
-3-
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538 F.2d 332
Berryv.Maier
No. 75-1677
United States Court of Appeals, Eighth Circuit
4/7/76
1
W.D.Mo.
AFFIRMED AND REMANDED
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NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STATE OF ARIZONA, Respondent,
v.
ALEXANDER CARATACHEA, Petitioner.
No. 1 CA-CR 13-0664 PRPC
FILED 9-24-2015
Petition for Review from the Superior Court in Maricopa County
No. CR2007-009027-001
CR2008-006084-001
CR2008-006586-001
CR2008-006591-001
The Honorable Jeanne Garcia, Judge
REVIEW GRANTED; RELIEF DENIED
COUNSEL
Maricopa County Attorney’s Office, Phoenix
By Susan L. Luder
Counsel for Respondent
Maricopa County Office of the Legal Advocate, Phoenix
By Consuelo M. Ohanesian
Counsel for Petitioner
STATE v. CARATACHEA
Decision of the Court
MEMORANDUM DECISION
Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Randall M. Howe and Judge Jon W. Thompson joined.
W I N T H R O P, Judge:
¶1 Petitioner, Alexander Caratachea, petitions this court for
review of the dismissal of his petition for post-conviction relief, filed
pursuant to Rule 32, Ariz. R. Crim. P. After considering the petition for
review, we grant review and deny relief for the reasons stated below.
¶2 This matter involves four consolidated cases in which
Caratachea pled guilty to several counts of armed robbery in 2008. We
detail the procedural history of those cases to give context to our decision.
In case “A,” Caratachea pled guilty to two counts of armed robbery, and
the trial court sentenced him to concurrent terms of twenty-one years’
imprisonment. In case “B,” Caratachea pled guilty to one count of armed
robbery, and the trial court sentenced him to twelve years’ imprisonment.
In case “C,” Caratachea pled guilty to two counts of armed robbery, and the
trial court sentenced him to concurrent terms of thirty-five years’
imprisonment. Finally, in case “D,” Caratachea pled guilty to armed
robbery, and the trial court sentenced him to twelve years’ imprisonment.
The trial court ordered all six sentences to run concurrently.
¶3 Caratachea filed a timely notice of post-conviction relief “of-
right,” but only identified cases A and B in the caption and/or within the
body of the notice. The trial court in turn appointed counsel to represent
Caratachea in those two cases only. Appointed counsel eventually
informed the court that he could find no colorable claims for relief. Shortly
thereafter, Caratachea moved to amend his notice of post-conviction relief
to include all four cases, noting that his omission of cases C and D was an
oversight. Caratachea did not raise any additional issues or provide any
additional argument, but sought only to add those two additional case
numbers. The record on review contains no ruling on this motion.
Regardless, approximately nine months later, in January 2010, the trial
court summarily dismissed the notice after Caratachea failed to file a pro se
petition as ordered by the court. That minute entry referenced only cases
A and B.
2
STATE v. CARATACHEA
Decision of the Court
¶4 Caratachea immediately filed a second notice of post-
conviction relief, in which he identified all four cases. In the accompanying
petition, Caratachea raised a number of claims of ineffective assistance of
trial counsel. Among the many claims, Caratachea argued his counsel was
ineffective when he failed to adequately communicate and/or maintain
sufficient contact with Caratachea; when he failed to adequately explain to
Caratachea the State’s cases and the evidence against him; when he failed
to adequately explain and/or timely provide disclosed evidence to
Caratachea despite Caratachea’s requests to see the evidence; and when
counsel failed to adequately communicate with Caratachea about the
State’s plea offers and/or explain those offers to Caratachea. The trial court
summarily dismissed the second post-conviction relief proceedings in
February 2010.
¶5 In June 2011, Caratachea filed his third notice of post-
conviction relief. The caption of that notice identified only cases A and B,
but the accompanying argument addressed case C as well. The trial court
summarily dismissed the notice in August 2011. Several months later,
however, the court granted Caratachea’s motion for reconsideration in part
and allowed Caratachea to proceed with the claim that counsel who
represented Caratachea in his “of-right” post-conviction relief proceeding
was ineffective when he failed to present claims of ineffective assistance of
trial counsel. See State v. Krum, 183 Ariz. 288, 292, 903 P.2d 596, 600 (1995)
(recognizing a defendant has a right to effective assistance of counsel in a
post-conviction of-right proceeding). The court did not find the claim was
timely, but simply allowed Caratachea to proceed. A different judge then
appointed counsel to represent Caratachea, but did so only in cases A and
B as identified in the caption of the notice of post-conviction relief. Ten
months later, counsel moved for appointment in cases C and D as well, and
the court granted the motion.
¶6 Through appointed counsel, Caratachea ultimately filed a
successive petition for post-conviction relief in all four cases. He raised
several claims of ineffective assistance of his post-conviction relief of-right
counsel. The trial court summarily dismissed the petition, and Caratachea
now seeks review. We have jurisdiction pursuant to Arizona Rule of
Criminal Procedure 32.9(c).
¶7 Caratachea contends his post-conviction relief of-right
counsel was ineffective when counsel failed to present claims that
Caratachea’s trial counsel was ineffective when he failed to adequately
communicate and/or maintain sufficient contact with Caratachea; when he
failed to adequately explain to Caratachea the State’s plea offers and the
3
STATE v. CARATACHEA
Decision of the Court
evidence against him; and when he failed to adequately explain and/or
timely provide disclosed evidence to Caratachea. Caratachea supports his
claims with information that indicates the State Bar placed Caratachea’s
trial counsel on probation in June 2011 for what Caratachea describes as
similar conduct in another case.1 Caratachea further argues that post-
conviction counsel was aware of his claims because he provided that
counsel with copies of letters he sent to the State Bar, in which he
complained about trial counsel’s conduct even before he accepted the plea
offers.
¶8 We deny relief. Caratachea could have raised these claims in
his second notice and petition for post-conviction relief in 2010. In general,
claims a defendant could have raised in an earlier post-conviction relief
proceeding are precluded. Ariz. R. Crim. P. 32.2(a). None of the exceptions
provided under Rule 32.2(b) apply here. That the trial court allowed the
claims to “proceed” does not mean, as argued by Caratachea, that the
claims are timely or they cannot now be precluded. The same court that
allowed this matter to proceed ultimately determined the claims were
precluded as untimely. Further, any court on review may find an issue is
precluded. Ariz. R. Crim. P. 32.2(c); State v. Peek, 219 Ariz. 182, 183, ¶ 4, 195
P.3d 641, 642 (2008).
¶9 We grant review and deny relief.
:ama
1 Caratachea did not provide copies of any documents from the
disciplinary proceedings, but simply provided information from the State
Bar webpage. Further, that information does not specifically indicate when
the conduct in the other case occurred. Although the information
references three “File Nos.,” the information addresses only one matter and
one client.
4
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520 S.E.2d 530 (1999)
239 Ga. App. 14
PENDARVIS CONSTRUCTION CORPORATION et al.
v.
COBB COUNTY-MARIETTA WATER AUTHORITY et al.
No. A99A0346.
Court of Appeals of Georgia.
July 8, 1999.
*531 Frank Pendarvis, pro se.
Cochran, Camp & Snipes, Scott A. Cochran, Smyrna, for appellants.
Talley & Darden, David P. Darden, Marietta, for appellees.
POPE, Presiding Judge.
A jury returned a verdict of $5,826 in favor of Pendarvis Construction Corporation in a condemnation action involving an easement for an underground water line over its property sought by Cobb County-Marietta Water Authority (the "Water Authority"). Pendarvis appeals and contends a jury charge impermissibly shifted the burden of proof and the court erroneously excluded certain material evidence.
1. The court instructed the jury with regard to the burden of proof as follows:
The law puts the burden of proof upon the condemnor to prove by a preponderance of evidence what amount of money constitutes just and adequate compensation for the property taken and that all material allegations made in the condemnor's pleadings are true except such allegations as are admitted by the owner in its pleadings or in open court.
Those contentions admitted by the owner will be taken to be true without the necessity of the proof. Those allegations, neither admitted nor denied, must likewise be proven. While the burden of proof is upon the condemning authority, the owner of the property is also allowed to offer evidence upon the issues involved, and you must determine the issues in the case by the preponderance of evidence as you find it to be.
The condemnor must prove its case by what is known as a preponderance of the evidence. That is evidence upon the issues involved which, while not enough to wholly free the mind from a reasonable doubt, is yet sufficient to incline a reasonable and impartial mind to one side of the issue rather than the other.
The court then instructed the jury on credibility, expert testimony, and several other matters including determining value of the property. Then the court gave this instruction: "The condemnee bears the burden of showing the amount of any additional damages with a reasonable degree of certainty. The amount of compensation for such additional damages cannot be left to speculation, conjecture or guess work by the jury."
The charge regarding the burden on the condemnee was erroneous. Lewis v. State Hwy. Dept., 110 Ga.App. 845, 140 S.E.2d 109 (1964). In Lewis, the court gave a charge which concluded with the following:
where the condemnee asserts the compensation to be paid, to which she is justly entitled, is greater than that shown by the condemnor's evidence, then the law places upon her likewise the burden to prove by a preponderance of the evidence that such assertion on her part is true.
Id. at 846, 140 S.E.2d 109. The court in Lewis, held that this charge impermissibly shifted the burden of proof from the condemnor. "The burden of proving value and damages never shifts from the condemnor, though a burden of producing evidence may *532 arise on the part of the condemnee when he asserts the greater value or damage." Id. at 845(1)(b), 140 S.E.2d 109. See also Dawson v. Dept. of Transp., 203 Ga.App. 157, 158-159, 416 S.E.2d 163 (1992).
The Water Authority argues that the charge given is consistent with Lewis because it only explains that Pendarvis had the burden of producing evidence to support its claim. Id. Although the charge as given used the phrase "burden of showing" instead of "burden of proving," we conclude the two are confusingly similar in this setting. In Ga. Power Co. v. Smith, 94 Ga.App. 166(1), 94 S.E.2d 48 (1956), the court explained the difference between the burdens on the parties in a condemnation action, and in so doing said, "In a case where the power of eminent domain is exercised, the burden is on the condemnor to show the value of the property taken and the consequential damages to the remainder of the property." Thus, the word "show" was used to describe the condemnor's burden. Its use here certainly suggests that the condemnee had the burden. The charge used in this case then required Pendarvis to make this showing "with a reasonable degree of certainty." This phrase also suggests a burden of proof. See Herr v. Withers, 237 Ga.App. 420, 515 S.E.2d 174 (1999) (improper charge on reasonable degree of medical certainty).
The Water Authority contends Dept. of Transp. v. Bird, 158 Ga.App. 369, 280 S.E.2d 394 (1981) sanctions the charge given in this case. In that condemnation case, this court stated:
Where a party seeks additional damages he has the burden of proof of showing the amount of loss in a manner from which the jury or the trial judge in a non-jury case can calculate the amount of the loss with a reasonable degree of certainty.
Id. at 370, 280 S.E.2d 394. However, none of the three cases cited for the proposition are condemnation cases.[1] The court in Bird continued its reasoning and stated that once the condemnor showed a prima facie case, "the burden then fell upon the [condemnee] to show that the [condemnor's] proof of value was inadequate." Bird, 158 Ga.App. at 371, 280 S.E.2d 394.
This statement is not consistent with condemnation law. See Lewis, 110 Ga.App. at 845, 140 S.E.2d 109; Dawson, 203 Ga.App. at 157, 416 S.E.2d 163. The burden of proof in a condemnation case never shifts and Bird states that it does. As explained by the Supreme Court,
While there are involved [in a condemnation action] such matters as requiring the condemnor to make proof against its interest and the necessity for evidence to authorize the amount found for the condemneewhich would suggest that the condemnee should have the burden of proving injury, however, the basic and controlling requirement is the constitutional command that, before such taking of private property for public use, the taker must first pay therefor, and this burdens the taker to prove the value thereof.
Ga. Power v. Brooks, 207 Ga. 406, 411(4), 62 S.E.2d 183 (1950). We therefore disapprove of using the language in Bird as the basis for a jury charge regarding the burden of the condemnee. We further criticize West v. Dept. of Transp., 176 Ga.App. 806, 809(2), 338 S.E.2d 45 (1985) to the extent it appears to sanction the holding in Bird.
Even taken as a whole, the charge given impermissibly placed the burden of proof on Pendarvis to show a value greater than offered by the Water Authority. As such, it was error to give the charge.
2. During the charge conference, Pendarvis stated it had no objection to any of the Water Authority's proposed jury charges. After the court charged the jury, Pendarvis stated it had no objection to the whole charge as given. Failure to object to an instruction before the jury returns its verdict generally results in a waiver of any defects in the charge. OCGA § 5-5-24(a); Bryant v. Housing Auth. of City of Atlanta, 121 Ga. App. 32(2), 172 S.E.2d 439 (1970); Pope v. Goodgame, 223 Ga.App. 672, 675(3)(c), 478 *533 S.E.2d 636 (1996). However, "the appellate courts shall consider and review erroneous charges where there has been a substantial error in the charge which was harmful as a matter of law, regardless of whether objection was made hereunder or not." OCGA § 5-5-24(c).
"A charge `harmful as a matter of law' is one that is blatantly apparent and prejudicial to the extent that it raises the question of whether the losing party has, to some extent at least, been deprived of a fair trial because of it, or a gross injustice is about to result or has resulted directly attributable to the alleged errors." (Citations and punctuation omitted.) Shilliday v. Dunaway, 220 Ga.App. 406, 411(8), 469 S.E.2d 485 (1996); Bryant, 121 Ga.App. at 32(2), 172 S.E.2d 439.
The error in this case was an error of law and it was prejudicial because it went to the primary issue in the case, the value of the property. The charge shifted the burden of proof on that issue, and the jury awarded only $426 more than the $5,400 sought by the Water Authority, less than one-half of one percent of what Pendarvis sought over and above that amount. Thus the charge may well have affected the outcome of the case and deprived Pendarvis of a fair trial. The charge was not corrected by the charge as a whole. It was separated from the earlier charge giving the Water Authority's burden and it may have taken on an importance in the jurors' minds separate from the earlier charge. Compare Trustees of Trinity College v. Ferris, 228 Ga.App. 476, 481(8), 491 S.E.2d 909 (1997) (no substantial error in whole charge, absent objection).
3. Pendarvis contends the court erred in refusing to allow certain testimony. Frank Pendarvis, who was representing the corporation, was allowed to testify extemporaneously in support of his case. At one point in his monologue, he appeared to begin to discuss the use of one of two prior easements on the property. The Water Authority objected on the grounds that there was no issue regarding the use of the prior easements; the only issue in the case was value. The court sustained the objection on those grounds.
The court has wide discretion to admit testimony of questionable relevance and we cannot say the court committed reversible error. Mosier v. State, 218 Ga.App. 586, 587, 462 S.E.2d 643 (1995). Further, Pendarvis made no proffer of the excluded evidence and this court cannot determine the propriety of the trial court's ruling without a proffer of the excluded evidence or testimony. Spruell v. Smith, 185 Ga.App. 484(1), 364 S.E.2d 594 (1987); Wright v. State, 216 Ga.App. 486(2), 455 S.E.2d 88 (1995).
Judgment reversed.
JOHNSON, C.J., McMURRAY, P.J., ANDREWS, P.J., BLACKBURN, P.J., SMITH, RUFFIN, ELDRIDGE and BARNES, JJ., concur.
NOTES
[1] Hayes v. Flaum, 138 Ga.App. 787, 227 S.E.2d 512 (1976) (landlord-tenant dispute); Taylor v. Roberson, 127 Ga.App. 24, 192 S.E.2d 384 (1972) (automobile collision); Studebaker Corp. v. Nail, 82 Ga.App. 779, 62 S.E.2d 198 (1950) (breach of automobile warranty).
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426 N.W.2d 651 (1988)
In re the MARRIAGE OF Patricia Probert GEBHARDT and Freddie L. Gebhardt Upon the Petition of Patricia Probert Gebhardt, Petitioner-Appellee,
And Concerning Freddie L. Gebhardt, Respondent-Appellant.
No. 86-1762.
Court of Appeals of Iowa.
May 31, 1988.
Barry S. Kaplan of Fairall, Fairall, Kaplan & Hoglan, Marshalltown, for respondent-appellant.
Donald J. Juhl, Nevada, for petitioner-appellee.
*652 Considered by OXBERGER, C.J., and DONIELSON and HAYDEN, JJ.
DONIELSON, Judge.
The respondent appeals from a finding by the district court that a common-law marriage existed between him and the petitioner, who has filed for dissolution. We affirm.
Petitioner (Patt) moved into the home of the respondent (Freddie) in 1970 and lived with him continuously for about sixteen years. On March 14, 1986, Patt filed for dissolution of an alleged common-law marriage to Freddie, who denied that such a marriage existed. The action was bifurcated and the only issue tried was whether or not a common-law marriage existed. The court found that it did. Freddie has appealed.
Our scope of review is de novo. Iowa R.App.P. 4. We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses, but we are not bound by them. Iowa R.App.P. 14(f)(7).
The three elements necessary to find a common-law marriage are (1) present intent and agreement to be married, (2) continuous cohabitation, and (3) public declaration that the parties are husband and wife. In re Marriage of Winegard, 278 N.W.2d 505, 510 (Iowa 1979). The burden of proof lies on the party asserting the existence of a common-law marriage. Id. The party carrying this burden of proof must prove all the elements of such a common-law marriage by a preponderance of the evidence. In re Marriage of Grother, 242 N.W.2d 1 (Iowa 1976). Cf. State v. Ware, 338 N.W.2d 707, 711 (Iowa 1983) (proof must be by a preponderance of clear, consistent, and convincing evidence). Proof of cohabitation, as well as evidence of conduct and general repute in the community where the parties reside, tends to strengthen the showing of present agreement to be husband and wife, as well as bearing upon the question of intent. Gammelgaard v. Gammelgaard, 247 Iowa 979, 980, 77 N.W.2d 479, 480 (1956). Newspaper articles and other publications are evidence of a general reputation as bearing on the question of repute. Id. at 987, 77 N.W.2d at 484.
A person may be entitled to marital rights if his or her intention is to be married, even though the other person's intention is not the same, provided they cohabit and provided the conduct of one person justifies the other to believe he or she intended to be married. In re Marriage of Winegard, 257 N.W.2d 609, 616 (Iowa 1977) (citing McFarland v. McFarland, 51 Iowa 565, 570, 2 N.W. 269, 273-74 (1879)). Continuous cohabitation and the declaration of holding out to the public that the parties are husband and wife constitutes circumstantial evidence which tends to create a fair presumption that a common-law marital relationship exists. Id. at 617. Introduction of one party by the other as a wife or husband is in and of itself acknowledgment of marital relation. In re Fisher's Estate, 176 N.W.2d 801, 807 (Iowa 1970).
Freddie agrees with the district court that the facts involved are undisputed. However, in his appeal, he contends that a common-law marriage was found only as a means of avoiding what the court said would otherwise be a "great injustice" to the petitioner. He argues that such a finding constitutes error because the couple did not show a present intent to be husband and wife and did not hold themselves out to the public to be married. In support thereof he relies on the following: (1) the rings purchased in 1974 were not wedding rings as Patt contends, but were merely gifts; (2) the sales bill of their business in 1982 which refered to "Freddie & Patt Gebhardt" was a "mistake;" (3) Patt referred to herself as Patt Probert in 1978 when she saw a physician; (4) the parties filed income tax returns listing themselves as single persons; (5) Patt filled out job applications under the name of Patt Probert, a single person; (6) Patt's title to a recently-purchased vehicle listed Patt Probert as the owner; (7) Freddie conveyed real estate as a single person; (8) Patt purchased stock from under the name of Patt Probert; (9) Patt's driver's license continued to be in the *653 name of Patt Probert; and (10) Patt held herself out to be Patt Probert in a federal lawsuit where she was listed as a defendant.
We have reviewed the other evidence in the record and find, as the district court did, that it clearly and convincingly demonstrated that the parties were holding out to the public that they were husband and wife. The record discloses the following bearing on the existence of a common-law marriage: (1) Patt's intent and belief with respect to her relationship with Freddie; (2) opinions of various witnesses that the community generally regarded the parties as married; (3) continuous cohabitation by the parties for sixteen years; (4) Freddie's acquiescence in Patt's use of his name and her representations to the community that they were married; (5) Patt's receipt of a diamond engagement ring and wedding ring from Freddie; (6) payment by Freddie of charge accounts incurred by Patt as Mrs. Freddie Gebhardt; (7) mail received and sent by the parties as Mr. and Mrs. Freddie Gebhardt; (8) payment of family and business debts from a single checking account on which both parties were authorized to draw checks, including Patt's authorization to sign Freddie's name to the checks; (9) joint vacations, with the parties' purchase of airline tickets under the names of Freddie and Patt Gebhardt; (10) Freddie's introduction of Patt as his wife to friends and business associates; (11) the parties' operation of a business together; (12) a joint AAA membership listing Patt Gebhardt as a member; (13) a newspaper publication circulated throughout the area which contained an auction sale bill listing the owners as Feddie and Patt Gebhardt; (14) Freddie's preparation of a will which provided for Patt in much the same way as one would provide for a spouse; and (15) reference to Patt as an "in-law" by Freddie's mother and sister.
The fact Patt declared herself as single on tax returns does not defeat her claim that a common-law marriage existed. "Considered alone, the tax information would weigh against the finding of a common-law marriage, but the remainder of the record sufficiently overcomes the contrary inferences which might be drawn." Winegard, 278 N.W.2d at 511. We find the tax returns were filed by the parties as single persons in an effort to facilitate Freddie's early retirement program.
Nor do we place emphasis on the fact Patt has signed her maiden name on various documents. The district court made the following comment regarding Patt's use of her maiden name:
Some of the inconsistencies that appear seem to be the result of lack of sophistication by Patt and Freddie in respect to what was necessary to change their status in respect to these "official" documents. It appears to the Court that both parties thought that some of these documents could only be changed after a "ceremonial" marriage had taken place. It appears to the Court very doubtful that either party had much real knowledge about "common-law" marriage.
The district court did not believe Freddie when he testified the rings he bought were not intended as engagement and wedding rings. In addition, the court addressed the credibility of both parties in the following remarks:
It might at this point be appropriate for the Court to point out that the Court watched both Freddie and Patt during extensive periods when each occupied the witness stand. Based upon the Court's observation of both witnesses and the manner in which they responded to questions, the Court is convinced that Freddie was a much less reliable witness, that he often resisted admitting certain matters until after extensive questioning had flushed out the answer and, on the whole, the Court finds that Patt made a much more believable witness in those areas where the testimony of the two parties diverge than did Freddie. On the other hand, the Court finds it quite surprising that a very substantial portion of the testimony of each party factually coincided.
The evidence for the most part is undisputed. We give weight to the fact findings of the trial court, especially in considering *654 the credibility of the parties, where the evidence appears to be in dispute. We find Patt has successfully carried her burden to prove a common-law marriage existed.
Patt requests attorney fees on appeal. The award of attorney fees is generally based on the parties' respective abilities to pay. In re Marriage of Williams, 303 N.W.2d 160, 167 (Iowa 1981). We order Freddie to pay $1,000 toward Patt's appellate attorney fees.
Accordingly, we affirm the district court.
AFFIRMED.
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722 F.2d 747
Trahan (Mary M.)v.Southern Pacific Transportation Company
NO. 82-5860
United States Court of Appeals,ninth Circuit.
NOV 14, 1983
1
Appeal From: C.D.Cal.
2
AFFIRMED.
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405 F.2d 1373
132 U.S.App.D.C. 103
UNITED STEELWORKERS OF AMERICA, AFL-CIO, Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent.NATIONAL LABOR RELATIONS BOARD, Petitioner,v.MISSISSIPPI STEEL CORPORATION, Respondent, UnitedSteelworkers of America, AFL-CIO, Intervenor.
Nos. 21749, 21875.
United States Court of Appeals District of Columbia Circuit.
Argued Sept. 16, 1968.Decided Nov. 5, 1968.
Mr. George C. Longshore, Birmingham, Ala., of the bar of the Supreme Court of Alabama, pro hac vice, by special leave of court, with whom Mr. Michael H. Gottesman, Washington, D.C., was on the brief, for petitioner in No. 21,749. Mr. George H. Cohen, Washington, D.C., also entered an appearance for petitioner in No. 21,749.
Mr. Herbert Fishgold, Atty., National Labor Relations Board, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Messrs. Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Elliott Moore, Atty., National Labor Relations Board, were on the brief, for petitioner in No. 21,875 and respondent in No. 21,749.
Mr. C. Dale Stout, New Orleans, La., with whom Mr. Richard C. Keenan, New Orleans, La., was on the brief, for respondent in No. 21,875.
Before BAZELON, Chief Judge, WILBUR K. MILLER, Senior Circuit Judge, and WRIGHT, Circuit Judge.
J. SKELLY WRIGHT, Circuit Judge:
1
After a protracted labor dispute between the United Steelworkers of America and the Mississippi Steel Corporation, the union complained to the National Labor Relations Board that the company had committed certain unfair labor practices. The Borad found that unfair practices had been committed and granted relief against the company, including both cease and desist orders and orders for reinstatement and back pay. The union, arguing that the relief granted was insufficient, has petitioned for review of the Board's order. The Board has cross-petitioned for enforcement of its order against the company, and the company resists enforcement. The petitions were consolidated and argued together. With a single minor exception, we deny the union's petition for review and grant enforcement of the Board's order against the company. We shall consider the points raised by the parties seriatim.
2
* Pursuant to a Board election, the union was certified on December 17, 1965, as exclusive bargaining agent for the company's production and maintenance unit at its plant in Flowood, Mississippi. The Board has found that prior to this election a representative of the company threatened employees that a Christmas bonus would not be paid if the union won. The union did win, and the bonus was not paid.
3
The Board found that the preelection threat constituted a violation of Section 8(a)(1) of the National Labor Relations Act, 29 U.S.C. 158(a)(1) (1964). The company now contends that no such threat was made. One witness testified that there was a threat, while another denied it. The trial examiner and the Board believed the former, and we will not disturb their judgment of credibility.
4
The Board found that the unilateral cancellation of the bonus after the union was certified was a violation of the duty to bargain established by Section 8(a)(5), and that anti-union animus prompted the cancellation, thus rendering it a violation of Section 8(a)(3). Payments called 'bonuses' or 'gifts' may be 'so tied to the remuneration which employees receive for their work that they are in fact a part of it,' so that they constitute wages within the meaning of the Act. N.L.R.B. v. Electric Steam Radiator Corporation, 6 Cir., 321 F.2d 733, 737 (1963). Here the testimony that a regular Christmas bonus had been paid for at least seven years was sufficient evidence to support the Board's finding that the bonus was part of the wage structure, and hence that the company had a duty to bargain with the union before eliminating it. The pre-election threats already noted were sufficient evidence of the antiunion motivation behind the bonus cancellation to support the finding of a Section 8(a)(3) violation.
II
5
Contract negotiations between the union and the company began in February 1966. In four meetings during the first two months, the company largely confined itself to criticism of the union's proposed contract, though agreement was reached on a few minor points. At the fifth meeting, the company finally offered its long-requested written contract proposal. The meeting left the parties far apart, and nine days later the union voted to strike. After April 26, no meeting was held until June 22. Further meetings on June 30 and July 26 failed to produce appreciable progress, and the strike ended in early August. A final meeting between the parties took place on October 20 and lasted about ten minutes, leaving the parties as far apart as before.
6
During the lengthy course of this bargaining the company several times pleaded inconvenience or the absence of its negotiator as the reason for delay. It refused to supply data concerning its pension plan and the wages paid strike replacements, which the Board has found to have been pertinent to the negotiations. In July it granted a unilateral wage increase to its employees.
7
The Board has found the withholding of data and the unilateral wage increase to have been violations of the duty to bargain. Further, it has found that the company, by the use of delaying tactics, 'was engaging in mere surface or disguised motions of collective-bargaining.'
8
The Supreme Court has held that the duty to bargain prohibits 'behavior which * * * directly obstructs or inhibits the actual process of discussion, or which reflects a cast of mind against reaching agreement.' N.L.R.B. v. Katz, 369 U.S. 736, 747, 82 S.Ct. 1107, 1114, 8 L.Ed.2d 230 (1962). And this court has said, 'What degree of cooperation is to be required, under any particular set of circumstances, from the parties at the bargaining table, is largely a matter for the Board's expertise.' Fruit & Vegetable Packers & Warehousemen, Local 760 v. N.L.R.B., 114 U.S.App.D.C. 388, 389-390, 316 F.2d 389, 390-391 (1963). And good faith or its lack is a question of fact as to state of mind, subject to review only for substantial evidence. Local 833, UAW-AFL-CIO, etc. v. N.L.R.B., 112 U.S.App.D.C. 107, 114, 300 F.2d 699, 706, cert. denied, sub nom. Kohler Co. v. Local 833, UAW-AFL-CIO Intern. Union, etc., 370 U.S. 911, 82 S.Ct. 1258, 8 L.Ed.2d 405 (1962).
9
Applying these standards, we find that the company's dilatory bargaining tactics and its reluctance to come forward with substantive contract proposals provide sufficient support for the Board's finding of a general Section 8(a)(5) violation, particularly when viewed in the light of the refusals to supply data and the unilateral wage increase.
III
10
The Board found that during the course of the strike the company engaged in surveillance of striking employees, and in threats, solicitations and promises to strikers in violation of Section 8(a)(1). It is undisputed that a company supervisor sat in his car across the street from a union meeting noting the names of employees attending the meeting. The company challenges the Board's inference that this surveillance was coercive, but we find that inference reasonable. In another incident Caldwell, chairman of the board of the company, visited two strikers, asked them to come back to work, and told them that 'no outsiders would tell him how to run that plant. If they did, he would close it down.' The Board reasonably judged this a combined solicitation and threat to close down, improper under Section 8(a)(1). See Textile Workers Union of America v. Darlington Mfg. Co., 380 U.S. 263, 274 n. 20, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965). The Board found that Ashley, the company's personnel manager, made a similar threat to close the plant to an employee. The company challenges the employee's testimony as 'patently incredible,' but we leave judgments of credibility to the Board. The testimony, if believed, was sufficient to support the finding of a violation. The Board found that a third threat to close the plant was made by Supervisor Dyas to another employee. Again the company challenges only the credibility of the employee, and again we leave the question of credibility to the Board.
11
Finally, the company challenges the Board's finding of an improper solicitation in the statement of a company representative to two picketing strikers that he would try to give these employees higher paying jobs. The Board found that the 'offer' was made 'with tongue in cheek,' but that nevertheless there was sufficient implication that the company representative was seeking the employees' abandonment of the strike and return to work. We cannot say as a matter of law that the tongue in cheek nature of the offer vitiates a finding of underlying intent to solicit abandonment of the strike.
IV
12
The Board found that the strike was caused and prolonged by the company's unfair labor practices, so that the company was obligated to reinstate all strikers in jobs the same as or of substantially equal status to those they had held before the strike. The company contends that the strike was entirely over economic issues, so that the reinstatement rules for unfair practice strikes do not apply. Substantial evidence supports the Board's finding. The strike was called after a meeting which included a report on the problem of keeping the company at the table and the recovery of the Christmas bonus. Though economic issues were also involved in the strike, it is well settled that 'if an unfair labor practice (has) anything to do with causing the strike, it (is) an unfair labor practice strike.' General Drivers & Helpers Union, Local 662 v. N.L.R.B., 112 U.S.App.D.C. 323, 326, 302 F.2d 908, 911, cert. denied, 371 U.S. 827, 83 S.Ct. 48, 9 L.Ed.2d 65 (1962).
13
Having found the violations of Sections 8(a)(1), (3) and (5) described above, the Board has ordered the company to cease and desist from such violations, to pay the 1965 Christmas bonus to the employees, and to reinstate the strikers in the same or substantially equivalent positions with back pay. The Board has broad discretion to formulate remedies, Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, 215-216, 85 S.Ct. 398, 13 L.Ed,2d 233, 6 A.L.R.3d 1130 (1964), and the kind of relief granted here comes within that discretion.
V
14
The union petitions for review of the Board's order on three points. First, it argues that the Board should have adopted the trial examiner's formula for computing the Christmas bonus due the employees, rather than leaving that computation to the compliance stage of the proceeding. Details of the order such as this are matters properly within the Board's discretion, and we will not disturb the Board's judgment.
15
Second, the union complains that the Board acted improperly in refusing to pass on an allegation of an individual refusal to bargain made in the General Counsel's complaint. The union cites no authority which would require the Board to consider all issues raised by its General Counsel, nor can we see any reason, in the circumstances of this case, why we should interfere with its discretion to leave possible issues undecided.1
16
Finally, the union contends that the Board erred in striking the names of three employees from the list of those entitled to reinstatement and back pay. With respect to one of these employees, James Fisher, the Board concedes that his name was deleted by clerical error. With respect to the other two, Roy Pendergrass and David Anderson, the Board contends that these employees were rehired and then resigned, so that they are not entitled to reinstatement. The record is unclear as to the status of these two employees and so, pursuant to the suggestion of counsel for the Board, we withhold enforcement of the Board's order insofar as it denies reinstatement and back pay to Anderson and Pendergrass, so that their right to reinstatement and back pay, if any, can be determined in the compliance proceedings.
17
So ordered.
18
WILBUR K. MILLER, Senior Circuit Judge, concurs in the affirmance of No. 21,749, but dissents from the enforcement of the Board's order in No. 21,875.
1
The union cites, without supporting argument, International Woodworkers of America, AFL-CIO, Local 3-10 v. N.L.R.B., 127 U.S.App.D.C. 81, 380 F.2d 628 (1967), and United Steelworkers of America, AFL-CIO v. N.L.R.B., 128 U.S.App.D.C. 219, 386 F.2d 981 (1967). These cases do not purport to bind the Board to decide every issue raised by the General Counsel in his complaint. They hold that, after a Board finding of an unfair labor practice, withholding of remedies on de minimis grounds may be improper where prejudice to the aggrieved party is shown
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718 F.2d 1505
14 Fed. R. Evid. Serv. 291
UNITED STATES of America, Plaintiff-Appellee,v.Herb NEAL, Defendant-Appellant.
No. 82-2309.
United States Court of Appeals,Tenth Circuit.
Sept. 30, 1983.Rehearing Denied Feb. 17, 1984.
Gene Stipe, Oklahoma City, Okl. (Robert K. McCune, Oklahoma City, Okl., with him on brief) of Stipe, Gossett, Stipe, Harper, Estes, McCune & Parks, Oklahoma City, Okl., for defendant-appellant.
Susie Pritchett, Asst. U.S. Atty., Oklahoma City, Okl. (William S. Price, U.S. Atty., Oklahoma City, Okl., also on brief), for plaintiff-appellee.
Before HOLLOWAY, McWILLIAMS and SEYMOUR, Circuit Judges.
HOLLOWAY, Circuit Judge.
1
This is a direct appeal by the defendant-appellant Herb Neal from his convictions on thirty-three counts of a thirty-four count indictment charging him with mail fraud and aiding and abetting mail fraud, in violation of 18 U.S.C. Sec. 1341 and 18 U.S.C. Sec. 2.1 Neal was sentenced to terms of five years' imprisonment on each of his convictions, Count II to run consecutively to Count I and Counts III through XXII and XXIV through XXXIV to run concurrently to Count I. He was also fined $1,000.00 for each of the first two counts.
2
Viewing all the evidence, direct and circumstantial, together with all reasonable inferences therefrom, in the light most favorable to the Government as we must on this appeal from a guilty verdict, United States v. Twilligear, 460 F.2d 79, 81-82 (10th Cir.), the evidence tended to show the following:
3
* Background
4
This case is one of many that arose from an extensive investigation by the F.B.I., the I.R.S., and the United States Attorneys for Oklahoma into payment to numerous county commissioners of kickbacks, by suppliers of equipment or materials purchased by the counties for road and bridge building and maintenance. During the period covered by the indictment Neal worked as a salesman for three companies in Ponca City, Oklahoma, that supplied such materials. All thirty-four counts were premised on allegations that Neal and others devised a scheme to defraud various counties and the citizens thereof "by depriving them of their right to have county business conducted openly, honestly, impartially, and free from corruption and undue influence by their elected County Commissioner and to use the ... mails in furtherance of the scheme." (I R. 93). Cf. United States v. Mandel, 591 F.2d 1347, 1362 (4th Cir.), cert. denied, 445 U.S. 961, 100 S.Ct. 1647, 64 L.Ed.2d 236 (bribery of public official satisfies fraud element of the mail fraud statute); United States v. Gann, 718 F.2d 1502, 1503 n. 2 (10th Cir.).
5
Seven different county commissioners testified at trial that they had received kickbacks from Neal.2 (E.g., V R. 248-50; VI R. 322-24, 409, 483, 547-48, and 573). Some stated that they had received kickbacks on every purchase from Neal while others testified that the kickbacks were only occasional. Moreover, some commissioners testified that not all suppliers gave kickbacks but they always tried to do business with suppliers like Neal who did give kickbacks. (E.g., V R. 325). The payments generally approximated 10% of the purchase price. Some commissioners further testified that they had accepted "50-50 splits" from Neal, also known as "split" or "blue-sky" deals, in which the commissioner would order materials or supplies from Neal, the county clerk would issue a warrant, i.e., check, to Neal as payment for the goods, the goods would not be delivered, and the commissioner and Neal would split the amount of the warrant between themselves.
6
Oftentimes the kickback was agreed to before a purchase was consummated, but generally the agreement was tacit that a kickback would be forthcoming. The kickback payment generally occurred after the county clerk had mailed the warrant to Neal and the material or supplies were delivered. Furthermore, the kickbacks were paid in cash and in a surreptitious manner with no one present but Neal and the commissioner, frequently while the parties were alone in Neal's car. In addition, six county clerks testified that warrants in payment for materials or supplies were always mailed unless the supplier was local and personally picked up the warrant. (V R. 43, 50, 110, and 183). With respect to the counts on which these convictions resulted, mailing of the warrants was proved.
7
In his defense, Neal offered the testimony of several county commissioners to the effect that he never offered or paid them kickbacks, and that of several character witnesses who testified that Neal had a good reputation in his community. Neal also took the stand and testified that he had never paid a kickback, that the Government's witnesses were lying, and that some of the Government's witnesses had told him that they were simply going to tell the F.B.I. whatever they wanted to hear.
8
For reversal, Neal asserts that the trial court erred (1) in denying his motion for judgment of acquittal or in the alternative for a new trial because the evidence was insufficient to prove that the mails were used in furtherance of a scheme or artifice to defraud; (2) in overruling his motion in limine regarding evidence of the relationship between a Government witness and two of Neal's in-laws; (3) in not granting a pretrial request for a change of venue based on prejudicial pretrial publicity, and; (4) in denying his motion in limine concerning the introduction of evidence outside the times and places set forth in the indictment.
II
9
At the close of the Government's case Neal moved for a judgment of acquittal, claiming that the evidence had failed to show that the mailings were an integral part of the scheme. (VII R. 702-09). The motion was overruled, and then renewed at the close of all the evidence, and again overruled. (I R. 163-69; VII R. 710-11 and 958-59). Again, after the verdict Neal moved for a judgment of acquittal or, in the alternative, for a new trial, asserting the same argument. (I R. 187-91); see F.R.Crim.P. 29(c). On appeal Neal asserts that the trial court erred in overruling these motions in that the evidence failed to show that the use of the mails was an integral part of the scheme. (Brief of Appellant at 5 and 9).
10
Neal devotes the majority of his argument on this issue to Counts XXX through XXXIV, Counts that charged kickbacks from lease-purchase transactions rather than direct purchases.3 Relying on United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974), Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960), Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944), and United States v. Lynn, 461 F.2d 759 (10th Cir.), inter alia, Neal contends that the mailings by the counties to the banks of monthly lease-purchase payments were "totally unrelated and not an integral part of the scheme," reasoning that the kickbacks had been paid prior to the use of the mails and thus the mailings played no role in the completion of the scheme. (Brief of Appellant at 9-10). Furthermore, Neal contends that the Government's proof as to the use of the mails was inadequate in the counts alleging kickbacks on direct purchases as well. (Id.).
11
We see no need to delve into these arguments in detail as we have considered and rejected them in related cases filed today. See United States v. Primrose, 718 F.2d 1484 (10th Cir.); United States v. Gann, 718 F.2d 1502 (10th Cir.); and see United States v. Whitt, 718 F.2d 1494 (10th Cir.); United States v. Boston, 718 F.2d 1511 (10th Cir.).
12
In Primrose we held that the mailing of the warrants from the county clerk to the vendor was an essential part of the scheme, regardless of whether the kickback was paid before or after the mailing. Primrose, supra, at 1488 - 1489. There, the defendant was a county commissioner and the argument that the scheme was complete upon receipt of the kickback was rejected. Here, Neal being the salesman for various vendors, the mailing of warrants to the vendors is even more closely within the scheme. Likewise in Gann, a case involving a lease-purchase agreement, we found the mailing of a warrant from the county clerk to a bank to be an integral part of the entire transaction and in furtherance of the scheme to defraud. Gann, supra, at 1504.
13
The circumstances in the instant case are similar to those in Primrose, Gann, Whitt, and Boston and the mailings in all these cases were sufficient to bring the charges within the purview of Sec. 1341. Viewing the evidence in the light most favorable to the Government as we must in reviewing the district court's refusal to grant a motion for judgment of acquittal, United States v. Tager, 481 F.2d 97, 100 (10th Cir.), cert. denied, 415 U.S. 914, 94 S.Ct. 1410, 39 L.Ed.2d 469, we conclude that the trial court did not err and that Neal's argument that the evidence was insufficient to support the mail fraud convictions is without merit.
III
14
Neal next contends that the court erred in refusing to grant his pretrial motion in limine by which he asked the trial court to direct the Government not to refer to evidence concerning relationships between Government witness Dorothy Griffin and Neal's father-in-law, Ralph Stewart, or brother-in-law, Monty Stewart.4 (I R. 144). The motion was overruled. (I R. 146).
15
Griffin testified that she was the owner of a lumber company that frequently did business with county commissioners and other suppliers to county commissioners. (III R. 657). Griffin stated that her company provided a "service" to other vendors, among them Stewart Supply Company. The "service" provided was as follows: a supplier would give her a check for the purchase of materials or supplies which neither party ever intended to be delivered, Griffin would cash the check and return ninety to ninety-five percent of the cash to the supplier along with a bogus invoice for the undelivered goods, and Griffin would keep the balance of the cash as her commission. (VI R. 658-61). The supplier then used the invoices as a record, which was false, of the supplier's expenditures, and as a means of obtaining cash to pay kickbacks.
16
Griffin stated that she provided this "service" for Stewart Supply Company while Neal worked there and identified some eighteen bogus invoices made for Stewart Supply totalling approximately $80,000.00 worth of goods, as well as numerous checks from Stewart Supply used to pay for the invoices. (III R. Pl. exhs. 57, 57A through Q, 58, and 58A through X). Among the checks, Griffin identified one (III R. Pl. exh. 58P), signed by Neal, used as payment for three phony invoices. (III R. Pl. exhs. 57M, N, and O; VI R. 671-74). Indeed, some of the invoices were made out for materials, such as steel pipe, that were not even sold by Griffin's lumber company. She further testified to meeting Ralph Stewart and Neal in an Oklahoma City coffee shop where Stewart indicated that he wanted some bogus invoices so that "he would have some money to operate on with his Commissioners." (VI R. 662). This was the only time Griffin ever met Neal. (VI R. 661). She identified him at trial. (Id.).
17
On appeal, Neal contends that this testimony was both irrelevant and prejudicial in violation of Rules 401 and 403 of the Federal Rules of Evidence. Specifically he claims that the prejudice "arose from the prosecutor's ability to inject Ralph Stewart into the trial of this action in order to attempt to prove that Herb Neal paid kickbacks because it was company policy." (Brief of Appellant at 11-12). We cannot agree.
18
In order for evidence to be relevant it need only "[tend] to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Rule 401 F.R.E. Here, the Government had to establish use of the mails in furtherance of a scheme to defraud in order to meet its burden in proving a violation of Sec. 1341. A portion of the scheme alleged was that Neal would pay cash kickbacks to various county commissioners. The Griffin testimony indicated that Neal was present when Griffin and Ralph Stewart, Neal's father-in-law, discussed the purchase of bogus invoices used as a means of obtaining funds for the payment of kickbacks. Furthermore, the documentary evidence introduced during Griffin's testimony showed Neal's signature on a check from Stewart Supply Company to Griffin's lumber company for more than $4,000.00 worth of materials and supplies that were never delivered.
19
The trial court is granted broad discretion in ruling on the relevance of evidence, see Hackbart v. Cincinnati Bengals, Inc., 601 F.2d 516, 525-26 (10th Cir.), cert. denied, 444 U.S. 931, 100 S.Ct. 275, 62 L.Ed.2d 188 and this court will not disturb that discretion absent a clear showing of abuse. Texas Eastern Transmission v. Marine Office-Appleton & Cox, 579 F.2d 561, 566-67 (10th Cir.). We feel the questioned testimony and documentary evidence was probative of a scheme to defraud and find no abuse of discretion in the trial court's ruling in that respect.
20
We are mindful, however, that relevant evidence should be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.5 As with Rule 401, a trial court has broad discretion under the Rule to determine whether the probative value of the evidence is substantially outweighed by the danger of unfair prejudice. See Rule 403 F.R.E.; United States v. Franklin, 704 F.2d 1183, 1187 (10th Cir.); United States v. Nolan, 551 F.2d 266, 271 (10th Cir.), cert. denied, 434 U.S. 904, 98 S.Ct. 302, 54 L.Ed.2d 191. Our review of the record reveals that the trial transcript includes more than one thousand pages and Griffin's testimony covered only 46 of those pages. Griffin testified that the only time she met Neal was at her meeting with Ralph Stewart and that Neal did not play an active role in that meeting. Under these circumstances we cannot say the trial judge abused his discretion in admitting this testimony.
IV
21
Neal argues further that the trial court erred in denying his pretrial motion to transfer the case to another district due to excessive pretrial publicity, citing Sheppard v. Maxwell, 384 U.S. 333, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966), inter alia.
22
In Sheppard, the defendant, who was suspected of murdering his wife, was exposed to extensive pretrial publicity including a three day televised inquest before an audience of hundreds of persons, publication of the names and addresses of the potential jurors in the major local newspapers more than three weeks prior to trial, and heavy newspaper, television, and radio coverage calling for the defendant's arrest, detailing an extra-marital love affair, and revealing that Sheppard had repeatedly refused to take a lie detector test, among other things.
23
Except as otherwise permitted by statute or the rules, a criminal prosecution is to be conducted "in a district in which the offense was committed." Rule 18, F.R.Crim.P. In instances of pretrial publicity, however, Rule 21(a), F.R.Crim.P., provides as follows:
24
For Prejudice in the District. The court upon motion of the defendant shall transfer the proceeding as to him to another district whether or not such district is specified in the defendant's motion if the court is satisfied that there exists in the district where the prosecution is pending so great a prejudice against the defendant that he cannot obtain a fair and impartial trial at any place fixed by law for holding court in that district.
25
Under the rule, the grant or denial of a motion for a change of venue in a criminal case is within the trial court's discretion and, absent an abuse of that discretion, the ruling will not be disturbed on appeal. See United States v. Hunter, 672 F.2d 815, 816 (10th Cir.); United States v. Jobe, 487 F.2d 268, 269-70 (10th Cir.), cert. denied, 416 U.S. 955, 94 S.Ct. 1968, 40 L.Ed.2d 305.
26
Unlike the Sheppard case, here Neal cites no specific instance of prejudicial publicity. In addition, defendant candidly admits that "[t]here has been little pretrial publicity concerning the particular appellant, Herb Neal..." (Brief of Appellant at 12). Defendant contends, nevertheless, that here the publicity "was even more insidious because the publicity was administered in such a broad and bold stroke that all defendants in these cases were tainted." Id. at 12.
27
However, "... when publicity is about the event, rather than directed at individual defendants, this may lessen any prejudicial impact." United States v. Hueftle, 687 F.2d 1305, 1310 (10th Cir.). Here defendant Neal submitted no evidence to make a record about the pretrial publicity which we can review. Moreover, "the proper occasion for determining juror partiality is upon voir dire examination." United States v. Lamb, 575 F.2d 1310, 1315 (10th Cir.), cert. denied, 439 U.S. 854, 99 S.Ct. 165, 58 L.Ed.2d 160. Neal has not designated the voir dire transcript as part of the record and we cannot speculate as to what the record of that examination might reveal as to any prejudicial effect on the venire.
28
On the record before us we see nothing to indicate that the trial court abused its discretion in denying the venue change, especially in a case such as this where, by Neal's admission, the publicity was not generally directed at him. See United States v. Hueftle, supra, 687 F.2d at 1310.
V
29
Neal's final argument is that the trial court erred in denying his motion in limine by which he attempted to prevent the introduction of any evidence as to a scheme to defraud or as to the payment of kickbacks which occurred outside the times and places charged in the indictment. In his brief in support of the motion he argued that such evidence "would be prejudicial and cumulative" and unnecessary to prove the existence of a scheme in that evidence as to the thirty-four counts charged should suffice. (I R. 143).
30
Here again our holding is guided by a companion opinion which considered and rejected a similar argument. In United States v. Primrose, 718 F.2d 1484 (10th Cir.), where defendant-appellant Primrose was charged with thirty-eight counts of mail fraud, among other things, and substantial evidence of a scheme outside the time frame charged in the indictment was admitted, we found no abuse of discretion on the part of the trial court. As in the Primrose case, here the court gave a cautionary instruction each time such evidence was admitted (see e.g. VI R. 488) and, in his charge to the jury, the judge instructed that evidence of crimes concerning offenses not charged in the indictment might be considered for the limited purpose of proof of "motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident ...." (VII R. 986; see also Rule 404(b) F.R.E.). At 1491-1492. On the reasoning in Primrose, we conclude that Neal's argument is without merit.
VI
31
The defendant appellant has demonstrated no reversible error in the record of his trial and accordingly the judgment is
32
AFFIRMED.
1
Neal was found not guilty on count twenty-three. (VII R. 1007-08)
2
Each of these witnesses testified that they had entered into an agreement with the United States Attorney to fully cooperate with the investigation in exchange for being allowed to plead guilty to one count of conspiracy to commit mail fraud and to tax evasion, thus relieving the commissioners of the threat of numerous prosecutions based on their individual transactions. (See e.g., III R. Pl. exh. 47)
3
In the case of a lease-purchase agreement the county would lease equipment from the supplier with an option to purchase the equipment at the end of the lease. The supplier would assign its rights under the lease to a bank, Neal would pay a kickback to a county commissioner, and the county would issue monthly payments (warrants) to the bank
4
Ralph Stewart was the owner of Stewart Supply Company, one of the three supply companies which employed Neal as a salesman during the period covered by the indictment. Monty Stewart was Ralph Stewart's son and was also employed by Stewart Supply Company
5
Rule 403 F.R.E. provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
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55 B.R. 25 (1985)
In the Matter of RUSTIC MANUFACTURING, INC., Debtor.
RUSTIC MANUFACTURING, INC., Plaintiff,
v.
MARINE BANK DANE COUNTY, f/k/a Security Marine Bank of Madison, Defendant.
Adv. No. 84-0263-11.
United States Bankruptcy Court, W.D. Wisconsin.
June 18, 1985.
*26 Denis P. Bartell, Ross & Stevens, S.C., Madison, Wis., for plaintiff.
Patricia M. Gibeault, Brynelson, Herrick, Gehl & Bucaida, Madison, Wis., for defendant.
MEMORANDUM DECISION AND ORDER
ROBERT D. MARTIN, Bankruptcy Judge.
On August 3, 1984, Rustic Manufacturing, Inc. ("Rustic") filed for bankruptcy under chapter 11. Rustic's principal secured creditor is Marine Bank ("Marine") which is owed approximately $425,000. Marine holds a lien on a variety of Rustic's assets as security for the obligation. In addition to that collateral, Marine has personal guarantees from each of the four principals of the debtor corporation who are the sole shareholders, officers and directors of Rustic ("guarantors"). The guarantors are also the principal management employees of Rustic, performing all or most of the day to day sales, development, personnel, record keeping and general management functions of that business.
On August 15, 1984, this court entered an order granting Rustic leave to use Marine's cash collateral. The court established conditions of such use, the fulfillment of which conditions was deemed adequate protection for Marine's interest in the collateral.
On September 5, 1984, Marine commenced a personal action against the guarantors in Dane County Circuit Court which is currently pending. Rustic seeks an injunction staying Marine's state court suit. Marine questions both the jurisdiction of the bankruptcy court over this controversy and the merits of Rustic's claim.
28 U.S.C. § 1334(b) provides;
(b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.[1]
The jurisdiction of bankruptcy courts originates from chapter 6 of title 28 of the U.S.Code, which designates bankruptcy judges as units of the district court, 28 U.S.C. § 151, and refers jurisdiction from the district courts to the bankruptcy courts, 28 U.S.C. § 157. Section 157(a) states, "[e]ach district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 or arising in or related to a case under title 11 shall be referred to the bankruptcy judges for the district." Jurisdiction of the district court for the Western District of Wisconsin is exercised under an order of general reference to the bankruptcy court dated July 12, 1984, which provides:
Pursuant to the provisions of 28 U.S.C. § 157, any or all cases under Title 11 and any or all proceedings arising under Title *27 11, or arising in or related to a case under Title 11, shall be referred to the bankruptcy judges for this district. . . .
Two views of the scope of the jurisdiction conferred by 28 U.S.C. § 1334 have been articulated. In In Re United Dept. Stores, Inc., 39 B.R. 54 (Bankr.S.D.N.Y.1984), the court held "[f]or an action to be within this `related to' jurisdiction it must have a significant connection to the pending bankruptcy case." In that case the debtor's chairman of the board, who was also a stockholder, sought an injunction from the bankruptcy court to stay an action on his personal guarantee of an obligation of the debtor. In holding that it lacked jurisdiction the court explained;
The connection of the Florida action to the UDS reorganization is at best tenuous. The Florida action is between non-debtors and does not involve bankruptcy issues. Outlet seeks no recovery from the estate, and the debtor has no interest in any recovery that may be obtained. Further, it has not been shown that the continuation of the Florida action will unduly interfere with the administration of the UDS estate.
39 B.R. at 55.
The other view is articulated in In Re Larmar Estates, Inc., 5 B.R. 328, 6 B.C.D. 711 (Bankr.E.D.N.Y.1980). There a preliminary injunction was sought against suits to collect from the officers of a chapter 11 debtor on their guarantees and the court stated;
11 U.S.C. section 105(a) empowers the bankruptcy court to `issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.' It is clear that with the bankruptcy court's expanded power and jurisdiction, this court has the power to enjoin enforcement of the state court judgment against the guarantors.
5 B.R. at 330-331 (footnotes omitted). These two views of the court's jurisdiction are not as far apart as may first appear. Each is dependent upon the extent of the impact on the debtor. Where the impact is sufficient to warrant the issuance of an injunction under the standards discussed below, it would seem that even a court applying the United Dept. Stores analysis would be compelled to find that the issues would be sufficiently "related to" the bankruptcy case to support the bankruptcy court's jurisdiction.
I am satisfied that where it can be shown that the commencement or continuation of a suit against a principal officer or employee of a debtor on the guaranty of a debt owed principally or jointly by the debtor would have a significant impact on the debtor's chances to reorganize by, inter alia depriving the debtor of the employee's services, depriving the debtor of the employee's loyalty, or being undertaken for the purposes of harassment to attempt to obtain favored treatment in a plan of reorganization, that a sufficient relation to the bankruptcy case would exist to secure jurisdiction under 28 U.S.C. § 1334(b). This is consistent with my statement in In Re Doughtie, 39 B.R. 950 (Bankr.W.D.Wis. 1984), "[i]f an act against a third party served as an indirect means of collecting a claim against the debtor, a bankruptcy court may exercise its powers to enjoin such an act." 39 B.R. at 952. Various courts have articulated similar standards. See, e.g., In Re Otero Mills, Inc., 25 B.R. 1018, 7 C.B.C.2d 1017 (D.N.M.1982); Mahaffey v. E-C-P of Arizona, Inc., 40 B.R. 469, 12 B.C.D. 164 (Bankr.D.Colo.1984); In Re Datair Systems Corp., 37 B.R. 690, 11 B.C.D. 1235 (Bankr.N.D.Ill.1983); In Re Hartley, 39 B.R. 281 (Bankr.N.D.Ohio 1984); In Re Brentano's, Inc., 27 B.R. 90, 10 B.C.D. 157 (Bankr.S.D.N.Y.1983); In Re Lahman Mfg. Co., Inc., 33 B.R. 681 (Bankr.D.S.D.1983); In Re Brookfield Tennis, Inc., 29 B.R. 1 (Bankr.E.D.Wis.1982).
The jurisdictional provisions of section 1334 are limited by the permissive and mandatory abstention provisions found in 28 U.S.C. § 1334(c). Section 1334(c)(1) allows a district court to abstain from hearing a proceeding in the interests of justice and comity. Rustic is seeking to enjoin a creditor from taking action which would allegedly hinder its attempt to successfully *28 reorganize under chapter 11 of the United States Bankruptcy Code. It does not appear that the interests of justice and comity would be offended were this court to consider the issue.
Section 1334(c)(2) provides;
Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. . . .
(emphasis added). This provision is clearly inapplicable, in part because no action seeking to enjoin Marine from suing Rustic's guarantors has been commenced in state court.
This court has jurisdiction under section 1334, section 157(a) and the order of general reference dated July 12, 1984, to hear the instant case as one "related to cases arising under chapter 11." It remains to be determined, however, whether this court has the power to render a final decision in this matter.[2] 28 U.S.C. § 157(b)(1) provides,
Bankruptcy judges may hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11, referred under subsection (a) of this section, and may enter appropriate orders and judgments, subject to review under section 158 of this title.
Section 157(c)(1) further provides,
A bankruptcy judge may hear a proceeding that is not a core proceeding but that is otherwise related to a case under title 11. In such a proceeding, the bankruptcy judge shall submit proposed findings of fact and conclusions of law to the district court, and any final order or judgment shall be entered by the district judge after considering the bankruptcy judge's proposed findings and conclusions and after reviewing de novo those matters to which any party has timely and specifically objected.
To determine whether a final decision may be made, this court must decide whether the instant proceeding is a "core proceeding" under section 157. Section 157(b)(2) lists examples of actions that constitute "core proceedings." Two of the examples may apply to the instant action, "(A) matters concerning the administration of the estate" and "(O) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor . . . relationship . . .," because the outcome of the state court guarantee action will affect the administration of Rustic's estate and the debtor-creditor relationship between Rustic and Marine. Subsections (A) and (O) are broad and would seemingly apply to a variety of proceedings. Since there are no hearing or committee reports, and little case law interpreting section 157 this court must look to the purposes behind enacting the provision and commentaries analyzing it, to aid in applying the term "core proceeding" to the instant case.
The purpose behind the core proceedings classification in the 1984 Bankruptcy Amendments is to distinguish between those matters in which bankruptcy judges can exercise broad discretion, i.e. in the adjudication of federally created rights, and those matters in which they can exercise only limited discretion, i.e. in the adjudication of state created rights. K. Lundin, The 1984 Bankruptcy Amendments: Holes in the Matrix?, 11 NORTON *29 BANKR. LAW ADVISER 1, 2 (1984). See Northern Pipeline Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982). Rustic is requesting this court to enjoin Marine from enforcing its contract rights against the guarantors in state court. In one respect this involves state-created rights in that state law created the rights arising under the guarantees. However, this court is not determining the validity of these guaranties, it is determining only whether an injunction should issue against Marine. While the equitable right to an injunction is created by both federal and state law, U.S. CONST. art. III, § 2, WIS.CONST. art. VII, § 3, Rustic is asking this court to issue an injunction pursuant to its powers under 11 U.S.C. § 105(a). Therefore, the action involves rights arising under a federal statute which authorizes the exercise of equity founded primarily on the federal bankruptcy laws.
In In Re Pierce, et al., BANKR.L.REP. (CCH) ¶ 70,153, at 86,182 (D.Colo.1984), the debtor sued the defendant in bankruptcy court for alleged breach of a leasing contract and sought injunctive relief. The bankruptcy judge issued the injunction. On appeal the district court held "`core proceedings' do not encompass separate state law contract actions. A different construction of § 157 would require explicit rejection of the Marathon mandate." BANKR.L.REP (CCH) ¶ 170,153, at 86,182. The instant case does not involve a separate state law contract action. This court is not considering the rights arising under the guaranties; only the merits of issuing an injunction against a creditor in this chapter 11 case.
A determination that this action is not a core proceeding because it involves the opportunity to exercise state-created rights is superficial. Many of the examples of core proceedings listed in section 157(b), including (A) and (O), involve state-created rights. At least one commentator has attempted to explain this incongruity;
[S]tate law rights arising in core bankruptcy proceedings are functionally equivalent to congressionally created rights, because Congress has the power to modify contractual obligations and other state-created rights through the bankruptcy clause. Indeed, the very purpose of bankruptcy is to modify the rights of the debtors and creditors, and the bankruptcy Code authorizes the Bankruptcy Court to aborogate or modify state-created rights in many ways.
T. Carlson, Are the Jurisdictional Provisions of the Bankruptcy Amendments of 1984 Constitutional?, 9 NORTON BANKR.LAW ADVISOR 1, 4 (1984) (cites omitted).[3] While the underlying guaranty action involves state-created contractual rights, a decision on whether to allow Marine to enforce its guarantees would be, under Carlson's analysis, a determination of congressional rights under the bankruptcy court's authority to modify the state created rights.
Carlson has suggested an alternative method to classify core from noncore proceedings; "determine whether the proceeding is a `suit in'. . . . If the proceeding is not a `suit in,' determine whether the right to relief is created by Title 11. If either of these tests are met, the proceeding is tentatively a core proceeding." T. Carlson, Distinguishing Core from Non-Core Proceedings, 1 NORTON BANKR.LAW AD. 1, 4 (1985). The term "suit in" is defined as all proceedings related to the distribution of assets to creditors, the discharge of the debtor, exemptions, and all phases of administration of the estate.[4] This definition is similar to the examples of core proceedings in section 157(b)(2)(A) and (O). Since it has been determined that jurisdiction *30 over the instant suit exists under section 1334(b) because the state court guarantee action would have a "significant impact on the debtor's chances to reorganize," this proceeding is related to the administration of Rustic's chapter 11 estate, and is thus a "suit-in."[5] This is akin to the reasoning employed by the court in Lion Capital Group, supra. There the court stayed defendants from collecting capital contributions from limited partners of the debtor. The court explained:
Since the stay of defendants from pursuing their actions in the district court is grounded on the harm to efficient administration of the debtor's estate that would likely occur absent a stay, the motion seeking such relief is undoubtedly a core proceeding within the meaning of the statute.
46 B.R. at 854-855 (footnote omitted).
It is clear from the analysis above that Rustic's suit is a core proceeding in which this court may render a final decision under section 157.[6] I will turn now to whether injunctive relief is appropriate. The bases for the bankruptcy court's injunctive power are 11 U.S.C. § 105(a) and 28 U.S.C. § 1481.[7] Courts acting in equity are vested with the power and authority to issue a wide range of injunctive relief. 2 Collier on Bankruptcy ¶ 105.02, 105-3. (15th ed. 1985).
The Bankruptcy Court for the Eastern District of Wisconsin impliedly recognized that it had the power to enjoin third parties from continuing actions against non-debtors. In Re Brookfield Tennis, Inc., 29 B.R. 1 (Bankr.E.D.Wis.1982). In that case a chapter 11 debtor filed a motion for an order enjoining the FDIC from continuing its suit in the United States District Court against officers of the debtor. The motion was denied as an improper manner of proceeding, but in commenting on the substantive issues raised Judge Clevert seems to have left open the possibility of a bankruptcy court enjoining actions against officers:
Even if the debtor had properly invoked this court's jurisdiction, the FDIC has correctly argued that the debtor has failed to demonstrate that this court should invoke its powers under 11 U.S.C. § 105.
Section 105 empowers Bankruptcy Courts to `issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of . . . [Title 11].' The debtor was, therefore, statutorily obligated to demonstrate that an injunction was necessary or appropriate in this case.
29 B.R. at 2 (cites omitted). If the debtor had met the test, the court appears to say that an injunction could issue.
The traditional tests for determining whether a preliminary injunction should issue are: first, whether the plaintiff will have an adequate remedy at law or will be irreparably harmed if the injunction does not issue; second, whether the threatened injury to the plaintiff outweighs the threatened harm the injunction may inflict on the defendant; third, whether the plaintiff has at least a reasonable likelihood of success on the merits; and fourth, whether the granting of a preliminary injunction will *31 disserve the public interest. Reinders Bros. v. Rain Bird Eastern Sales Corp., 627 F.2d 44, 48 (7th Cir.1980); Fox Valley Harvestore, Inc. v. A.O. Smith Harvestore Products, Inc., 545 F.2d 1096, 1907 (7th Cir.1976); Wojciechowski v. Amoco Oil Co., 483 F.Supp. 109 (E.D.Wis.1980).
Rustic will be irreparably harmed if the preliminary injunction does not issue. Numerous courts have held that actions against corporate debtors' guarantors in state court can cause irreparable harm. See Otero Mills, supra; Datair, supra; In Re Northlake Bldg. Partners, 41 B.R. 231 (Bankr.N.D.Ill.1984); Lahman, supra. Rustic asserts that if Marine proceeds against the guarantors personally, they will file bankruptcies to protect their personal assets. The guarantors will have less incentive to work towards Rustic's rehabilitation, and will have to devote time and expense to the Marine litigation that they could have devoted to Rustic's reorganization. Additionally, two of the guarantors owe Rustic approximately $90,000. They are paying the debt monthly, but the debt is unsecured and would probably be discharged in the guarantors' individual proceedings. In the face of these assertions it is hard to sort the probable effects of the Marine suit from the guarantor's threats intended to discourage creditor action. For the most part I find the threat of disinterest and refusal to pay debts owed to the company less than compelling by themselves. However, taken as a whole it seems obvious that the suit on the guaranties would cause a major disruption to the debtor's progress toward reorganization.
More importantly, should Marine obtain judgment against the guarantors, who are the sole shareholders of Rustic, it could execute on their securities. Having the principal secured creditor as a principal shareholder of Rustic may not be in the best interests of the general creditors and the estate as a whole.[8]
Any harm caused Marine by this court's issuing the injunction is relatively minor in comparison with the harm caused to Rustic in the absence of an injunction. Marine has been found to be secured for its entire debt without accounting for the value of the guaranties, and Rustic is making payments of 2% per month on Marine's claim. Those payments are contended to provide adequate protection for Marine's interest. The court in Otero Mills, supra, found that payments made by a debtor similar to these, negated any harm to the creditor. If the injunction is issued Marine will only be inconvenienced in having to wait until Rustic drafts a plan, to collect on its debt.
Because of the nature of a chapter 11 case probability of debtor's ultimate success on the merits of its claim is hard to measure. "[S]uccess on the merits, may be said to refer to the probability of the debtors' having plans of reorganization confirmed in the near future which would provide for 100% repayment to the FDIC." Larmar 5 B.R. at 331. There is no comparable proposal for payment in this case, although Rustic asserts that it will be able to propose a plan in a timely manner which will provide for full payment of Marine's claim and meet with creditor approval.
Finally, I cannot see how public interest will be disserviced by the issuance of an injunction in the instant case. The court in Otero Mills, stated, "in the bankruptcy setting, the public interest lies in promoting successful reorganization." 7 C.B.C.2d at 1021. See also, Northlake Bldg., 41 B.R. at 234 ("it is clear that the public interest will be best served if Debtor . . . continues to work as they have toward the eventual goal of successful reorganization."); cf. Mahaffey, supra.
*32 Upon the foregoing which constitute my findings of fact and conclusions of law, it is hereby
ORDERED that judgment be entered enjoining Marine from pursuing the actions it has commenced in state courts of Wisconsin on the guaranties given by the officers of Rustic Manufacturing, Inc. the debtor herein until the jurisdiction of this court is terminated by the confirmation of a chapter 11 plan or until further order of this court.
NOTES
[1] The language of subsection (b) is identical to that contained in its predecessor statute 28 U.S.C. § 1471, and all cases cited by the parties interpreted section 1471.
[2] i.e. Whether this court has the power to render a final decision on whether the injunction, an interlocutory order, should issue. Cf. In Re Lion Capital Group, 46 B.R. 850 (Bankr.S.D.N.Y. 1985), in which the court, after noting that an injunction "pendente lite" is interlocutory, held that an order "insofar as it would enjoin the defendants from proceeding with their district court actions against affiliates of the debtors . . . may, therefore, be entered without regard to whether the proceeding is core or non-core." 46 B.R. at 854.
[3] Carlson sets forth two additional arguments in favor of defining some state-created rights as congressional; first, bankruptcy adjudications, themselves, are matters of federal law, and second "state-created rights become in a sense federalized when adjudicated in bankruptcy proceedings integral to the restructuring of debtor-creditor rights," 9 NORTON BANKR.LAW ADVISOR at 4, citing Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966).
[4] Distinguishing at 3.
[5] Carlson's test may be prone to cyclic reasoning. The definition of "suit-in" appears to be broad enough to include "all civil proceedings under title 11, or arising in or related to cases under title 11," section 1334(b). This may result in all proceedings under the jurisdiction of the district courts pursuant to section 1334(b), being "tentatively" labelled core proceedings under the first step of Carlson's test. This would defeat Congress' purpose behind distinguishing between core and noncore proceedings in section 157.
[6] In Holes in the Matrix, supra, Lundin posits that through Congress' inadvertant wording of section 157, bankruptcy courts are not granted the power to make final decisions in cases which are both core proceedings and "related to" cases under chapter 11. While this analysis is engrossing, it is unpersuasive when applied to the instant facts.
[7] The Bankruptcy Amendments and Federal Judgeship Act of 1984 may have effectively nullified section 1481. If section 1481 is repealed, then section 105 is the sole authority for the issuance of injunctions by a bankruptcy court. 2 Collier on Bankruptcy ¶ 105.02, 105-3 (15th ed. 1985).
[8] In Brookfield Tennis the court found that the debtor had not demonstrated that irreparable harm would result if the FDIC were allowed to continue its suit against the debtor's officers and shareholders. The court reasoned that since the debtor's plan provided that if the officers were to pay the FDIC they would stand in the FDIC's shoes as a secured claimant, the debtor would be in a better position to win creditor approval for its plan if it could deal with its officers rather than an unrelated third party. Cf. Mahaffey, supra.
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NUMBER 13-13-00342-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
JENNIFER J. GARZA, M.D. AND
JENNIFER GARZA, M.D., P.A., Appellants,
v.
RAFAEL DELEON AND VANESSA
DELEON AS PARENTS AND NEXT
OF FRIEND OF E.D., A MINOR CHILD, Appellees.
On appeal from the County Court at Law No. 4
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Benavides and Longoria
Memorandum Opinion by Justice Longoria
This is an interlocutory appeal from an order denying appellant Jennifer Garza,
M.D.’s motion to dismiss under section 74.351(b) of the Texas Civil Practice and
Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(b) (West 2011);
§ 51.014(a)(9) (West 2008). We affirm.
I. BACKGROUND
Appellees 1 brought a healthcare liability claim against Dr. Garza in connection
with an elective circumcision that she performed on their four-year-old minor son, E.D.
E.D.’s pediatrician recommended that E.D. be circumcised because of the conditions of
phimosis (tight foreskin) and redundant foreskin. Appellees alleged that Dr. Garza
overused an electrocautery device during the circumcision and caused E.D. to develop
two holes (fistulas) on his penis that required reconstructive surgery.
Specifically, appellees alleged that Dr. Garza first told them that the circumcision
had been successful but that there had been a small amount of bleeding that she had
been able to stop. A nurse who came to change E.D.’s bandages in the recovery room
noticed that E.D. “still had a lot of bleeding” that did not appear to be stopping. Dr.
Garza returned E.D. to the operating room under anesthesia and found that there was
“general ooze” of blood from under the head of the penis but without a specific source.
Dr. Garza stated that she “gently used” an electrocautery device along with hemostatic
agents on the head of the penis to stop the bleeding. Appellees alleged that within two
to three days of being released from the hospital, E.D. was voiding urine through two
holes in his penis and that the “oozing bleeding” continued. Appellees took E.D. to the
emergency room for blood in his urine and for pain that they allege was so severe that
he was unable to sleep. Appellees were eventually referred to a pediatric urologist who
diagnosed the holes as “urethrocutaneous fistulas,” holes between the urethra and the
1
Appellees are Rafael and Vanessa DeLeon, acting as the parents and next friends of E.D., their
minor son. Both parties refer to E.D. by his initials, and we will do the same.
2
skin of the penis. After waiting approximately six months for healing and to permit the
scar tissue to soften, E.D. underwent reconstructive surgery that closed the holes
without any bleeding issues 2, but the surgeon also noted that E.D. might require further
surgeries if complications arose.
Appellees brought suit on behalf of E.D., alleging that Dr. Garza was negligent
for: (1) “failing to properly perform the circumcision”; (2) “causing excessive bleeding
during the circumcision procedure”; (3) “removing excessive tissue during the
circumcision procedure”; (4) “using excessive electrocautery during the second
procedure”; (5) “injuring E.D.’s glans, urethra and skin of his penis”; and (5) generally
“failing to provide proper care and treatment” to E.D. Appellees filed three separate
expert reports from Dr. James E. Moulsdale, M.D., a pediatric urologist from Maryland.
The trial court overruled Dr. Garza’s objections to the third expert report, and it issued
an order denying Dr. Garza’s motion to dismiss. This appeal followed. See id.
§ 51.014(a)(9) (allowing for an interlocutory appeal of the denial of a motion to dismiss
brought under section 74.351(b)).
II. DISCUSSION
By two issues, Dr. Garza argues that the trial court abused its discretion in
denying her motion to dismiss because the third expert report is not an objective good
faith effort to comply with the definition of an expert report in section 74.351(r)(6) of the
Texas Civil Practice and Remedies Code. See id. § 74.351(r)(6), (l).
2
Blood tests ruled out the possibility that E.D. had a blood disorder that would have prevented his
blood from clotting.
3
A. Standard of Review and Applicable Law
The Texas Medical Liability Act requires that a plaintiff in a suit against a
physician or health care provider must serve an expert report on the defendant or the
defendant’s attorneys within 120 days after the filing of the first petition. TEX. CIV. PRAC.
& REM. CODE ANN. § 74.351(a). If the defendant objects to the adequacy of the report
and files a motion to dismiss, the trial court should grant the motion “only if it appears to
the court, after hearing, that the report does not represent an objective good faith effort
to comply with the definition of an expert report in Subsection (r)(6).” Id. § 74.351(l),
(r)(6). We review a trial court’s decision on a motion to dismiss under section 74.351(b)
for abuse of discretion. Jernigan v. Langley, 195 S.W.3d 91, 93 (Tex. 2006).
In the context of a motion to dismiss under section 74.351(b), “[a] good faith
effort . . . simply means a report that does not contain a material deficiency.” Samlowski
v. Wooten, 332 S.W.3d 404, 409–10 (Tex. 2011). “A valid expert report . . . must
provide (1) a fair summary of the applicable standards of care; (2) the manner in which
the physician or health care provider failed to meet those standards; and (3) the causal
relationship between that failure and the harm alleged.” TTHR Ltd. P’ship v. Moreno,
401 S.W.3d 41, 44 (Tex. 2013) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(r)(6)).
A plaintiff is not required to present evidence in the report as if he was arguing the
merits, but it is not enough that the report merely state the expert’s conclusions about
the three elements. See Am. Transitional Care Ctrs. of Tex., Inc. v. Palacios, 46
S.W.3d 873, 878–79 (Tex. 2001). “Rather, the expert must explain the basis of his
statement to link his conclusions to the facts.” Bowie Mem’l Hosp. v. Wright, 79 S.W.3d
48, 52 (Tex. 2002) (citing Earle v. Ratliff, 998 S.W.2d 882, 890 (Tex. 1999)). The report
4
must contain information that is sufficient to fulfill two purposes: “[f]irst, the effort must
inform the defendant of the specific conduct the plaintiff has called into question.
Second, . . . the report must provide a basis for the trial court to conclude that the claims
have merit.” Palacios, 46 S.W.3d at 879. “Therefore, an expert report that includes all
the required elements, and that explains their connection to the defendant’s conduct in
a non-conclusory fashion, is a good faith effort.” Samlowski, 332 S.W.3d at 410
(citations omitted); see Otero v. Leon, 319 S.W.3d 195, 199 (Tex. App.—Corpus Christi
2010, pet. denied).
B. Standard of Care, and Departure Therefrom
By her first issue, Dr. Garza argues that all three reports are inadequate because
they do not include an adequate statement of the applicable standard of care and the
alleged departure from the standard of care. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 74.351(r)(6). We will primarily refer to the third report because it includes everything
in the first two reports and also provides a more thorough discussion of Dr. Moulsdale’s
opinions and the basis for them.
In his report, Dr. Moulsdale opined that “[t]he standard of care applicable to all
circumcisions is to perform the circumcision by removing an appropriate amount of
foreskin without excessive bleeding and without injury to the urethra or glans penis.”
Specifically,
the physician must avoid incising the urethra with a cutting agent, or with a
suture placed for hemostasis. In other words, fistulas may result from . . .
either accidental crushing of the urethra by the circumcision clamp, or
from a stitch placed in the underside of the penis to control excessive
bleeding at the site of the frenulum. Additionally, a fistula can be caused
by incising the urethra with the scalpel or electrocautery device.
5
Dr. Garza argues that the report is deficient because it does not explain “what
[she] was specifically required to do to avoid injury while removing foreskin,” does not
quantify “how much foreskin was appropriate to remove and how much was too much”
and does not discuss “what specifically [she] was required to do in exercising ‘great
care’ while using electrocautery so as not to damage the urethra or the glans.” Dr.
Garza argues that “[w]ithout this information, [she] is left to guess what specific action
she was required to take.”
Dr. Garza also argues that Dr. Moulsdale’s statement of the departure from the
standard of care is insufficient because it is conclusory. Dr. Moulsdale states in the
report that in his opinion:
Dr. Garza breached the standard of care here by using the electrocautery
device improperly and too aggressively. She removed too much skin,
burned [E.D.’s] penis by overcauterizing it, and she also created two
fistulas in his urethra. This in turn caused substantial bleeding and the
later complications that [E.D.] experienced and continues to experience
. . . . Urethral fistulas are not a normal or non-negligent result of
circumcision. Rather, in my experience and opinion, it is a breach of the
applicable standards of care to conduct the circumcision in such a way
that results in fistulas. It indicates that the physician failed to carefully
conduct the surgery, removing too much skin, cutting into the urethra or
crushing the urethra—or all three.
Dr. Garza argues that this statement is conclusory because it does not give her
notice of the claims against her by explaining how much skin should have been
removed and how much use of electrocautery is reasonable and how much is
excessive. Dr. Garza asserts that the report therefore is nothing but an extended
conclusory statement which “impermissibly concludes that a bad result equates to
negligence.” 3
3
Dr. Garza cites to section 74.303(e)(2) of the Texas Civil Practice and Remedies Code for the
proposition that “[a] finding of negligence may not be based solely on the evidence of a bad result to the
6
However, appellees do not need to present evidence in their expert report as if
they were fully litigating the merits. See Certified E.M.S., Inc. v. Potts, 392 S.W.3d 625,
631 (Tex. 2013) (observing that “the purpose of evaluating expert reports is to deter
frivolous claims, not to dispose of claims regardless of their merits”) (quotation marks
omitted); Scoresby v. Santillan, 346 S.W.3d 546, 554 (Tex. 2011); Palacios, 46 S.W.3d
at 878 (rejecting a summary judgment standard of review for reviewing motions to
dismiss under Chapter 74). The report must only contain a “fair summary” of the
standard of care and the alleged departure from it that is sufficient to inform Dr. Garza
of the conduct that appellees are calling into question and to provide a basis for the trial
court to conclude that the claims against Dr. Garza are meritorious. See Potts, 392
S.W.3d at 630; Palacios, 46 S.W.3d at 878. Having reviewed Dr. Moulsdale’s report in
its entirety, we conclude that the trial court was justified in finding that it discusses the
two elements of the standard of care and breach with sufficient specificity to fulfill the
dual purposes of the expert report requirement. The report states the actions Dr. Garza
was supposed to avoid doing when conducting the surgery: cutting into the urethra with
either a scalpel or an electrocautery tool, crushing the urethra with the circumcision
clamp, or puncturing the urethra with a suture, and that the injuries E.D. suffered were
the proximate result of Dr. Garza departing from the applicable standard of care by
doing at least one of those things. Dr. Moulsdale’s report therefore apprises Dr. Garza
of the conduct that is being called into question and provides enough information to
claimant.” See TEX. CIV. PRAC. & REM. CODE ANN. § 74.303(e)(2) (West 2011). However, section
74.303(e)(2) does not address expert reports; rather, it addresses the proper instructions that must be
given to juries trying the merits of a health care liability claim. See id. § 74.303(e) (“In any action on a
health care liability claim that is tried by a jury in any court in this State, the following shall be included in
the court’s written instructions to the jurors.”) (emphasis added).
7
provide a basis for the trial court to conclude that the claims are meritorious. See Potts,
392 S.W.3d at 630; Palacios, 46 S.W.3d at 879; see also Benson v. Vernon, 303
S.W.3d 755, 758, 760 (Tex. App.—Waco 2009, no pet.) (rejecting a similar attack on an
expert report in a case where the plaintiff suffered complications during a breast
augmentation procedure and where the expert report opined that the standard of care
required the surgeon to, among other things, cut only in the “normal dissection plane”
without “entering” a specific cavity in the breast, but without specifying in the report “how
the appropriate depth and dissection plane are determined”).
We overrule Dr. Garza’s first issue.
C. Causation
By her second issue, Dr. Garza argues that the report was insufficient because it
did not include any opinion on whether E.D.’s injuries were foreseeable. Dr. Garza
asserts that foreseeability is an element of the causation analysis that is required by
section 74.351. See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351(r)(6). In the past, this
Court has agreed with the Dallas Court of Appeals in concluding that there is no
authority that “an expert report must opine on whether the specific injuries sustained by
the claimant could have been foreseen by the healthcare defendants.” Rio Grande
Reg. Hosp. v. Ayala, No. 13-11-00686-CV, 2012 WL 3637368, at *15 (Tex. App.—
Corpus Christi Aug. 24, 2012, pet. denied) (mem. op.) (citing Adeyemi v. Guerrero, 329
S.W.3d 241, 246 (Tex. App.—Dallas 2010, no pet.)); see Valley Reg’l. Med. Ctr. v.
Gonzalez, No. 13-12-00572-CV, 2013 WL 2298470, at *3 (Tex. App.—Corpus Christi
May 23, 2013, no pet.) (mem. op.) (declining to revisit our holding in Ayala). Dr. Garza
requests overruling these precedents because “the causal relationship in a health care
8
liability claim consists of both cause-in-fact and foreseeability.” All of the cases cited by
Dr. Garza do not discuss the expert report requirement, but refer to elements that must
be found by the factfinder to support a verdict in a healthcare liability claim. 4 Dr. Garza
makes essentially the same argument that we rejected recently in Gonzalez but gives
this Court no reason to revisit our holding in that case. See Gonzalez, 2013 WL
2298470, at *3 (declining to revisit our holding in Ayala). Accordingly, we overrule Dr.
Garza’s second issue. See Adeymei, 329 S.W.3d at 246; Gonzalez, 2013 WL 2298470,
at *3; Ayala, 2012 WL 3637368, at *15.
We overrule Dr. Garza’s second issue.
III. MOTION FOR SANCTIONS
Appellees filed a separate motion in which they request that this Court sanction
Dr. Garza under Rule 45 for bringing a frivolous appeal. See TEX. R. APP. P. 45.
A. Applicable Law
“Under Rule 45, we may award a prevailing party just damages if we objectively
determine that an appeal is frivolous after considering the record, briefs or other papers
filed in this Court.” Lookshin v. Feldman, 127 S.W.3d 100, 106 (Tex. App.—Houston
[1st Dist.] 2003, pet. denied) (citing TEX. R. APP. P. 45). “To determine if an appeal is
frivolous, we review the record from the viewpoint of the advocate and decide whether
there were reasonable grounds to believe the case could be reversed.” London v.
London, 349 S.W.3d 672, 676 (Tex. App.—Houston [14th Dist.] 2011, no pet.). The
decision whether to grant sanctions is committed to this Court’s discretion, a power that
4
Both cases cited by Dr. Garza were decided in the context of a challenge to a jury verdict in a
health care liability case. See Columbia Rio Grande Healthcare, L.P., v. Hawley, 284 S.W.3d 851, 860
(Tex. 2009); Grider v. Mike O’Brien, P.C., 260 S.W.3d 49, 57 (Tex. App.—Houston [1st Dist.] 2008, pet.
denied).
9
we exercise “with prudence and caution and only after careful deliberation in truly
egregious circumstances.” Methodist Hosp. v. Shepherd-Sherman, 296 S.W.3d 193,
200 (Tex. App.—Houston [14th Dist.] 2009, no pet.). “If an appellant’s argument on
appeal fails to convince us but has a reasonable basis in law and constitutes an
informed . . . challenge to the trial court’s judgment, sanctions are not appropriate.” Id.
B. Analysis
Appellees argue that this appeal is frivolous because: (1) the report plainly
contains an adequate statement of the three statutory elements, and there is even a
case, Baylor College of Medicine v. Pokluda, 283 S.W.3d 110 (Tex. App.—Houston
[14th Dist.] 2009, no pet.), upholding the sufficiency of an expert report against similar
attacks; and (2) Dr. Garza argued to this Court about whether appellees’ expert was
required to address whether E.D.’s injuries were foreseeable, even though this Court
has already twice rejected a similar argument.
While we were not persuaded by Dr. Garza’s arguments regarding the adequacy
of the expert report in this case, after a thorough review of the record we conclude that
Dr. Garza had a reasonable basis in law to challenge the trial court’s ruling. Even if
Pokluda was directly on point, as a decision of one of our sister courts it is not binding
authority that appellant could reasonably try to persuade us that we should not follow.
See Thomas v. Cook, 350 S.W.3d 382, 395 n.2 (Tex. App.—Houston [14th Dist.] 2011,
pet. denied) (observing that cases from other appellate courts “are persuasive but not
binding on other intermediate appellate courts of this state”). Regarding Dr. Garza’s
request that we overrule our precedent in Ayala and Gonzalez, although we reject the
request, we note that it is not necessarily frivolous for an appellant to ask this Court to
10
revisit our past precedent. See Kingston v. Helm, 82 S.W.3d 755, 760 (Tex. App.—
Corpus Christi 2002, pet. denied) (reasoning that “although consideration of stare
decisis normally counsel against overruling an opinion of this court after such a short
time, a clearly erroneous decision should be corrected”) (internal citations omitted). We
will impose sanctions in only the most egregious cases, Methodist Hosp., 296 S.W.3d at
200, and we conclude that these are not such circumstances. We deny appellees’
motion for sanctions under Rule 45.
IV. CONCLUSION
We affirm the order of the trial court.
___________________
NORA L. LONGORIA
Justice
Delivered and filed the
19th day of December, 2013.
11
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774 A.2d 1107 (2001)
Bari MUHAMMAD, Petitioner,
v.
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent, and
Verizon Communications, formerly d/b/a/ Bell Atlantic, Washington, D.C., Inc., Intervenor.
No. 00-AA-336.
District of Columbia Court of Appeals.
Argued June 7, 2001.
Decided June 28, 2001.
*1108 Bari Muhammad, pro se.
Robert R. Rigsby, Corporation Counsel, and Charles L. Reischel, Deputy Corporation Counsel, filed a statement in lieu of brief for respondent, District of Columbia Department of Employment Services.
Donald P. Maiberger, Rockville, MD, for intervenor, Verizon Communications.
Before SCHWELB and REID, Associate Judges, and MACK, Senior Judge.
SCHWELB, Associate Judge:
Bari Muhammad has asked this court to review a decision by the Director of the District of Columbia Department of Employment Services (DOES or the agency) denying him a "schedule award"[1] for a *1109 25% permanent disability of the "right upper extremity"[2] pursuant to D.C.Code § 36-308(3) (1997). Mr. Muhammad contends that the Director erroneously affirmed a compensation order previously issued by a DOES hearing examiner. We agree with Mr. Muhammad that certain findings by the hearing examiner that led to the denial of the schedule award were not supported by substantial evidence on the record as a whole. Accordingly, we vacate the agency's decision to the extent that it denies Mr. Muhammad a schedule award, and we remand the case to the agency for further proceedings.
I.
FACTUAL AND PROCEDURAL BACKGROUND
Mr. Muhammad has been employed by Verizon Communications and its predecessors, Bell Atlantic and C & P Telephone Company, since 1982. After having served as a security guard for a short period, Mr. Muhammad worked as a telephone service technician from 1982 until 1992. While employed in that capacity, he sustained two job-related injuries to his lower back, one in 1989 and one in 1990. As a result of these injuries, Mr. Muhammad was placed on permanent medical restrictions that made it impossible for him to continue to work as a service technician.[3] In 1992, he was reassigned to a position as a computer/keyboard operator. In that capacity, Mr. Muhammad spends a large portion of his workday responding, through the use of a computer keyboard and mouse, to telephonic complaints from customers.
In the early 1990s, Mr. Muhammad began experiencing problems in both hands, including stiffness, numbness, tingling, reduced coordination, and dull, shooting pain. He did not seek treatment for this condition until April 1996, when his condition deteriorated, especially in his right hand. On April 12, 1996, Mr. Muhammad was diagnosed with bilateral carpal tunnel syndrome. Later in the same month, he informed his immediate supervisor of this diagnosis, and he explained its impact on his ability to perform his job. On May 28, 1996, Mr. Muhammad filed an Employee's Claim Application pursuant to the District of Columbia Workers' Compensation Act of 1979, D.C.Code §§ 36-301 et seq. (1997 & Supp.2000), and he provided written notice to his employer on July 26 of the same *1110 year.[4]
On December 12, 1996, following consultations with various doctors, both through his medical care providers at Kaiser Permanente and as requested by Verizon in connection with his compensation claim, Mr. Muhammad underwent carpal tunnel surgery on his right hand. He was released to return to work on January 20, 1997, although he continued thereafter to receive physical therapy. However, even following the surgery and physical therapy, Mr. Muhammad continued to experience problems and pain in his right hand. At the time of the hearing, on February 23, 1999, Mr. Muhammad was taking Motrin and using a wrist brace to control the symptoms on an as-needed basis. From time to time, he had to stop working, and he sometimes missed work altogether.
At the February 23, 1999 hearing, Mr. Muhammad requested temporary total disability benefits from December 11, 1996 through January 23, 1997; wage loss benefits for approximately ten days intermittently between July and September 1998; a schedule award for a 25% permanent disability of the "right upper extremity" pursuant to D.C.Code § 36-308(3); and related medical costs. See also note 3, supra. In her compensation order, which was issued on June 30, 1999, the hearing examiner granted the requested relief in part. She awarded Mr. Muhammad temporary total disability benefits and intermittent wage loss benefits, offset against any wage loss benefits that Verizon had previously paid to Mr. Muhammad for the periods in question. The examiner also ordered Verizon to pay the related medical costs. The hearing examiner found, however, that Mr. Muhammad had not carried his burden of proving a "rateable impairment"[5] of his right hand and arm. Consequently, she denied Mr. Muhammad's request for a schedule award.[6]
*1111 Mr. Muhammad filed an internal appeal to the Director in connection with the hearing examiner's ruling that he had not sustained a rateable impairment and was not entitled to a schedule award. On February 29, 2000, in a brief written opinion, the Director affirmed the compensation order. Mr. Muhammad now asks this court to review the Director's decision.
II.
STANDARD OF REVIEW
Mr. Muhammad contends that the findings by the hearing examiner presently at issue were not supported by substantial evidence, and that the Director erred in adopting them.[7] We have held that the "Director is limited to substantial evidence review of a hearing examiner's decision." WMATA, supra note 5, 683 A.2d at 476. Substantial evidence review "presents an issue of law which this court is in a position to address without need for deference to the agency's decision." Id. (internal alteration, quotation marks, and citation omitted).
To meet the substantial evidence standard,
(1) the [hearing examiner's underlying] decision must state findings of fact on each material, contested factual issue;
(2) those findings must be based on substantial evidence; and
(3) the conclusions of law must follow rationally from the findings.
Stewart v. District of Columbia Dep't of Employment Servs., 606 A.2d 1350, 1351 (D.C.1992) (citation omitted). "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. (quotation marks and citations omitted). However, in making her factual findings, the "trier of fact" in this case, the hearing examiner "is entitled to draw reasonable inferences from the evidence presented." Dell v. District of Columbia Dep't of Employment Servs., 499 A.2d 102, 108 (D.C.1985).
III.
SUBSTANTIAL EVIDENCE REVIEW
The gravamen of Mr. Muhammad's argument to this court is that the hearing examiner's finding of no rateable impairment, and her resulting denial of the schedule award, were unsupported by substantial evidence. In reaching her conclusion, the hearing examiner "relied upon the findings, diagnosis[,] and conclusions in the medical reports of [Mr. Muhammad's] treating physicians at Kaiser Permanente." The examiner "rejected the opinion of William Launder, M.D., an orthopedic specialist who examined [Mr. Muhammad]... at the request of [Mr. Muhammad's] counsel," and who found that Mr. Muhammad suffered a 25% permanent disability to this right hand and arm.[8] The hearing examiner declined to adopt Dr. Launder's views because the doctor *1112 had based "his opinion regarding the percentage of permanent impairment largely upon [Mr. Muhammad's] reduced grip strength in his right hand." The examiner found the "reduced grip strength" analysis unconvincing because "the Kaiser physical therapy reports reflect [Mr. Muhammad's] lack of concern about grip weakness in April of 1997" and because Mr. Muhammad "also testified [that] he works out weekly at a gym, doing ten to fifteen pushups at a session."
As an initial matter, we discern no substantial evidence supporting the hearing examiner's implicit finding that Mr. Muhammad's grip weakness did not contribute to any part of his permanent disability. The hearing examiner did not find nor could she have found, see infra that Mr. Muhammad did not suffer from grip weakness. Rather, she based her decision on her impression that "the Kaiser physical therapy reports reflect [Mr. Muhammad's] lack of concern about grip weakness in April of 1997."
It is true that, in April 1997, Mr. Muhammad was less concerned about grip weakness than about the pain he continued to experience in his right hand. His greater concern with the pain that he was suffering did not, however, take the issue of grip weakness out of the case. The fact that pain caused even more distress than loss of strength is not "such relevant evidence as a reasonable mind might accept as adequate to support [the hearing examiner's] conclusion" that grip weakness could not form the basis for any permanent partial disability suffered by Mr. Muhammad. Stewart, supra, 606 A.2d at 1351. Although the April 1997 Kaiser Permanente report reveals that Mr. Muhammad understandably wanted to have his pain treated first, the same report identifies the achievement of increased strength in the patient's right grip as a goal of the continuing physical therapy. This report thus demonstrates that, at that very time, grip weakness problems were an ongoing medical concern. The Kaiser Permanente report is therefore consistent with, rather than contradictory to, Dr. Launder's finding that Mr. Muhammad suffered a significant permanent partial impairment as a result of continued grip weakness in his right hand.
Under these circumstances, we conclude that the hearing examiner's determination that Mr. Muhammad did not suffer a rateable impairment based on grip weakness is not supported by substantial evidence on the record as a whole. The hearing examiner also based her partial denial of Mr. Muhammad's claim on his testimony that "he works out weekly at a gym, doing ten to fifteen push-ups at a session." The evidence regarding pushups, however, likewise fails to provide the requisite support for the hearing examiner's findings. Even if we were to assume that the ability to do push-ups negates the existence of grip weakness and the record contains no substantiation of this not-at-all obvious proposition Mr. Muhammad testified that although he exercises when he is feeling well enough, he does not go to the gym when he experiences substantial pain in his right hand. The compensation order contains no explanation of the examiner's apparent assumption that Mr. Muhammad's ability to do push-ups on days when his hand is not hurting is irreconcilable with the presence of a rateable impairment. We therefore conclude that the Director erred in affirming that aspect of the compensation order.[9]
*1113 Even if Mr. Muhammad's grip weakness did not warrant a schedule award and, as explained in the preceding discussion, we do not believe that the finding to that effect is supported by substantial evidence there remains the question whether Mr. Muhammad's other symptoms, including the pain, tingling, reduced coordination, and general dysfunction of his right hand and arm, constitute a partial permanent disability entitling him to such an award. In Murrell v. District of Columbia Dep't of Employment Servs., 697 A.2d 40, 42 & n. 3 (D.C.1997), we declined to decide whether pain alone could support a schedule award, but we did not exclude such a possibility. Dr. Launder found Mr. Muhammad's loss of grip strength to constitute a 15% disability, but he also specifically stated that Mr. Muhammad suffered from a "5% impairment of the hand" due to "loss of [finger] motion" and that Mr. Muhammad's "pain, dysfunction, and loss of endurance" constituted another 5% permanent disability. Thus, quite apart from the weakness in Mr. Muhammad's grip, there was evidence that Mr. Muhammad suffered from an additional 10% permanent impairment.
In her compensation order, the hearing examiner did not address the relevance of these additional symptoms, nor did she determine whether Mr. Muhammad has suffered a rateable impairment through them. The hearing examiner concluded that Mr. Muhammad had suffered "no rateable impairment of the right upper extremity," but she did not focus her inquiry on whether he had suffered an impairment, but a lesser one than he had argued for. (Emphasis added.) The hearing examiner's failure to address the other symptoms is particularly significant because the Kaiser Permanente reports on which she relied, and particularly the April 30, 1997 report emphasized in her order, are replete with documentation of Mr. Muhammad's complaints about the pain, numbness, reduced coordination, and general dysfunction in his right hand.[10] Mr. Muhammad testified to the same effect. In our view, the evidence on which the hearing examiner professed to rely in reaching her conclusion on the rateable impairment issue supports, rather than contradicts, Dr. Launder's report with respect to Mr. Muhammad's symptoms.
In sum, the hearing examiner also failed to address Mr. Muhammad's claim that he suffered from conditions, other than the loss of grip strength, that entitled him to a schedule award based on a rateable impairment. The record therefore compels us to conclude that the hearing examiner's order did not "state findings of fact on each material, contested factual issue," Stewart, supra, 606 A.2d at 1351, by failing to address Mr. Muhammad's other symptoms, such as pain, dysfunction, and loss of mobility, as a possible basis for a schedule *1114 award. For that reason, as well, the challenged portions of the compensation order are not supported by substantial evidence.
IV.
CONCLUSION
For the foregoing reasons, we conclude that the Director erred in affirming the hearing examiner's order, in which the examiner found that Mr. Muhammad did not suffer from a rateable impairment, and in which the examiner denied Mr. Muhammad's request for a schedule award. We therefore vacate the agency's decision and remand the case for further proceedings consistent with this opinion.
So ordered.
NOTES
[1] A "schedule award" pursuant to D.C.Code § 36-308(3) (1997) is an award designed to compensate an employee who has suffered a permanent partial disability, that is, a disability that does not result in the loss of two hands, arms, feet, legs, or eyes and that does not prevent the employee from "earn[ing] any wages in the same or other employment." D.C.Code § 36-308(1) & (3). The statute enumerates a list of injuries, e.g., the loss of an arm or a hand, id. § 36-308(3)(A) & (C), and specifies the amount of disability compensation (i.e., the "schedule award") to which an employee suffering from that partial disability is entitled. Thus, the loss of an arm entitles the employee to an award of "662/3 % of the employee's average weekly wages" multiplied by "312 weeks' compensation"; the loss of a hand results in an award of 662/3 % of those wages multiplied by "244 weeks' compensation." Id.; see also Harris v. District of Columbia Dep't of Employment Servs., 746 A.2d 297, 300 (D.C.2000) (explaining award mechanism).
[2] This rather ponderous term appears to have been used during the administrative proceeding to describe Mr. Muhammad's hand, wrist and arm.
[3] On March 19, 1999, as a result of the injuries to his back, Mr. Muhammad was awarded continuing permanent partial disability wage loss benefits for a period beginning on September 22, 1993. He received this award in a second proceeding independent from the one presently under review. The proceeding relating to the back injuries is relevant to the present case only insofar as the hearing examiner here ordered that the temporary total disability benefits that she awarded Mr. Muhammad in this case were to be offset against any wage loss benefits that the employer had already paid him for the same time periods. The Director affirmed this decision, and Mr. Muhammad has not asked us to review this aspect of the affirmed order.
[4] The hearing examiner concluded that Mr. Muhammad "knew, or should have known, [when he was diagnosed with carpal tunnel syndrome on April 12, 1996 that] his right hand symptoms were related to his work duties of typing information using a computer keyboard." Mr. Muhammad did not provide written notice of his injury to Verizon until more than three months after this diagnosis, thereby failing to comply with the notice requirements of D.C.Code § 36-313 (1997). That section requires that the claimant provide the employer and the Mayor with written notice of an employment-related injury within "30 days after the employee ... is aware or... should have been aware of a relationship between the injury ... and the employment." Id. § 36-313(a) & (b). The hearing examiner found, however, that Verizon acquired actual knowledge of Mr. Muhammad's injury and of its relation to his employment in late April 1996, when Mr. Muhammad informed his immediate supervisor of the relevant facts. Because Verizon had actual knowledge, it was not prejudiced by Mr. Muhammad's failure to give timely written notice. D.C.Code § 36-313(d)(1). Verizon has not challenged the agency's resolution of this issue.
[5] A "rateable impairment" results where an employee suffers a partial disability, see supra note 1, not in the form of a lost "member" (i.e., a limb, an eye, or other essential body part), but in the form of some permanent "partial ... loss of use of a member." D.C.Code § 36-308(3)(S). An employee suffering from such a partial loss is entitled to "[c]ompensation ... for proportionate ... loss of use of the member." Id. Thus, if Mr. Muhammad had been awarded a 20% rateable impairment of his "right upper extremity," as he requested, he would have received a schedule award equal to 20% of the award for total loss of that member. Id. § 36-308(3); see also Washington Metro. Area Transit Auth. (WMATA) v. District of Columbia Dep't of Employment Servs., 683 A.2d 470, 473 & n. 2 (D.C.1996).
[6] The hearing examiner also found that Mr. Muhammad did, in fact, suffer from carpal tunnel syndrome, that Verizon had introduced insufficient evidence to rebut the statutory presumption that this condition arose out of Mr. Muhammad's employment, D.C.Code § 36-321(1) (1997), and that Mr. Muhammad had provided Verizon with timely notice of the injury, see supra note 4. None of these findings has been challenged either before the agency or in this court.
[7] In his pro se brief, Mr. Muhammad consistently refers to and challenges the hearing examiner's order, without focusing on the Director's affirmance of that order. Because "it is the Director's final decision, not the examiner's, which may be reviewed in this court," however, we treat Mr. Muhammad's argument as applying to the Director's affirmance of the hearing examiner's order. WMATA, supra note 5, 683 A.2d at 472 (internal quotation marks and citation omitted).
[8] The hearing examiner was also unpersuaded by a medical evaluation prepared by a physician selected by Verizon, who insisted that Mr. Muhammad had never suffered from carpal tunnel syndrome.
[9] In addition, the Director apparently concluded that the hearing examiner was faced with "competing expert medical opinions" in reaching her conclusion concerning the schedule award. As we have demonstrated in the preceding discussion, the record does not bear this out.
[10] The April 30, 1997 report notes that Mr. Muhammad "is concerned about the pain he has in his [right] hand" and that that pain causes him problems with typing and with moving the "mouse." A November 30, 1998 report by a Kaiser Permanente physician notes that Mr. Muhammad suffered pain in his right hand and that he had endured "numbness and pain in his hands for five years," with the symptoms having recurred following the carpal tunnel release surgery. At the hearing, Mr. Muhammad testified that he continued to experience pain and stiffness in his hand. His symptoms sometimes caused him to have to stop typing, and they caused him to work more slowly than the three-minute-per-call standard set for Verizon customer service representatives. Indeed, he testified that on several occasions, his condition compelled him to take consecutive days off from work.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-1743
LONNIE GARNER,
Plaintiff – Appellee,
v.
MICHAEL J. ASTRUE, Commissioner of Social Security,
Defendant – Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Terrence W. Boyle,
District Judge. (5:08-cv-00304-BO)
Submitted: April 11, 2011 Decided: June 21, 2011
Before MOTZ and KING, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Reversed by unpublished per curiam opinion.
Tony West, Assistant Attorney General, George E. B. Holding,
United States Attorney, Thomas M. Bondy, Ian J. Samuel,
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Diane
S. Griffin, CHARLES HALL LAW FIRM, Raleigh, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
The Commissioner of the Social Security Administration
appeals the district court’s order remanding to the agency
Lonnie Garner’s application for disability insurance benefits
and supplemental security income benefits for additional
intelligence testing. The Commissioner argues that the district
court improperly shifted the burden of proof. The Commissioner
asserts that his decision is supported by substantial evidence
and that Garner is not entitled to additional intelligence
testing where the physician administering the initial test
concluded Garner minimized his performance. We agree.
The district court granted Garner’s motion for
judgment on the pleadings. Fed. R. Civ. P. 12(c). Pursuant to
the Federal Rules of Civil Procedure, a district court should
treat a motion for judgment on the pleadings as a motion for
summary judgment where “matters outside the pleadings are
presented to and not excluded by the court.” Fed. R. Civ. P.
12(d). Because the district court considered the administrative
record, we review the district court’s order as the grant of
summary judgment, and therefore renew it de novo, using the same
standards of review applied by the district court. See Nader v.
Blair, 549 F.3d 953, 958 (4th Cir. 2008). We review the
Commissioner’s disability determination under the highly
deferential substantial evidence standard. See 42 U.S.C.
2
§ 405(g) (2006); Johnson v. Barnhart, 434 F.3d 650, 653
(4th Cir. 2005) (per curiam). Substantial evidence is “such
relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.” Johnson, 434 F.3d at 653 (internal
quotation marks omitted). This court does not reweigh evidence
or make credibility determinations in evaluating whether a
decision is supported by substantial evidence; “[w]here
conflicting evidence allows reasonable minds to differ,” we
defer to the Commissioner’s decision. Id.
Garner bears the burden of proving that he is disabled
within the meaning of the Social Security Act. 42 U.S.C.
§ 423(d)(5) (2006); English v. Shalala, 10 F.3d 1080, 1082
(4th Cir. 1993). The Commissioner uses a five-step process to
evaluate a disability claim. See 20 C.F.R. §§ 404.1520(a)(4),
416.920(a)(4) (2010). The claimant bears the burden of proof at
steps one through four, but the burden shifts to the
Commissioner at step five. See Bowen v. Yuckert, 482 U.S. 137,
146 n.5 (1987). If a decision regarding disability can be made
at any step of the process, however, the inquiry ceases. See 20
C.F.R. §§ 404.1520(a)(4), 416.920(a)(4).
Here, we conclude that Garner has failed to meet his
burden and that the Commissioner’s finding that Garner is not
disabled is supported by substantial evidence. At step two, the
administrative law judge (“ALJ”) determined that Garner had a
3
combination of impairments that qualify as severe. * However, at
step three, where Garner retains the burden of proof, the ALJ
found that Garner’s impairments did not meet or medically equal
any of the listed impairments in 20 C.F.R. Part 404, Subpart P,
app. 1. Because Garner minimized his performance on the IQ
test, thereby invalidating the result, the only evidence he
presented arguably establishing any mental impairment consisted
of, first, school records from the ninth grade reporting scores
on a national aptitude test placing him in the upper borderline
to lower average range of intelligence, and second, a mental
residual functional capacity assessment finding Garner “not
significantly limited” in a majority of the twenty categories
assessed, and no more than “moderately limited” in any category.
Garner is not entitled to additional tests because he chose to
invalidate the results of the initial evaluation. See Lax v.
Astrue, 489 F.3d 1080, 1086-89 (10th Cir. 2007); Longworth v.
Comm’r of Soc. Sec. Admin., 402 F.3d 591, 597-98
(6th Cir. 2005); Johnson v. Barnhart, 390 F.3d 1067, 1070-71
*
Although the ALJ failed to list these impairments at step
two, the analysis at step three makes it clear that the ALJ
found Garner’s severe impairments included status-post gunshot
wound, status-post S1-S2 laminectomy, mild radiculopathy, and
post-traumatic stress disorder. Accordingly, Garner has failed
to show that he was harmed by the ALJ’s drafting error. See
Shinseki v. Sanders, 129 S. Ct. 1696, 1706 (2009) (stating party
attacking agency determination bears the burden of showing that
an error was harmful).
4
(8th Cir. 2004); Markle v. Barnhart, 324 F.3d 182, 184-86
(3d Cir. 2003).
Accordingly, we reverse the district court’s remand
order and uphold the Commissioner’s disability determination.
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.
REVERSED
5
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890 A.2d 630 (2006)
93 Conn.App. 844
STATE of Connecticut
v.
Kenneth WILLIAMS.
No. 25075.
Appellate Court of Connecticut.
Argued November 14, 2005.
Decided February 21, 2006.
*631 Joaquina Borges King, special public defender, for the appellant (defendant).
Elizabeth M. Moseley, special deputy assistant state's attorney, with whom, on the brief, were Michael Dearington, state's attorney, and Marc G. Ramia, deputy assistant state's attorney, for the appellee (state).
SCHALLER, McLACHLAN and WEST, Js.
SCHALLER, J.
The defendant, Kenneth Williams, appeals from the judgment of conviction, rendered after a jury trial, of robbery in the second degree in violation of General Statutes § 53a-135. On appeal, the defendant claims that the trial court improperly denied (1) his motion for a mistrial, which was made on the basis of the state's late disclosure of witnesses and police reports, and (2) his motion for a judgment of acquittal *632 that alleged insufficient evidence. We affirm the judgment of the trial court.
The jury reasonably could have found the following facts. On June 25, 2002, Andrew Waller was working alone as an attendant at the Hess gasoline station at 1159 Whalley Avenue in New Haven. Waller, who was working the 11 p.m. to 7 a.m. shift, was stationed in a small, enclosed kiosk, which consisted of a large glass window and sliding metal drawer in the front, and a single door in the rear.[1] At approximately 5 a.m., the defendant approached the front of the kiosk and, claiming that his car had overheated, asked Waller for assistance. Waller directed the defendant to a water faucet at the rear of the kiosk. The defendant then requested a container to hold the water, at which point Waller instructed the defendant to go to the door of the kiosk, where Waller would give him a water jug.
As Waller unlocked the door, the defendant and another man began to force their way inside the kiosk. Despite Waller's attempts to keep the door shut, the men eventually gained entry. The defendant was the first to enter and proceeded directly to the front of the kiosk where he removed "less than $100" from the cash drawer. Meanwhile, the other man, later identified as Donald Payne, physically struggled with Waller.
After emptying the cash drawer, the defendant walked toward the door. That required him to move between Payne and Waller. As the defendant maneuvered through that narrow space, he grabbed Waller and began to grapple with him. Payne then moved to the front of the kiosk and removed two cases of Newport cigarettes.
Thereafter, the defendant and Payne exited the kiosk, and Payne placed the cigarettes into a vehicle. Prior to leaving, the defendant turned to Waller and, while gesturing to his waist,[2] instructed Waller not to call the police. As the two men fled the scene, Waller observed their vehicle, which was a gray-silver four door car, and recorded its license plate number. He then immediately called 911.
On the basis of the information provided by Waller, the police were able to trace the car to its owner, Larry Nelson. Nelson informed the police that he and several other individuals had spent the evening of June 24, 2002, at the defendant's residence[3] and that during that evening, the defendant had asked to borrow Nelson's car. Nelson permitted the defendant to borrow the car, and the defendant left the residence for approximately fifteen minutes. When the defendant returned, Nelson observed him remove Newport cigarettes from the backseat of the automobile.
On June 17, 2002, the defendant was arrested and charged with robbery in the second degree in violation of § 53a-135(a)(1). At trial, the state introduced into evidence a video surveillance tape of the crime, as well as the testimony of Waller and several police witnesses. On September 15, 2003, the defendant was convicted on the robbery charge and pleaded guilty to being a persistent serious felony offender pursuant to General Statutes § 53a-40(c). The court rendered judgment in accordance with the verdict, and on November 26, 2003, sentenced the *633 defendant to a term of ten years incarceration. This appeal followed.
I
The defendant first claims that the court improperly denied his motion for a mistrial. Specifically, the defendant argues that he was prejudiced by the state's late disclosure of exculpatory material. He asserts that his trial counsel was unable to prepare an adequate defense and that the late disclosure affected his trial strategy. We disagree.
The following additional facts are necessary for the resolution of the defendant's claim. On the first day of trial, defense counsel notified the court that the state had failed to disclose in a timely manner certain police reports[4] as well as a formal witness list. In response, the court held a conference prior to the start of evidence. At that conference, the state provided the court with the police reports as well as a copy of a witness list, which included the names of three police officers who were added after the conclusion of jury selection. The court reviewed the documents and, thereafter, delayed the start of evidence by one to two hours to allow defense counsel the opportunity to review the reports and the witness list. After reviewing the documents, the defendant moved for a mistrial, arguing that the disclosure was not made "at a time sufficiently prior to trial to enable counsel to research and investigate."
The court, however, disagreed and found that the defendant had failed to demonstrate that the state's late disclosure created any prejudice.[5] The court reasoned that because it had presided over the earlier trial of Payne, it was familiar with the facts of the robbery and did not think that the reports contained anything that would cause surprise or require a delay of the trial. The court explained that "the reason I gave you one hour to review those documents is because I concluded, having reviewed them myself, that you didn't need more than an hour, and because they are not voluminous documents and I haven't. . . heard you remark to the court that [the defendant] has been substantially prejudiced by the late disclosure."[6] Accordingly, the court denied the defendant's motion for a mistrial.
"While the remedy of a mistrial is permitted under the rules of practice, it is not favored. [A] mistrial should be granted only as a result of some occurrence upon the trial of such a character that it is apparent to the court that because *634 of it a party cannot have a fair trial. . . and the whole proceedings are vitiated.... If curative action can obviate the prejudice, the drastic remedy of a mistrial should be avoided. ... On appeal, we hesitate to disturb a decision not to declare a mistrial. The trial judge is the arbiter of the many circumstances which may arise during the trial in which his function is to assure a fair and just outcome. . . . The trial court is better positioned than we are to evaluate in the first instance whether a certain occurrence is prejudicial to the defendant and, if so, what remedy is necessary to cure that prejudice. . . . The decision whether to grant a mistrial is within the sound discretion of the trial court. . . . Put another way, [o]n appeal, the defendant bears the burden of establishing that there was irreparable prejudice to the defendant's case such that it denied him a fair trial." (Citations omitted; internal quotation marks omitted.) State v. Coltherst, 87 Conn.App. 93, 99, 864 A.2d 869, cert. denied, 273 Conn. 919, 871 A.2d 371 (2005).
In essence, the defendant claims on appeal that the state's late disclosure of exculpatory material prevented him from adequately researching, investigating and preparing a defense. "In [Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963)], the United States Supreme Court held that the suppression by the prosecution of evidence favorable to an accused . . . violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution. To establish a Brady violation, the defendant must show that (1) the government suppressed evidence, (2) the suppressed evidence was favorable to the defendant, and (3) it was material [either to guilt or to punishment]. . . .
"It is well established that [e]vidence known to the defendant or his counsel, or that is disclosed, even if during trial, is not considered suppressed as that term is used in Brady. . . . Furthermore, we have stated: Brady does not mandate pretrial disclosure in all cases. . . . Where there has been an initial disclosure of exculpatory evidence at trial, the appropriate standard to be applied is whether the disclosure came so late as to prevent the defendant from receiving a fair trial. . . . The defendant bears the burden of proving that he was prejudiced by the failure of the state to make the disclosure earlier." (Citations omitted; internal quotation marks omitted.) State v. Thompson, 81 Conn.App. 264, 277-78, 839 A.2d 622, cert. denied, 268 Conn. 915, 847 A.2d 312 (2004).
In the present case, the police reports and the witness list were disclosed prior to the start of evidence. It is clear, therefore, that the documents were not suppressed, as the term is used in Brady. Consequently, the question becomes whether the disclosure came so late that it prevented the defendant from receiving a fair trial. Here, in an effort to ensure a fair trial, the court provided defense counsel one to two hours to review the limited materials and adequately addressed the late disclosure of the witness list by inquiring of the jurors whether any of them knew the three additional witnesses. "There is no denial of due process if the disclosed material can be utilized effectively at trial, and the defendant bears the burden of proving that he was prejudiced by the late disclosure." Id., at 279, 839 A.2d 622. In support of his claim, the defendant argues that he "would have utilized" the substance of the police reports in cross-examining certain witnesses if the reports had been disclosed earlier. That argument ignores the reality that defense counsel made no use of the disclosed information *635 at trial, despite having reviewed it, and that defense counsel did not request a continuance to allow for further review. See State v. Sinchak, 47 Conn.App. 134, 142, 703 A.2d 790 (1997) ("if the defendant wanted to use the statements to impeach the state's witnesses, he could have moved to recall the witnesses or requested a continuance to conduct further investigation and preparation"), appeal dismissed, 247 Conn. 440, 721 A.2d 1193 (1999).
In sum, while we do not approve of the state's late disclosure, we cannot conclude that the defendant "was prejudiced by the failure of the state to make the disclosure earlier." (Internal quotation marks omitted.) State v. Thompson, supra, 81 Conn. App. at 278, 839 A.2d 622. The defendant, therefore, has failed to meet his burden of proving that the state's disclosure of the police reports and witness list "came so late as to prevent the defendant from receiving a fair trial." (Internal quotation marks omitted.) Id. Accordingly, the court's denial of the motion for a mistrial was proper.
II
The defendant next claims that the court improperly denied his motion for a judgment of acquittal. Specifically, the defendant argues that the state failed to prove beyond a reasonable doubt that he used "physical force upon another person for the purpose of: (1) Preventing or overcoming resistance to the taking of the property or to the retention thereof immediately after the taking. . . ." General Statutes § 53a-133. We disagree.
At the outset, we set forth the applicable standard of review. "In reviewing [a] sufficiency [of evidence] claim, we apply a two part test. First, we construe the evidence in the light most favorable to sustaining the verdict. Second, we determine whether upon the facts so construed and the inferences reasonably drawn therefrom the jury reasonably could have concluded that the cumulative force of the evidence established guilt beyond a reasonable doubt. . . .
"While . . . every element [must be] proven beyond a reasonable doubt in order to find the defendant guilty of the charged offense, each of the basic and inferred facts underlying those conclusions need not be proved beyond a reasonable doubt. . . . If it is reasonable and logical for the jury to conclude that a basic fact or an inferred fact is true, the jury is permitted to consider the fact proven and may consider it in combination with other proven facts in determining whether the cumulative effect of all the evidence proves the defendant guilty of all the elements of the crime charged beyond a reasonable doubt. . . . Moreover, [i]n evaluating evidence that could yield contrary inferences, the [jury] is not required to accept as dispositive those inferences that are consistent with the defendant's innocence. . . . As we have often noted, proof beyond a reasonable doubt does not mean proof beyond all possible doubt . . . nor does proof beyond a reasonable doubt require acceptance of every hypothesis of innocence posed by the defendant that, had it been found credible by the [jury], would have resulted in an acquittal. . . . On appeal, we do not ask whether there is a reasonable view of the evidence that would support a reasonable hypothesis of innocence. We ask, instead, whether there is a reasonable view of the evidence that supports the jury's verdict of guilty." (Internal quotation marks omitted.) State v. Leon-Zazueta, 80 Conn.App. 678, 681-82, 836 A.2d 1273 (2003), cert. denied, 268 Conn. 901, 845 A.2d 405 (2004).
In support of his claim, the defendant argues that although Waller testified about having physically struggled with Payne, Waller never testified about any physical *636 contact with the defendant. Additionally, the defendant argues that the video surveillance tape offered by the state showed close proximity between only the defendant and Waller, and did not show the defendant exerting physical force on Waller.
Our resolution of the defendant's claim requires only brief discussion. Although it is true that Waller did not testify about physical contact with the defendant, a viewing of the surveillance tape unmistakably depicts the defendant grappling with Waller during the commission of the crime. As defense counsel conceded at oral argument, if physical force is depicted on the surveillance tape, the defendant's claim must fail. Thus, viewing that evidence in the light most favorable to sustaining the jury's verdict, we conclude that the state produced sufficient evidence that the defendant used "physical force upon another person for the purpose of: (1) Preventing or overcoming resistance to the taking of the property or to the retention thereof immediately after the taking...." General Statutes § 53a-133. Accordingly, we affirm the judgment of the trial court.
The judgment is affirmed.
In this opinion the other judges concurred.
NOTES
[1] Only Hess employees are permitted inside the kiosk, and the rear door is kept locked at all times.
[2] Waller interpreted that gesture as a suggestion by the defendant that he was armed.
[3] The defendant's residence is at 11 Victory Drive in New Haven and is an estimated three to five minute drive from the Hess station.
[4] The defendant argues that the various police reports constituted exculpatory evidence in that they contained (1) a fingerprint analysis that indicated that his fingerprints were not found in Nelson's car and (2) a summary of Waller's statements that included his inability to identify the defendant in photoboards.
[5] Specifically, the court stated: "I don't think you've satisfied me . . . that the nondisclosure or failure to comply with the disclosure requested. . . has created any prejudice. I have not heard you comment to the court that, having reviewed the five reports that were handed over to you today, there's a need for any delay of the trial because of the noncompliance. I also have not heard you make any requests other than for a mistrial with regard to the introduction of any of the evidence contained in those reports. I did not see in my review of those reports that there's anything by way of surprise or anything that would require any delay in going forward today."
[6] With respect to the late disclosure of a formal witness list, the court's concern focused on the fact that three police officers were added to the state's witness list after the conclusion of jury selection. Accordingly, the court, prior to the start of evidence, inquired of the jurors whether any of them knew the three additional witnesses. None of the jurors knew the additional witnesses.
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538 U.S. 1027
CONNECTICUT GENERAL LIFE INSURANCE CO.v.INSURANCE COMMISSIONER FOR THE STATE OF MARYLAND.
No. 02-1154.
Supreme Court of United States.
May 6, 2003.
1
CERTIORARI TO THE COURT OF APPEALS OF MARYLAND.
2
Ct. App. Md. Certiorari dismissed under this Court's Rule 46.1. Reported below: 371 Md. 455, 810 A. 2d 425.
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980 So.2d 689 (2008)
STATE of Louisiana
v.
Timothy A. BRANNON.
No. 2007-K-2465.
Supreme Court of Louisiana.
May 9, 2008.
In re Brannon, Timothy A.; Defendant; Applying for Writ of Certiorari and/or Review, Parish of Beauregard, 36th Judicial District Court Div. A, No. CR-428-05; to the Court of Appeal, Third Circuit, No. 07-431.
Denied.
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THE THIRTEENTH COURT OF APPEALS
13-20-00174-CV
In the Interest of J. R. M., a Child
On Appeal from the
347th District Court of Nueces County, Texas
Trial Cause No. 2012-FAM-4948-H
JUDGMENT
THE THIRTEENTH COURT OF APPEALS, having considered this cause on
appeal, concludes the appeal should be dismissed. The Court orders the appeal
DISMISSED in accordance with its opinion. Costs of the appeal are adjudged against
appellant, although he is exempt from payment due to his inability to pay costs.
We further order this decision certified below for observance.
April 30, 2020
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 15-2867
___________
JUAN GUADALUPE GALVAN GRIMALDO,
Petitioner
v.
ATTORNEY GENERAL UNITED STATES OF AMERICA,
Respondent
____________________________________
On Petition for Review of an Order of the
Board of Immigration Appeals
(Agency No. A078-886-828)
Immigration Judge: Honorable Walter A. Durling
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
February 3, 2016
Before: CHAGARES, KRAUSE and GREENBERG, Circuit Judges
(Opinion filed: April 1, 2016)
___________
OPINION*
___________
PER CURIAM
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Juan Guadalupe Galvan Grimaldo petitions from an order of the Board of
Immigration Appeals (“BIA”), which dismissed his appeal from an Immigration Judge’s
(“IJ”) final removal order. We will deny the petition for review.
Petitioner, a native and citizen of Mexico, entered the United States at an unknown
date and location, but in 2002 adjusted his status to that of a lawful permanent resident.
In 2010, he was convicted in federal court of conspiracy to distribute more than 50 grams
of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(B), and 846. He
was initially sentenced to 87 months in prison, but in February 2015 the sentence was
reduced to 70 months in prison. Petitioner was charged with being removable on two
bases: (1) INA § 237(a)(2)(B)(i) [8 U.S.C. § 1227(a)(2)(B)(i)] (controlled substance
violation); and (2) INA § 237(a)(2)(A)(iii) [8 U.S.C. § 1227(a)(2)(A)(iii)] (conviction of
an aggravated felony).1
Petitioner appeared pro se2 before the IJ, who sustained the charges and ordered
him removed. Although Petitioner had not presented the IJ with any applications for
1
The Notice to Appear charged that Petitioner’s conviction was an offense relating to
drug trafficking and thus an aggravated felony. See INA § 101(a)(43)(B) & (U) [8
U.S.C. § 1101(a)(43)(B) & (U)].
2
Petitioner was given the “free lawyer list” on March 17. He was granted one
continuance to find a lawyer, but he was not able to do so. When the hearing reconvened
on May 12, the IJ denied Petitioner’s request for a continuance to seek relief from his
criminal conviction. To the extent Petitioner alleges that the denial of his motion for
continuance resulted in a due process violation, we find no error, as Petitioner has not
demonstrated how he was prejudiced by the failure to grant a continuance. See Jarbough
v. Att’y Gen., 483 F.3d 184, 192 (3d Cir. 2007) (to establish due process violation,
petitioner must show he was deprived of right to full and fair hearing and must show
substantial prejudice); Paredes v. Att’y Gen., 528 F.3d 196, 198-99 (3d Cir. 2008)
2
relief, on appeal he argued that the IJ should have granted him cancellation of removal
under INA § 240A(b)(1) [8 U.S.C. § 1229b(b)(1)], or a waiver under INA § 212(c) or (h)
[8 U.S.C. § 1182(c) or (h)]. The BIA explained that Petitioner was ineligible for any
relief because of his conviction for an aggravated felony. The BIA also noted
Petitioner’s statement that the IJ did not “want to see and hear” during his removal
proceedings. The BIA stated that Petitioner had not demonstrated that the IJ erred in any
way in evaluating his evidence or conducting his hearings. The BIA also noted that
Petitioner had not demonstrated that he had been prejudiced in any way.3 Petitioner
timely filed a petition for review.
In his brief, Petitioner challenges only the agency’s failure to grant him a waiver
under INA § 212(h). We have limited jurisdiction over this petition for review, as
Petitioner was convicted of a controlled substance violation, which was also an
aggravated felony.4 See 8 U.S.C. § 1252(a)(2)(C). Further, INA § 212(h) provides that
“[n]o court shall have jurisdiction to review a decision of the Attorney General to grant or
deny a waiver under this subsection.” 8 U.S.C. § 1182(h); see also 8 U.S.C.
(pendency of post-conviction petition does not affect validity of conviction for removal
purposes).
3
The BIA also properly noted that the IJ had no authority to grant general humanitarian
relief.
4
Petitioner did not challenge before the agency and does not challenge here his
aggravated felony status. See Chen v. Ashcroft, 381 F.3d 221, 235 (3d Cir. 2004) (issue
not raised in opening brief is waived). In any event, we agree with Respondent that
Petitioner’s conviction constitutes both a controlled substance violation and an
aggravated felony. See Respondent’s Br. at 11-12.
3
§ 1252(a)(2)(B)(i). While we retain jurisdiction to consider colorable constitutional
claims or questions of law, see 8 U.S.C. § 1252(a)(2)(D); Kaplun v. Att’y Gen., 602 F.3d
260, 265 (3d Cir. 2010), the only legal issue Petitioner raises is irrelevant.5 Petitioner is
statutorily ineligible for § 212(h) relief because such relief only applies if a conviction
“relates to a single offense of simple possession of 30 grams or less of marijuana.” INA
§ 212(h). Petitioner’s conviction was for conspiracy to distribute methamphetamines, not
for simple possession of marijuana.
For the foregoing reasons, we will deny the petition for review.6
5
Petitioner argues that the agency erred in finding him ineligible for a § 212(h) waiver
because of his post-entry adjustment of status. The agency did not deny relief on that
basis.
6
Petitioner’s request to be released on bond pending a decision, contained in his brief, is
denied as moot.
4
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15 N.J. 203 (1954)
104 A.2d 310
THE SPERRY AND HUTCHINSON COMPANY, PLAINTIFF-RESPONDENT,
v.
WALTER T. MARGETTS, JR., TREASURER OF THE STATE OF NEW JERSEY, AARON K. NEELD, DEPUTY DIRECTOR OF THE DIVISION OF TAXATION IN THE DEPARTMENT OF THE TREASURY, ARMAND J. SALMON, JR., STATE SUPERVISOR OF MOTOR FUELS TAX BUREAU IN THE DIVISION OF TAXATION IN THE DEPARTMENT OF THE TREASURY, DEFENDANTS-APPELLANTS.
The Supreme Court of New Jersey.
Argued February 8, 1954.
Argued February 15, 1954.
Decided April 5, 1954.
*205 Mr. Joseph A. Murphy, Assistant Deputy Attorney-General, and Mr. Sanford Freedman argued the cause for appellants (Mr. Theodore D. Parsons, Attorney-General, and Mr. Samuel Kaufman, on the brief).
Mr. Samuel M. Lane, of the New York Bar, by leave of court, argued the cause for respondent (Mr. James J. Langan and Mr. William S. Beinecke, the latter of the New York Bar, on the brief; Messrs. Emory, Langan & Lamb, attorneys).
The opinion of the court was delivered by HEHER, J.
We inquire here as to whether the use of plaintiff's long-established trading stamp discount system by retailers of motor fuel would constitute a violation of L. 1938, c. 163, as amended by L. 1939, c. 62, and L. 1952, c. 258, N.J.S.A. 56:6-2, directing: (a) the posting as therein provided of the price per gallon of motor fuel sold by such retailers from a pump or other dispensing equipment, including all taxes, state and federal, levied on the "manufacture or sale" of the fuel, which "shall remain posted and in effect for a period of not less than twenty-four hours"; (b) enjoining retail dealers against selling motor fuel "at a price which is below the net cost of such motor fuel to the retail dealer plus all selling expenses," and forbidding on pain of specific penalties the sale of such fuel "at any other price than the price, including tax, so posted," and the implementing provision (e) that no "rebates, allowances, concessions or benefits shall be given, directly or indirectly, *206 so as to permit any person to obtain motor fuels from a retail dealer below the posted price or at a net price lower than the posted price applicable at the time of the sale."
Judge Goldmann concluded that the use of such cash discount stamps according to plaintiff's system would not constitute a "rebate," "allowance," "concession," or "benefit" within the ban of subdivision (e) of the cited section 56:6-2, and, moreover, that on the contrary hypothesis this statutory provision must be deemed an arbitrary, discriminatory and unreasonable interference with a private business, and therefore unconstitutional. 25 N.J. Super. 568 (Ch. Div. 1953).
The case is here by our certification, on plaintiff's motion, of an appeal taken by defendants to the Appellate Division of the Superior Court.
Such use of plaintiff's discount stamps is not within the letter of the statutory interdiction; nor would it be inimical to the reason and spirit of the act. Of this there can be no doubt when the legislative policy and purpose are related to the chosen means of fulfillment.
We are not here concerned with the conventional price-fixing law. The retailer himself may determine the sale price of the fuel, though he is enjoined not to sell below cost plus selling expenses; he is required to post the price on the pump or other dispensing equipment, but he is free to change the price every 24 hours; the statute directs only that the posted price shall remain in force for not less than that period. N.J.S.A. 56:6-2(a), (b). Subdivision (e) is a measure designed to implement and prevent evasion of the prior injunction against sales of the particular commodity at a price other than the price posted. To this end, it forbids "rebates," "allowances," "concessions" or "benefits," either directly or indirectly, making for sales "below the posted price or at a net price lower than the posted price applicable at the time of the sale." But these are terms that in their natural sense and significance do not import the cash discount that long has been familiar practice in general merchandising as representative of the value of the immediate use of the price of the commodity as compared to the *207 deferred payment. The words take color from one another and from the context.
Plaintiff's "cooperative discount system" is in aid of what has come to be the normal cash discount and the only practical means to that end where there are intermittent purchases in small lots. Sperry & Hutchinson Co. v. McBride, 307 Mass. 408, 30 N.E.2d 269, 131 A.L.R. 1254 (Sup. Jud. Ct. 1940). Not long after the inception of the device, it was judicially assessed as "merely one way of discounting bills in consideration for immediate payment in cash, which is a common practice of merchants, and is doubtless a popular method, and advantageous to all concerned, and it is not obnoxious to public policy." Ex parte Hutchinson, 137 F. 949 (C.C.D. Wash. 1904). Although the business is now country-wide, there has been no change in mode or method that has materially altered this concept.
As Judge Goldmann has said, the "S. & H." trading stamps have been in use throughout the country for more than 50 years, as a means of providing a cash discount comporting with standard in the form of merchandise when the issued stamps represent cash purchases of $120 in the aggregate, the equivalent of a discount of 1.66% when the stamps are redeemed directly by the merchant, and 2.08% when redeemed by the plaintiff corporation, seemingly alternative courses at the option of the holder of the stamps, although we do not suggest that option is of the essence in this regard. Thereby, the purchaser is given the benefit of the traditional cash discount; and the merchant-licensee has the reciprocal advantage of trade with the frugal shopper who is attracted by the saving. But the discount is measured by the economic worth to the merchant of the prompt use of the money and the corresponding reduction in working capital requirements and the avoidance of the expense of maintaining credit facilities and the inevitable losses from bad debts. The cash discount is a term of payment merely, not a price adjustment; it is a mode of financing, not a reduction in the price. The "cooperative" feature permits the accumulation and redemption of stamps issued by any and all of plaintiff's licensees *208 in New Jersey. R.S. 45:23-1 et seq. sanctions the use of trading stamps for such a purpose, subject to conditions which are not of concern here.
In a word, the cash discount thus provided measures the value of the use of the money to the merchant-licensee, and makes for economic equality between the merchant selling for cash and the merchant selling on credit. It does not in any real sense work an inequality of price within the intendment of subdivision (e). Rather, it has reference to the terms of sale, making for price parity in respect of all retail sales, either for cash or on credit. The true cash discount of approximately 2%, according to common practice, bears no relation to the object and policy of the law. It is not a trade discount nor a rebate or concession not concerned with the value of the sales related to the time and terms of payment.
The opinion evidence adduced is one on this proposition. Accounting practice distinguishes between "trade discount on sales" and "cash discount on sales." The former affords a means of adjusting prices "purposely established at high amounts" in published catalogs "in order that fluctuations in prices may be measured from the list or catalog prices," thereby "obviating the necessity of publishing new catalogs," and also "as a device to give certain customers preference over others"; a cash discount, on the other hand, "is a financial inducement to the customer to pay bills on or before a date specified in the sales invoice," usually 1% or 2% if the bill is paid in ten days, and "Consequently, it should be treated as a non-operating item, rather than as a deduction from the sales price." Rosenkampff and Wider in Theory of Accounts, pp. 478, 488 (1942). "A cash discount is a reward for prompt payment. It is a trade practice long established, and is authoritatively recognized as being not a reduction from the purchase price." Montgomery, Auditing Theory and Practice, pp. 499, 500.
The avowed purpose of this statutory regulation is the prevention, in the public interest, of fraudulent and unfair practices in the retailing of motor fuel. But there is no *209 suggestion in the enactment itself of a design to outlaw the true cash discount as a means to this end. Indeed, its omission from the category of forbidden acts and conduct contained in subdivision (e) makes reasonably clear an intention contra Compare R.S. 56:4-7 (a), where the Legislature expressly distinguished between "trade discounts" and "cash discounts." Certain it is that, quite apart from power, we cannot assume from the nature of the expressed policy that the Legislature had in view the interdiction of this well established and commonly known general trade practice of a discount for cash, available to all alike.
The intention of the lawgiver is taken or presumed according to what is consonant to reason and good discretion. The particular words are to be made responsive to the reason and spirit of the enactment. Wright v. Vogt, 7 N.J. 1 (1951). The purpose of construction is to bring the operation of the statute within the apparent intention of the Legislature. Nagy v. Ford Motor Co., 6 N.J. 341 (1951). When the general intent is found, general words may be restrained accordingly, and those of narrower significance expanded to effectuate that intent. Glick v. Trustees of Free Public Library, 2 N.J. 579 (1949). The true meaning of any clause or provision ordinarily is that which best comports with the subject and general object of the act. Maritime Petroleum Corporation v. City of Jersey City, 1 N.J. 287 (1949).
In this view, we have no occasion to consider the constitutional questions raised and argued on the contrary hypothesis.
Affirmed.
OLIPHANT, J. (concurring).
I am of the opinion that the issuance of trading stamps which have a redemption value brings about a direct reduction, or at least an indirect one, in the price of the article purchased and constitutes a "rebate," "concession" or "benefit" in clear contravention of the provisions of N.J.S.A. 56:6-2(e).
As to the constitutional question involved I am generally in accord with the opinion of Judge Goldmann below.
*210 I accordingly concur in the result reached by the majority, which is to affirm the judgment entered in the Superior Court.
Mr. Justice BURLING desires me to state that he joins in this concurring opinion.
For affirmance Chief Justice VANDERBILT, and Justices HEHER, OLIPHANT, WACHENFELD, BURLING, JACOBS and BRENNAN 7
For reversal None.
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9 Ariz. App. 49 (1969)
449 P.2d 66
Miriam A. DAVIS, Appellant,
v.
Samuel H. DAVIS, Appellee.
No. 2 CA-CIV 548.
Court of Appeals of Arizona.
January 10, 1969.
*51 Knez & Glatz, by Nick Knez, Tucson, for appellant.
Mesch, Marquez & Rothschild, by John K. Mesch, Jr., Tucson, for appellee.
HATHAWAY, Judge.
Miriam A. Davis has appealed from a Brown decree of divorce contending that the decree should have been entered in her favor and that the trial court otherwise committed multiple errors. The sufficiency of the evidence supporting the judgment is challenged and error is charged (1) in the admission of evidence concerning the acquisition of property during marriage, (2) failure to award a reasonable sum of permanent alimony, (3) disposition of property, and finally, (4) failure to award appellant her costs and a larger sum for attorneys' fees.
The parties were married on the 29th of August, 1960. At that time the appellant was approximately 44 years old and the appellee, Samuel Davis, was approximately 65 years old. He had been previously married and divorced. She had been a widow for several years.
Prior to the marriage, Miriam worked as a hostess and waitress and earned approximately $75 to $90 per week. She owned the home where she lived and paid only a small tax thereon because of her widow's exemption.
After the marriage Samuel moved into her home where they lived together throughout the marriage. No children were born to them.
Samuel spent $10,000 of his separate funds enlarging portions of the house, putting in air-conditioning, installing a bathroom, and otherwise remodeling the house. He moved in some of his furniture and installed new fixtures. Miriam removed some of her furniture which she sold.
The parties continued living together in the house until sometime in 1966 when Samuel moved out because of marital difficulties.
Prior to the marriage Miriam owned, in addition to her residence and furniture, a life insurance policy with a loan value of approximately $2,500, an automobile which was traded during marriage for a 1965 Dodge, a cabin on Mount Lemmon which she sold during the marriage for approximately $4,500, a small amount of cash and her personal effects.
Samuel had retired prior to marriage and had accumulated substantial assets. He had sold a business in New York in 1957 for a price in excess of $634,000, and received annual installments from the sale in the amount of $80,000, including interest, from 1957 to 1967. As these funds were received, they were invested in real estate, stocks and bonds, bank saving deposits, and time certificates of deposit.
Neither party was gainfully employed during the marriage. Both parties maintained the bulk of their assets separately identified by keeping them in their respective separate names. Samuel did, however, make certain gifts to Miriam, and he jointly acquired certain securities with her. These were awarded to her in the judgment.
The record would indicate that both parties had ample grounds for divorce, particularly evidence that she had pointed a revolver threateningly at him and called *52 him dirty names. She put on evidence justifying a conclusion of unfaithfulness on his part. We conclude that the court was justified in entering the Brown decree of divorce.
SUFFICIENCY OF EVIDENCE THAT PROPERTY ACQUIRED BY SAMUEL DURING MARRIAGE WAS COMMUNITY PROPERTY
The appellant points out that substantial property was acquired by the appellee during their marriage and contends that, although the property was taken only in his name, such property, nevertheless, is presumed to be community property, Lincoln Fire Insurance Company of New York v. Barnes, 53 Ariz. 264, 88 P.2d 533 (1939); In re Torrey's Estate, 54 Ariz. 369, 95 P.2d 990 (1939), and that appellee did not overcome this presumption, citing Evans v. Evans, 79 Ariz. 284, 288 P.2d 775 (1955); Lawson v. Ridgeway, 72 Ariz. 253, 233 P.2d 459, 29 A.L.R.2d 518 (1951); Porter v. Porter, 67 Ariz. 273, 195 P.2d 132 (1948); Arizona Central Credit Union v. Holden, 6 Ariz. App. 310, 432 P.2d 276 (1967).
The appellant also contends that the burden of proof is upon Samuel to establish the source from whence the funds came that were used for the purchase of the property acquired during marriage, and that this must be shown by "* * * strong, satisfactory, convincing, clear and cogent or nearly conclusive evidence * * *" to establish its separate nature. Porter v. Porter, supra. We have no problem with these general propositions put forth by the appellant.
She argues, additionally, that regardless of the source of the funds used for the purchases, Samuel obviously expended labor for the purpose of acquiring the property. He left their residence every morning and did not return until dinner time every evening and she could not know what he was doing or where he was going or what labor he was expending on behalf of the property accumulated during the marriage. She points out that he did not show how this time was spent and the burden was on him to account for it.
We have carefully examined the record, considering the evidence most favorably to supporting appellee's position and find the judgment is amply supported by the evidence. Samuel retired before marriage. He had accumulated his wealth through wages and investments prior to marriage and through the sale of his business. The evidence appears uncontradicted that all of his assets were comprised of these holdings or were converted from such holdings and retained their separate nature.[1] Horton v. Horton, 35 Ariz. 378, 278 P. 370 (1929). The property retains its separate status though sold during marriage and the proceeds are used to purchase other property. See Guthrie v. Guthrie, 73 Ariz. 423, 242 P.2d 549 (1942); Porter v. Porter, supra. The profits from the sole and separate property are also sole and separate. Osborne v. Mass. Bonding & Insurance Co., 229 F. Supp. 674 (D.Ariz. 1964).
We find of no consequence the labor expended by Samuel in investing and re-investing his assets. The evidence indicated that he traded very little and that he did not engage in a great amount of stock market activity. There is no evidence of commingling of the assets in question, which were controlled exclusively by Samuel in such a manner as to clearly preserve their separate nature.
DID THE TRIAL COURT ERR IN FAILING TO AWARD MORE PERMANENT ALIMONY?
Miriam contends that she was not treated fairly in the award of alimony granted her, pointing out the standard of living the parties enjoyed during the marriage and Samuel's ability to pay more *53 than was decreed. The question of alimony is left to the sound discretion of the trial court, DeMarce v. DeMarce, 101 Ariz. 369, 419 P.2d 726 (1966). In the exercise of that discretion, the court could properly consider the length of the marriage, the ability of Miriam to provide for herself, the benefits that she received from the marriage, and her fault in bringing about the destruction of the marital relationship.
Miriam entered the marriage with a residence, a cabin on Mount Lemmon, a 1956 Dodge automobile valued at $300, $2,845.71 in cash, and an interest in an annuity policy. She emerged from the marriage with a substantial increment in assets, including:
1. A two-carat diamond ring.
2. A three-carat wedding ring.
3. A $1,500 mink stole.
4. A sable neck piece worth $125.
5. A chinchilla stole worth $1,000.
6. A Persian neck piece of undetermined value.
7. A 1/4 interest in 100 shares of Mountain States Telephone and Telegraph (no value given).
8. A 1/2 interest in Elks Lodge Bonds, of the value of $2,100 plus interest.
9. A free and clear 1965 Dodge automobile, original cost $3,100.
10. A $10,000 addition to her real property.
11. The sum of $500 per month from February, 1967 to February, 1968.
Considering the duration of the marriage, the benefits received by Miriam, her needs and abilities, and her fault in contributing to its termination, we conclude that the trial court did not abuse its discretion in the amount of permanent alimony awarded.
DID THE COURT ERR IN DECREEING THAT THE FURNITURE, FIXTURES AND OTHER HOUSEHOLD ITEMS BROUGHT IN BY SAMUEL REMAINED HIS SEPARATE PROPERTY?
This part of the judgment is again supported by the record. Although the parties disagreed in their testimony concerning the disposition that was to be made of the furnishings, Samuel testified that no gift was intended, Miriam testified to the contrary, and the trial court chose to believe Samuel's testimony.
DID THE COURT ERR IN NOT REQUIRING SAMUEL TO RETURN THE TWO-CARAT DIAMOND OR TO REPLACE ITS VALUE IN MONEY?
Here, again, the parties gave conflicting testimony. Samuel testified that he permitted Miriam to use the diamond pendant, but that he at no time made a gift of it to her. Also, the two-carat diamond was replaced by a zircon. Both parties had the opportunity to have accomplished the replacement, but both denied having done so. The trial court ordered that "[t]he diamond from the diamond drop pendant shall be the sole and separate property of the party now having it in his or her possession or control." We cannot subscribe to such disposition of this issue. The prime function of courts is the resolution of disputes in an orderly fashion pursuant to law. The litigants are entitled to no less.
It is indisputable that the diamond was the separate property of Samuel immediately prior to the time that Miriam commenced to wear it. There is a substantial dispute as to whether a gift was made by Samuel to Miriam at that time. The essential elements of a gift of personal property are that the donor manifest a clear intent to make a present gift to the party claiming as the donee and to deliver over to this person full possession and control of the property. Goff v. Guyton, 86 Ariz. 349, 346 P.2d 286 (1959); McNabb v. Fisher, 38 Ariz. 288, 299 P. 679 (1931). As the trial court could not compel Samuel to divest himself of title to *54 the diamond, A.R.S. § 25-318, subsec. A, as amended, it is the sole and separate property of Samuel unless the preponderance of the evidence establishes that Samuel made a gift of the diamond to Miriam. As this issue was not resolved by the trial court we will remand the action for a new trial as to this limited issue.
DID THE COURT ABUSE ITS DISCRETION IN FAILING TO AWARD APPELLANT HER COSTS AND A LARGER SUM FOR ATTORNEYS' FEES?
The trial court awarded the appellant temporary attorneys' fees in the sum of $250 and the additional sum of $2,500 at the conclusion of the trial. Appellee contends that the trial court did not abuse its discretion in refusing costs to the appellant, since appraisor's fees and other items of costs were incurred unnecessarily for the purpose of establishing values of certain of the appellee's properties. He contends that these expenses were incurred to establish values already known to the appellant, and, therefore, unnecessarily expended. The record seems to support appellee's position in this regard and we conclude that the trial court properly exercised its discretion in permitting the parties to abide their own costs.
Allowance of attorneys' fees and costs is, of course, discretionary with the trial court. Barnett v. Barnett, 95 Ariz. 226, 388 P.2d 433 (1964); Atkinson v. Atkinson, 2 Ariz. App. 1, 405 P.2d 919 (1965). The purpose of the allowance is to assure that the wife may have proper means to litigate the divorce action. Her attorney testified that he spent 105 and one-quarter hours in the litigation, not including five days in trial. He further testified that, as a result of the nature of the litigation and the length of the trial and the many problems involved and the anticipated future work, a fee of $5,000 would be reasonable. Be that as it may, we cannot say from the record before us that the allowance given was unreasonably small, in view of the broad discretion vested in the trial court.
Affirmed, except as modified with reference to paragraph six of the judgment of the trial court.
MOLLOY, C.J., and JACK G. MARKS, Superior Court Judge, concur.
NOTE: Judge HERBERT F. KRUCKER having requested that he be relieved from consideration of this matter, Judge JACK G. MARKS was called to sit in his stead and participate in the determination of this decision.
NOTES
[1] A.R.S. § 25-213 provides, in part:
"A. All property, real and personal, of the husband, owned or claimed by him before marriage * * * and also the increase, rents, issues and profits thereof, is his separate property."
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IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
COMMONWEALTH EX REL. JEREMY : No. 161 MM 2016
MILES, :
:
Petitioner :
:
:
v. :
:
:
MARK GARMAN, SUPERINTENDENT, :
:
Respondent :
ORDER
PER CURIAM
AND NOW, this 19th day of January, 2017, the Application for Leave to File
Original Process is GRANTED, and the Petition for Writ of Habeas Corpus is DENIED.
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714 F.2d 130
Higginsv.Schweiker
83-1061
UNITED STATES COURT OF APPEALS Fourth Circuit
7/6/83
1
N.D.W.Va.
AFFIRMED
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663 F.2d 100
Campbellv.Gunn
80-1982
UNITED STATES COURT OF APPEALS Fifth Circuit
11/4/81
1
W.D.Tex.
REVERSED
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In The
Court of Appeals
Ninth District of Texas at Beaumont
_________________
NO. 09-15-00445-CV
_________________
AUNDRE JAMES SIMIEN SR., Appellant
V.
TANIKA MICHELLE SIMIEN-RIDEAU, Appellee
________________________________________________________________________
On Appeal from the 317th District Court
Jefferson County, Texas
Trial Cause No. C-215,371
________________________________________________________________________
MEMORANDUM OPINION
This divorce originated in the 317th District Court. Appellant, Aundre James
Simien, Sr. appeals a final judgment entered in the case by the presiding judge of the
136th District Court.1 In three issues, Aundre argues that the trial court that entered
1
We note at the outset that both the 136th and the 317th Judicial Districts are
located in Jefferson County. Tex. Gov’t Code Ann. §§ 24.238(a), 24.625 (West
2004). Although the final judgment and post-trial pleadings identify the 136th
District Court in their respective captions, the record from the Jefferson County
District Clerk’s office indicates that the case remained docketed in the 317th District
Court through the time of appeal.
1
the divorce decree lacked jurisdiction to do so and complains about provisions in the
decree that provide for the division of the community estate. For the reasons set forth
below, we affirm the trial court’s judgment.
Jurisdiction
This case was originally filed in the 317th District Court and was called to
trial before an associate judge sitting in that court. Aundre objected to the associate
judge hearing the case, and the case was then “assigned to Judge Milton Gunn
Shuffield to preside.”2 The final hearing was continued to allow the parties to prepare
a joint inventory. Following the continuance, Judge Shuffield called the case to trial
and heard evidence over the course of several days, and thereafter, signed and
entered a Final Decree of Divorce. The record contains no indication that Aundre
objected to the assignment of Judge Shuffield to hear the case or enter orders at the
time of assignment, before or during the trial on the merits, at the hearing on Tanika’s
request to enter a final order, or in his Motion for New Trial.
In his first issue on appeal, Aundre argues that the 136th District Court did
not have jurisdiction to enter any divorce decree or custody order because there was
no motion or order to transfer the case into that court from the 317th District Court.
2
The Honorable Milton Shuffield was the presiding judge of the 136th
District Court at the time of the assignment.
2
The Texas Constitution expressly permits District Judges to “exchange
districts, or hold courts for each other when they may deem it expedient[.]” Tex.
Const. art. V, § 11. The Texas Government Code also provides district judges wide
discretion to temporarily exchange benches with the judge of another district court
in the county, hear and determine matters pending in other district courts within the
county, and transfer civil or criminal cases to the docket of another district court
within the same county. See Tex. Gov’t Code Ann. § 24.003 (West Supp. 2016).
Aundre argues that “[t]he exclusive transfer provisions provided in . . . section
155.202 [of the Texas Family Code] negate the ability to transfer cases freely
between District Courts and [sic] the same county.” Aundre’s reliance on section
155.202 under the facts of this case is misplaced, however, as that subchapter applies
specifically to proceedings in which one trial court has acquired continuing,
exclusive jurisdiction over a matter as a result of the rendition of a final order
pertaining to a child, and a party seeks to initiate or transfer subsequent proceedings
relating to that child in or to a different court. See Tex. Fam. Code Ann. § 155.001(a),
(c) (West Supp. 2016). The cases Aundre cites in support of his argument are also
inapplicable, as both cases involve transfers of suits from courts that had acquired
continuing, exclusive jurisdiction over the respective matters. See Alexander v.
Russell, 699 S.W.2d 209, 210 (Tex. 1985) (holding that jurisdiction could not be
3
transferred from the court that originally established conservatorship of a child to
another district court without a proper motion and transfer order); Kirby v. Chapman,
917 S.W.2d 902, 907–08 (Tex. App.—Fort Worth 1996, no writ) (finding that a
district court lacked subject matter jurisdiction to modify the custody order of
another district court that had acquired continuing, exclusive jurisdiction over the
matter).
In this case, there was no transfer of the proceedings from the 317th District
Court to the 136th District Court; rather, there was an assignment for Judge Shuffield
to preside, as explicitly permitted by section 24.003 of the Texas Government Code
irrespective of Chapter 155 of the Texas Family Code. See Tex. Gov’t Code Ann. §
24.003(b)(2). Moreover, even if the proceedings were deemed “transferred,” no
court had acquired continuing, exclusive jurisdiction over the matter prior to entry
of a final order. See Tex. Fam. Code § 155.001(a). Therefore, the assignment of
Judge Shuffield to preside over the matter was not subject to the procedures for
transfer of suits affecting the parent-child relationship set forth in Chapter 155. See
Tex. Fam. Code Ann. § 155.204 (West 2014).
Aundre also cites section 74.053(a) of the Texas Government Code in support
of his assertion that a written notice or order was required to properly convey
jurisdiction. This reliance is likewise misplaced, because “[w]hen judges exchange
4
districts or hold court for each other, [s]ection 74.053 of the Government Code does
not apply.” Gonzalez v. Ables, 945 S.W.2d 253, 254 (Tex. App.—San Antonio 1997,
orig. proceeding). Further, nothing in section 24.003 of the Government Code or
article V, section 11 of the Texas Constitution requires a written order or explanation
for an exchange of benches by district judges. See Mata v. State, 669 S.W.2d 119,
121 (Tex. Crim. App. 1984). Accordingly, we overrule Aundre’s first issue.
Property Division
In his second issue, Aundre argues that the trial court abused its discretion by
awarding Tanika a disproportionate division of the community estate. Specifically,
Aundre contends that the trial court awarded Tanika sixty percent of the community
property and that “[n]o conceivable explanation justifies this disproportionate
division.”
The Texas Family Code provides that in divorce cases, the trial court “shall
order a division of the estate of the parties in a manner that the court deems just and
right, having due regard for the rights of each party and any children of the
marriage.” Tex. Fam. Code Ann. § 7.001 (West 2006). We review a trial court’s
division of marital property under an abuse of discretion standard, and “indulge
every reasonable presumption in favor of the proper exercise of discretion.” Massey
v. Massey, 807 S.W.2d 391, 398 (Tex. App.—Houston [1st Dist.] 1991, writ denied).
5
“The party attacking the property division bears the heavy burden of showing that
the trial court’s property division was not just and right.” Pletcher v. Goetz, 9 S.W.3d
442, 446 (Tex. App.—Fort Worth 1999, pet. denied). Thus, it is Aundre’s burden to
show not only that “an inequality in the division of the community property was
manifestly unjust . . . but also that such inequality is of such substantial proportions
that it constitutes an abuse of the trial court’s discretion.” King v. King, 661 S.W.2d
252, 255 (Tex. App.—Houston [1st Dist.] 1983, no writ).
The record before us indicates that the parties prepared and submitted a joint
inventory that the trial court used in its division of the marital estate; however, the
inventory was not admitted as an exhibit at trial and does not otherwise appear in the
appellate record. The record from the trial on the merits does contain some testimony
from Aundre and Tanika about their respective valuations of some items of
community property, such as the marital home and retirement accounts; however,
neither the record nor Aundre’s brief provide the overall value of the marital estate
or the relative value of the community property awarded to each party. Based on the
record before us, we are unable to conclude that the property division was
disproportionate, much less so disproportionate as to constitute an abuse of the trial
court’s discretion. We hold that Aundre has not met his burden on this issue. See
6
Levesque v. Levesque, No. 04-05-00146-CV, 2006 WL 47044, at *2 (Tex. App.—
San Antonio Jan. 11, 2006, no pet.) (mem. op.).
Motion for New Trial
In his final issue on appeal, Aundre complains that the trial court abused its
discretion by denying his motion for new trial based on the sufficiency of the
evidence to support what Aundre characterizes as a disproportionate property
division. Like legal and factual sufficiency of evidence, we review a trial court’s
denial of a motion for new trial for abuse of discretion. See Dolgencorp of Tex., Inc.
v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009) (per curiam). “A trial court abuses its
discretion if it acts in an arbitrary or unreasonable manner without reference to any
guiding rules or principles.” Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex.
2002).
As discussed above, we find that Aundre has failed to meet his burden to show
that the trial court’s division of the marital estate was manifestly unjust. See King,
661 S.W.2d at 255. Therefore, we find that the trial court did not abuse its discretion
by denying Aundre’s motion for new trial on that basis. See Hinkle v. Hinkle, 223
S.W.3d 773, 783 (Tex. App.—Dallas 2007, no pet.).
Having overruled all of Aundre’s issues, we affirm the judgment of the trial
court.
7
AFFIRMED.
______________________________
CHARLES KREGER
Justice
Submitted on November 15, 2016
Opinion Delivered August 3, 2017
Before McKeithen, C.J., Kreger and Johnson, JJ.
8
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510 U.S. 1215
Ruiz Camachov.Texas.
No. 93-7476.
Supreme Court of United States.
March 21, 1994.
1
Appeal from the Ct. Crim. App. Tex.
2
Certiorari denied. Reported below: No. 93-7002, 997 F. 2d 512; No. 93-7152, 864 S. W. 2d 493; No. 93-7235, 866 S. W. 2d 210; No. 93-7379, 864 S. W. 2d 496; No. 93-7476, 864 S. W. 2d 524; No. 93-7627, 868 S. W. 2d 238.
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Greg Abbot Attorney General
for the State of
Fourth Court of Appeals
San Antonio, Texas
March 11, 2015
No. 04-14-00791-CV
Michael Thomas PAUL,
Appellant
v.
GREG ABBOT ATTORNEY GENERAL FOR THE STATE OF TEXAS,
Appellee
From the 225th Judicial District Court, Bexar County, Texas
Trial Court No. 2001-CI-16843
Honorable Michael E. Mery, Judge Presiding
ORDER
Sitting: Karen Angelini, Justice
Marialyn Barnard, Justice
Rebeca C. Martinez, Justice
On January 28, 2015, we issued an opinion and judgment dismissing this appeal. On
February 10, 2015, appellant filed a motion for extension of time to file a motion for rehearing
en banc. On February 13, 2015, we issued an order granting appellant’s motion for extension of
time to file a motion for rehearing to March 16, 2015.
On February 26, 2015, appellant filed a motion for summary judgment in this court.
Appellant’s motion for summary judgment is DENIED.
_________________________________
Karen Angelini, Justice
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said
court on this 11th day of March, 2015.
___________________________________
Keith E. Hottle
Clerk of Court
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981 F.2d 1249
U.S.v.Astheimer (David L.)
NO. 92-1321
United States Court of Appeals,Third Circuit.
Nov 10, 1992
Appeal From: E.D.Pa.,
Buckwalter, J.
1
AFFIRMED.
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716 F.2d 901
Conleyv.Board of Trustees of Grenada County Hosp.
82-4018
UNITED STATES COURT OF APPEALS Fifth Circuit
9/8/83
N.D.Miss., 707 F.2d 175
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-07-00622-CV
The State of Texas; the City of Houston, Texas, and
the Transit Authority of Houston, Texas, Appellants
v.
Steve Crawford, a/k/a Steven Lynn Crawford, and
Robert Wills, a/k/a Robert William Wills, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
NO. D-V-GV-04-000065, HONORABLE GISELA D. TRIANA, JUDGE PRESIDING
OPINION
Appellants the State of Texas; the City of Houston, Texas; and the Transit Authority
of Houston, Texas (collectively, the “State”) sued appellees Steve Crawford and Robert Wills, as
responsible individuals, for the sales tax liability of S. L. Crawford Construction, Inc. Seeking to
establish appellees’ individual liability under section 111.016(b) of the Texas Tax Code, the State
asserted that Crawford and Wills willfully failed to pay or cause to be paid the delinquent sales tax
amounts. Following a bench trial, the district court concluded that Crawford and Wills did not act
willfully, and the court entered judgment that the State take nothing by its suit. The State
appeals, asserting that: (1) the district court erred in construing the willfulness requirement of
section 111.016(b) to encompass knowledge, but not reckless disregard of the risk that taxes were
not remitted, (2) the defendant taxpayers should have had the burden of proof on the issue of
willfulness, and (3) the evidence was legally and factually insufficient to support the district court’s
judgment on the issue of willfulness. We conclude that the district court properly placed the burden
of proof on the State to establish willfulness. As to the State’s first point on appeal, we agree that
the term “wilfully” in section 111.016(b) encompasses both knowledge and reckless disregard.
However, because we find the evidence sufficient to establish that the defendants did not act with
knowledge or reckless disregard, we affirm the judgment of the district court.
Factual and Procedural Background
S. L. Crawford Construction, Inc. (the “Company”) was engaged in the construction
business in the Houston area, specializing in the interior finish-out of commercial properties.
Appellees Crawford and Wills were officers of the Company during the events at issue in this suit.
Crawford formed the Company in 1982, and was its president until 2001 when he became the chief
executive officer. He had ultimate decision-making authority on all Company matters. Wills joined
the Company in 1996, and was its chief financial officer until 2001 when he became the president.
He reported solely to Crawford. Crawford and Wills made all financial decisions, had check-writing
authority, signed the Company’s sales tax returns, and had the authority to hire and fire employees.
In November 2000, the Texas Comptroller of Public Accounts commenced a
sales tax audit of the Company for the period of October 1, 1997, through September 30, 2000. By
mid-January 2001, the Comptroller had narrowed its inquiry to two construction jobs, only one of
which—the “McCord-Reliant job”—is at issue in this suit.
In its regular course of business, the Company performed jobs that were subject to
sales tax and jobs that were not subject to sales tax. Similarly, some of the work performed for the
2
client on the McCord-Reliant job was taxable, and some was non-taxable. The job at issue was
taxable, and the Company collected sales tax from the client in the amount of $158,912.27.
However, the Company’s bookkeeper, Linda Delgado, incorrectly marked the job as non-taxable in
the Company’s monthly sales tax worksheets. As a result of this error, the Company’s sales tax
returns and payments to the Comptroller for the months that included the McCord-Reliant job did
not include the sales tax collected on the McCord-Reliant job. Thus, the sales tax was collected by
the Company but not remitted to the State.
Vernon Wallace, a senior auditor for the Comptroller, conducted the sales tax audit.
When the audit began, Wills executed a limited power of attorney authorizing John P. Wade, an
outside certified public accountant, to act on behalf of the Company with regard to sales tax matters
during the audit period. According to Wills, he “turned everything over” to Wade. During the
course of the audit, Wallace dealt only with Wade in obtaining documentation and an explanation
of the Company’s sales tax collections and payments.
By letter dated March 7, 2001, Wallace informed Wade that the audit was complete
and attached documents showing an unpaid tax amount on the McCord-Reliant job of $179,743.17.
Wills was copied on the letter. By letter dated April 2, 2001, Wade formally requested a
redetermination hearing on the audit results. Wade did not contest that the McCord-Reliant job was
taxable or that the Company had not paid sales tax on the job. Instead, Wade stated the Company’s
intention “to submit documentation that would show the sales tax applicable to this job was timely
paid by [the Company] with a credit from previous periods.” In response, as part of the
Comptroller’s administrative hearings process, the Comptroller informed Wade that he had
3
sixty days in which to submit documentation to support the Company’s claim regarding preexisting
credits. Wade did not provide any supporting documentation during the sixty-day period or at any
other time. On September 28, 2001, the Comptroller issued a Position Letter regarding the audit,
rejecting Wade’s arguments on the McCord-Reliant job because the Company “has presented
nothing to identify and to have properly determined any overpayment [or] any period in which the
overpayment allegedly occurred.” Prior to any hearing before the administrative law judge taking
place, Wade announced, by letter dated October 16, 2002, that the Company was withdrawing its
petition for redetermination and requested that the hearing be dismissed. By the Comptroller’s order,
the dismissal became final on November 15, 2002, and the tax, penalty, and interest amounts were
“due and payable within twenty (20) days thereafter.”
The Comptroller sent the Company notice of its order, but sent the notice to
the wrong address. The Company had changed addresses at some point in 2001 or earlier in
2002. According to Crawford and Wills, they did not become aware of the final
determination (or Wade’s request for dismissal) until they discovered that the Comptroller had
frozen the Company’s bank accounts.1 On that date, they went in person to the Comptroller’s
Houston branch office and proposed an initial payment of $70,000 and the remainder to be paid
within “the next few months.” On February 11, the Comptroller obtained $70,000 from the
1
There is some confusion in the record as to when Crawford and Wills discovered that the
Company’s accounts were frozen. Crawford testified that he and Wills discovered that the accounts
were frozen on February 3, 2003. According to the trial court’s findings of fact, Crawford and Wills
learned the Company’s accounts were frozen in mid-January. The State has not challenged the trial
court’s findings of fact regarding this issue on appeal, and argues based on the discovery occurring
in mid-January.
4
Company’s bank account. Before the end of that month, due to the hold on the Company’s accounts
and its impact on the Company’s payment capabilities, lines of credit, and customer perception, the
Company went out of business.
On June 2, 2003, the Comptroller issued a jeopardy determination against Crawford
and Wills in their individual capacities for $179,743.17, plus penalties and interest. According to
Jeremy Davies, an accounts examiner for the Comptroller, the determination to impose individual
liability was based on records showing that during the time period at issue both Crawford and Wills
were officers of the Company, signed the sales tax returns, and had the authority to sign Company
checks. The tax liability was subsequently amended to $158,912.27—the amount actually collected
by the Company—and then reduced by a portion of the $70,000 already paid.
The State filed suit against Crawford and Wills in district court on January 23, 2004,
and the case was tried without a jury on September 10 and 11, 2007. At trial, under the authority
of section 111.016 of the Texas Tax Code, the State sought $95,817.75 in unpaid sales tax,
plus $25,473.01 in penalties and $62,726.29 in interest. Crawford and Wills conceded at trial
that they were “responsible individuals” with the requisite control over the sales tax payments.
See Tex. Tax Code Ann. § 111.016(d)(1) (West 2008) (defining “responsible individual”).
Appellees also stipulated at trial to the amounts alleged due and that the Company had collected the
sales tax at issue. See id. § 111.016(a) (liability applies as to “the full amount collected plus any
accrued penalties and interest”). The only issue was whether Crawford and Wills “wilfully” failed
to pay or cause to be paid the sales tax from the McCord-Reliant job. See id. § 111.016(b).
5
The district court entered judgment on October 2, 2007, that the State take nothing
by its suit. In its conclusions of law, the district court ruled that the term “wilfully” requires a higher
mental state than reckless disregard and that the State has the burden of proof on the issue of
willfulness. The State presents four points on appeal: (1) the willfulness requirement of tax code
section 111.016(b) should be construed in accordance with federal law so as to encompass both
knowledge and reckless disregard, (2) defendant taxpayers should bear the burden of proof to
establish their lack of willfulness, (3) the trial court’s finding that Crawford and Wills had no actual
knowledge of their failure to pay collected taxes is not supported by legally or factually sufficient
evidence, and (4) the trial court’s finding that Crawford and Wills did not recklessly disregard the
risk that collected taxes would not be paid is not supported by legally or factually sufficient evidence.
Applicable Law
Under section 111.016(a) of the tax code, the Company was obligated to remit to the
State sales tax collected from its clients on taxable jobs. In addition, the Company held the collected
sales tax “in trust” for the State until the taxes were remitted to the State:
(a) Any person who receives or collects a tax or any money represented to be a tax
from another person holds the amount so collected in trust for the benefit of the state
and is liable to the state for the full amount collected plus any accrued penalties and
interest on the amount collected.
6
Id. § 111.016(a).2 The State, in this suit, attempts to recover the Company’s sales tax delinquency
from Crawford and Wills in their individual capacities, as “responsible individuals” of the Company.
Under section 111.016(b) of the tax code, a responsible individual can be held liable for a company’s
collected, but unremitted, sales tax if he “wilfully” fails to pay the tax:
(b) With respect to tax or other money subject to the provisions of Subsection (a),
an individual who controls or supervises the collection of tax or money from another
person, or an individual who controls or supervises the accounting for and paying
over of the tax or money, and who wilfully fails to pay or cause to be paid the tax or
money is liable as a responsible individual for an amount equal to the tax or money
not paid or caused to be paid.
Id. § 111.016(b).
Definition of Willfulness under Section 111.016(b)
The State contends that the district court misconstrued the term “wilfully” in
section 111.016(b). In its Conclusions of Law No. 5 and No. 6, the district court held that if the
defendants did not have “actual knowledge,” the statute’s willfulness standard was not met. In
its first point on appeal, the State asserts that the term “wilfully” encompasses both actual
knowledge and a responsible individual’s reckless disregard of the risk that taxes may not be
remitted to the government.
Section 111.016(b) was enacted by the legislature in 1995, imposing liability
on individuals for a company’s unpaid state taxes. See Act of May 3, 1995, 74th Leg., R.S., ch. 87,
2
The term “person” is generally defined to cover business entities. See Tex. Tax Code Ann.
§ 101.002(a) (West 2008); Tex. Gov’t Code Ann. § 311.005(2) (West 2005).
7
§ 1, 1995 Tex. Gen. Laws 872, 872. This court has not yet addressed the meaning of the term
“wilfully” in this statute.3 The State’s position that willfulness under section 111.016(b) includes
both actual knowledge and reckless disregard is based on the assertion that federal tax law defines
willfulness in that manner and the legislature modeled section 111.016(b) after the federal tax law.
When a Texas statute is modeled after a federal statute, we presume that the legislature intended to
adopt the federal courts’ construction of the federal statute. City of Garland v. Dallas Morning
News, 22 S.W.3d 351, 360 (Tex. 2000).
Section 6672 of the Internal Revenue Code (the “Code”) imposes individual liability
on a person who is required to collect, truthfully account for, or pay a tax but who “willfully fails”
to do so. See 26 U.S.C. § 6672(a) (2000). According to federal case law, willfulness under
section 6672(a) requires “a voluntary, conscious, and intentional act, but not a bad motive or evil
intent.” Morgan v. United States, 937 F.2d 281, 285 (5th Cir. 1991). Willfulness under the federal
statute may be proven in either of two ways. First, willfulness is normally established by evidence
that the responsible person had knowledge that taxes were due to the United States and yet paid other
creditors. See Barnett v. Internal Revenue Serv., 988 F.2d 1449, 1457 (5th Cir. 1993). Once the
responsible person becomes aware of a past due tax liability, the taxpayer must use all unencumbered
funds to pay the delinquent taxes. See Huizinga v. United States, 68 F.3d 139, 145 (6th Cir. 1995).
Funds are considered encumbered only if the taxpayer is legally obligated to use the funds for a
purpose other than the tax liability and the legal obligation is superior to the government’s interest
3
“The district courts of Travis County have exclusive, original jurisdiction of a suit arising
under this section.” Tex. Tax Code Ann. § 111.016(c) (West 2008).
8
in the funds. See Honey v. United States, 963 F.2d 1083, 1090 (8th Cir. 1992). Second, a
responsible person acts “willfully” if he “recklessly disregards the risk that the taxes may not be
remitted to the government.” Logal v. United States, 195 F.3d 229, 232 (5th Cir. 1999). The
“reckless disregard” standard is met when a responsible person “(1) clearly ought to have known that
(2) there was a grave risk that withholding taxes were not being paid and if (3) he was in a position
to find out for certain very easily.” Wright v. United States, 809 F.2d 425, 427 (7th Cir. 1987).
While conduct amounting to mere negligence is insufficient to satisfy the willfulness standard under
the federal statute, “gross negligence is enough to establish reckless disregard.” Id. Thus, under
federal case law, “willfulness” encompasses not only knowledge, but also reckless disregard, which
can be described as a form of “willful ignorance.”
To determine whether the Texas Legislature modeled section 111.016(b) of the
tax code after section 6672(a) of the Internal Revenue Code, we look at the plain language of the
statutes. See State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006) (“When construing a statute, we
begin with its language.”). The federal statute applies to “an officer or employee of a corporation,
or a member or employee of a partnership, who as such officer, employee, or member is under a duty
to perform the act” covered by the statute. 26 U.S.C. § 6671(b) (2000). The Texas statute applies
to “an officer, manager, director, or employee of a corporation, association, or limited liability
company or a member of a partnership who, as an officer, manager, director, employee, or member,
is under a duty to perform an act” covered by the statute. Tex. Tax Code Ann. § 111.016(d)(1).
Under the federal statute, liability will attach (1) to a “person required to collect, truthfully account
for, and pay over any tax,” (2) if the person “willfully fails to collect such tax, or truthfully account
9
for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the
payment thereof,” (3) resulting in “a penalty equal to the total amount of the tax evaded, or not
collected, or not accounted for and paid over,” and (4) such amount is “in addition to other penalties
provided by law.” 26 U.S.C. § 6672(a). Under the Texas statute, liability will attach (1) to an
“individual who controls or supervises the collection of tax or money from another person, or . . .
the accounting for and paying over of the tax or money,” (2) if the individual “wilfully fails to pay or
cause to be paid the tax or money,” (3) resulting in liability in “an amount equal to the tax or money
not paid or caused to be paid,” and (4) such amount is “in addition to any other penalty provided by
law.” Tex. Tax Code Ann. § 111.016(b). Based on these similarities in the plain language of the
statutes, we agree with the State that the Texas Legislature modeled section 111.016(b) of the
tax code after section 6672(a) of the Internal Revenue Code. We, therefore, presume that the
legislature intended to adopt the federal courts’ construction of the term “willfully.” See Dallas
Morning News, 22 S.W.3d at 360.
Indeed, Crawford and Wills concede that section 111.016(b) is, as a general matter,
modeled after the federal statute, and that the term “willfully” in the federal statute encompasses
reckless disregard. However, they argue that the term “wilfully” in section 111.016(b)—unlike the
rest of the subsection—was deliberately not modeled after federal law. Crawford and Wills point
out that the presumption that the Texas Legislature adopted the federal courts’ construction of federal
law arises “absent some indication to the contrary.” See Chiriboga v. State Farm Mut. Auto. Ins.
Co., 96 S.W.3d 673, 682 (Tex. App.—Austin 2003, no pet.).
10
For “some indication” that the legislature intended the meaning of the term “wilfully”
not to be modeled after federal case law, Crawford and Wills rely on changes made to proposed
section 111.016(b) as it was making its way through the legislative process. As originally
introduced, Senate Bill 401 set forth section 111.016(b) as follows:
A person required to collect, truthfully account for, or pay over a tax who fails to
collect, truthfully account for, or pay over the tax, or who knowingly attempts in any
manner to evade or defeat the tax or payment of the tax, is liable for a penalty equal
to the total amount of the tax evaded, not collected, not accounted for, or not paid
over.
Tex. S.B. 401, 74th Leg., R.S. (1995) (introduced version) (emphasis and footnote added). Unlike
the version of the statute ultimately enacted, which uses the term “wilfully,” the version of the statute
originally filed as a bill in the senate used the term “knowingly.” Crawford and Wills present
two reasons why this change evidences a contrary legislative intent sufficient to rebut the
presumption that the term “wilfully” is to be interpreted consistently with federal case law construing
section 6672(a) of the Code.
First, Crawford and Wills assert that two key changes were made to proposed
section 111.016(b): (1) the provision’s applicability became limited to “tax or other money subject
to the provisions of Subsection (a)”; and (2) “knowingly” was changed to “wilfully.” Compare id.,
with Tex. Tax Code Ann. § 111.016(b). As to the former change, subsection (a) specifically governs
sales tax amounts that a person “receives or collects” and, therefore, holds in trust for the State.
See Tex. Tax Code Ann. § 111.016(a). Thus, this change to proposed section 111.016(b) was a
narrowing of the statute’s scope—from any taxes owed, to only those amounts actually received or
11
collected. Crawford and Wills contend that because the former change was a narrowing of the
statute’s scope, the latter change—“knowingly” changed to “wilfully”—must have been intended
as a narrowing of the scope of the statute as well.
However, Crawford and Wills cite to no authority for their contention that the
narrowing of one aspect of a proposed statute indicates that other changes to the statutory language
in the legislative process must also be intended to have a similar narrowing effect. Without
additional guidance in the statutory text or the legislative history, it is just as likely that the
legislature intended to narrow the statute’s scope in one regard by effecting the former change, while
simultaneously broadening the statute’s scope in another regard via the latter change. We recognize
that “when the Legislature looks to another jurisdiction’s statute, but modifies rather than adopts
some of its provisions, it does so purposefully.” Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 497
(Tex. 2001). Here, however, it was an earlier version of the statute that modified the term “wilfully.”
The enacted version did not. This, if anything, is consistent with a legislative intent not to
modify the federal statutory language as to the term “wilfully.” See Transportation Ins. Co.
v. Maksyn, 580 S.W.2d 334, 338 (Tex. 1979) (“Courts should be slow to put back that which the
legislature has rejected.”).
Next, Crawford and Wills rely on Texas case law defining the term “willful” in
other contexts. They focus particularly on language in the Texas Supreme Court’s opinion in
Luna v. North Star Dodge Sales, Inc., 667 S.W.2d 115 (Tex. 1984). The supreme court in Luna
considered a trial court’s award of mental anguish damages in a Deceptive Trade Practices Act
(“DTPA”) suit. The court of appeals had set aside the award for mental anguish because such
12
damages were available where there was proof of a “willful tort, willful and wanton disregard, or
gross negligence,” but the jury found only that the act was committed “knowingly.” See 667 S.W.2d
at 117. The supreme court reversed the court of appeals’ judgment because, based on the continuum
of culpable mental states set out in the opinion, knowing conduct was sufficient to satisfy the gross
negligence standard. The court stated, “We are not attempting to equate the terms gross negligence,
‘knowingly,’ ‘willful’ and intentional. These terms lie on a continuum with gross negligence being
the lowest mental state and intentional being the highest.” Id. at 118. According to Crawford and
Wills, the legislature is presumed to have been aware of this Luna continuum in enacting
section 111.016(b), and the modification of the subsection’s language in S.B. 401 from “knowingly”
to “wilfully” indicates, based on Luna, the legislature’s selection of a “higher” mental state.
We note, as an initial matter, that the “continuum” language of the
Texas Supreme Court is likely dicta as to the term “willful,” given that the court limited its
holding to a comparison between the terms “gross negligence” and “knowingly.” See id. at 117-18.
We also note that the court did not explicitly announce what positions the terms “knowingly” and
“willful” hold in relation to each other on the continuum. See id. at 118. Regardless, we are not
persuaded that the court’s placement of the term “willful” in a continuum is to be applied
unwaveringly beyond Luna’s context of mental anguish damages under the DTPA. The term
“willful” in a statute is “a word of many meanings, its construction often being influenced by
its context.” Paddock v. Siemoneit, 218 S.W.2d 428 (Tex. 1949) (quoting Spies v. United States,
317 U.S. 492, 497 (1943)); Meisner v. State, 907 S.W.2d 664, 668 (Tex. App.—Waco 1995, no writ)
13
(quoting Screws v. United States, 325 U.S. 91, 101 (1945)). Courts interpreting the term “willful”
in different statutes have placed the term on several different points along the Luna continuum.4
Thus, contrary to Crawford’s and Wills’s position, the continuum introduced in Luna
that seems to have placed “willful” between “knowing” and “intentional” has not been universally
applied beyond DTPA claims or the imposition of mental anguish damages. We cannot conclude,
therefore, that the Texas Supreme Court’s treatment of willfulness in Luna overcomes the
presumption that the term “wilfully” in section 111.016(b) should be interpreted in accordance with
federal courts’ interpretation of section 6672(a) of the Code. Consequently, we conclude that
because the term “willfully” in section 6672(a) has been consistently interpreted to encompass both
knowledge and reckless disregard, the term “wilfully” in section 111.016(b) of the tax code likewise
encompasses both knowledge and reckless disregard.
4
See, e.g., In the Matter of Humphreys, 880 S.W.2d 402, 407 (Tex. 1994) (in the context
of federal statute regarding tax evasion, finding that “willfulness . . . means voluntary intentional
violation of a known duty”); Woodhouse v. Rio Grande R.R. Co., 3 S.W. 323, 324 (Tex. 1887)
(“The word ‘willfully’ carries the idea, when used in connection with an act forbidden by law, that
the act must be done knowingly or intentionally . . . .”); Morrone v. Prestonwood Christian Acad.,
215 S.W.3d 575, 582 (Tex. App.—Eastland 2007, pet. denied) (for purposes of liability protection
for teachers, comparing “willful misconduct” to “heedless and reckless disregard” and “gross
negligence”); Brown v. State, 183 S.W.3d 728, 733 (Tex. App.—Houston [1st Dist.] 2005, pet. ref’d)
(“A person commits the offense of reckless driving by driving a vehicle in willful or wanton
disregard for the safety of persons or property.”); In re Thoma, 873 S.W.2d 477, 489 (Tex. Rev. Trib.
1994, no appeal) (for constitutional provision regarding discipline of judges, construing “willful”
to refer to “a judge acting intentionally, or with gross indifference to his conduct”); Wheeler v. Yettie
Kersting Mem’l Hosp., 866 S.W.2d 32, 50 n.25 (Tex. App.—Houston [1st Dist.] 1993, no writ)
(considering the terms “heedless and reckless disregard,” “willful act or omission,” “willful and
wanton disregard,” and “gross negligence” to be synonymous in the context of Good Samaritan
statute); Louisiana Pac. Corp. v. Smith, 553 S.W.2d 771, 775 (Tex. Civ. App.—Tyler 1977, no writ)
(“There is no difference in legal consequences between a willful disregard of the rights of another
and a reckless disregard of same.”) (quoting Emporia Lumber Co. v. League, 105 S.W. 1167, 1168
(Tex. Civ. App.—San Antonio 1907, no writ)).
14
Our conclusion finds support in both the object sought to be attained by
section 111.016(b) and the consequences of a construction to the contrary. Tex. Gov’t Code Ann.
§ 311.023(1), (5) (West 2005); Helena Chem. Co., 47 S.W.3d at 493 (even when statute not
ambiguous on its face, courts may consider other factors to determine legislative intent). Were we
to construe the term “wilfully” to require only actual knowledge, responsible individuals such as
officers and directors who would potentially be subject to individual liability for a corporate tax
delinquency could evade section 111.016(b) simply by delegating all tax responsibilities to
administrative staff or outside accountants. Federal courts have taken into account consequences
such as this in applying their more expansive interpretation of willfulness in the context of
section 6672. According to the Fifth Circuit, if the term “willfully” required a “higher” mental state,
a corporate official could thwart the statute’s purpose “just by compartmentalizing responsibilities
within a business (however small) and adopting a ‘hear no evil—see no evil’ policy.” Wright,
809 F.2d at 427. Crawford’s and Wills’s interpretation could also impair the government’s ability
to operate efficiently and effectively, as “repeated escape from liability would be possible and the
government would be required to monitor corporate affairs daily.” Mazo v. United States, 591 F.2d
1151, 1157 (5th Cir. 1979). The Fifth Circuit has also recognized the positive consequences of
interpreting “willfully” to include reckless disregard. “[W]e believe that the rationale for the broad
net of § 6672 responsibility serves a valuable prophylactic purpose: it encourages officers, directors,
and other high-level employees to stay abreast of the company’s withholding and payment of
employee’s taxes.” Barnett, 988 F.2d at 1456-57. According to the senate bill analysis, the purpose
of the amendments to section 111.016 was to “enforce[] timely payment of taxes and fees collected
15
by the Comptroller more efficiently and effectively than current law allow[ed].” Sen. Comm. on
Finance, Bill Analysis, Tex. S.B. 401, 74th Leg., R.S. (1995). Requiring actual knowledge to
establish section 111.016(b) liability would limit the State’s ability to efficiently and effectively
collect delinquent taxes where a company is in financial difficulty and its officers have no interest
in seeing to it that taxes are remitted.
For purposes of section 111.016(b) of the tax code, we hold that a responsible
individual acts “wilfully” if either he has knowledge that taxes are due to the State and yet uses
unencumbered funds to pay other creditors, or he recklessly disregards the risk that the taxes may
not be remitted to the government. See Logal, 195 F.3d at 232.
Burden of Proof on Willfulness under Section 111.016(b)
The district court’s Conclusion of Law No. 7 states, “Under the facts of this case, the
Comptroller has failed to carry its statutory burden of proof to show that Defendant . . . willfully
failed to pay or cause[] to be paid the tax or money, as required by Tax Code § 111.016(b).” In its
second point on appeal, the State asserts that the trial court’s placement of the burden of proof for
the issue of willfulness on the government rather than on the individual defendants was in error.
The State relies, first, on section 111.013 of the tax code for its assertion. Under
section 111.013, in a suit involving the collection of state tax, a certificate of the Comptroller
showing the tax delinquency is prima facie evidence of: “(1) the stated tax or amount of the tax . . . ;
(2) the stated amount of penalties and interest; (3) the delinquency of the amounts; and (4) the
compliance of the comptroller with the applicable provisions of this code in computing and
determining the amount due.” Tex. Tax Code Ann. § 111.013(a) (West 2008). The statute does not,
16
however, make the certificate prima facie evidence on issues other than those stated. In Parker
v. State, 36 S.W.3d 616 (Tex. App.—Austin 2000, no pet.), for instance, in a suit to collect a
corporation’s delinquent taxes under section 111.016 from the corporation’s owner and director in
his individual capacity, this court held that the State retained the burden to prove the amount of tax
actually collected by the corporation. See 36 S.W.3d at 617-18. This court declared: “We will not
shift the burden that requires the State to prove taxes actually collected by requiring Parker to rebut
a presumption that all reported taxes were collected.” Id. at 619.
Section 111.016(b) makes a responsible individual liable for non-payment of
collected taxes, but only if the non-payment is willful. See Tex. Tax Code Ann. § 111.016(b). This
court’s refusal in Parker to shift the burden to the individual taxpayer on the issue of whether
taxes were collected applies equally to the issue of whether the individual acted willfully. A
tax certificate does not prove the mental state of a responsible individual. When the State litigates,
it occupies the same position as any other litigant, except where specific provision is made to the
contrary. Texas Dep’t of Corr. v. Herring, 513 S.W.2d 6, 7-8 (Tex. 1974). Section 111.013 of the
tax code does not except the issue of willfulness in section 111.016(b) from this general rule.
Next, the State cites to federal case law interpreting section 6672. Under federal case
law, once the government offers an assessment into evidence, the burden of proof is on the taxpayer
as to both his responsible-person status and his willfulness. See Barnett, 988 F.2d at 1453.
However, the State does not explain why federal case law should apply to section 111.016(b) on the
issue of burden of proof. We are not compelled to apply here the rule of construction we applied to
construe the meaning of the term “wilfully” in section 111.016(b)—when a Texas statute is modeled
17
after a federal statute, we give weight to the federal courts’ construction—because section 111.016
itself contains no language that could be interpreted to allocate the burden of proof on willfulness.
The placement of the burden of proof on the taxpayer in federal case law stems from
the “uniform rule” in federal tax law that the taxpayer must pay the full amount of a tax assessment
before he can challenge its validity in court. See Psaty v. United States, 442 F.2d 1154, 1158
(3d Cir. 1971); see also Bull v. United States, 295 U.S. 247, 260 (1935) (“Thus the usual procedure
for the recovery of debts is reversed in the field of taxation. Payment precedes defense, and the
burden of proof, normally on the claimant, is shifted to the taxpayer.”). An exception to this rule
arose under section 6672 actions in that the taxpayer could pay only a portion of the assessment and
make a claim for a refund, forcing the government to file a counterclaim for the remainder of the
assessment. See Psaty, 442 F.2d at 1159 (citing Steele v. United States, 280 F.2d 89 (8th Cir. 1960)).
The federal courts placed the burden of proof on the taxpayer with respect to the government’s
counterclaim so that there would not be “a substantially greater burden upon a taxpayer who pays
his taxes in full and sues for the refund than upon one who makes a partial payment.” Id. at 1160;
see United States v. Lease, 346 F.2d 696, 700 (2d Cir. 1965) (“We can see no reason why the
taxpayer should be in any better position when he . . . waits until the Government has to resort to
enforcing its lien before he attempts to cast doubt upon the underlying tax liability.”)
In contrast, there is no “uniform rule” under Texas law that where the State seeks to
impose individual liability under section 111.016(b), the individual must pay the tax delinquency
and then seek a refund to contest his liability. See Tex. Tax Code Ann. § 111.010 (West 2008)
(attorney general shall bring suit to recover delinquent state taxes). Thus, the original reasoning
18
behind the federal case law’s placement of the burden of proof on taxpayers in a section 6672 action
is inapplicable to a tax code section 111.016 action. We decline to extend the federal burden-shifting
rule to section 111.016 actions.5 Regardless of whether the State introduces a certificate of the
Comptroller showing the tax delinquency, and thus establishes prima facie evidence on the matters
set forth in section 111.013 of the tax code, we hold that the State retains the burden of proof on the
issue of willfulness under section 111.016(b) of the tax code.
Evidentiary Sufficiency
In its final two points on appeal, the State challenges the district court’s holding that
Crawford’s and Wills’s failure to pay the collected sales tax on the McCord-Reliant job was not
willful. The State bases its challenges on both legal and factual sufficiency of the evidence.
Findings of fact in a bench trial are reviewable for legal and factual sufficiency by the same standards
as applied in reviewing a jury’s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
In reviewing a legal sufficiency challenge, we review the evidence in the light
favorable to the verdict, crediting favorable evidence if reasonable jurors could and disregarding
contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 827
(Tex. 2005). As the State has the burden of proof on the issue of willfulness, we will sustain its
point on appeal based on legal sufficiency only if the evidence conclusively establishes, as a matter
5
According to the Third Circuit, the public policy behind the taxpayer bearing the burden
of proof—on the issue of willfulness specifically—is that “the presumption appropriately requires
that corporate officers explain their failure to perform duties imposed upon them by law.” Psaty
v. United States, 442 F.2d 1154, 1160 (3d Cir. 1971). Such a policy would seem to relieve the
State of its burden of proof in any enforcement action where liability depends on the defendant’s
mental state, and we decline to apply it here.
19
of law, the defendant taxpayers’ willfulness. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241
(Tex. 2001). The test is whether the evidence at trial would enable reasonable and fair-minded
people to reach the verdict under review. Wilson, 168 S.W.3d at 827.
In reviewing a factual sufficiency challenge, we must consider and weigh all the
evidence in the record, both supporting and against the finding, to decide whether the judgment
should be set aside. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). We will set aside
the judgment for factual insufficiency only if the evidence that supports the finding of lack of
willfulness is so against the great weight and preponderance of the evidence as to be clearly wrong
and unjust. Dow Chem. Co., 46 S.W.3d at 242.
“Knowledge” prong of willfulness
Under the “knowledge” prong of willfulness, according to federal case law
interpreting section 6672 of the Internal Revenue Code, willfulness is proven by evidence that the
responsible person had knowledge that taxes were due and yet paid other creditors. See Barnett,
988 F.2d at 1457. Willfulness does not require a bad motive or evil intent, but rather a “voluntary,
conscious, and intentional act.” Id.
In its findings of fact, the district court stated, “During the audit period and
through the time the Company ceased operations in March 2003, neither Mr. Crawford nor Mr. Wills
knew that sales tax had actually been charged to and collected . . . on the McCord-Reliant job.”
(Emphasis added). In its third point on appeal, the State challenges this finding based on legal and
factual sufficiency. Wills testified that he did not know tax was collected on the McCord-Reliant
job until after the Company ceased operations. Crawford testified that he first learned there was a
20
tax issue on the McCord-Reliant job when the Company’s assets were frozen. The State questions
the credibility of the defendants’ statements, but presented no evidence directly controverting their
disavowment of actual knowledge. The trial court is the sole judge of witness credibility and the
weight to be given to testimony. Navasota Res., Ltd. v. Heep Petroleum, Inc., 212 S.W.3d 463, 468
(Tex. App.—Austin 2006, no pet.).
Wallace, testifying for the State, admitted that all his contact regarding the tax audit
was with Wade. The State asserts that Wade’s knowledge that tax was “collected and not remitted”
on the McCord-Reliant job was made known to Crawford and Wills, either by an actual
communication or by imputed knowledge. Regarding an actual communication of the information,
Wills testified that he and Crawford had discussions with Wade regarding the audit. However, there
is no evidence that these discussions included the particular issue alleged by the State. Wills testified
that the discussions focused on the other tax matter at issue in the audit, and that Wade never
informed him or Crawford that the Company had actually collected the tax on the McCord-Reliant
job. Crawford’s testimony was to the same effect.
The State contends that even if Wade did not communicate the specifics of the
McCord-Reliant tax delinquency, his knowledge should be imputed to Crawford and Wills under
principles of agency. Wade’s power of attorney authorized him to act on behalf of the Company’s
interests as a taxpayer. However, assuming that Wade’s knowledge can be imputed to the Company
under agency principles, the State provides no authority for the proposition that the Company’s
imputed knowledge can, in turn, be imputed to Crawford and Wills as the Company’s officers.
See Restatement (Third) of Agency § 5.03 cmt. g (2006) (“Notice of facts that a principal knows or
21
has reason to know is not imputed downward to an agent.”). It appears the State is conflating the
“responsible person” and “willfulness” elements for liability under section 6672 of the Code.
Whether an individual is a responsible person may involve agency principles. See Gustin
v. United States, 876 F.2d 485, 491-92 (5th Cir. 1989) (“One does not cease to be a responsible
person merely by delegating that responsibility to others . . . .”). We do not, however, find authority
in section 111.016(b) to hold every responsible individual in a company liable for the willful actions
of a single agent of the company. See Tex. Tax Code Ann. § 111.016(b).
Next, the State points to the information contained in the Comptroller’s
March 7, 2001, sales tax audit, a copy of which was sent to Wills. Wills admitted in his testimony
that because of his receipt of the audit, he and Crawford knew there was a tax delinquency. The
State argues that this conclusively establishes willfulness because the evidence showed vendors and
employees were paid with Company funds after that date. Crawford and Wills argue in response that
while the audit showed a tax delinquency, neither knew that the tax had actually been collected. In
fact, Wallace admitted in his testimony that nothing in the audit communicated that tax on the
McCord-Reliant job had been collected but not remitted. The audit report had a “zero” on its
“Tax Collected not Remitted” line. Thus, there was sufficient evidence to support a finding that
Crawford and Wills never obtained actual knowledge that tax had been collected until the Company
went out of business.6
6
The State also points to two admissions by Wills to argue that he knew the tax was
collected. Wills admitted in his deposition to being aware the audit showed “there was tax not
remitted to the State for the McCord project.” However, this admission did not demonstrate
knowledge that the tax was collected. Also, Wills admitted at trial that the $158,912.27 amount was
included on invoices and monthly sales tax reports and was deposited into the Company’s operating
account. However, Wills did not admit to his having knowledge of these facts prior to the State’s
filing of the lawsuit below.
22
In addition to the evidence being sufficient to support the district court’s finding that
Crawford and Wills had no knowledge that the tax was actually collected, there was sufficient
evidence that Crawford and Wills did not have knowledge that the tax delinquency on the
McCord-Reliant job had become due.7 Following receipt of the audit results in March 2001, the
Company, through its agent Wade, disputed its obligation to pay the tax delinquency and sought
resolution through the Comptroller’s administrative hearings process. Consequently, the tax amount
did not become “due and payable” until after the Comptroller’s decision in the redetermination
hearing became final. See Tex. Tax Code Ann. § 111.0081(c) (West 2008). Knowledge of the
March 7, 2001, audit report, therefore, was insufficient to conclusively establish that Crawford or
Wills “wilfully fail[ed] to pay or cause to be paid the tax,” because the tax amount had not yet
become due. See Logal, 195 F.3d at 232.
In accordance with the Comptroller’s order, the tax became “due and payable” within
20 days after November 15, 2002. However, the Comptroller’s notice was sent to the wrong
address.8 The earliest date on which any evidence shows either Crawford or Wills had actual
knowledge of a final determination of tax due on the McCord-Reliant job is January 15, 2003, when
7
It is not clear from the plain language of section 111.016 that knowledge that tax was
collected constitutes willfulness, or that a lack of such knowledge proves a lack of willfulness.
See Tex. Tax Code Ann. § 111.016(a), (b). However, the State has not challenged on appeal the
district court’s conclusion that the defendants’ lack of willfulness regarding whether the tax had been
collected was sufficient to refute their willfulness under section 111.016(b), and, because we find
the evidence sufficient to show that Crawford and Wills had no knowledge (and did not recklessly
disregard) that the tax was due, we decline to reach the issue.
8
The State does not dispute this fact.
23
apparently Wills received a faxed letter from the Comptroller.9 Once a responsible individual
becomes aware of a past due tax liability, he is considered to act willfully if “he fails to use all
unencumbered funds that come into his possession thereafter to pay the delinquent taxes.” Huizinga,
68 F.3d at 145. Although the State argues that the Company had the “means” to pay the tax, the
State presented no evidence that, during the time period subsequent to January 15, 2003, the
Company paid unencumbered funds to creditors other than the State.
The evidence is sufficient to support the district court’s finding that Crawford
and Wills did not have the requisite knowledge to satisfy the “wilfully” requirement of
section 111.016(b). The evidence at trial would enable reasonable and fair-minded people to reach
the district court’s conclusion, and the evidence that supports the district court’s finding of lack of
knowledge is not so against the great weight and preponderance of the evidence as to be clearly
wrong and unjust.
9
Crawford testified that the hold on the Company’s accounts occurred on February 3, 2003,
which, he alleges, is the first time he received any notification that tax on the McCord-Reliant job
was due. Although there is no evidence in the record before us of another date on which the hold
may have occurred, the district court found that it occurred in mid-January 2003. The court may
have based its finding on (1) Wills’s testimony that until he “got the letter of freeze on the accounts,”
he had not heard or seen anything to notify him that the Comptroller’s determination was final, and
(2) Wills’s letter to the Comptroller, dated January 22, 2003, that proposes a payment plan
“in response to my conversations with Kim Bridges of your office and following guidelines
described to me in her faxed letter of 1/15/03.” We need not consider Crawford’s testimony of a
February 3 hold because the State has not challenged the district court’s findings on this issue on
appeal. Even if we were to determine that Wills learned of the tax due on January 15 and yet the
hold did not occur until February 3, we would still find the evidence sufficient to show Wills’s lack
of willfulness under section 111.016(b) because the State presented no evidence that, during the time
period subsequent to January 15, 2003, the Company paid unencumbered funds to creditors other
than the State.
24
“Reckless disregard” prong of willfulness
Willfulness can also be proven if the responsible individual acted with
reckless disregard of a known or obvious risk that tax would not be paid over to the government.
Morgan, 937 F.2d at 285-86. Reckless disregard includes failure to investigate or correct
mismanagement after being notified that taxes have not been paid. Id. at 286. Mere negligence does
not establish willfulness. Id.
Although the district court incorrectly concluded that willfulness under
section 111.016(b) does not encompass reckless disregard, the court made a finding of no reckless
disregard in its Conclusion of Law No. 3: “Mr. Crawford and Mr. Wills did not act recklessly in
relying on Ms. Delgado and Mr. Wade with regard to the sales tax responsibilities of the Company.”
In its fourth point on appeal, the State challenges the legal and factual sufficiency of the
district court’s finding of a lack of reckless disregard. Regarding Delgado, the bookkeeper who
made the error that resulted in the tax nonpayment, Wills testified that she routinely allocated sales
as taxable or nontaxable during the four years she had been at the Company, and that she had
fifteen years of experience in construction accounting prior to her employment with the Company.
She had been with the Company during the previous audit, during which period the Company paid
over four million dollars in sales tax to the Comptroller, and the audit showed an error rate of
only one-half of one percent. As for Crawford’s and Wills’s reliance on Wade, Wills testified
that in addition to handling an IRS audit “100 percent clean,” Wade properly handled the
“federal tax returns and the franchise tax returns and the information returns.” The State, in
25
response, presented no evidence that prior to its freezing the Company’s bank account, Crawford or
Wills had reason to suspect that reliance on Delgado or Wade would be reckless.
The State argues that Crawford and Wills acted recklessly by not doing their own
research into the tax delinquency upon obtaining knowledge of the 2001 audit. The cases the State
cites, to support its argument, that conclude the responsible person under section 6672 of the Code
acted willfully under the “reckless disregard” prong are distinguishable.10 In Mazo, the responsible
individuals contended that they relied on a company employee who misled them by asserting that
he would “take care” of the tax delinquencies, even though that employee had been originally
responsible for the tax delinquencies in the first place. See Mazo, 591 F.2d at 1155, 1157. The
court in Wright based its finding of recklessness on the company’s small size, its history of
noncompliance, the continued participation of the employee who had been responsible for the
earlier violation of the company’s tax responsibilities, and the “continued parlous state” of the
company’s finances. See Wright, 809 F.2d at 428. The court in United States v. Vespe, 868 F.2d
1328 (3d Cir. 1989), found reckless disregard as to a tax quarter because the responsible individual
knew that taxes had not been paid for the four quarters immediately following. See 868 F.2d
at 1335. In Denbo v. United States, 988 F.2d 1029 (10th Cir. 1993), the responsible individual knew
that the corporation was financially unsound and that there had been tax delinquencies, and relied
on the president’s claim that “they had everything worked out” even though he knew the
10
We note that federal case law may not always be ideal authority on the issue of willfulness,
since under section 6672 of the Internal Revenue Code the taxpayer bears the burden to establish
lack of willfulness, and, as we concluded above, for purposes of section 111.016(b) the State has the
burden of proof on willfulness.
26
president’s prior representations regarding tax payments had turned out to be false. See 988 F.2d at
1031, 1033-34. Unlike the cited cases, in this case there was no evidence that (1) prior to the
Comptroller’s freezing of the bank accounts, the Company’s finances were troubled, (2) Wade,
whom Crawford and Wills relied on to resolve the Company’s tax delinquency, had any known
history of being irresponsible as to such a tax matter, or (3) the Company had any significant history
of sales tax noncompliance.
To satisfy the reckless disregard prong, there must be a “known or obvious risk” that
tax is owed but not paid. See Morgan, 937 F.2d at 285-86. As noted previously, the evidence was
sufficient to establish that Crawford and Wills did not know tax was actually collected on the
McCord-Reliant job. Also, as noted previously, according to the evidence, Crawford and Wills did
not know of the tax becoming due and payable until the Company’s bank accounts were frozen.
Vernon Wallace, a senior auditor of the Comptroller, admitted to no personal knowledge that
Crawford or Wills received any communication of the audit results. The only basis identified by
Jeremy Davies, accounts examiner for the Comptroller, for the determination that Crawford and
Wills had knowledge of taxes being collected and due was their having signed sales tax returns
during the months at issue. According to Wills, the freezing of the Company’s accounts was the first
notice that the tax determination was final. Crawford testified that he was “surprised, shocked and
panicked” by the State’s action in freezing the Company’s accounts and did not get an answer from
Wade as to his lack of communication regarding the Comptroller’s final determination.
The evidence is sufficient to establish that Crawford and Wills did not have the
requisite reckless disregard to satisfy the “wilfully” requirement of section 111.016(b). The evidence
27
at trial would enable reasonable and fair-minded people to reach the district court’s conclusion, and
the evidence that supports the district court’s finding of lack of recklessness is not so against the
great weight and preponderance of the evidence as to be clearly wrong and unjust.
Conclusion
We conclude that willfulness under section 111.016(b) of the tax code encompasses
both actual knowledge and reckless disregard, and we, therefore, vacate the district court’s
Conclusions of Law No. 5 and No. 6. We also conclude that the State bears the burden to establish
a responsible individual’s willfulness under section 111.016(b). Finally, we conclude that the
evidence was legally and factually sufficient to establish that Crawford and Wills did not willfully
fail to pay or cause to be paid the delinquent tax on the McCord-Reliant job. We affirm the
judgment of the district court.
__________________________________________
G. Alan Waldrop, Justice
Before Chief Justice Law, Justices Pemberton and Waldrop
Affirmed
Filed: August 21, 2008
28
| {
"pile_set_name": "FreeLaw"
} |
Filed 11/27/13; pub. order 12/26/13 (see end of opn.; reposted 12/26/13 to add counsel)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
PERRY C. BECKLEY,
Plaintiff and Respondent,
A135418
v.
BOARD OF ADMINISTRATION OF (Alameda County
CALIFORNIA PUBLIC EMPLOYEES‘ Super. Ct. No. RG11593721)
RETIREMENT SYSTEM,
Defendant and Appellant.
Plaintiff Perry Beckley was a California Highway Patrol (CHP) officer until the
CHP determined he was not able to perform the tasks required of an officer. He applied
for disability retirement, and the Board of Administration of California Public
Employees‘ Retirement System (CalPERS) denied his application, ruling that Beckley
was not disabled from carrying out the duties of the position he had most recently held as
a public affairs officer (PAO). Beckley brought a petition for writ of mandate, which the
trial court granted. CalPERS has appealed.1 We shall affirm the trial court‘s judgment.
1
Although CalPERS filed an election to proceed with an appendix in lieu of a
clerk‘s transcript (Cal. Rules of Court, rule 8.124), CalPERS failed to file an appendix.
The only record of the trial court proceedings any party filed was a reporter‘s transcript.
CalPERS also failed to ensure the administrative record was transmitted to this court in a
timely manner. Because the factual background of this case is contained in the
administrative record, which we arranged to have transmitted to us, we will decide this
matter on the merits rather than dismissing it for appellants‘ failure to provide an
adequate record. We remind CalPERS, however, of its obligation to do so. (See In re
1
I. BACKGROUND
Beckley worked as a CHP officer for approximately 23 years. In 2003, he sought
treatment for wrist and arm pain, which he believed were the result of processing an
unusually large number of reports at work. Later in 2003, Beckley reported that he had
hurt his back getting out of his state vehicle. While he was assigned to patrol duty later
that year, he had ― ‗flare-ups‘ ‖ of his back condition, was diagnosed with lumbar disc
degeneration and sciatica, and was taken off work temporarily on several occasions in
2003 and 2004.
In 2004, Beckley applied for a position as a PAO. The duties of the position
included meeting with local legislators, city managers, and community leaders; speaking
to community groups; community outreach programs such as child car seat inspections;
and attending community fairs. Beckley would typically drive a patrol car and wear a
uniform when attending outreach events. He was not assigned a beat to patrol, but when
driving in a patrol car in uniform, he was expected to undertake ordinary enforcement
actions, and did so on a number of occasions. The PAO is not a limited duty position,
and a PAO could be assigned to perform road duty. Beckley performed well in his
position as a PAO.
In 2006, Beckley was evaluated by a chiropractor, Dr. Erich Parks, in connection
with a workers‘ compensation claim. Dr. Parks concluded that, as a result of his injuries
to his upper extremities and lower back, Beckley could not ―continue in his occupation
since he has preclusions which cause him to be unable to fulfill the 14 critical activities,
Marriage of Wilcox (2004) 124 Cal.App.4th 492, 498–499; Cal. Rules of Court,
rule 8.120(a).) On our own motion, we take judicial notice of the records of the superior
court in this matter. (Evid. Code, §§ 452, subd. (d) & 459.)
2
required by CHP.‖2 Of those tasks, Dr. Parks concluded Beckley was unable safely to
extract a 200-pound victim from a vehicle and lift, carry, and drag the victim 50 feet;
physically subdue and handcuff a combative subject; change a flat tire; drive for extended
periods of time; and run up and down stairs.
Either the State Compensation Insurance Fund or CHP‘s disability and retirement
section reviewed the chiropractor‘s report, informed Beckley‘s commanding officer that
Beckley ― ‗could not perform the 14 critical tasks,‘ ‖ and instructed the commanding
officer to ― ‗send [Beckley] home.‘ ‖ The commanding officer did so. Beckley asked if
he could continue to work as a PAO, and was told he could not do so because CHP
officers had to be able to perform the 14 critical tasks at any time. Beckley was sent
home on leave, and later took service retirement.
It is undisputed that in his job as PAO, Beckley was not required to perform any of
the 14 critical tasks regularly, although he performed a few of the tasks on rare occasions
during his time as PAO.
Beckley applied for industrial disability retirement. At a hearing on his
application, Beckley presented evidence from three chiropractors that he was unable to
carry out all of the 14 critical tasks. This evidence included the report of Dr. Parks, who
had evaluated Beckley in connection with his workers‘ compensation claim. According
to Dr. Parks, Beckley had suffered two distinct industrial injuries. The first involved
2
The administrative record includes a document entitled ―California Highway
Patrol Officer Task Statements,‖ which lists 14 attributes (such as lower and upper
extremity muscle strength, balance, flexibility, agility, and aerobic and anaerobic power
and capacity), and samples of tasks that use those attributes, including running up and
down stairs; ascending and descending an embankment; crawling/crouching/walking 50
feet; extracting a 200-pound victim from a vehicle and lifting, carrying, and/or dragging
the victim 50 feet; exiting a vehicle, sprinting 50 yards, vaulting a three-foot barrier, and
running 20 yards up a 40 percent grade; physically subduing and handcuffing a
combative subject after a 100-yard chase; changing a flat tire; and driving, standing, or
directing traffic for extended periods of time while dressed in full uniform. These tasks
are referred to as the ―14 critical tasks.‖
3
―cumulative trauma to his upper extremities,‖ including carpal tunnel syndrome. The
second was the injury to Beckley‘s lower back, in which a ―chronic degenerative
condition . . . was aggravated by a sudden twist when exiting a patrol car.‖ Dr. Parks
concluded Beckley had lost approximately half of his pre-injury capacity for fine motor
control of his hands and for lifting, and that he ―should be precluded from doing heavy
lifting, repeat bending or stooping.‖ Dr. Parks believed Beckley‘s carpal tunnel
syndrome was ―permanent and stationary,‖ and his low back condition was ―most likely
permanent and stationary.‖
Another chiropractor, Dr. Joseph Ambrose, opined in 2005 that Beckley had
strained his lower back and his upper extremities in his employment with CHP, and that,
―[g]iven [Beckley‘s] subjective factors of disability and objective findings . . . it is my
opinion that this patient should be permanently precluded from heavy lifting, repeated
bending, prolonged running, jogging or jarring activities.‖ Later, after reviewing MRI
results, he opined that Beckley ―cannot perform all of the essential functions of his usual
and customary occupation.‖
The third chiropractor, Dr. Moses Jacob, evaluated Beckley in 2008 and reviewed
his medical records. He diagnosed Beckley as suffering from, among other things,
chronic back strain, ―superimposed over lumbar disc herniation‖ and ―bilateral carpal
tunnel syndrome,‖ and concluded that these injuries were caused by his employment as a
CHP officer. Objective factors for the spine diagnoses included ―[l]imited mobility on
extension,‖ ―[p]ain on palpation,‖ ―MRI findings,‖ and ―[p]ositive orthopedic tests.‖
Objective findings to support the upper extremity injury included limited mobility in the
right wrist and positive orthopedic and radiographic tests. Dr. Jacob concluded Beckley
4
had a ―preclusion from heavy lifting, repeated bending and stooping,‖ and that as a result
of his injuries, Beckley ―can NOT perform the duties required of a CHP officer.‖3
Dr. Joseph Serra, an orthopedic surgeon, examined Beckley at the request of
CalPERS and reviewed his medical records. He concluded Beckley had ―[c]hronic
musculoligamentous strain lumbar spine,‖ ―[m]ild degenerative disc disease L3-4 lumbar
spine,‖ and ―carpal tunnel syndrome, mild, resolved at present.‖ He opined that Beckley
was not precluded from performing any of the job duties of a CHP officer, including the
14 tasks, although he could suffer pain or discomfort from performing them.4
CalPERS concluded Beckley‘s application for disability retirement ―must be
measured against his usual duties as a PAO, not against the 14 critical tasks‖ and that
there was no medical evidence Beckley was unable to perform his usual duties as PAO
either when he applied for disability in 2006 or when he retired in 2008. On that basis,
CalPERS denied his application.
Beckley brought a petition for writ of mandate in the trial court. The trial court
granted the petition. The court prepared a statement of decision concluding CalPERS
erred in measuring Beckley‘s disability against his assigned usual duties as a PAO, rather
than against the usual duties of a CHP officer, including the 14 critical tasks, and that the
3
In his report, Dr. Jacob stated that based on his musculoskeletal disorders,
Beckley ―would have difficulties with: [¶] Item 1: Lower extremity dynamic muscle
strength anaerobic power. [¶] Item 2: Lower and upper extremity static and dynamic
muscle strength aerobic power; ability to extract 200 pound victim from a vehicle.
[¶] Item 3: Upper and lower extremity static and dynamic strength aerobic power.
[¶] Item 5: Lower and upper extremity dynamic muscle strength aerobic power after 100
yard chase physically subdue and handcuff combative subject. Remove spilled loads or
traffic hazards such as lumber, large rocks or sacks of heavy material from roadway.
[¶] Item 11: Manual and finger dexterity. Load and fire, reload shotgun shells from a
shotgun. Operate a mobile digital computer.‖ These item numbers correspond to the 14
critical tasks. At the hearing, Dr. Jacob testified that Beckley could not perform those
tasks.
4
Beckley also claimed psychological disability and disability for tinnitus and
hearing loss.
5
weight of the evidence showed Beckley was incapacitated for his performance of his
duties. The court entered judgment directing CalPERS (1) to set aside its decision
denying Beckley‘s application for disability for retirement and (2) to grant the
application. Three weeks later, the court issued a peremptory writ of mandamus
commanding CalPERS ―to reconsider [its] action in light of this Court‘s Statement of
Decision, and take further action especially enjoined on you by law.‖ This appeal
ensued.5
II. STANDARD OF REVIEW
A public employee has a fundamental vested right to a disability pension if he or
she is in fact disabled. (Quintana v. Board of Administration (1976) 54 Cal.App.3d 1018,
1023 (Quintana).) Accordingly, the trial court was authorized to apply its independent
judgment as to the weight of the evidence. (Id. at p. 1021.) On appeal, we ―need only
review the record to determine whether the trial court’s findings are supported by
substantial evidence.‖ (Id. at p. 1024, italics added; see also Singh v. Board of Retirement
(1996) 41 Cal.App.4th 1180, 1185, fn. omitted (Singh).) As to questions of law, we
review those determinations de novo, although we give great weight to CalPERS‘s
construction of the California Public Employees‘ Retirement Law (PERL) (Gov. Code,6
5
The appeal purports to be from the writ of administrative mandamus. ―No
appeal lies from a peremptory writ of mandate issued pursuant to a judgment.‖ (C.R.W.
v. Orr (1970) 13 Cal.App.3d 70, 72, fn. 2; see also Department of Transportation v. State
Personnel Bd. (2009) 178 Cal.App.4th 568, 575, fn. 3.) The appeal rather lies from the
judgment itself. (See Kindig v. Palos Verdes Homes Assn. (1939) 33 Cal.App.2d 349,
355; Demartini v. Department of Alcoholic Beverage Control (1963) 215 Cal.App.2d
787, 794, disapproved on other grounds in Harris v. Alcoholic Bev. etc. Appeals Bd.
(1965) 62 Cal.2d 589, 596; Code Civ. Proc., § 904.1.) We shall exercise our discretion to
deem the appeal to be from the judgment. (See Walker v. Los Angeles County
Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 21 [appeal from
nonappealable order denying a new trial may be construed as an appeal from an existing
final judgment].)
6
All undesignated statutory references are to the Government Code.
6
§ 20000 et seq.). (Molina v. Board of Administration, Etc. (2011) 200 Cal.App.4th 53,
61; O’Connor v. State Teachers’ Retirement System (1996) 43 Cal.App.4th 1610, 1620–
1621.) If, however, there is ―any ambiguity or uncertainty in the meaning of [the Public
Employees‘ Retirement System] legislation [it] is to be liberally construed in favor of the
public employee, as long as such construction is consistent with the clear language and
purpose of the statute.‖ (City of Martinez v. Workers’ Comp. Appeals Bd. (2000) 85
Cal.App.4th 601, 617.)
III. DISCUSSION
Section 21151, subdivision (a) provides: ―Any patrol, state safety, state industrial,
state peace officer/firefighter, or local safety member incapacitated for the performance
of duty as the result of an industrial disability shall be retired for disability, pursuant to
this chapter, regardless of age or amount of service.‖ The PERL defines ― ‗[d]isability‘ ‖
and ― ‗incapacity for performance of duty‘ ‖ to mean ―disability of permanent or
extended and uncertain duration, as determined by the board, . . . on the basis of
competent medical opinion.‖ (§ 20026.)
CalPERS contends these statutes mean that Beckley was eligible for disability
retirement only if he was substantially unable to perform his ― ‗usual duties,‘ ‖ and that
those duties should be measured based on the requirements of his job as a PAO. For this,
CalPERS relies on Mansperger v. Public Employees’ Retirement System (1970) 6
Cal.App.3d 873 (Mansperger) and Hosford v. Board of Administration (1978) 77
Cal.App.3d 854 (Hosford). We examine each, in turn.
The applicant in Mansperger was a fish and game warden who had suffered work-
related injuries to his right arm that prevented him from lifting and carrying heavy loads.
(Mansperger, supra, 6 Cal.App.3d at p. 875.) He remained able to perform most of his
usual duties, including apprehending a prisoner, but could not lift heavy weights or carry
the prisoner away. (Ibid.) CalPERS concluded he was not physically incapacitated from
performing his duties as a fish and game warden. The trial court denied his petition for
7
writ of mandate, and the Court of Appeal affirmed. (Id. at pp. 874, 877.) The court held
that ―to be ‗incapacitated for performance of duty‘ within [former] section 20122 means
the substantial inability of the applicant to perform his usual duties.‖7 Although the
applicant was not able to lift or carry heavy objects, the evidence showed he ―could
substantially carry out the normal duties of a fish and game warden. The necessity that a
fish and game warden carry off a heavy object alone is a remote occurrence.‖ (Id. at
pp. 876–877.) Because the applicant could carry out most of his duties, CalPERS and the
trial court properly found he was not ― ‗incapacitated for the performance of duty‘ ‖
within the meaning of the statute, and he was therefore not entitled to disability
retirement. (Id. at p. 877.)
The court in Hosford reached a similar result. The applicant there was a CHP
sergeant who had sustained injuries, including back injuries, in three separate incidents.
(Hosford, supra, 77 Cal.App.3d at pp. 856–857.) As a result, he experienced continuing
pain, and believed he was in danger of further injury when he had to overpower people
who resisted arrest. (Id. at p. 857.) CalPERS determined he was not incapacitated for his
duties as a traffic officer. The applicant petitioned for a writ of mandate, and the trial
court, exercising its independent judgment, found he was ― ‗substantially able to perform
the normal duties of a sergeant in the California Highway Patrol,‘ ‖ and denied the
petition. (Id. at p. 859.) The Court of Appeal concluded that substantial evidence
supported the trial court‘s determination. (Id. at pp. 859, 865.) In considering the nature
of the applicant‘s ― ‗usual duties,‘ ‖ the court rejected the contentions that those duties
should be determined exclusively by use of either a job description prepared by the State
Personnel Board or a document prepared by the CHP describing the typical physical
7
Former section 21022, a predecessor to section 21151, provided ―[a]ny patrol or
local safety member incapacitated for the performance of duty as the result of an
industrial disability shall be retired for disability, pursuant to this chapter, regardless of
age or amount of service.‖ (Mansperger, supra, 6 Cal.App.3d at p. 876.)
8
demands on traffic officers and sergeants. The court noted that a sergeant‘s supervisory
role meant both that he might need to make arrests and subdue prisoners and that he
would be subjected to such physical demands less frequently than would traffic officers.
(Id. at pp. 860–861.) In concluding the evidence supported the trial court‘s finding, the
Court of Appeal noted that sitting for long periods of time would probably bother the
applicant‘s back, but that did not mean he was unable to do so, particularly since he could
stop and exercise as needed. (Id. at p. 862.) As to more strenuous activities, such as
running and apprehending a fleeing suspect, the court relied on ―[t]he rarity of the
necessity for such strenuous activity, coupled with the fact that Hosford could actually
perform the function.‖ (Ibid.)
CalPERS argues that under Mansperger and Hosford, Beckley is entitled to
disability retirement only if he is substantially unable to perform the usual duties of the
position he most recently held as a PAO, whether or not he could perform the general
duties of a CHP officer. We disagree. These cases do not hold that the usual duties of a
job should be measured only by the applicant‘s last job assignment. Instead, both cases
measured those duties in terms of the job classification the applicant held (fish and game
warden in Mansperger and CHP traffic sergeant in Hosford). This approach makes
sense: As the trial court in the case before us pointed out, ―[t]ying an applicant‘s
entitlement to disability retirement to his last specific assignment would tend to lead to
highly inconsistent results for persons in identical job categories who suffer from
identical disabilities.‖
Moreover, this approach is undercut by Vehicle Code section 2268, which was
enacted in 1983, after Mansperger and Hosford were decided. (Stats. 1983, c. 1004, § 1,
p. 3552.) As pertinent here, that statute provides: ―(a) Any member of the Department
of the California Highway Patrol . . . shall be capable of fulfilling the complete range of
official duties administered by the commissioner pursuant to Section 2400 and other
critical duties that may be necessary for the preservation of life and property. Members
9
of the California Highway Patrol shall not be assigned to permanent limited duty
positions which do not require the ability to perform those duties. [¶] . . . [¶] (c)
Nothing in subdivision (a) entitles a member of the California Highway Patrol to, or
precludes a member from receiving, an industrial disability retirement.‖ Thus, under
Vehicle Code section 2268, a CHP officer must be able to perform all of the job duties of
an officer—and there appears to be no dispute between the parties that the ―14 critical
tasks‖ reflect those duties.
This case is similar in many ways to Thelander v. City of El Monte (1983) 147
Cal.App.3d 736 (Thelander). The employee there, a probationary police officer for a
city‘s police department, was injured while attending police training academy. Her
employment was terminated because of her inability to complete the police academy and
perform the required duties of a police officer. (Id. at pp. 739–740.) She later sought
industrial disability retirement, and the city concluded she was not incapacitated for the
performance of her duties as a police officer within the meaning of the PERL law. (Id. at
p. 741.) The trial court granted the employee‘s petition for writ of mandate, and the
Court of Appeal affirmed the judgment. (Id. at pp. 741–742, 749.) The court noted that
there was evidence that every city police officer was ―required to operate at the same
level as a field officer regardless of her assigned position. This admission negates El
Monte‘s contention that a distinction exists between the daily requirements of the job and
the rare strenuous activities that may occasionally be involved. If every officer must be
capable of and prepared for the worst everyday, then that is a ‘usual’ duty of the job.‖
(Id. at p. 742, italics added.) Moreover, completing police academy was a requirement of
the job of a police officer. The court reasoned: ―The training requirement is analogous
to the periodic health and performance tests a police department might require permanent
officers to pass in order to retain their positions on the force. Would a police department
be allowed to terminate an industrially injured officer on grounds she failed a required
annual physical examination or performance test yet deny her a disability pension
10
because she was ‘capable’ of performing the ‘usual’ duties of the job? Pretty clearly
not.‖ (Id. at p. 745, italics added.) The court also noted that no light duty assignment, or
assignment that did not require the completion of police academy training, was available
to the officer on a permanent basis. (Id. at p. 746.)
Similarly, under Vehicle Code section 2268, a CHP officer must be capable of
carrying out ―the complete range of official duties,‖ and may not be assigned to
permanent light duty assignments that do not require those capabilities. (Veh. Code,
§ 2268, subd. (a).) As part of the job description of an officer, the CHP has enumerated
the ―14 critical tasks‖ an officer must be able to carry out in order to perform those
duties. Beckley‘s position as PAO was not considered a light duty assignment, and he
was discharged because he was not able to perform all of the 14 tasks. This evidence
amply supports the conclusion that—as was the case in Thelander—the ability to perform
all tasks required of a CHP officer is part of the ―usual‖ duties of his job.
CalPERS argues that Vehicle Code section 2268 does not affect the rule of
Mansperger and Hosford, and that it is still entitled to consider only the duties an
individual CHP officer actually was performing when deciding a disability claim. But as
mentioned above, these cases did not establish a rule that employees‘ usual duties were to
be established by their last assignment instead of their job classification. And section
2268, which was enacted after Mansperger and Hosford were decided, makes clear that
all CHP members, regardless of job classification, must be capable of performing the
11
complete range of duties administered by the Commissioner, which—the parties do not
dispute—include the 14 tasks.8
CalPERS contends, nevertheless, that its position is supported by subdivision (c)
of Vehicle Code section 2268, which provides: ―Nothing in subdivision (a) entitles a
member of the California Highway Patrol to, or precludes a member from receiving, an
industrial disability retirement.‖ According to CalPERS, this provision means that,
regardless of the clear language of subdivision (a), it has sole and complete authority to
make a disability determination based on a CHP officer‘s individual job duties. We
disagree with the notion that subdivision (c) requires CalPERS to measure a CHP
officer‘s usual duties by looking to his or her last assignment. When read as a whole, it is
clear that the statute establishes that the ―usual duties‖ of every CHP officer include, by
legislative mandate, the ability to carry out all tasks necessary for the preservation of life
and property, but that an officer‘s inability to accomplish those tasks does not require a
finding that the officer sustained an industrial disability (compare §§ 21150 & 21151), or
that his incapacity is ―of permanent or extended and uncertain duration‖ (see § 20026), or
that the officer meets any other proper requirements for entitlement to industrial disability
retirement. These matters are for CalPERS to decide.
In its reply brief, CalPERS acknowledges that Beckley ―admittedly was left in a
difficult position by [CHP‘s] actions,‖ but argues that it has exclusive authority to make
8
Indeed, in a precedential decision in 2000, which it cites in its reply brief on
appeal, CalPERS stated that it ―has interpreted Vehicle Code section 2268(a) as defining
the ‗usual job duties‘ of respondent CHP members as being the complete range of duties
set forth in Vehicle Code section 2400 and ‗other critical duties that may be necessary
for the preservation of life and property.‘ [¶] . . . [¶] The test for determining whether a
[State Traffic Sergeant] is entitled to a CalPERS disability is whether the official is
substantially unable to perform his/her full range of ‘usual duties’ as defined by Vehicle
Code section 2268.‖ (In the Matter of the Application for Reinstatement from Industrial
Disability Retirement, Willie Starnes, Case No. 2530, OAH No. L-1999060537, Jan. 22,
2000, italics added.) We take judicial notice of this precedential decision.
12
determinations of eligibility for disability retirement and that it is not bound by CHP‘s
determinations about whether Beckley could perform his job. (See §§ 20026, 20125,
21153, 21154, 21156.) The question here, however, is not who makes the eligibility
determination, but whether CalPERS applied the correct legal standards in doing so. We
have concluded that it did not because it measured Beckley‘s usual job duties by
considering only the duties he engaged in when he was assigned to be a PAO.
CalPERS also argues that, rather than relieving Beckley of his duties as a PAO
because of his disability, CHP should have applied for disability retirement on his behalf.
(§ 21153.) But regardless of whether CHP followed the correct procedure, CalPERS was
required to apply the correct legal standards.
CalPERS also contends that as a result of its determination that Beckley was
substantially able to perform his duties as a PAO, he is entitled to reinstatement with the
CHP. This argument simply reinforces the problem with defining Beckley‘s ―usual
duties‖ based on his role as a PAO, when the law requires any CHP officer to be able to
perform all of the duties necessary to protect life or property and does not permit limited
duty assignments. CalPERS makes no effort to explain how CHP could reinstate an
officer unable to perform all necessary duties in a manner consistent with section 2268.
According to statute, Beckley‘s usual duties were not limited to those normally
performed by a PAO.
Finally, CalPERS points out that Dr. Serra, the orthopedic surgeon appointed by
CalPERS, examined Beckley and concluded he was not precluded from performing any
of the job duties of a CHP officer, including the 14 tasks. CalPERS‘s decision, however,
was not based on the factual conclusion that Beckley could perform all of a CHP officer‘s
job duties, but on the legal conclusion that his usual duties should be measured against
those of a PAO. In any case, the trial court made the factual finding that Beckley was
incapacitated from performing all of the duties of a CHP officer, and we review the trial
court’s determination for substantial evidence. (See Singh, supra, 41 Cal.App.4th at
13
p. 1185; Quintana, supra, 54 Cal.App.3d at pp. 1023–1024.) As we have explained, in
addition to Dr. Serra‘s report and testimony, the record contains evidence from three
chiropractors, all of whom examined Beckley and his medical records, and all of whom
opined that Beckley was not able to carry out the full range of duties of a CHP officer.
Although the trial court did not recite this medical evidence in its statement of decision,
there is no indication that CalPERS objected to the statement of decision on this basis,
and we will therefore imply findings in Beckley‘s favor that are supported by the record.
(See Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 528–529; In re Marriage of
Arceneaux (1990) 51 Cal.3d 1130, 1133–1134; Code Civ. Proc., § 634.) Moreover, the
record is undisputed that CHP directed Beckley to leave the workplace because of his
inability to perform the 14 tasks. The evidence is sufficient to support the trial court‘s
factual finding that Beckley was unable to carry out the usual duties of a CHP officer.
IV. DISPOSITION
The judgment is affirmed.9
_________________________
Rivera, J.
We concur:
_________________________
Reardon, Acting P.J.
_________________________
Humes, J.
9
As we have noted, the trial court‘s judgment directed CalPERS (1) to set aside its
decision denying Beckley‘s application for disability for retirement and (2) to grant the
application. Thereafter, the writ of mandamus commanded CalPERS ―to reconsider [its]
action in light of this Court‘s Statement of Decision, and take further action especially
enjoined on you by law.‖ CalPERS has not pointed out, or raised any argument about,
the effect of the differing wording of the judgment and the writ of mandamus, and we
express no opinion on the matter.
14
CALIFORNIA COURT OF APPEAL
FIRST APPELLATE DISTRICT
DIVISION FOUR
PERRY BECKLEY
v.
BOARD OF ADMINISTRATION OF CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM
A135418
Alameda County
Sup. Ct. No. RG11593721
BY THE COURT:
The request filed on December 16, 2013 by respondent that this court‘s November
27, 2013 opinion be certified for publication is granted.
The Reporter of Decisions is directed to publish said opinion in the Official
Reports.
Date: December 26, 2013
15
Perry C. Beckley v. Board of Administration of California Public Employees‘ Retirement
System (A135418)
Trial court: Alameda County
Trial judge: Hon. Evelio Grillo
Counsel:
Patricia Bertha Miles and Rory Jerome Coffey for Defendant and Appellant.
Law Offices of Linda Joanne Brown and Christopher Hayes Dahms for Plaintiff
and Respondent.
16
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Case: 12-16085 Date Filed: 08/05/2013 Page: 1 of 8
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 12-16085
Non-Argument Calendar
________________________
D.C. Docket No. 9:12-cr-80054-WJZ-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JOSNY CHARLESTAIN,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 5, 2013)
Before TJOFLAT, DUBINA, and PRYOR, Circuit Judges.
PER CURIAM:
Case: 12-16085 Date Filed: 08/05/2013 Page: 2 of 8
Appellant Josny Charlestain appeals his 108-month above guideline-range
total sentence imposed by the district court for possession of a firearm and
ammunition by a convicted felon, in violation of 18 U.S.C. § 922(g)(1), and
possession of a firearm and ammunition by a person subject to a domestic violence
order, in violation of 18 U.S.C. § 922(g)(8). He argues that the district court erred
by admitting evidence about an unrelated 2009 murder for which he was charged
but not prosecuted, applying an aggravating role sentencing enhancement, and
imposing an unreasonable sentence which was far above the Guideline range. We
address each point in turn.
I.
We review a “district court’s application of the sentencing guidelines de
novo and its findings of fact for clear error.” United States v. Grant, 397 F.3d
1330, 1332 (11th Cir. 2005). Where a defendant raises a sentencing issue for the
first time on appeal, plain error review applies. See United States v. Aguillard,
217 F.3d 1319, 1320 (11th Cir. 2000). “For this Court to correct plain error:
(1) there must be error; (2) the error must be plain; and (3) the error must affect
substantial rights.” Id. at 1320 (internal quotation marks omitted).
Federal law provides that “[n]o limitation shall be placed on the information
concerning the background, character, and conduct of a person convicted of an
offense which a court of the United States may receive and consider for the
2
Case: 12-16085 Date Filed: 08/05/2013 Page: 3 of 8
purpose of imposing an appropriate sentence.” 18 U.S.C. § 3661 (emphasis
added). That includes hearsay, so long as it is sufficiently reliable, and evidence
that may not be admissible at trial, as long as the defendant has a chance to rebut
the evidence. United States v. Baker, 432 F.3d 1189, 1253-54 & n.68 (11th Cir.
2005). The Supreme Court has noted that, at sentencing, the district court has
broad discretion to consider “the fullest information possible concerning the
defendant’s life and characteristics.” Pepper v. United States, 562 U.S. __, __, 131
S. Ct. 1229, 1235-36 (2011) (internal quotation marks omitted). We have held that
a court may even consider relevant acquitted conduct so long as that conduct is
proven by a preponderance of the evidence. See United States v. Faust, 456 F.3d
1342, 1348 (11th Cir. 2006).
The Guidelines similarly provide that in deciding whether to sentence a
defendant within or outside of the Guideline range, the court can consider any
information about the defendant’s background, character, and conduct, unless it is
otherwise illegal to do so. U.S.S.G. § 1B1.4. Moreover, under Federal Rule of
Criminal Procedure 32, the court may allow the parties to introduce evidence
regarding objections to the presentence investigation report (“PSI”) during
sentencing. Fed.R.Crim.P. 32(i)(2).
We conclude from the record that the district court did not err, plainly or
otherwise, in admitting evidence about the 2009 homicide because it was relevant
3
Case: 12-16085 Date Filed: 08/05/2013 Page: 4 of 8
to the district court’s consideration of the 18 U.S.C. § 3553(a) factors, such as
Charlestain’s background and characteristics, and the need to provide adequate
deterrence, prevent additional gun-related crimes, and protect the public.
II.
We review for clear error the district court’s determination that a defendant
is subject to an aggravating-role enhancement under U.S.S.G. § 3B1.1(c). United
States v. Jiminez, 224 F.3d 1243, 1250-51 (11th Cir. 2000). We review the district
court’s application and legal interpretations of the Guidelines de novo. United
States v. Zaldivar, 615 F.3d 1346, 1350 (11th Cir. 2010).
Section 3B1.1(c) subjects a defendant to a two-level enhancement “[i]f the
defendant was an organizer, leader, manager, or supervisor in any criminal
activity” [other than one that involves five or more participants or is otherwise
extensive]. U.S.S.G. § 3B1.1(c). A defendant’s assertion of control over only one
other participant is sufficient to sustain a § 3B1.1(c) role enhancement.
Id. § 3B1.1, comment. (n.2); United States v. Mandhai, 375 F.3d 1243, 1248
(11th Cir. 2004). A “participant” is a person who is criminally responsible for the
offense, even if not convicted. U.S.S.G. § 3B1.1, comment. (n.1). In Mandhai, we
determined that the district court properly applied a § 3B1.1(c) enhancement where
the defendant recruited one other individual into a terrorist plot, prompted that
4
Case: 12-16085 Date Filed: 08/05/2013 Page: 5 of 8
individual to purchase weapons, and briefed him on the bombing plan. Mandhai,
375 F.3d at 1248.
We conclude from the record that the district court did not clearly err by
applying the aggravating role enhancement because it was entitled to conclude that
Charlestain directed his wife to buy the guns involved in the instant offenses.
III.
We review the sentence imposed by the district court for reasonableness and
evaluate the substantive reasonableness of a sentence for an abuse of discretion.
Gall v. United States, 552 U.S. 38, 46, 128 S. Ct. 586, 594 (2007); United States v.
Talley, 431 F.3d 784, 785 (11th Cir. 2005). Application of a variance is likewise
reviewed for abuse of discretion. Gall, 552 U.S. at 51, 128 S. Ct. at 597-98. After
Irizarry v. United States, 553 U.S. 708, 714-16, 128 S. Ct. 2198, 2202-04 (2008), a
district court’s grant of a variance does not require prior notice of the grounds
contemplated for a sentence above the range. We will only vacate a sentence when
“left with the definite and firm conviction that the district court committed a clear
error of judgment in weighing the § 3553(a) factors by arriving at a sentence that
lies outside the range of reasonable sentences.” United States v. Irey, 612 F.3d
1160, 1190 (11th Cir. 2010) (en banc) (internal quotation marks omitted). We
review only a defendant’s final sentence, and not each individual decision made
5
Case: 12-16085 Date Filed: 08/05/2013 Page: 6 of 8
during the sentencing process, for reasonableness. See United States v. Dorman,
488 F.3d 936, 938 (11th Cir. 2007).
When reviewing a sentence, we must first determine that the “district court
committed no significant procedural error,” United States v. McGarity, 669 F.3d
1218, 1263 (11th Cir.) (internal quotation marks omitted), cert. denied, 133 S. Ct.
378 (2012), and a sentence may be considered procedurally reasonable where the
district court considered the parties’ arguments and provided a reasoned basis for
its choice of sentence, see Rita v. United States, 551 U.S. 338, 356-58, 127 S. Ct.
2456, 2468-69 (2007). If the district court’s decision is procedurally reasonable,
our analysis then turns to the substantive reasonableness of the sentence. Gall, 552
U.S. at 51, 128 S. Ct. at 597. We review the totality of the facts and circumstances
to gauge for substantive error. Irey, 612 F.3d at 1189-90. “[T]he party who
challenges the sentence bears the burden of establishing that the sentence is
unreasonable in the light of both [the] record and the factors in section 3553(a).”
Talley, 431 F.3d at 788. The § 3553(a) factors include:
(1) the nature and circumstances of the offense and the history and
characteristics of the defendant; (2) the need to reflect the seriousness
of the offense, to promote respect for the law, and to provide just
punishment for the offense; (3) the need for deterrence; (4) the need to
protect the public; (5) the need to provide the defendant with needed
educational or vocational training or medical care; (6) the kinds of
sentences available; (7) the Sentencing Guidelines range; (8) pertinent
policy statements of the Sentencing Commission; (9) the need to
6
Case: 12-16085 Date Filed: 08/05/2013 Page: 7 of 8
avoid unwanted sentencing disparities; and (10) the need to provide
restitution to victims.
Id. at 786 (summarizing 18 U.S.C. § 3553(a)). In United States v. Scott, 426 F.3d
1324 (11th Cir. 2005), we noted that, “nothing in [United States v.] Booker[, 543
U.S. 220, 125 S. Ct. 738 (2005),] or elsewhere requires the district court to state on
the record that it has explicitly considered each of the § 3553(a) factors or to
discuss each of the § 3553(a) factors.” Id. at 1329. An acknowledgment that the
court considered the defendant’s arguments and the § 3553(a) factors is adequate
under Booker. Talley, 431 F.3d at 786.
“A district court abuses its discretion when it . . . gives significant weight to
an improper or irrelevant factor . . . .” Irey, 612 F.3d at 1189 (internal quotation
marks omitted). A sentence imposed well below the statutory maximum is an
indicator of a reasonable sentence. See United States v. Gonzalez, 550 F.3d 1319,
1324 (11th Cir. 2008). When uncertainty exists as to whether the district court
applied an upward variance or an upward departure, the court considers:
(1) whether the court referenced a particular Guideline departure provision; and
(2) whether the court based its decision on a belief that the Guidelines were not
adequate. United States v. Kapordelis, 569 F.3d 1291, 1316 (11th Cir. 2009).
We conclude from the record that Charlestain’s total sentence was
procedurally and substantively reasonable. First, the record demonstrates that the
district court imposed an upward variance rather than a departure, and as to
7
Case: 12-16085 Date Filed: 08/05/2013 Page: 8 of 8
procedural reasonableness, it correctly calculated the advisory Guideline range.
Charlestain has not met his burden of showing that his sentence was substantively
unreasonable. The court held two sentencing hearings, heard testimony from
numerous witnesses, considered the parties’ arguments, and discussed the
§ 3553(a) factors before deciding that a sentence above the Guideline range was
warranted to reflect the full extent of Charlestain’s criminal history, violent
characteristics, danger to the public, and the need for deterrence. In noting that it
had considered the parties’ positions, the Guidelines, and the statutory factors, the
court satisfied Talley. Charlestain’s sentence was also well below the statutory
maximum.
For the above-stated resons, we affirm Charlestain’s total sentence.
AFFIRMED.
8
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365 F.2d 559
STATE OF NORTH CAROLINA, Appellee,v.Reginald A. HAWKINS, Appellant.
No. 10062.
United States Court of Appeals Fourth Circuit.
Argued April 7, 1966.Decided Aug. 16, 1966.
Melvyn Zarr, New York City (Thomas Wyche, Charles V. Bell, J. Levonne Chambers, Charlotte, N.C., Jack Greenberg, New York City, and Anthony G. Amsterdam, Washington, D.C., on brief), for appellant.
Theodore C. Brown, Jr., Deputy Atty. Gen. of North Carolina (T. W. Bruton, Atty. Gen. of North Carolina, on brief), for appellee.
Before HAYNSWORTH, Chief Judge, and SOBELOFF and BRYAN, Circuit judges.
PER CURIAM:
1
Dr. Hawkins, a dentist, was indicted by a state grand jury charged with unlawful interference with a voting registration commissioner in the discharge of her duties and with the unlawful procurement of the registration of four un-qualified voters. He undertook to remove the prosecution to the District Court. We affirm the order of remand.
2
In the removal petition, it is alleged that he merely rendered requested assistance to the commissioner, that he made no representations about the qualifications of any voter, that the state's purpose was to harass and deter him, and, in conclusionary language, that he could not obtain a fair trial in North Carolina's courts. His allegations as to what transpired on the particular occasion are in contradiction of the specific charges of the indictment.
3
It is clear that this is not a case removable under 28 U.S.C.A. 1443. Compare City of Greenwood v. Peacock, 384 U.S. 808, 86 S.Ct. 1800, 16 L.Ed.2d 944; with State of Georgia v. Rachel, 384 U.S. 780, 86 S.Ct. 1783, 16 L.Ed.2d 925; see Baines v. City of Danville, 384 U.S. 890, 86 S.Ct. 1915, 16 L.Ed.2d 996, affirming Baines v. City of Danville, 4 Cir., 357 F.2d 756; and Wallace v. Virginia, 384 U.S. 891, 85 S.Ct. 1916, 16 L.Ed.2d 996, affirming Commonwealth of Virginia v. Wallace, 4 Cir., 357 F.2d 105.
4
Affirmed.
5
SOBELOFF, Circuit Judge (concurring specially):
6
Appellant, Dr. Reginald A. Hawkins, is a Negro dentist practicing in Charlotte, North Carolina, who has engaged in civil rights activities. E.g., see Hawkins v. North Carolina Dental Society, 355 F.2d 718 (4th Cir. 1966). On September 7, 1964, he was indicted by the Grand Jury of Mecklenburg County, North Carolina, on charges of unlawfully interfering with a apecial voting registration commissioner, North Carolina General Statutes 163-196(3), and unlawfully and fraudulently procuring the registration of certain persons not qualified to vote under North Carolina law, in violation of 163-197(1) of the statute. The prosecutions were removed to the District Court for the Western District of Nortll Carolina, pursuant to 28 U.S.C.A. 1443 et seq., but that court remanded to the state court, and this appeal followed.
7
The removal petition recites inter alia, that on the night of April 8, 1964, in his capacity as president of the Mecklenburg Organization on Political Affairs, Dr. Hawkins was engaged in a voters' registration tration campaign to encourage Negroes in the community to register and vote in the forthcoming federal and state elections. Petitioner, and presumably others participating in the drive, visited the homes of prospective voters, determined whether they could read and write and were otherwise eligible for registration, encouraged qualified persons to register, and assisted them by providing transportation to the local high school which was used as a place of registration.
8
On petitioner's arrival at the place of registration, there were a large number of applicants waiting to be registered. The special registration commissioner, due to her asserted unfamiliarity with the procedure, requested Dr. Hawkins to assist in registering the prospective Negro voters. Dr. Hawkins suggested, among other things, that the oath be administered en masse rather than individually, and then the registration commissioner herself attested to the qualifications of the applicants and signed their applications. The indictments mentioned above allegedly grew out of these activities.
9
In State of Georgia v. Rachel, 384 U.S. 780, 86 S.Ct. 1783, 16 L.Ed.2d 925 (1966), the Supreme Court authorized removal to the federal court of prosecutions against Negro defendants charged under a local trespass statute with failing to obey an order to leave a restaurant. Adhering generally to the interpretation of removal enunciated in the Rives-Powers line of decisions,1 the Court nevertheless held that removal was in order if a basis could be shown for a 'firm prediction that the defendant would be 'denied or cannot enforce' the specified federal rights in the state court.' Id. 86 S.Ct. at 1796. That basis was found in the public accommodations section of the Civil Rights Act of 1964, which grants all persons, regardless of their race, a right to be served in places of public accommodation, and further prohibits the state from punishing or attempting to punish any person for exercising those rights. Civil Rights Act of 1964, 203(c). 42 U.S.C.A. 2000a-2 (1964). The Court went on to hold that:
10
'Hence, if as alleged in the present removal petition, the defendants were asked to leave solely for racial reasons, then the mere pendency of the prosecutions enables the federal court to make the clear prediction that the defendants will be 'denied or cannot enforce in the courts of (the) state' the right to be free of any 'attempt to punish' them for protected activity.' Ibid. 86 S.Ct. at p. 1797.
11
Since the removal petition in Rachel had been remanded by the District Court to the state court without a hearing, the Supreme Court ordered the District Court to conduct a hearing to determine the truth of the petitioners' allegations that they had been ordered to leave the restaurant solely for racial reasons. If that should be the finding of the District Court, said the Supreme Court, then 'it will be apparent that the conduct of the defendants is 'immunized from prosecution' in any court,' and the removal petition should be allowed. Id. 86 S.Ct. at 1797.
12
Rachel cannot fairly be construed to mean that removal may be had only where the facts precisely duplicate those presented there, i.e.: where a Negro is indicted under a state criminal statute for refusing to leave the premises of a place of public accommodation. The essence of the Rachel decision is that the federal court is empowered to determine the narrow question whether the activities giving rise to a charge in the state courts constitute conduct protected by a federal statute that provides for equal civil rights and prohibits the state from prosecuting persons engaged in that conduct.
13
The court's opinion in the present case states that Dr. Hawkins' 'allegations as to what transpired on the particular occasion are in contradiction of the specific charges of the indictment,' and suggests that this is the ground for rejecting removal. The Supreme Court's opinion in Rachel makes clear, however, that conflict between the allegations in the removal petition and the criminal indictment is not ground for denying removal, provided that (1) the petition alleges facts which, if true, establish that the conduct is protected under a federal statute guaranteeing equal civil rights, and (2) there is a federal statutory prohibition against prosecution in the state courts for such conduct. Establishment of both propositions will impel the conclusion that the petitioner 'is denied or cannot enforce' his rights in the state court, justifying removal.
14
Here, as in the Rachel sit-in cases, Dr. Hawkins was engaged in assisting Negroes in the exercise of equal civil rights guaranteed by a federal statute, namely the Voting Rights Act of 1964. Section 1971(b) of that statute, originally a part of the Civil Rights Act of 1957, specifically provides that:
15
'No person, whether acting under color of law or otherwise, shall intimidate, threaten, coerce, or attempt to intimidate, threaten, or coerce any other person for the purpose of interfering with the right of such other person to vote * * *.' 42 U.S.C.A. 1971(b) (1964).
16
If, as alleged in the removal petition, prosecution against persons assisting in a Negro voter registration drive is racially motivated, this is an 'attempt to intimidate, threaten or coerce' Negroes in the exercise of their right to vote. If Georgia is forbidden to prosecute sit-ins under the public accommodations provisions of the 1964 Act,2 North Carolina would likewise seem to be forbidden to prosecute Dr. Hawkins for assisting in the exercise of rights under the voting provisions of the same act.3 Section 203(c) of the public accommodations portion of the Civil Rights Act of 19644 -- the basis for permitting removal in Rachel-- provides that 'No person shall * * * (c) punish or attempt to punish any person for exercising or attempting to exercise any right or privilege secured by section 2000a or 2000-1 (equal access to public accommodations).'5 Section 1971(b) of the voting rights provisions employs a more general prohibition against any attempted intimidation, threats, or coercion by persons 'acting under color of law or otherwise.'6 Literal comparison of the two provisions suggests that 1971(b) is a more, not less, sweeping prohibition of official acts of harassment against equal civil rights than the limited proscription of 203(c), since 'attempts to punish' are only one means of coercing, threatening, or intimidating.7
17
However, in Peacock v. City of Greenwood, 384 U.S. 808, 86 S.Ct. 1800, 16 L.Ed.2d 944 (1966), where the voting rights provisions of 1971 were invoked in support of a removal claim, the Supreme Court held that 'no federal law confers immunity from state prosecutions' growing out of attempts to secure the right to vote. Since 1971 did not contain the specific prohibition against state action that 'punish(es) or attempts to punish' present in Rachel the Court distinguished voting rights cases from public accommodations cases, and refused to permit removal. Under this interpretation of 1971(b), which is binding upon me, I agree that the present case must be held not entitled to removal.
18
On that ground I concur in today's per curiam opinion, and not on the ground therein stated, that the allegations of the petitioner are 'in contradiction of the specific charges of the indictment.' The test of removability is the content of the petition, not the characterization given the conduct in question by the prosecutor.
1
See Commonwealth of Kentucky v. Powers, 201 U.S. 1, 26 S.Ct. 387, 50 L.Ed. 633 (1906); Virginia v. Rives, 100 U.S. 313, 25 L.Ed. 667 (1879); Strauder v. State of West Virginia, 100 U.S. 303, 25 L.Ed. 664 (1879); State of Georgia v. Rachel, supra 86 S.Ct. at 1787, n. 5
2
Hamm v. City of Rock Hill, 379 U.S. 306, 85 S.Ct. 384, 13 L.Ed.2d 300 (1965)
3
It is immaterial that Dr. Hawkins himself was not seeking to register; it is enough that he was assisting other Negroes to do so. If the law's protection cannot be invoked by the more intelligent and better-educated Negro who furnishes leadership and guidance to others of his race, the purpose of the Voting Rights Act will be severely impaired
Negroes' rights are as effectively frustrated by prosecutions arising out of the attempt to exercise voting rights as by prosecutions growing out of the assertion of the right to equal accommodations. The use of the criminal process for the purpose of intimidation, I submit, would logically be proscribed in both cases.
4
42 U.S.C.A. 2000a-2 (1964)
5
Section 201 provides in its entirety:
'No person shall (a) withhold, deny, or attempt to withhold or deny, or deprive or attempt to deprive, any person of any right or privilege secured by section 201 or 202, or
(b) Intimidate, threaten, or coerce * * * any person with the purpose of interfering with any right or privilege secured by section 201 or 202, or
(c) punish or attempt to punish any person for exercising or attempting to exercise any right or privilege secured by section 201 or 202.' 42 U.S.C.A. 2000a-2 (1964).
6
'No person, whether acting under color of law or otherwise, shall intimidate, threaten, coerce, or attempt to intimidate, threaten, or coerce any other person for the purpose of interfering with the right of such other person to vote * * *.' 42 U.S.C.A. 1971(b) (1964)
7
Section 203(b) prohibits acts of intimidation, threats, and coercion, but does not contain the key words 'acting under color of authority of law' which are found in the comparable provision of 1971. 203(c) cures this omission by specifying that no one shall 'punish or attempt to punish' any person for exercising or attempting to exercise his rights. Having eliminated acts of state officials from part (b) of 203, they are thus in effect restored by paragraph (c)
In other words, 1971(b) of the voting rights provisions seems to express in different language the principle contained in 203(c) of the public accommodations clauses-- that the states, acting through state officials are forbidden to employ any form of attempted intimidation, coercion, or threats, including 'attempts to punish.' Thus, 1971(b) performs the same function as 203(c), and suggests that the two clauses should be given the same effect. In this view the Supreme Court's interpretation of 203(c) in Hamm v. City of Rock Hill, supra, 379 U.S. 306, 85 S.Ct. 384 (1965), would apply with equal force to the prohibitions of 1971(b). It is difficult to conceive that Congress intended to place voting rights guarantees on a lower plane of protection than the right to equal public accommodations.
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NO. 07-00-0582-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
DECEMBER10, 2001
______________________________
JORGE LUIS RODRIGUEZ, APPELLANT
V.
THE STATE OF TEXAS, APPELLEE
_________________________________
FROM THE 208TH DISTRICT COURT OF HARRIS COUNTY;
NO. 9417160; HONORABLE DENISE COLLINS, JUDGE
_______________________________
Before BOYD, C.J., and REAVIS and JOHNSON, JJ.
Pursuant to a plea bargain, appellant Jorge Luis Rodriguez was convicted of delivery of cocaine of at least 400 grams, a first degree felony, and punishment was assessed at 22 years confinement and a $100 fine. Appellant filed a
pro se
general notice of appeal. In presenting this appeal, counsel has filed an
Anders
(footnote: 1) brief in support of a motion to withdraw. Based upon the rationale expressed herein, the appeal is dismissed for want of jurisdiction and counsel’s motion to withdraw is rendered moot.
In support of his motion to withdraw, counsel has certified that he has diligently reviewed the record and, in his opinion, the record reflects no reversible error or grounds upon which an appeal can be predicated. Anders v. California, 386 U.S. 738, 744-45, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967); Monroe v. State, 671 S.W.2d 583, 585 (Tex.App.--San Antonio 1984, no pet.).
Thus, he concludes the appeal is frivolous and without merit. In compliance with High v. State, 573 S.W.2d 807, 813 (Tex.Cr.App. 1978), counsel has candidly discussed why, under the controlling authorities, there is no error in the court's judgment. Counsel has also shown that he sent a copy of the brief to appellant, and informed appellant that, in counsel's view, the appeal is without merit. In addition, counsel has demonstrated that he notified appellant of his right to review the record and file a
pro se
brief if he desires to do so. Appellant did not file a
pro se
brief. Concluding that the appeal is frivolous, the State filed a waiver of time in which to file its brief.
When an appeal is made challenging an issue relating to a conviction rendered from a defendant’s initial guilty plea and the punishment assessed does not exceed the punishment recommended by the State, the notice of appeal limitations of Rule 25.2(b)(3) of the Texas Rules of Appellate Procedure are triggered. Vidaurri v. State, 49 S.W.3d 880 (Tex.Cr.App. 2001). Moreover, voluntariness of a plea is no longer appealable from plea-bargained felony convictions. Cooper v. State, 45 S.W.3d 77, 83 (Tex.Cr.App. 2001). Thus, because appellant filed a general notice of appeal, we are without jurisdiction to entertain any arguable complaints that could have been raised.
We have also made an independent examination of the entire record to determine whether there are any arguable grounds which might support the appeal.
See
Penson v. Ohio, 488 U.S. 75, 109 S.Ct. 346, 102 L.Ed.2d 300 (1988); Stafford v. State, 813 S.W.2d 503, 511 (Tex.Cr.App. 1991). We have found no such grounds and agree with counsel that the appeal is without merit and is, therefore, frivolous. Currie v. State, 516 S.W.2d 684 (Tex.Cr.App. 1974); Lacy v. State, 477 S.W.2d 577, 578 (Tex.Cr.App. 1972).
Accordingly, the appeal is dismissed for want of jurisdiction and counsel’s motion to withdraw is rendered moot.
Don H. Reavis
Justice
Do not publish.
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1In a forfeiture proceeding, the State must show that the officer had probable cause to reasonably believe that a substantial connection existed between the property to be seized and criminal activity.
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, 820 S.W.2d 783, 784 (Tex. 1991).åÆ(Y(å2$
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2Short testified that the vehicle was parked some distance from the restaurant’s entry which seemed odd to him.à3#Õåæåæå37=CIQYag1.a.i.(1)(a)(i)1)a)Å]æi)ÕÆåèÉåÃÉÉdåãVå
3The officer also testified to seeing an exchange of a $50 bill. How he could do so at night while sitting in a different vehicle went unexplained.åã<Æ
4We note that Donelson also argues that forfeiture of his Land Cruiser would amount to excessive punishment and violate the 8
th
Amendment of the United States Constitution. Yet, the argument was not raised below. Moreover, and unlike the circumstances in the case upon which he relies,
i.e.
One Car, 1996 Dodge X-Cab Truck White in Color 5YC-T17 VIN 3B7HC13Z5TG163723 v. State
, 122 S.W.3d 422, 427 (Tex. App.–Beaumont 2003, no pet.), the vehicle’s involvement in the drug deal was not incidental here. Donelson not only used his Land Cruiser to transport the marijuana across state lines but also to provide the locale from which to consummate the drug sales to at least one high school student. åÆ(ííÅæ O$
NO. 07-08-0073-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
JANUARY 13, 2009
______________________________
THE STATE OF TEXAS,
Appellant
v.
1998 TOYOTA LAND CRUISER, OKLAHOMA TAG CMN-633
VIN JT3HT05J9W0007179,
Appellee
________________________________
FROM THE 47
TH
DISTRICT COURT OF RANDALL COUNTY;
NO. 58,915-A; HON. HAL MINER, PRESIDING
_______________________________
Opinion
_______________________________
Before QUINN, C.J. and CAMPBELL and HANCOCK, JJ.
The State appeals from the trial court’s denial of its motion to forfeit the 1998 Toyota Land Cruiser of Cole Austin Donelson. We agree, reverse, and remand.
Background
The Land Cruiser was seized after Donelson was found selling marijuana from it. Donelson sought to recover the vehicle. At issue was the propriety of the detention that resulted in his arrest.
In permitting Donelson to recover the Cruiser, the trial court determined, via written conclusions of law, that the interaction between the arresting officer and Donelson was not a consensual encounter but rather an “investigative stop.” “[T]here were no[] articulable facts sufficient to give rise to a rational inference that a crime was being committed,” the court continued. Thus, the “investigative detention . . . amounted to an illegal stop lacking in sufficient articulable facts or probable cause.” Moreover, the smelling of marijuana by an officer occurred “after the illegal investigative detention[,] and probable cause . . . cannot be based on facts discovered after the illegal detention.” So, because the detention was illegal, the State lacked basis to forfeit the vehicle.
(footnote: 1) We have been asked by the State to review this decision.
Law and Its Application
Whether the trial court’s decision regarding the nature of the detention is sound depends upon whether it abused its discretion. According to the Texas Supreme Court, we determine this by applying the standard of review developed by the Court of Criminal Appeals in
Guzman v. State
, 955 S.W.2d 85 (Tex. Crim. App. 1997).
State v. $217,590.00 in U.S. Currency
, 18 S.W.3d 631, 634 n.3 (Tex. 2000). Under that standard, great deference is accorded the trial court’s interpretation of historical facts.
Ford v. State,
158 S.W.3d 488, 493 (Tex. Crim. App. 2005),
Guzman v. State
, 955 S.W.2d at 87. This is so because the trial court has the sole authority to assess the credibility of the witnesses; simply put, it may choose who to believe.
State v. Ross,
32 S.W.3d 853, 855 (Tex. Crim. App. 2000);
State v. Ramirez
, 246 S.W.3d 287, 289 (Tex. App.–Amarillo 2008, no pet.). However, like deference is not afforded the trial court’s application of law to the facts or its interpretation of the law.
Ford v. State,
158 S.W.3d at 493. Those matters are reviewed
de novo
.
Id
.;
Guzman v. State
, 955 S.W.2d at 87.
Next, in support of the legal conclusions listed above, the trial court entered the following findings of fact:
5. On May 11, 2007, Capt. Roger Short of the Randall County Sheriff’s Office was working the Sober program in an unmarked vehicle watching for alcohol violations and other offenses in the area of Paramount Street and South Western.
6. At approximately 10:40 p.m. . . . Short, while parked, observed a blue pick-up in the Mr. Gattis pizza parking lot.[
(footnote: 2)] The driver, later identified as Cooper Mark Hurst W/M 08-14-89, was sitting in the pick-up alone. As Short was watching, another vehicle, (a green 1998 Toyota Land Cruiser . . .), drove up next to the blue pick-up. Hurst got out of his pick-up and got into the . . . Land Cruiser. Capt. Short could see into the vehicle and saw the driver of the Toyota reach into the back seat of the vehicle and grab a camouflage back pack. Short could see Donelson [who was driving the Land Cruiser] retrieving items from the back pack. Short observed that Donelson would reach back and forth with his right hand from the back seat area and place something on the center console.[
(footnote: 3)] Short radioed several other officers who were in the area of the possible drug transaction. Short advised two uniformed officers to make contact with [the] occupants.
7. Deputy Bushef parked his patrol unit behind the Land Cruiser while Lt. Sheets parked his patrol unit in a position behind the cruiser. Captain Short’s vehicle was in front and to the side of the Land Cruiser. Simultaneously the officers approached the vehicle on each side, knocked on the window and ordered occupants [sic] to roll down his window. The Deputy claims to have smelled an odor of marijuana. He removed the passenger and did a pat down search. Later the officer searched the vehicle finding marijuana under four . . . ounces.
8. Neither party consented to the search.
9. Captain Short never observed any illegal activity or illegal substance prior to ordering the two Deputies to make contact with the occupants.
These findings depict a situation wherein a peace officer, charged with watching for alcohol related violations and other criminal offenses, saw Hurst sitting alone in a parked car at 10:40 at night waiting for Donelson. The officer also saw 1) Donelson arrive in the Land Cruiser and park next to Hurst, 2) Hurst leave his vehicle and enter that of Donelson’s, 3) Donelson secure a backpack from the rear of his car, and 4) Donelson repeatedly remove items from the backpack and place them on the center console of the vehicle. Assuming
arguendo
that these circumstances were insufficient to create probable cause to believe a crime was in progress,
they nevertheless were unusual given the time and place. And, to an officer charged with conducting surveillance in the area for alcohol related and other offenses, they were reminiscent of those performed in a drug transaction. Given that, Short had reasonable suspicion to believe criminal activity was afoot.
See Hall v. State
, 74 S.W.3d 521, 525 (Tex. App.–Amarillo 2002, no pet.) (defining reasonable suspicion as the presence of articulable facts which, when combined with rational inferences therefrom, would allow an officer to reasonably suspect that a particular person has engaged, or is or soon will be engaging, in criminal activity);
State v. Jennings
, 958 S.W.2d 930, 933 (Tex. App.–Amarillo 1997, no pet.) (stating that reasonable suspicion arises when the circumstances depict the occurrence of unusual activity, the existence of a nexus between the detainee and the activity, and the likeness of the unusual activity to a crime).
That Short did not specifically see any contraband or illegal activity matters not for innocent activity may itself give rise to reasonable suspicion.
Woods v. State
, 956 S.W.2d 33, 38-39 (Tex. Crim. App. 1997). Indeed, the totality of the circumstances are determinative,
State v. Garcia-Cantu
, 253 S.W.3d 236, 244 (Tex. Crim. App. 2008);
State v. Jennings
,
supra
, even those which when viewed independently of each other could be indicative of innocent action. As stated in
Woods
, the possibility of an innocent explanation does not deprive the officer of the capacity to entertain reasonable suspicion of criminal activity.
Woods v. State
, 956 S.W.2d at 37. It is “the principal function of [the officer’s] investigation . . . to resolve that very ambiguity and establish whether the activity is in fact legal or illegal.”
Id.
And, to facilitate that determination, the officer has the authority to temporarily detain those engaged in the conduct.
Johnson v. State
, 912 S.W.2d 227, 235 (Tex. Crim. App. 1995). And, once the officer witnessing the activity gathers facts sufficient to create reasonable suspicion, we know of nothing that prohibits him from having other law enforcement personnel undertake the investigation.
Short had and did as much here. Thus, the officers were allowed to temporarily detain Donelson and Hurst by parking behind them to investigate whether criminal activity was occurring.
Additionally, approaching the Land Cruiser and directing Donelson to lower his window was activity well within the range of permissible conduct once reasonable suspicion to investigate arose; indeed, making contact with the detainee is often the best way to secure information needed to resolve the ambiguity mentioned in
Woods
. Once Donelson lowered his window and the officer purported to smell marijuana, probable cause arose to believe a crime was occurring within the vehicle, and we so hold as a matter of law. In concluding otherwise the trial court erred, which error lead to improperly denying the application for forfeiture.
(footnote: 4)
Again, we note that a trial court may well opt to disbelieve the testimony of any witness, whether controverted or not.
State v. Ramirez
, 246 S.W.3d at 289. Yet, that truism has little importance here since our decision is founded upon the facts which the trial court found to exist. So, we are not engaging in any effort to re-weigh the evidence or resolve credibility issues. Instead, we merely applied the law to the facts, which we may do
de novo
.
Guzman v. State
, 955 S.W.2d at 89.
Accordingly, we reverse the judgment of the trial court and remand the proceeding.
Brian Quinn
Chief Justice
Hancock, J., dissents.
FOOTNOTES
1:Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967).
1:
2:
3:
4:
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Cite as 2017 Ark. 28
SUPREME COURT OF ARKANSAS.
No. CR-16-998
Opinion Delivered February 9, 2017
ROBERT EARL HENRY
APPELLANT PRO SE APPELLANT’S PETITION
V. FOR WRIT OF MANDAMUS
[FAULKNER COUNTY CIRCUIT
COURT, NOS. 23CR-14-791, 23CR-14-
STATE OF ARKANSAS 817]
APPELLEE
HONORABLE CHARLES E.
CLAWSON, JUDGE
APPEAL DISMISSED; PETITION
MOOT.
PER CURIAM
On April 11, 2016, judgment was entered in the Faulkner County Circuit Court in
case number 23CR-14-791 reflecting that appellant Robert E. Henry had entered a plea of
guilty to possession of a controlled substance. Henry was sentenced as a habitual offender
to 144 months’ imprisonment. On the same date, Henry also entered a plea of guilty in
case number 23CR-14-817 to delivery of a controlled substance for which he was sentenced
as a habitual offender to 144 months’ imprisonment. Imposition of a sentence of 96 months
was suspended in the case. The court ordered that the sentences in the two cases would be
served concurrently.1
1
The judgments reflect pleas of guilty in the two cases. At the hearing when the
pleas were taken, the trial court indicated that the pleas were pleas of nolo contendere and
informed Henry correctly that the pleas would be treated just the same as pleas of guilty and
that the sentences would be the same for a plea of nolo contendere or guilty. Trial courts
Cite as 2017 Ark. 28
On July 7, 2016, Henry filed in the trial court a pro se petition to correct an illegal
sentence pursuant to Arkansas Code Annotated section 16-90-111 (Supp. 2015) that
encompassed both cases. There is a provision in section 16-90-111 that allows the trial
court to correct an illegal sentence at any time because a claim that a sentence is illegal
presents an issue of subject-matter jurisdiction. Williams v. State, 2016 Ark. 16, at 2 (per
curiam). While the time limitations on filing a petition under section 16-90-111 on the
grounds that the sentence was imposed in an illegal manner were superseded by Arkansas
Rule of Criminal Procedure 37.2(c) (2015), the portion of section 16-90-111 that provides
a means to challenge a sentence at any time on the ground that the sentence is illegal on its
face remains in effect. Halfacre v. State, 2015 Ark. 105, 460 S.W.3d 282 (per curiam). For
that reason, the trial court had authority to grant relief under the statute if the sentence
imposed on Henry in either of the cases was indeed illegal on its face. Id.; see also Hill v.
State, 2013 Ark. 29 (per curiam).
The trial court held a hearing on August 8, 2016. At that hearing, Henry indicated
that he did not wish to pursue the petition to correct the sentences because he was satisfied
with the sentences once he understood that they would run concurrently with each other
and with the sentences imposed in other judgments entered against him. On August 24,
are required to treat a plea of nolo contendere the same as if it were a plea of guilty. See
Ashby v. State, 297 Ark. 315, 319, 761 S.W.2d 912, 914 (1988). The plea of nolo
contendere to a charge in a criminal case is an admission of guilt in the criminal case. Seaton
v. State, 324 Ark. 236, 237, 920 S.W.2d 13, 14 (1996) (per curiam) (holding that procedural
rules governing pleas of guilty and nolo contendere make no distinction between the pleas
for the purposes of seeking postconviction relief).
2
Cite as 2017 Ark. 28
2016, the court entered its order granting Henry’s request to dismiss the petition. Henry
had filed a pro se notice of appeal on August 22, 2016, stating his intention to appeal to this
court from the decision of the court issued from the bench on August 8, 2016. Henry has
lodged the appeal in this court.
Now before us is Henry’s petition for writ of mandamus in which he seeks a writ
compelling the trial court to correct the order dismissing his petition to correct the sentences
in the cases. On January 5, 2016, we granted the appellee’s motion to supplement the
record in this matter with a copy of the amended felony information in in case number
23CR-14-817 that reflects that Henry was charged as a habitual offender in the case.
As it is evident from the record that Henry could not prevail on appeal, the appeal is
dismissed, and the mandamus petition is moot. An appeal from an order that denied a
petition for postconviction relief, including a petition under section 16-90-111, will not be
permitted to go forward where it is clear that there is no merit to the appeal. Burgie v. State,
2016 Ark. 144, at 1–2 (per curiam), reh’g denied (May 5, 2016); Perrian v. State, 2015 Ark.
424, at 2 (per curiam).
The trial court at the August 8, 2016 hearing questioned Henry about his decision
not to proceed with the petition to correct an illegal sentence that covered his two cases,
specifically asking, “[M]y understanding is you are dismissing or dropping both those
motions [sic] today.” Henry replied that the court’s understanding was correct. It is
therefore not clear on what basis Henry has lodged this appeal except for his assertion in the
mandamus petition that he did not make a formal motion to dismiss the section 16-90-111
petition. As the record clearly reflects that Henry chose to abandon his claims under section
3
Cite as 2017 Ark. 28
16-9-111, Henry could not succeed if the appeal were allowed to proceed. For that reason,
there was no error, and the appeal is subject to dismissal.
Appeal dismissed; petition moot.
4
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RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4705-17T1
NEW JERSEY DIVISION
OF CHILD PROTECTION
AND PERMANENCY,
Plaintiff-Respondent,
v.
M.E.,
Defendant-Appellant,
and
J.M.,
Defendant.
IN THE MATTER OF M.M.,
a Minor.
Submitted August 5, 2019 – Decided August 9, 2019
Before Judges Sabatino and Rose.
On appeal from the Superior Court of New Jersey,
Chancery Division, Family Part, Bergen County,
Docket No. FN-02-0295-17.
Joseph E. Krakora, Public Defender, attorney for
appellant (Fabiola E. Ruiz-Doolan, Designated
Counsel, on the briefs.)
Gurbir S. Grewal, Attorney General, attorney for
respondent (Jason Wade Rockwell, Assistant Attorney
General, of counsel; Victoria Kryzsiak, Deputy
Attorney General, on the brief.)
Joseph E. Krakora, Public Defender, Law Guardian,
attorney for minor (Danielle Ruiz, Designated Counsel,
on the brief.)
Defendant M.E. appeals from the Family Part's January 16, 2018 order
concluding, after a fact-finding hearing, she abused and neglected her seven-
year old daughter, M.M. (Maria). 1 We affirm substantially for the reasons set
forth in Judge Jane Gallina-Mecca's cogent oral opinion.
The judge's opinion, spanning twenty transcript pages, sets forth the facts
in detail, and we incorporate by reference her findings here. Judge Gallina-
Mecca conducted the fact-finding hearing on October 26, 2017, at which
plaintiff Division of Child Protection and Permanency (Division) presented the
1
Due to the similarity of family names and initials, we use pseudonyms for ease
of reference and privacy. R. 1:38-3(d)(10).
A-4705-17T1
2
testimony of caseworker Lori Laverty; Maria's father, J.M. (John) 2; and New
Milford Police Officer Bryan Mone; and introduced documents in evidence,
including Division investigation reports and police reports. Neither defendant
nor the law guardian presented any witnesses or documentary evidence at the
hearing.
In her comprehensive opinion, Judge Gallina-Mecca carefully reviewed
the testimony and evidence presented at the hearing. She found the testimony
of Laverty, John, and Mone credible, based on their manner of testifying,
personal knowledge, and lack of inconsistent or contradictory statements. The
judge noted Laverty and Mone also lacked a personal interest in the outcome of
the proceedings. Although John's interest in the proceedings was obviously
personal, the judge recognized he had Maria's "best interest at heart." The judge
also determined Maria's statements concerning defendant's conduct were
corroborated. See N.J.S.A. 9:6-8.46(a)(4) (providing "previous statements made
by the child relating to any allegations of abuse or neglect shall be admissible in
evidence; provided, however, that no such statement, if uncorroborated, shall be
sufficient to make a fact finding of abuse or neglect").
2
John was named as a defendant, but is not a party to this appeal.
A-4705-17T1
3
Judge Gallina-Mecca concluded the Division established by a
preponderance of the evidence that defendant abused or neglected Maria under
N.J.S.A. 9:6-8.21(c)(4). The judge elaborated:
A review of the material, relevant and competent
evidence in this case leads to the inexorable conclusion
that the Division has proven by a preponderance of the
evidence that the defendant mother placed [Maria] at a
substantial risk of harm when she was intoxicated and
unable to care for her daughter and allowed her to be
driven by a drunk driver. . . .
The [c]ourt finds that [Maria]'s disclosures
concerning parental behaviors were corroborated by the
admissions made by the defendant mother and
information [ob]tained by the Division during its
investigation. Specifically, [defendant] admitted to
drinking frequently to the point of intoxication. She
also admitted that she had previously been referred to
substance abuse treatment. These admissions are
sufficient to corroborate [Maria]'s report concerning
her mother's relationship with alcohol.
[Maria] described her mother as drinking wine
and alcohol every day. She explained that her mother
often has too much to drink causing her to act
differently. [Maria] described her mother when drunk
as shaking, not walking properly, slurring her words,
melting to the floor and being unable to get up or do
things for herself when she drinks.
[Maria] is fearful when her mother drinks and she
has devised an escape plan if her mother ever becomes
too drunk. By her own admissions, it is abundantly
clear that the defendant mother has a serious untreated
alcohol issue and the uncontroverted evidence
A-4705-17T1
4
establishes that [Maria] was exposed to and [a]ffected
by her mother's drinking.
This fact is not, however, of any consequence in
analyzing the defendant mother's actions on the
evening of the referral incident to determine whether
those accidents rose to the level of abuse or neglect. It
is uncontroverted that [defendant] was inebriated while
in the caretaking role of her daughter at the party on
December 19, 2016 [(the incident date)].
[Defendant] admitted that she consumed a
significant amount of alcohol and was unable to drive
herself and [Maria] home from the party. Nevertheless,
in her impaired state she determined that her paramour
[Michael] was indeed the appropriate choice of driver.
While [defendant] surmised that [Michael] was not
drunk since he only arrived to the party an hour before,
her seven-year-old daughter was able to recognize that
he was under the influence.
[Maria] observed her mother at the party to be
walking side-to-side with shaking arms. She described
[Michael] as also shaking but not as much as her
mother. These observations were corroborated as to
[defendant] by her own admission and as to [Michael]
by Officer Mone.
As the Appellate Division concluded in [Division
of Child Protection & Permanency v.] J.A., [436 N.J.
Super. 61, 68 (App. Div. 2014),] a parent or guardian
who permits a child to ride with an inebriated driver
acts inconsistently with N.J.S.A. 9:6-8.21(c)(4). It is
not less reckless but more so that [defendant] was not
in a position to assess the condition of her paramour
because she too was inebriated.
A-4705-17T1
5
[Defendant] was responsible for her daughter's
safety yet she was in an intoxicated state so that she
could neither ensure her child's safety nor make an
appropriate plan for her. Even if [Michael] had only
one beer at the party and arrived late, [defendant] had
no idea where he was previously and whether he had
been drinking. Without any inquiry and a complete
lack of judg[]ment, [defendant] permitted her child to
ride with a drunk driver placing her precious child in
peril because she was too intoxicated to adequately
provide for her daughter's safety.
It is unquestionable that [defendant] acted with
reckless disregard for her child's safety that could have
resulted in an unspeakable tragedy. Therefore, the
[c]ourt finds that [defendant] failed to exercise a
minimum degree of care in caring for her child and as
such, the [c]ourt finds that the Division has successfully
established by a preponderance of the evidence that
[defendant] committed an act of abuse or neglect
against her minor child pursuant to N.J.S.A. 9:6-
8.21(c)(4).
Following a dispositional hearing, the judge determined there was no
longer a need to continue litigation and dismissed the matter. Defendant now
appeals. She argues the record is insufficient to establish abuse and neglect by
a preponderance of the evidence. In particular, she claims the judge's finding
that she was "intoxicated to the point she was unable to care for her daughter"
is contradicted by Mone's response after he arrested Michael for driving while
intoxicated, i.e., Mone did not arrest defendant and permitted Maria to return
A-4705-17T1
6
home with her. The Division and law guardian urge us to affirm the judge's
order.
Our standard of review of the Family Part's fact-finding determination is
limited. On appeal from orders issued in Title 9, we accord considerable
deference to the trial court's credibility determinations and findings of fact, as
long as those findings are supported by adequate, substantial, and credible
evidence. N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 278-79
(2007). We maintain that deference "unless the trial court's findings 'went so
wide of the mark that a mistake must have been made.'" Id. at 279. Moreover,
we do not readily second-guess the factual findings of the Family Part in general,
given that court's special expertise in matters concerning children. N.J. Div. of
Youth & Family Servs. v. R.G., 217 N.J. 527, 553 (2014). Applying that limited
and well-settled scope of review, we affirm the trial judge's finding of abuse and
neglect, substantially for the sound reasons expressed in Judge Gallina-Mecca's
opinion. We add only a few comments.
N.J.S.A. 9:6-8.21(c) defines various circumstances that can comprise the
abuse or neglect of a child. Among other things, the statute specifically covers:
[A] child whose physical, mental, or emotional
condition has been impaired or is in imminent danger
of becoming impaired as the result of the failure of his
A-4705-17T1
7
parent or guardian, as herein defined, to exercise a
minimum degree of care . . . in providing the child with
proper supervision or guardianship, by unreasonably
inflicting or allowing to be inflicted harm, or
substantial risk thereof, including the infliction of
excessive corporal punishment; or by any other acts of
a similarly serious nature requiring the aid of the
court . . . .
[N.J.S.A. 9:6-8.21(c)(4)(b).]
Our Supreme Court has noted, "[t]he law's paramount concern is the safety
of the children, and not the culpability of parental conduct." N.J. Div. of Youth
& Family Servs. v. A.L., 213 N.J. 1, 18 (2013) (citations and internal quotation
marks omitted); see also G.S. v. Dep't of Human Servs., Div. of Youth & Family
Servs., 157 N.J. 161, 177 (1999). "The focus in abuse and neglect matters . . .
is on promptly protecting a child who has suffered harm or faces imminent
danger." A.L., 213 N.J. at 18 (emphasis added) (citing N.J.S.A. 9:6-8.21(c)(4)).
Relevant here, a court need not wait until a child is actually harmed or
neglected before it can act in the welfare of that minor. N.J. Div. of Youth &
Family Servs. v. V.M., 408 N.J. Super. 222, 235 (App. Div. 2009) (citing In re
Guardianship of D.M.H., 161 N.J. 365, 383 (1999)). Thus, "[i]n the absence of
actual harm, a finding of abuse and neglect can be based on proof of imminent
A-4705-17T1
8
danger and substantial risk of harm." A.L., 213 N.J. at 23 (citing N.J.S.A. 9:6-
8.21(c)(4)(b)).
A court's finding of abuse or neglect must be based on a preponderance of
the evidence when the proof is considered in its totality. N.J.S.A. 9:6-
8.46(b)(1); N.J. Div. of Youth & Family Servs. v. C.M., 181 N.J. Super. 190,
201 (App. Div. 1981) ("In child abuse and neglect cases the elements of proof
are synergistically related. Each proven act of neglect has some effect on the
[child]. One act may be 'substantial' or the sum of many acts may be
'substantial.'"). Notably, the Title 9 proof standard is less stringent than in
guardianship cases for the termination of parental rights, which must instead be
proven by clear and convincing evidence. See N.J.S.A. 30:4C-15.1(a). The
proofs adduced before Judge Gallina-Mecca amply met these evidentiary
standards.
As the judge aptly found, the Division established, by a preponderance of
the credible evidence, defendant abused or neglected Maria by failing to
recognize in her intoxicated state that Michael was too intoxicated to drive.
Defendant also later acknowledged her brother, who had not been drinking on
the incident date, was a viable alternative to drive Maria home. Although the
judge was careful to limit her findings to the incident date, she also aptly cited
A-4705-17T1
9
Maria's continued trepidation that defendant's ongoing inebriation would
interfere with her ability to parent. Notably, Laverty testified that in the course
of her ten-year employment with the Division, she had never experienced a child
of Maria's age "formulating an escape plan" under similar circumstances.
The evidence of neglect is readily apparent from the record. Defendant's
ongoing inebriation impacted Maria's welfare. Indeed, Maria's disclosures to
Laverty about defendant's appearance when she drank were remarkable for a
seven-year-old child. Maria said defendant's "arms shake, . . . she slurs her
words together . . . [she] walks side to side." Maria further told Laverty that
defendant and Michael "drink together sometimes and [Maria] thinks at least
one of them shouldn't be drinking . . . because at least one of them should have
a brain." Defendant and Michael "don't make good decisions when they're drunk
and at least one of them should have good ideas." Maria was "afraid when her
mother . . . drink[s] because when her mother melts to the floor, she can't take
care of herself and [Maria] knows that she can't take care of [Maria] either."
Defendant did not dispute Maria's account. Although defendant denied
she was an alcoholic, she admitted she "sometimes" drank alcohol to the point
of intoxication. Defendant also acknowledged a prior family court order
directing her to attend substance abuse treatment, but claimed she failed to do
A-4705-17T1
10
so for financial reasons. Thus, Maria's claims of abuse or neglect are amply
corroborated by defendant's own statements.
Contrary to defendant's contention, her actions on the day of the incident
placed Maria in imminent danger, even though Mone permitted the child to
return home with defendant. When Mone pulled over Michael's car, "[r]ight
away [he] smelled the odor of alcohol emanating from the vehicle." Michael
admitted he consumed "about five beers," failed the standard field sobriety test,
and his blood alcohol content (BAC) was 0.15 percent, supporting Mone's field
test findings. See N.J.S.A. 39:4-50(a) (providing a person who operates a motor
vehicle is considered under the influence of intoxicating liquor if his or her BAC
is 0.08 percent or more by weight of alcohol in the blood).
We therefore conclude the Division introduced substantial credible
evidence to demonstrate defendant abused or neglected Maria by allowing her
daughter to ride in an automobile Michael was driving while legally intoxicated.
As Judge Gallina-Mecca recognized, a parent "who permits a child to ride with
an inebriated driver acts inconsistently with N.J.S.A. 9:6-8.21(c)(4)." J.A., 436
N.J. Super. at 68. "[N]o reasonable person could fail to appreciate the danger
of permitting children to ride in a motor vehicle driven by an inebriated
operator." Id. at 69. Thus, in J.A., we found that a father "was grossly negligent
A-4705-17T1
11
in failing to protect the children from the imminent risk posed by [their mother's]
driving." Id. at 69-70. Here, defendant's gross negligence was underscored by
her inability to recognize Michael's intoxication.
Affirmed.
A-4705-17T1
12
| {
"pile_set_name": "FreeLaw"
} |
13 F.3d 6
MARUHO COMPANY, LTD., Plaintiff, Appellant,v.MILES, INC., Defendant, Appellee.
No. 93-1385.
United States Court of Appeals,First Circuit.
Heard Sept. 9, 1993.Decided Dec. 29, 1993.
Alan R. Hoffman, with whom John R. Cavanaugh and Lynch, Brewer, Hoffman & Sands, Boston, MA, were on brief, for plaintiff, appellant.
Sydelle Pittas, with whom Powers & Hall, P.C., Boston, MA, was on brief, for defendant, appellee.
Before BREYER, Chief Judge, ALDRICH, Senior Circuit Judge, and McAULIFFE,* District Judge.
BREYER, Chief Judge.
1
Miles, Inc., invented and patented a pain-killing drug called Xorphanol. In 1984, Miles gave Pars Pharmaceutical Co. the
2
exclusive right throughout the world to make, have made, use and sell
3
Xorphanol, in return for which Pars promised to pay a royalty and
4
to use reasonable efforts directly or through its subcontractors to develop one or more compounds ... to the point of [obtaining] ... government ... approval for ... [Xorphanol's] therapeutic use....
5
In 1988, Pars sublicensed the plaintiff in this lawsuit, Maruho, Inc., to develop Xorphanol "compounds" and to sell them in Japan.
6
According to Maruho, Pars misled it during the sublicense negotiations. Although Maruho asked Pars to produce all relevant studies, Pars did not tell it about 1) an important negative study conducted by the Charterhouse Research Unit of a well-known British pharmaceutical firm, Glaxo, Inc., and 2) a less important negative study conducted by the Director of the Stanford Pain Clinic. Both of these studies indicated that Xorphanol, while effectively reducing pain, also caused adverse side effects, such as headaches, drowsiness, dizziness, and euphoria. Maruho says that, had it seen these studies, it would not have bought the sublicense. In its view, Pars is guilty of fraud.
7
Maruho, however, seems unlikely to get its money back from Pars, for Pars is in the midst of bankruptcy proceedings. Maruho instead seeks recovery from Miles, Xorphanol's original licensor; and, in this (diversity-based) lawsuit against Miles, it pleads various theories of state law. The district court, after examining the evidence proffered by the parties, granted summary judgment for Miles. Maruho appeals. We affirm the district court's judgment.
8
* Maruho's Procedural Argument
9
At the outset, Maruho raises a procedural point. It says that the district court improperly converted a motion by Miles for judgment on the pleadings, Fed.R.Civ.P. 12(b)(6), into a motion for summary judgment, Fed.R.Civ.P. 56, without giving Maruho a "reasonable opportunity" to present "pertinent material." See Fed.R.Civ.P. 12(b) (court shall treat motion for judgment on pleadings as a motion for summary judgment where "matters outside the pleading" are presented to and accepted by the court and "reasonable opportunity" to present "pertinent material" is "given").
10
The record, however, does not support Maruho's claim. Miles' motion gave Maruho adequate notice of the risk of summary judgment, for Miles entitled it "Motion to Dismiss or, in the Alternative, for Summary Judgment " (emphasis added). We concede that Maruho immediately told the court that it thought Miles' motion requested summary judgment on only one count. But Maruho also told the court, in writing at the same time, that it would assume "that all of Miles' contentions are asserted under both Fed.R.Civ.P. 12 and [summary judgment rule] 56" (emphasis in original). Maruho then presented to the court three volumes of documents, which it titled "Plaintiff Summary Judgment Record." In response to questioning by this court at oral argument, Maruho could not identify any piece of evidence that it had lacked the opportunity to submit. Given these circumstances, Maruho converted Miles' motion into a motion for summary judgment on all counts by presenting pertinent material outside the pleadings; and Maruho not only had, but also took advantage of, a "reasonable opportunity" to present all "pertinent" material. See In re G. & A. Books, Inc., 770 F.2d 288, 294-95 (2d Cir.1985), cert. denied, 475 U.S. 1015, 106 S.Ct. 1195, 89 L.Ed.2d 310 (1986). The district court was therefore legally entitled to treat Miles' motion as one for summary judgment on all counts.
II
Miles' Participation in the Fraud
11
Maruho argues that Miles is liable as an actual participant in Pars' fraud, either by "aiding and abetting" Pars' fraud, by acting "in concert" with Pars, or by engaging in an "unfair or deceptive act or practice." See Mass.Gen.L. ch. 93A, Sec. 11; Kyte v. Philip Morris, Inc., 408 Mass. 162, 556 N.E.2d 1025 (1990); Restatement (Second) of Torts Sec. 876(a), (b) (1979) [hereinafter "Restatement (2d) "]. It says that, in the circumstances, a showing that Miles either 1) actually knew about the fraud, or 2) should have known about the fraud, is sufficient to trigger Miles' liability as an actual participant. We shall consider, in turn, each of the two branches of Maruho's argument.
12
1. Actual knowledge. We shall assume, for argument's sake, that a finding that Miles actually knew about Pars' fraud would trigger Miles' liability. Nonetheless, like the district court, we do not believe the record would permit a reasonable juror to make that factual finding.
13
Maruho says that a juror might find Miles' "actual knowledge" by inferring, from Miles' conceded knowledge that Maruho was willing to pay $3 million for the sublicense, that Miles must have known that Pars hid the negative Xorphanol studies from Maruho. Otherwise, why would Maruho pay so much for so little? To make the inference, however, requires some kind of propositional link, such as, "a knowledgeable firm would likely not have paid $3 million had it known about the studies." The problem for Maruho is that this link is missing.
14
We agree with Maruho that a reasonable juror could believe that Miles knew the following:
15
a. After obtaining its license in 1984, Pars sublicensed Glaxo, Inc., a highly reputable British firm, to prepare Xorphanol for marketing. In 1986, Glaxo, after paying Pars more than $1.5 million for the sublicense, terminated the agreement.
16
b. Glaxo cancelled the sublicensing agreement after its Charterhouse Research Unit tested Xorphanol by giving ten volunteers single doses (each in an amount growing from 0.25 mg to 4.0 mg over the course of several days). The Charterhouse study showed that many of these volunteers suffered some significant adverse side effect not suffered when they took a placebo.
17
c. Earlier, in 1985, the Director of Stanford Pain Clinic had conducted a multidose study of Xorphanol, giving volunteers several doses of 2 mg and 4 mg over several days. More of these volunteers suffered some significant adverse side effect than those who received comparable doses of codeine, a commonly used pain killer.
18
d. After Glaxo's 1986 termination, Maruho, in mid-1987, agreed to pay Pars $3 million for Japanese sublicensing rights.
19
The record, however, also shows the following facts, which are not significantly disputed:
20
a. Xorphanol was potentially a very valuable product. The market for pain killers amounts to several billion dollars annually. Xorphanol seemed to have the pain killing properties of a narcotic, such as codeine, without any addictive quality. Financial newspapers spoke initially of expected "annual worldwide" Xorphanol "sales of at least $50-100 million."
21
b. Miles, after receiving "updated IND information on Xorphanol," (which Maruho says included the Stanford, as well as the Charterhouse, studies), wrote Pars a letter in which it basically accepted the fact that the Charterhouse study was negative, but nonetheless pointed to other, positive, studies; urged Pars to perform further studies; noted the large sales of combination and other pain killers; and concluded, in reference to Xorphanol, that "there is still a place for a moderate to strong, orally active, non-dependence producing" pain killer.
22
c. Other studies in the record show Xorphanol as having highly desirable pain-killing effects, with the frequency of side effects depending upon the study and the dose. The studies all make clear that codeine and other pain killers also have side effects, and that, since many of the side effects are subjective, placebos have them as well.
23
d. The experts differed about the significance of the Charterhouse study, with at least one prominent expert finding that it was not critically important and did not warrant abandoning the Xorphanol project. Dr. Louis Lasagna, the Dean of Tufts University School of Graduate Biomedical Sciences, examined the Charterhouse study and concluded that:
24
1) "[T]here is nothing in the Charterhouse data that is disturbing about the 0.25 and 0.5 mg doses, and even at the 1.0 and 2.0 mg doses, there is no reason for excessive anxiety about adverse effects, if one compares the results on active drug with the results with placebo."
25
2) "There is nothing in this report, in my opinion, that would call for a halt to clinical testing of Xorphanol at doses up to (and including) 2 mg."
26
3) "In my view it is premature to make a judgment as to the clinical utility and safety of this drug in the absence of more clinical trial data."The upshot is a record that, even when viewed in Maruho's favor, shows (1) a product potentially worth a great deal of money; (2) Miles' belief, after learning of the negative studies, that Xorphanol was still valuable; (3) experts (at Glaxo) who thought that Xorphanol was not worth developing; but (4) a respected expert who thought that Xorphanol was still worth developing. Had Maruho presented favorable expert testimony on the relevant question--whether the hidden studies were conclusive to the point that a reasonable pharmaceutical executive would have thought Xorphanol had little or no value--the jury might have had a basis for reaching a favorable conclusion about what Miles knew. But Maruho presented no such expert testimony. And, our lay reading of the record, including the relevant studies, leads inexorably to the conclusion that experts differed in their views about Xorphanol's value, with Miles indisputedly arguing for further development. That fact, in turn, means that Miles need not have concluded, from the $3 million payment, that Pars must have hidden the studies. And, a reasonable jury could not conclude that Miles in fact knew about Pars' misconduct.
27
2. "Should have known." Maruho argues that Miles is liable as long as it "should have known" about Pars' fraud. The record, however, even when interpreted favorably to Maruho, supports the factual part of this claim only to the point where a reasonable juror might find that Miles should have been suspicious--and no further. And, that factual finding does not provide sufficient basis for a legal finding that Miles is liable as an actual participant in the fraud.
28
First, insofar as Maruho's "actual participant" theories rest upon a tortfeasor's intentional action, a finding about what Miles "should have known" is insufficient for a finding of an actual unlawful intent, whether one defines that "intent" in terms of a "purpose" or, more broadly, as a "belie[f] that the consequences are substantially certain to result from [the act]." Restatement (2d) Sec. 8A (1965). The Massachusetts courts have made clear that a defendant "aids and abets" a tortfeasor only if, at the least, the defendant actually knows about "its substantial, supporting role in an unlawful enterprise." Kyte, 556 N.E.2d at 1028. Similarly, the Massachusetts courts have held that a defendant acts "in concert" with a tortfeasor only if the defendant "agrees" to work toward the unlawful result. See, e.g., id. at 1027-28; Gurney v. Tenney, 197 Mass. 457, 84 N.E. 428 (1908). Without actual knowledge that Pars was hiding negative tests, Miles can neither have known of Pars unlawful (i.e., fraudulent) objective nor have agreed to help achieve it.
29
Second, insofar as Maruho tries to predicate liability upon Miles' negligence, a jury could find, at the very worst, nothing more than a negligent failure to act upon a suspicion, that is, an omission on Miles' part. To predicate tort liability upon a negligent omission, one must find a special relationship, between defendant and plaintiff, that imposes a duty upon the defendant to take positive steps to protect the plaintiff. See Restatement (2nd) Secs. 291 comment f (negligent "nonfeasance" requires a special relationship), 314 & comments a, c (1965) (stating the general rule that liability for failure to take action for the aid or protection of another is limited to situations in which there exists some special relationship between the parties). We are not aware of any authority suggesting that the simple relationship "licensor/sub licensee" automatically, by itself, creates such a duty. The exceptional situations in which authority supports the existence of such a duty are not present here. See id. Secs. 314A-324A (listing exceptions to the general rule of non-liability, none of which encompasses the licensor-sublicensee relationship). Finally, Maruho has not argued any other ground that might support the existence of the necessary duty. We therefore agree with the district court that no such duty existed.
30
3. Maruho argues that Miles has violated chapter 93A of the Massachusetts General Laws by engaging in an "unfair or deceptive act or practice." Mass.Gen.L. ch. 93A, Sec. 11. But, to prove a violation, Maruho must show conduct that involves some kind of "rascality." Tagliente v. Himmer, 949 F.2d 1, 7 (1st Cir.1991). Maruho has cited no authority that would justify such a finding where a licensor has only suspicion, not actual knowledge, of a licensee's improper conduct, and where the licensor has no duty to act to protect the potential victim. The circumstances simply do not indicate "rascal-like" behavior on Miles' part. We therefore do not believe the Massachusetts courts would find a violation of the chapter.
III
Vicarious Liability
31
Maruho says that, even if Miles is without fault, it is nonetheless "vicariously" liable for the harm Pars caused, either because Pars was Miles' agent, or because Miles and Pars were engaged in a "joint venture" (or "joint enterprise"). The theories of vicarious liability that Maruho argues, however, all require Maruho to show that Miles had the legal right to control Pars' negotiating activity. See, e.g., Lyon v. The Ranger III, 858 F.2d 22, 27 (1st Cir.1988) (joint enterprise exists where participants " 'ha[ve] an equal right to direct and control the conduct of the other[s] concerning acts or omissions which cause, or contribute to the causation of, injury.' " (quoting Adams v. Dunton, 284 Mass. 63, 187 N.E. 90, 92 (1933)); Payton v. Abbott Labs, 512 F.Supp. 1031, 1036 (D.Mass.1981) (joint venture requires "joint [but not necessarily equal] control of the objectives of the undertaking and of the means of achieving those objectives"); Restatement (Second) of Agency Sec. 1 comments a, b (1958); W. Page Keeton et al., Prosser and Keeton on the Law of Torts Sec. 72, at 519-20 (5th ed. 1984) (joint enterprise requires something that shows a mutual right of control). Yet Maruho can make no such showing here.
32
The licensing agreement between Miles and Pars did not give Miles any right to participate in or control the negotiation and granting of sublicenses. And the record provides no evidence of any statement, or action, by Miles that suggests any right to control Pars' negotiating activity. We concede that, sometimes, a jury might use evidence of actual control as a basis for inferring the existence of a corresponding legal right. But here, there was no actual control. Miles did not even know that Pars and Maruho were negotiating a sublicense until the negotiations were already roughly seven months old; and it first learned the terms of the proposed contract--such as the fee Maruho was to pay for the sublicense--only a few weeks before the contract was scheduled to take effect.
33
Maruho nevertheless argues that Miles' legal ability to grant, or deny, Pars a needed extension of the basic license permitted Miles to influence the terms of, or to benefit from, the sublicense. But, we have no reason to believe that the simple, unexercised, practical power to influence a negotiation could, by itself, create an agency, or joint venture (or enterprise), or otherwise, every negotiator would discover himself the agent of, or venturer with, any of the many persons who might influence the negotiations. We are not surprised that we could find no legal authority supporting such a proposition. We add that the simple fact that Miles might have benefitted from the sublicense (through the royalty-sharing provision in the Miles/Pars license agreement) does not make Miles vicariously liable for Pars' conduct. See, e.g., Payton, 512 F.Supp. at 1036 (recognizing that profit sharing and joint control are central to a joint venture); Stock v. Fife, 13 Mass.App.Ct. 75, 430 N.E.2d 845, 847-48 (1982) (absent joint control, a common (pecuniary) interest is not enough to establish a joint enterprise).
IV
Unjust Enrichment
34
Maruho argues that Miles was "unjustly enriched" by having received a share of the $3 million sublicense fee, and that it must therefore "return" the share to Maruho. See Restatement of Restitution Sec. 1 (1937) ("A person who has been unjustly enriched at the expense of another is required to make restitution to the other."). The controversial part of this argument, however, lies in its premise. Did Miles ever receive a portion of the $3 million?
35
The relevant facts are not in dispute. Miles and Pars disagreed about whether Miles was entitled to some of Maruho's $3 million sublicense fee. Miles argued that the fee was a "royalty," in which case it was entitled to one-half. Pars argued that the entire sum represented a return of Xorphanol development expenses, in which case Miles was entitled to nothing. Miles and Pars then agreed that Pars would deposit $1,350,000 of the fee into an escrow account and retain the remainder. The escrow agreement provided that the money "shall remain in escrow" until
36
a. The Parties ... either reach a satisfactory agreement as to ... distribution; or
37
b. A final decision is reached by arbitration ...; or,
38
c. In the event the Parties cannot agree to arbitration, a final decision on the distribution ... is rendered by an appropriate court....
39
Eventually, Miles decided not to bring a legal proceeding and permitted Pars to take the money from escrow.
40
For Maruho to obtain "restitution" from Miles, it must show, at a minimum, that Miles had "possession of or some other interest in" this money. Restatement of Restitution Sec. 1 comment b. But Miles never did have possession of the money. The interest that it had (in the absence of an agreement from Pars as to distribution) consisted of little more than a right to bring a lawsuit to obtain money to which its legal right (the record indicates) was highly uncertain. And, since Pars would not agree, the escrow served only to isolate and protect the money from other potential Pars creditors while Miles made up its mind whether or not to bring suit.
41
This kind of interest--at best analogous to an attachment--seems to us too slight to count as the kind of benefit that might support a suit for restitution. This undefined interest is not analogous to that of a joint owner in a joint bank account. We can find no convincing analogy to any other kind of joint ownership. Nor does the record, read favorably to Miles, show anything of value that Miles received for releasing the escrow. (It shows no "promise" by Pars to engage in development work that it would not otherwise have undertaken.) The record shows only that Miles, for a time, thought it had a right to the money and convinced Pars (in part through its power to extend, or not to extend, the basic license) to place the money in escrow while Miles decided whether or not to sue. (If there was some more tangible interest here, Maruho at least had the burden of showing just what it consisted of, but Maruho did not even try to do so.) We are not surprised that we could find no authority supporting the proposition that such an "interest" falls within the scope of the Restatement's description of "enrichment," while we found contrary authority directly on point. Gilpin v. AFSCME, AFL-CIO, 875 F.2d 1310, 1314-15 (7th Cir.), cert. denied, 493 U.S. 917, 110 S.Ct. 278, 107 L.Ed.2d 258 (1989). The authority that Maruho cites, Gill Equipment Co. v. Freedman, 339 Mass. 303, 158 N.E.2d 863 (1959), says that a person may be "unjustly enriched" by money that he does "possess" under a constructive trust created by his promise to assume "personal responsibility, " which trust he violates by later giving the money to another. That case is not on point.
42
For these reasons the judgment of the district court is
43
Affirmed.
*
Of the District of New Hampshire, sitting by designation
| {
"pile_set_name": "FreeLaw"
} |
966 F.2d 1454
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Isaac TURNER, Petitioner-Appellant,v.Terry MORRIS, Respondent-Appellee.
No. 91-3974.
United States Court of Appeals, Sixth Circuit.
June 18, 1992.
Before BOYCE F. MARTIN JR. and MILBURN, Circuit Judges, and BROWN, Senior Circuit Judge.
PER CURIAM.
1
Petitioner Isaac Turner appeals from the district court's denial of his petition for a writ of habeas corpus filed pursuant to 28 U.S.C. § 2254.
2
Petitioner was indicted in May 1984 on one count of aggravated burglary in violation of Ohio Revised Code § 2911.11, one count of kidnapping in violation of Ohio Rev.Code § 2905.01, and two counts of rape in violation of Ohio Rev.Code § 2907.02. On January 14, 1985, a Cuyahoga County, Ohio, jury convicted petitioner of both counts of rape and the count of kidnapping. Petitioner was acquitted of the aggravated burglary charge.
3
The trial court sentenced petitioner to concurrent terms of 7 to 25 years for each conviction. Subsequently, the trial court modified petitioner's sentence to 5 to 25 years for each conviction, the sentences to be served concurrently.
4
Petitioner appealed his conviction to the Ohio Court of Appeals, Eighth District. The appeal presented nine assignments of error, including the four issues raised in this case. The Ohio Court of Appeals affirmed petitioner's conviction on December 12, 1985.
5
Petitioner next filed a motion for leave to appeal to the Supreme Court of Ohio. The motion presented eight assignments of error, again including the issues in this case. On April 23, 1986, the Ohio Supreme Court dismissed the appeal on the ground that no substantial constitutional question was presented.
6
Petitioner was released on parole on July 30, 1990. He filed his petition for a writ of habeas corpus on July 22, 1986, presenting seven grounds for relief.
7
The matter was referred to a magistrate judge who recommended that the petition for a writ of habeas corpus be dismissed. After de novo review in light of petitioner's objections, the district court adopted the magistrate judge's report and recommendation and dismissed the habeas petition on September 17, 1991. This timely appeal followed. On October 18, 1991, the district court certified that probable cause exists for petitioner's appeal.
8
On appeal, the issues are whether petitioner was denied due process when: (1) the trial court refused to instruct the jury on common law marriage, (2) the trial court refused to instruct the jury on lesser included offenses, (3) the trial court concluded that petitioner bore the burden of proof on the affirmative defense of intoxication, and (4) petitioner was denied a new trial on the grounds of newly discovered evidence.
9
After hearing argument of counsel and duly considering the briefs and record filed herein, we AFFIRM the order of the district court denying the writ for the reasons stated in the magistrate judge's report and recommendation of July 8, 1987, and the district judge's memorandum and order of September 17, 1991.
| {
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United States Bankruptcy Appellate Panel
FOR THE EIGHTH CIRCUIT
No. 97-6028SI
In re: *
*
HOWARD JOHN TATGE, *
* Appeal from the United
Debtor. * States Bankruptcy Court
* for the Southern District
PAMELA TATGE, * of Iowa
*
Plaintiff-Appellee, *
-v.- *
*
HOWARD JOHN TATGE, *
*
Defendant-Appellant *
Submitted: August 21, 1997
Filed: October 8,1997
Before KRESSEL, SCHERMER, and DREHER, Bankruptcy Judges.
DREHER, Bankruptcy Judge
This is an appeal from the bankruptcy court's determination that a
debt incurred during the course of a marital dissolution proceeding was
excepted from discharge under § 523(a)(5)1 of the
1
The bankruptcy court also made findings and conclusions
with respect to dischargeability under § 523(a)(15). However,
the Plaintiff conceded that Plaintiff was proceeding solely under
§ 523(a)(5). This renders moot that portion of the appeal which
relates to: (i) the bankruptcy court's order denying Debtor's
motion to dismiss for untimeliness (under § 523(c)(1) and Fed. R.
Bankr. P. 4007(c)); and (ii) the bankruptcy court's findings,
conclusions, and order for judgment holding alternatively that
the debt was excepted from discharge under § 523(a)(15).
Bankruptcy Code. For the reasons set forth below, we affirm.
I. FACTUAL BACKGROUND
On March 1, 1990, the eleven-year marriage of Debtor and Appellee,
Pamela Tatge ("Pamela"), was dissolved in Illinois state court. The
dissolution decree incorporates a Marital Settlement Agreement
("Settlement Agreement") of the parties. At the time, Debtor owned and
operated an auto parts business. Pamela was not, and never had been,
employed outside the home and had no special work skills or training.
The Settlement Agreement provided that Pamela would have custody
of their two minor children and that Debtor would pay $400 per month as
child support. Debtor was also to maintain medical insurance for the
children. The Settlement Agreement did not explicitly provide for
alimony, support or maintenance for Pamela. The parties further agreed
that Debtor would receive the auto parts business and assume the
business debts. There were also provisions splitting certain personal
property (of which there was little) between Debtor and Pamela.
2
At the time of the dissolution, Pamela was living with the two
children in a home that had originally been wholly owned by Pamela's
mother. In order to fund the startup of the auto parts business,
Pamela's mother had earlier deeded a small interest in the home to
Pamela and to Debtor; they, in turn, had borrowed money secured by a
mortgage on the home. Debtor, Pamela, and Pamela's mother were all
listed on the mortgage. The Settlement Agreement provided that Debtor
would quitclaim any interest he had in the home to Pamela and Debtor
would assume and pay the mortgage payments of $430 per month. The
Settlement Agreement further provided that: (1) "said assumption of
mortgage payments can be discharged in bankruptcy in the event . . .
[Debtor] files bankruptcy"; (2) Pamela could join in the petition and
Debtor would pay her attorneys' fees; and (3) if Debtor filed a
bankruptcy petition and defaulted on the mortgage payments, Pamela could
return to state court and seek an award of maintenance from Debtor. The
Settlement Agreement also specifically provided that any such
maintenance obtained by Pamela was to be for a period of four years from
the date of the entry of the judgment dissolving the marriage, "it being
the intent of the parties that . . . [Pamela] should not be able to
claim maintenance from . . . [Debtor] for more than four . . .
3
years from the date of the entry of the judgment of dissolution."
Finally, the Settlement Agreement recited that each party waived any
further claims arising from the marriage, including, specifically,
maintenance.
In the ensuing years, Debtor's business floundered. On December
14, 1994, Debtor filed a petition for relief under Chapter 7 of the
United States Bankruptcy Code, and, on March 28, 1995, the bankruptcy
court issued an order discharging Debtor.
II. PROCEDURAL HISTORY AND BANKRUPTCY COURT DECISION
Pamela's original complaint in this action sought a determination
that Debtor's obligations to continue to pay the mortgage payments on
the home were excepted from discharge. The complaint described the
marital history of the parties, the terms of the Settlement Agreement,
and, in general terms, sought a determination of nondischargeability
"under § 523(a) of the United States Bankruptcy Code," without
specifying a subsection. Debtor answered, counterclaimed under § 523(d)
of the Code, and moved to dismiss.
Debtor's motion to dismiss asserted that the complaint lacked
specificity; that, if Pamela was proceeding under § 523(a)(15), the
cause of action was barred by the sixty-day time limit set forth in Fed.
R. Bankr. P. 4007(c); and, that the cause
4
of action was subject to a res judicata defense because of the prior
state court proceedings. The bankruptcy court treated the motion to
dismiss as one for a more definite statement under Fed. R. Bankr. P.
7012(e) and ordered Pamela to amend her complaint to more specifically
plead her claims. The court continued for further hearing the other two
portions of the motion. Pamela then filed an amended complaint in which
she made clear that her claim was under § 523(a)(5) only. At the
continued hearing, Pamela's counsel again explicitly acknowledged that
she was proceeding solely under § 523(a)(5). The bankruptcy court then
denied the motion to dismiss, ruling that the lack of particularity had
been corrected in the amended complaint; that res judicata was an
affirmative defense preserved for trial; and, that the argument based on
the sixty day time limitation for asserting an action under § 523(a)(15)
was moot because Pamela was proceeding solely under § 523(a)(5).
Debtor's answer and counterclaim asserted that Debtor's obligation
to pay the mortgage payments was in the nature of a property settlement
not excepted from discharge under § 523(a)(5). Debtor also asserted
affirmative defenses including res judicata, equitable estoppel, and
contract. Debtor also reasserted the counterclaim for attorneys fees
under § 523(d).
5
After the bankruptcy court denied a motion for summary judgment, a
trial was held on the merits. The court found that the agreement to
make the mortgage payments was a debt for support of the children and
Pamela that was excepted from discharge under § 523(a)(5) of the
Bankruptcy Code. The court based its rulings on its finding that, at
the time of the dissolution, the parties intended Debtor's commitment to
be in the nature of support for Pamela and the two children, basically
"to put a roof over their heads." The court noted, among other factors,
that Pamela had never worked outside the home and had virtually no
marketable job skills; that the only sources of income for her and the
children were the child support and mortgage payments; and that Debtor
had a stable work history and, as a result of the dissolution
proceedings, owned the business and its assets. The court further noted
that the Debtor's obligation to support his children was not limited by
the language in the Settlement Agreement restricting the amount of
maintenance that Pamela might later obtain.
III. DECISION
Debtor's main contention on appeal is that the bankruptcy court
erred in holding that Debtor's commitment to pay the mortgage payments
was in the nature of a support obligation
6
excepted from discharge under 11 U.S.C. § 523(a)(5). In addition,
Debtor asserts that the prior state court judgment is res judicata on
the issue of dischargeability, that the contract between the parties
regarding dischargeability should be enforced, and that, in any event,
Pamela is equitably estopped to contest dischargeability by reason of
such contract. Debtor also asserts that the bankruptcy court erred in
denying his motion to dismiss and in denying his motion for summary
judgment.
A. DISCHARGEABILITY UNDER § 523(A)(5)
Section 523(a)(5) of the Bankruptcy Code excepts from discharge a
debtor's obligation to make alimony, maintenance or support payments to
a former spouse and dependents. 11 U.S.C. § 523(a)(5) (1994). It is
clear that whether a particular debt is a support obligation or part of
a property settlement is a question of federal bankruptcy law, not state
law. Williams v. Williams (In re Williams), 703 F.2d 1055, 1056 (8th
Cir. 1983) (quoting H.R. REP. NO. 95-595, at 364 (1977)). The crucial
issue in making this determination is the intent of the parties and the
function the award was intended to serve. Holliday v. Kline (In re
Kline), 65 F.3d 749, 751 (8th Cir. 1995); Adams v. Zentz, 963 F.2d 197,
200 (8th Cir. 1992); Williams, 703 F.3d at 1056; Boyle v. Donovan, 724
F.2d 681, 683 (8th Cir. 1984).
7
The determination of whether an award arising out of marital
dissolution proceedings was intended to serve as an award for alimony,
maintenance or support, or whether it was intended to serve as a
property settlement is a question of fact to be decided by the
bankruptcy court. Kline, 65 F.3d at 750; Adams, 963 F.2d at 200;
Williams, 703 F.3d at 1056. As a finding of fact, the bankruptcy
court's determination of this issue may be reversed only if it is
clearly erroneous under the evidence presented. First Nat'l Bank v.
Pontow, 111 F.3d 604, 609 (8th Cir. 1997).
We conclude that the bankruptcy court's finding that the Debtor's
obligation to make the mortgage payments was intended to serve as an
award for alimony, maintenance or support is not clearly erroneous.
Factors considered by the courts in making this determination include:
the relative financial conditions of the parties at the time of the
divorce; the respective employment histories and prospects for financial
support; the fact that one party or another receives the marital
property; the periodic nature of the payments; and, whether it would be
difficult for the former spouse and children to subsist without the
payments. See, e.g., Friedkin v. Sternberg (In re Sternberg), 85 F.3d
1400, 1406 (9th Cir. 1996); Williams, 703 F.2d at 1056; Boyle, 724 F.2d
8
at 683; Shaver v. Shaver, 736 F.2d 1314, 1316 (9th Cir. 1984). After
properly assessing these factors, the bankruptcy court in this case
found that Debtor's agreement to make the mortgage payments was intended
to serve the most basic of support functions, to provide a home for the
children and Pamela which they otherwise would not have been able to
afford.2 This conclusion is reasonable under the evidence presented,
and for that reason it cannot be disturbed on appeal. Finally, the
Debtor's argument that the obligation cannot reasonably be construed as
an obligation for support because he cannot now afford it is the very
"needs-based" argument that was rejected in this circuit long ago. See,
e.g., Draper v. Draper, 790 F.2d 52, 60 (8th Cir. 1986) (relying on In
re Harrel, 754 F.2d 902, 906-07 (11th Cir. 1985)).
B. THE DEFENSES
Debtor asserts three "affirmative defenses," each of which is
without merit.
2
Debtor asserts that Pamela should be bound by certain
admissions he claims Pamela made in pretrial discovery
proceedings. The parties disputed the timeliness of Pamela's
response to a request that she admit that the agreement was in
fact in the nature of a property settlement. Apparently, the
bankruptcy court resolved the dispute in Pamela's favor. This
ruling was a discretionary one, and Debtor has pointed to no
abuse of discretion.
9
1. Res Judicata
Debtor urges that the bankruptcy court was precluded, under the
doctrine of res judicata, from holding that Debtor's obligation to make
the mortgage payments is nondischargeable under § 523(a)(5) because the
terms of the Settlement Agreement, which were incorporated into the
state court judgment, provided that Debtor's obligation to make the
mortgage payments would be dischargeable in bankruptcy. Section 1738 of
Title 28 directs that state judicial proceedings "shall have the same
full faith and credit in every court within the United States . . . as
they have by law or usage in the courts of such State . . . from which
they are taken." 28 U.S.C. § 1738 (1994). This statute requires a
federal court to refer to the preclusion law of the state in which
judgment was rendered when determining the preclusive effect of a state
court judgment. Marrese v. American Academy of Orthopedic Surgeons, 470
U.S. 373, 380, 105 S. Ct. 1327, 1331 (1985); Teleconnect Co. v. Ensrud,
55 F.3d 357, 361 (8th Cir. 1995). Under Illinois law, a final judgment
rendered by a court of competent jurisdiction in a previous action
between two parties bars a subsequent action between those parties on
the same claim or cause of action. Hexacomb Corp. v. Corrugated Sys.,
Inc., 678 N.E.2d 765, 770-71 (Ill. App. 1997) (citing
10
Housing Auth. v. Young Men's Christian Ass'n, 461 N.E.2d 959 (Ill.
1984)).
The requirements of res judicata have not been satisfied in this
case because Pamela's § 523(a) nondischargeability cause of action is
not identical to the cause of action decided in state court. It is well
settled that an action brought under state law to establish a state
created debt is separate and distinct from an action brought under §
523(a) of the Bankruptcy Code to determine the dischargeability of the
same debt. Brown v. Felsen, 442 U.S. 127, 134-35, 99 S. Ct. 2205, 2211
(1979); Resolution Trust Corp. v. McKendry (In re McKendry), 40 F.3d
331, 336-37 (10th Cir. 1994). At the time of the state court's decree,
the Debtor's bankruptcy petition had not yet been filed, and therefore
no cause of action under § 523 yet existed. As a result, the issue of
dischargeability was not properly before the state court, and any
judgment rendered by the state court on the issue of dischargeability
does not constitute a final judgment rendered by a court of competent
jurisdiction.
In fact, although inarticulately framed, Debtor is actually urging
that we apply the doctrine of collateral estoppel, or issue preclusion.
It, too, is inapplicable in this case. Under Illinois law, the doctrine
of collateral estoppel prevents
11
relitigation of a particular issue or fact in a proceeding where that
issue was actually or necessarily decided by a court of competent
jurisdiction in an earlier proceeding. Hexacomb Corp., 678 N.E.2d at
771. The issue for determination in this case is whether the Debtor's
commitment to pay the mortgage payments was intended to serve as a
support obligation or as a property settlement. This issue was not
involved in the prior state court proceeding, was not decided in the
state court proceeding, was not actually litigated in the prior state
court proceeding, and was not necessary to the state court's prior
decision. See Arnett v. Environmental Science & Eng'g, Inc., 657 N.E.2d
668, 673 (Ill. App. 1995) (holding that a consent judgment is not
entitled to collateral estoppel effect under Illinois law).
Accordingly, issue preclusion is not applicable.
2. Contract and Estoppel
The remaining defenses urge that the bankruptcy court erred
because, by signing the prepetition Settlement Agreement, Pamela waived
any argument that the Debtor's obligation to pay the mortgage payments
would be dischargeable in bankruptcy and Pamela should be estopped to
argue otherwise. We disagree.
Waiver is defined as the intentional relinquishment of a known
right. First Nat'l Bank v. Allen, 118 F.3d 1289, 1294-95
12
(8th Cir. 1997); European Am. Bank v. Benedict (In re Benedict), 90 F.3d
50, 55 (2d Cir. 1996). Whether a waiver has occurred is a question of
fact that is established by showing that a party actually intended to
relinquish a known right or privilege. Allen, 118 F.3d at 1294. In
evaluating the Debtor's contract and estoppel arguments, the bankruptcy
court found that "insofar as the nature of contract is concerned, the
Court finds that the agreement between the parties is such that it
cannot be determined specifically from reading that particular document
what was the intent of the parties." This finding regarding intent was
not clearly erroneous. While the Settlement Agreement specifically
provided that Debtor's assumption of the mortgage payments "can be
discharged in bankruptcy in the event [Debtor] files bankruptcy," it
further provided that, should bankruptcy occur, Pamela could return to
state court and obtain additional relief in the form of maintenance.
This suggests that the parties intended that Debtor's obligation was a
maintenance obligation and that bankruptcy would not, in fact, affect
that obligation. Waiver, therefore, was in no way the intended result
of the agreement. Rather, the Settlement Agreement preserved
13
Pamela's right to seek maintenance for four years3 in spite of any
subsequent bankruptcy.
Moreover, it is well settled that agreements regarding subsequent
discharge in bankruptcy are disfavored (see, e.g., Alsan Corp. v.
DiPierro (In re DiPierro), 69 B.R. 279, 282 (Bankr. W.D. Pa. 1987);
Klingman v. Levinson (In re Levinson), 58 B.R. 831, 836-37 (Bankr. N.D.
Ill. 1986). This should be especially true in dissolution proceedings
for the same reasons that courts refuse to accept the labels affixed to
an award by the divorce court or by the parties themselves in a
separation agreement. See, e.g., Williams, 703 F.2d at 1057. In this
case, when the Settlement Agreement attempted to determine
dischargeability, not by label, but by specific agreement, we are still
bound to assess the dischargeability of the debt in the event the Debtor
files for bankruptcy. As we have previously held, the Settlement
Agreement was intended to treat the obligation to pay the mortgage
payments as a form of nondischargeable maintenance.
3
The Settlement Agreement limited Pamela's right to spousal
maintenance to four years, but the obligation to provide child
support was not so limited.
14
C. THE MOTION TO DISMISS AND THE MOTION FOR SUMMARY JUDGMENT
Lastly, we reach Debtor's procedural arguments.
Preliminarily, we note that a trial court's denial of a motion for
summary judgment is not the proper subject of appeal following trial.
Metropolitan Life Ins. Co. v. Golden Triangle, 121 F.3d 351 (8th Cir.
1997). In Metropolitan Life, the Eighth Circuit Court of Appeals
adopted "the general and better view . . . against review of summary
judgment denials on appeals from a final judgment after trial." Id. at
356. An appeal from a final judgment, however, necessarily incorporates
an appeal from all earlier interlocutory orders (other than an order
denying summary judgment) such as a denial of a motion to dismiss.
Quackenbush v. Allstate Ins. Co., __ U.S. __, 116 S. Ct. 1712, 1718
(1996) ("The general rule is that 'a party is entitled to a single
appeal, to be deferred until final judgment has been entered, in which
claims of district court error at any stage of the litigation may be
ventilated.'"); Glass v. Dachel, 2 F.3d 733 (7th Cir. 1993); Peachtree
Lane Assocs., Ltd. v. Granader (In re Peachtree Lane Assocs., Inc.), 188
B.R. 815, 822 (N.D. Ill. 1995). Therefore, although the bankruptcy
court's denial of the Debtor's motion for summary judgment is not
properly before us, the bankruptcy court's denial of the Debtor's motion
to dismiss
15
is fully reviewable on appeal.
Rule 15(a) of the Federal Rules of Civil Procedure, as
incorporated by Federal Rule of Bankruptcy Procedure 7015, provides that
"a party may amend the party's pleading only by leave of the court or by
written consent of the adverse party, and leave shall be freely given
when justice so requires." FED. R. BANKR. P. 7015. The bankruptcy
court's decision whether to allow amendment will be reviewed only for an
abuse of discretion. Williams v. Little Rock Mun. Water Works, 21 F.3d
218, 224 (8th Cir. 1994); Perkins v. Spivey, 911 F.2d 22, 34-35 (8th
Cir. 1990).
The bankruptcy court did not abuse its discretion in denying the
motion to dismiss and allowing Pamela to amend her complaint. Pamela's
original complaint met the notice pleading requirements of Fed. R.
Bankr. P. 7008(a). Wright v. Anthony, 733 F.2d 575, 577 (8th Cir.
1984); FED R. BANKR. P. 7008(f), 7015. A motion for a more definite
statement is appropriate where a pleading is so vague or ambiguous that
a party cannot reasonably be expected to plead in response. This was
the true nature of Debtor's motion to dismiss, and the bankruptcy court
properly exercised its discretion in denying the motion and allowed
Pamela to file an amended and more specific complaint.
16
Accordingly, we AFFIRM the bankruptcy court's decision.
A true copy.
Attest:
CLERK, U.S. BANKRUPTCY APPELLATE PANEL
FOR THE EIGHTH CIRCUIT
17
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430 F.Supp.2d 195 (2006)
MINERALS TECHNOLOGIES INC. and Specialty Minerals Inc. Plaintiffs,
v.
OMYA AG, Omya Industries Inc., and Omya, Inc. Defendants.
No. 04 Civ. 4484(VM).
United States District Court, S.D. New York.
May 8, 2006.
*196 Anthony J. Costantini, Duane Morris, LLP (NYC), New York, NY, Laura Danielle, Patricia Bayer Cunningham, Sutherland Asbill & Brennan LLP, Atlanta, GA, for Minerals Technologies Inc., Specialty Minerals Inc.
Jeffrey T. Golenbock, Golenbock Eiseman Assor Bell & Peskoe LLP, New York, NY, for Omya AG, Omya Industries Inc., Omya, Inc.
DECISION AND ORDER
MARRERO, District Judge.
Plaintiffs Minerals Technologies Inc. ("MTI") and Specialty Minerals Inc. ("SMI") (collectively, "MTI") brought the underlying action against defendants Omya AG, Omya Industries, Inc., and Omya, Inc. (collectively, "Omya") alleging infringement and inducing infringement of two United States patents, No. 5,043,017, (the "'017 Patent") and No. 5,156,719 (collectively the "Patents"), that are owned by MTI and based on essentially the same *197 papermaking technology.[1] By a Settlement Agreement (the "Agreement") dated November 22, 2005, the parties settled a related action,[2] resolved a number of other issues in dispute in the instant case, and thus narrowed the scope of this litigation. The Agreement calls upon the Court to provide interpretations of certain important terms used in the Patents and, on the basis of that construction, to resolve the remaining matters about which the parties still disagree. Set forth below are the Court's findings, conclusions and reasoning in this regard.
I. FACTUAL BACKGROUND
The Patents relate to a chemical process for manufacturing paper. The technology uses Calcium carbonate as a filler and coating substance that does not affect the acidity of paper when it is mixed with wood pulp during the process and that improves the quality of the product's color, gloss and opacity.[3] Normally, calcium carbonate, an alkaline substance, when mixed with wood pulp decreases the acidity of the mixture, which is referred to as a paper "furnish" or "slurry," causing the filler to decompose. This change in acidity can be harmful for certain types of neutral or weakly acidic paper.[4]
The '017 Patent was issued in 1991 to June Passaretti ("Passaretti") for a papermaking system based on the use of a calcium carbonate that is "acid-stabilized" in a neutral to mildly acidic environment of a mixture composed of a calcium-chelating agent[5] and/or a conjugate base, combined with a requisite amount of "weak acid."[6] In this system the calcium carbonate does not affect the acidity of the slurry because the weak acid works to control the pH of the mixture and maintain it in equilibrium. Claim 1 of the patent asserts protection for:
An acid-stabilized finely divided calcium carbonate comprising a mixture of at least about 0.1 weight percent of a compound selected from the group consisting of a calcium-chelating agent and a conjugate base, together with at least *198 about 0.1 weight percent of weak acid, with the balance to give 100 weight percent being finely divided calcium carbonate, such that the calcium carbonate is coated by and is in equilibrum [sic] with the calcium-chelating agent or conjugate base and the weak acid.
Id.
In the underlying action as filed, MTI sought relief against Omya, its primary competitor in the relevant market, on the grounds that Omya had infringed and induced paper manufacturers to infringe the Patents by conducting tests in which calcium carbonate and a calcium-chelating agent were combined with a weak acid used to reduce the alkalinity of the slurry and resulting paper product, and by evidencing Omya's intentions to expand its papermaking business by means of this process. Specifically, MTI points to papermaking tests Omya conducted at a mill owned by a company named Stora Enso North America ("SENA" or "Stora Enso") in December 2003 (the "2003 SENA Trial") and August 2004 (the "2004 SENA Trial") as instances in which Omya induced infringement of MTI's patents by providing supplies and instructions for papermaking that used the same components in the requisite amounts to satisfy the "weak acid" requirement described in the Patents (the "Weak Acid Requirement").[7] The parties agree that at the 2004 SENA Trial, which was conducted over a seven-day period, Omya injected 36.5 tons of carbon dioxide (CO2) into an aqueous paper furnish consisting of a calcium-chelating agent and 1034 tons of calcium carbonate filler.
It is also undisputed that some amount of the carbon dioxide reacted with the water in the furnish to produce some amount of carbonic acid (a weak acid). The quantity of carbonic acid thus formed at the trial was not measured. MTI argues that Omya's use of carbon dioxide in this test met the Weak Acid Requirement in three ways: (1) by itself, on the ground that carbon dioxide is classified in the chemical literature and recognized by those skilled in the chemical arts as a "Lewis" acid[8] that exhibits the properties of a weak acid and that was present in the requisite amount in the system; (2) through its formation of a requisite amount of carbonic acid; and (3) by the production of bicarbonate in a sufficient quantity from the further reaction and disassociation of carbonic acid in the slurry. According to MTI's computations, the 36.5 tons of carbon dioxide used at the 2004 SENA Trial, in combination with 1034 tons of calcium carbonate, would have exceeded the 0.1 weight percent relationship of these substances in the mixture as claimed by the Patents. Similarly, MTI contends that the amount of carbonic acid and bicarbonate produced at the 2004 SENA Trial each totaled 50.6 tons, or about 4.9 weight percent, thus exceeding the 0.1 limitation the Weak Acid Requirement specifies. MTI also maintains that Omya's use of any of these three claimed weak acids at the 2004 SENA Trial infringed the Patents under the doctrine of equivalents.
*199 Omya admits that it conducted the Stora Enso trials, but claims that for several reasons the tests did not infringe or induce infringement of the Patents, either literally or under the doctrine of equivalents. First, Omya asserts that carbon dioxide is a gas, not a "weak acid" within the meaning of the literal terms of the Patents, and that indeed by this standard it cannot be classified as an acid at all, whether under the Lewis acid definition claimed by MTI, or according to the "Bronsted" acid[9] definition. Omya contends that the latter definition is more commonly known by those skilled in the chemical arts and is thus the understanding of "weak acid" that comports with the ordinary and customary meaning of the terms and teaching of the Patents. Second, Omya argues that at the 2004 SENA Trial it was not the carbon dioxide itself that performed the weak acid function to lower the alkalinity of the paper furnish, but the carbonic acid produced by the carbon dioxide, some portion of which reacted with the water when injected into the slurry. According to Omya's analysis, the amount of carbonic acid produced totaled approximately 0.0129 weight percent of the calcium carbonate mixture, well below the 0.1 percent measure the Patents claim as a minimum. And third, Omya claims that the 2004 SENA Trial did not infringe because the calcium carbonate in the system was not "acid-stabilized." Rather, the furnish was maintained at all times at a pH level of 7.2, thus in the alkaline range, rather than neutral or acidic, as the product would have to be if the Passaretti technology had been employed according to its literal terms.
II. ISSUES BEFORE THE COURT UNDER THE AGREEMENT
The issues remaining in dispute that the parties have asked the Court to resolve are set forth in Paragraph 4 of the Agreement.[10] The first section of Paragraph 4 reads as follows:
Although the parties have agreed to settle the Antitrust and Patent Actions as set forth above, they continue to disagree as to the requirement in U.S. Patent No. 5,4043,017 (the "'017 Patent") and U.S. Patent No. 5,516719 (the "'719 Patent") that at least about 0.1 weight percent of weak acid be used (the "Weak Acid Requirement"); specifically, the parties disagree whether the Weak Acid Requirement was met in connection with the papermaking trial that took place at Stora Enso North America, in Duluth, Minnesota, in August 2004 (the "August SENA Trial").
(Id.)
In an earlier ruling addressing a dispute concerning the scope of what the Agreement called upon the Court to resolve, the Court determined that this provision describes the parties' continuing disagreement as to whether the Weak Acid Requirement was met by any means during the 2004 SENA Trial. See Minerals Tech. II, 406 F.Supp.2d at 335.
However, because Omya used carbon dioxide at the 2004 SENA Trial, the Agreement describes several additional aspects of the underlying dispute the parties asked the Court to review in connection with its determination of whether the Weak Acid Requirement was met during that experiment. There was no disagreement that *200 Paragraph 4 placed before the Court the narrow question of whether the amount of carbonic acid formed at the 2004 SENA Trial satisfied the Weak Acid Requirement. (See id. at 335.) This section of the Agreement reads:
MTI contends that the amount of carbonic acid formed by the use of the CO2 satisfied the Weak Acid Requirement. Omya denies that. The parties have agreed . . . to resolve this issue before [the District Court].
(Agreement, at ¶ 14.)
The Court also concluded, however, that the remainder of Paragraph 4 enlarges the scope of -what the parties request the Court to address. In particular, in addition to rendering a "definitive ruling" on the issue of whether the Weak Acid Requirement was satisfied at the 2004 SENA Trial, the Agreement calls for the Court to provide a detailed explanation concerning the chemical reaction of carbon dioxide in a paper furnish. Specifically, that second task requests that the Court "also" explain "the basis for its decision," including three distinct components: (1) a "detailed statement" of "its claim construction of the term `weak acid' as it relates to the formation of carbonic acid through the addition of CO2 to a paper furnish," "as well as" (2) an explanation regarding "the circumstances under which the addition of CO2 to a paper furnish will meet the Weak Acid Requirement," "as well as" (3) "the circumstances when carbonic acid, alone or in combination with other weak acids, meets the Weak Acid Requirement." (Id.; see also, Minerals Tech. II, 406 F.Supp.2d at 338.)
The last sentence of Paragraph 4 spells out a third task for the Court that also arises as a component of the underlying question. It records that the parties continue to disagree with regard to "the proper application of the Doctrine of Equivalents, Prosecution Estoppel, and other legal issues as they relate to the Weak Acid Requirement," and asks the Court to "address these issues as well," to the extent they are raised by the parties. (Agreement ¶ 4.)
There is another provision of the Agreement that has some factual bearing on the Court's resolution of the matters at hand. It is contained in Paragraph 7 and states that "for purposes of this Agreement . . . both phosphoric acid and carbonic acid are weak acids," and that "there is no intent by this Agreement to limit what would otherwise constitute . . . a weak acid." (Id. ¶ 7 (emphasis added).) Therefore, the Agreement does not rule out the prospect that carbon dioxide or bicarbonate could be found to constitute weak acids for purposes of the Weak Acid Requirement.
III. THE TRIAL
To address the parties' remaining disputes as set forth in the Agreement the Court conducted a bench trial on December 19 and 20, 2005 and January 20, 2006. The evidence, issues and arguments at the trial are described below.
A. MTI's CLAIMS
MTI argued at the trial, and in related documents entered into the record of these proceedings, that the Patents allow that various claimed weak acids, alone or in combination, could serve as the weak acid in the system. In particular, it contended that the Weak Acid Requirement was met at the 2004 SENA Trial both literally and under the doctrine of equivalents by the presence of requisite amounts of three different substances MTI claims are weak acids, as summarized above: carbon dioxide, carbonic acid and bicarbonate. According to MTI any one of these weak acids, or a combination of them, functioned during that test to attain the result of *201 lowering and maintaining the pH of the slurry at a constant level of about 7.2, thereby achieving what the Patents describe as an acid-stabilized calcium carbonate coated by and in equilibrium with the other compounds in the system.
1. Carbon Dioxide
MTI presented the testimony and reports of its expert, Robert Pelton ("Pelton"), a chemist whose field of specialty and experience are grounded in the papermaking industry.[11]
In support of its argument that carbon dioxide qualifies as a "weak acid" as the term is used in the Patents, MTI relied on several sources and forms of evidence. First, it pointed to statements made by Omya representatives during the course of this litigation purportedly acknowledging that carbon dioxide is commonly referred to as a weak acid with an assigned pKa value, a chemical measure by which the weakness of an acid is determined. (See Minerals Technologies Inc. and Specialty Minerals Inc.'s Post-Trial Memorandum dated February 3, 2006 ("MTI's Post-Trial Mem."), at 4.)[12] Second, MTI cited portions of a number of chemistry texts that refer to or describe carbon dioxide as a weak acid. (See id. at 5.) And third, MTI relied on the opinion of Pelton, who testified that carbon dioxide is a Lewis acid that qualifies as a weak acid for the purposes of the Patents. (See id.) In this connection, MTI points out that the Patents specifically list boric acid as a weak acid that could satisfy the Weak Acid Requirement and that, as conceded by Omya's experts at trial, boric acid in an aqueous solution functions as a Lewis acid by bonding with a water molecule and then donating a proton. (See id. at 7.)
Alternatively, MTI contended that carbon dioxide may be classified as a weak acid under the doctrine of equivalents. On this point, MTI argued that in a paper furnish, carbon dioxide acts just as boric acid does to perform the same function of lowering pH: it dissolves, reacts with the water to form carbonic acid, a conceded a weak acid, which then donates protons to the furnish, and in turn disassociates to produce bicarbonate, another known weak acid. (See id. at 8.) Similarly, MTI maintained that carbon dioxide as used in the 2004 SENA Trial may also be determined the functional equivalent of phosphoric acid, which Omya employed at the 2003 SENA Trial to maintain the pH of the furnish at between 7.1 and 7.3. (See id. at 9.) Further, MTI argued that carbon dioxide is also the equivalent of carbonic acid, in that once hydrated it serves as the acid anhydride of carbonic acid, its conjugate acid.
There is no dispute that the 36.5 tons of carbon dioxide injected into the 1034 tons of calcium carbonate in the paper furnish at the 2004 SENA Trial constituted at least 0.1 weight percent of the calcium *202 carbonate. Accordingly, were the Court to find that carbon dioxide properly may be termed a weak acid, MTI would have demonstrated that the literal terms of the Weak Acid Requirement were met at the 2004 SENA Trial by this means.
2. Carbonic Acid
As stated above, the parties agree that carbonic acid is a weak acid as the term is used in the Patents and that at the 2004 SENA Trial the carbon dioxide injected into the furnish dissolved and reacted with the water. Some or all of the dissolved carbon dioxidethe precise amount remains in disputeconverted to form an amount of carbonic acid, which functioned to control alkalinity, maintaining the pH of the slurry at about 7.2. For the purposes of the Agreement, the parties' principal disagreement in this respect is whether the amount of carbonic acid produced during the test met the Weak Acid Requirement by exceeding the 0.1 weight percent limitation. On this point Pelton testified that at a pH of 7.2 in the slurry most or all of the 36.5 tons of carbon dioxide introduced into the paper furnish converted to form about 50.6 tons of carbonic acid, as a transitional state before further reacting to produce bicarbonate, each of these weak acids yielding a weight percent measure of 4.9 of the calcium carbonate in the system. (See id. at 10.)
According to Pelton, the carbon dioxide injected in the slurry dissolved and remained in the system. It continuously recycled and, through a relatively slow reaction by chemical standards, disassociated in the water to generate carbonic acid which, through further consumption of carbon dioxide, formed bicarbonate. Under this analysis of the system, because the carbon dioxide was constantly consumed by the paper furnish, carbonic acid was being produced continuously to generate bicarbonate, and thus, more of the carbon dioxide that was dissolved and recycling in the water was disassociating and converting to produce carbonic acid. (See id. at 14; Trial Tr. at 73.)
3. Bicarbonate
Citing Pelton's calculations, MTI argued that the 36.5 tons of carbon dioxide used at the SENA August Trial, at a slurry pH of 7.2, formed 50.6 tons of bicarbonate, which translates into 4.9 weight percent of the calcium carbonate in the paper furnish, thus meeting the Weak Acid Requirement. Moreover, MTI maintained that the formation of bicarbonate satisfied the Weak Acid Requirement under the doctrine of equivalents, insofar as it is a weak acid and functioned as such at the 2004 SENA Trial, lowering the pH of the paper furnish by disassociating and generating hydronium ions and donating protons to the slurry.
B. OMYA'S RESPONSES
Omya counters that the evidence produced at the trial and related record of this proceeding was not sufficient to satisfy MTI's burden to prove its claims by a preponderance of the evidence. In support of its defense, Omya relied on the testimony and reports of two experts, Michael Waller ("Waller")[13] and Christopher Cummins ("Cummins").[14] Omya contended *203 that the well-established ordinary and customary meaning of the term "weak acid" to a person skilled in the chemical arts at the time the Patents were issued was what is known as a Bronsted-Lowry acid. (See Defendants' Post-Trial Memorandum of Law in CO2/Carbonic Acid Mini-Trial, dated February 3, 2006 ("Def.'s Post-Trial Mem."), at 4-5.) According to both Waller and Cummins, a person of ordinary skill in the chemical arts at that time would not have classified a Lewis acid within the definition of a weak acid. (See id.)
Omya then argued that carbon dioxide is not an acid under any definition of the term, and thus cannot be considered either a weak acid or a Bronsted acid because carbon dioxide (1) does not possess a proton to donate; (2) does not disassociate and release a hydronium ion when reacting in an aqueous solution; and (3) does not have an assigned value on the pKa scale, which is used to measure the strength of Bronsted acids, because it has no protons to donate in reacting with water. (See id. at 6.)
Omya dismissed MTI's argument that carbon dioxide is a Lewis acid as irrelevant because: (1) by definition, a weak acid encompasses only Bronsted acids; (2) there are many Lewis acids that cannot be considered weak acids; (3) Lewis acids are characterized as "hard" or "soft," unlike Bronsted acids that are termed "weak" or "strong"; and (4) in any event, carbon dioxide is not electron-deficient and thus cannot properly be considered a Lewis acid under the accepted Lewis acid definition as "an electron-deficient molecule that can act as an electron pair acceptor." (Id. at 6-S.) For this reason, Omya asserts that the classification of carbon dioxide as a Lewis acid in the chemistry textbooks cited by MTI is incorrect.
Omya next rejected MTI's claim that the Patents were also infringed by application of the doctrine of equivalents. First, it argued that MTI's invocation of the doctrine of equivalents is vitiated under the related doctrine of prosecution history estoppel because in processing its application to obtain the Patents, MTI made statements asserting that the word "weak" with regard to "weak acid" was well known to those skilled in the chemical acts and that the terms have a well-established meaning in that context. Omya thus contended that because at the time the Patents were issued the recognized meaning of the term "weak acid" to persons skilled in the chemical arts was a weak Bronsted acid, or proton donator, MTI should be estopped from now claiming that a "weak acid" means anything else, in particular a Lewis acid. (See id. at 11.)
Moreover, Omya maintained that the carbon dioxide used at the 2004 SENA Trial was not the equivalent of a weak acid because when injected into the paper furnish most of it did not disassociate to convert into carbonic acid, and therefore the unconverted carbon dioxide gas itself (1) did not function as an acid, (2) had no effect on the acid stability of the calcium carbonate, and (3) did not otherwise operate to lower the pH of the slurry to the alkaline pH of 7.2, contrary to the function of the weak acid as described in the Patents, which teach that the calcium carbonate is stabilized in a mildly acidic environment. (See id. at 12-14.)
Finally, though it acknowledged that carbonic acid constitutes a weak acid within the meaning of the Patents, and that at the 2004 SENA Trial it was the carbonic acid, and not the carbon dioxide, that functioned *204 as a weak acid to lower the pH of the paper furnish, Omya nonetheless contended that the amount of carbonic acid formed during the test was less than 0.1 weight percent of the calcium carbonate in the slurry. (See id. at 14-15.) Specifically, Waller testified that according to his computation, the 36.5 tons of carbon dioxide injected into the furnish containing 1034 tons of calcium carbonate yielded carbonic acid in an amount of approximately .0129 weight percent in relation to the calcium carbonate present, thus less than the Patents' 0.1 weight percent limitation. (See id. at 16-17.) Relying on Waller's testimony, Omya asserted that all of the carbon dioxide injected into the furnish dissolved and was then pumped to a deculator which, according to Omya, operated to remove all dissolved gases from the furnish to prevent holes and other defects in the paper product. (See id. at 16.) By Omya's theory, the small portion of dissolved carbon dioxide not removed by the deculator reacted with the water in the furnish to form some carbonic acid, and thus, because of the rapid speed at which the slurry moved through the Stora Enso papermaking machine, was not available to form any more carbonic acid. (See id.)
In response to Pelton's analysis calculating the amount of carbonic acid yielded by the 2004 SENA Trial as 4.9 weight percent, Omya challenged the conclusion that all of the carbon dioxide used at the trial remained in the system and was consumed while producing carbonic acid and bicarbonate. On this point Omya asserted that Pelton did not consider the "rate constant" of carbon dioxide nor the time the furnish took to travel from the point of injection of the carbon dioxide to the deculator, where the dissolved unconverted carbon dioxide, according to Omya's argument, was all removed from the slurry. (See id. at 18.) Omya rejected Pelton's analysis on the ground that it posited a "closed system" that assumed the presence of an infinite amount of carbon dioxide for an infinite time. (See id. at 19.)
Finally, Omya contended that Pelton's theory that the carbon dioxide used in the paper furnish at the 2004 SENA Trial continuously produced carbonic acid until it was all consumed by the bicarbonate, despite the presence of a calcium-chelating agent, is inconsistent with the premise of the Patents, which teach that when the calcium-chelating agent is applied to the surface of the calcium carbonate, it acts to reduce the solubility of the calcium carbonate's surface and thus to prevent the acid from reacting with the surface of the filler. (See id. at 21.)
III. DISCUSSION
A. TESTIMONY OF EXPERTS
Resolution of a complex dispute laden with disagreements over highly technical and scientific issues, as are the questions the parties have placed before the Court, necessarily rests in substantial part on which of the experts the Court considers more persuasive overall and better qualified to address the specific matters in contention, as well as what arguments, analysis and authority offered in support of their opinions the Court finds more compelling. Here, each of the experts who appeared at trial and submitted reports had impressive professional credentials. The Court found each of them sufficiently learned and distinguished as regards the technical issues they were asked to address. Yet, their explanations of the chemistry of the slurry, the understanding they conveyed of the papermaking process that occurred during the Stora Enso trials, and their professional opinions concerning the scientific issues in contention differed fundamentally. As a matter of scientific fact relevant to the resolution of the instant *205 disputes, those conflicting views cannot all be right, nor can the divergences be fully reconciled. Consequently, insofar as the Court relies upon the opinions and analyses of the experts for this purpose, on balance it gives an edge to Pelton, whose testimony and report the Court credits as more compelling.
Given the large contrast among the experts' testimony, the Court found several considerations as persuasive. First, the Court takes note that Pelton's doctorate education, work, professional expertise and writings more closely derive from and relate to the chemistry of the papermaking industry that is at issue here. As MTI points out, Waller's professional training and specialty, whatever his experience in this field, is as a mechanical engineer, not a chemist, and Cummins admitted at trial that the range of his professional specialty and experience did not extend to the papermaking industry. Second, as regards some material issues elaborated below where the analysis and opinions of the experts disagreed sharply, the Court found Pelton's views of the chemistry and technology both more plausible and more convincing, not only in itself, but in part as well by reason of some material gaps or inconsistencies in the testimony of Omya's experts. And third, having reviewed the experts' reports, observed their respective presentations at trial during the parties' direct case presentations and under cross-examination, and after gauging their overall professional reliability and demeanor in this context, the Court found Pelton's testimony the more creditable on these grounds as well.
B. MATERIAL DIFFERENCES
Among the material issues over which the parties and their experts strongly disagreed, the Court found two that are particularly central to the questions the Court must address: the function of the deculator in the Stora Enso papermaking machine and, somewhat related, the length of time that the carbon dioxide used in the trial remained dissolved and unconverted in the paper furnish, a duration that consequently determined the amount of carbon dioxide which remained available to form carbonic acid and bicarbonate. How these disputes are resolved substantially guides the adjudication of the issues before the Court.
1. Function of the Deculator
As summarized above, MTI, relying on Pelton's testimony, asserts that the deculator in the Stora Enso papermaking machine operated to remove undissolved air or gas bubbles, not dissolved gas, from the paper furnish, and that the carbon dioxide used in the test remained dissolved and recycling in the slurry long enough for all of it to convert to carbonic acid, which in turn formed bicarbonate, each compound in the requisite amount to meet the Weak Acid Requirement. (See Trial Tr. 119, ll. 15-21; MTI Post-Trial Mem. at 14.) By contrast, Omya, citing Waller's testimony, contends that a deculator removes dissolved gas from the slurry and that therefore, at the 2004 SENA Trial, all of the dissolved carbon dioxide injected into the furnish that did not convert to carbonic acid in the relatively small reaction time available was removed. Omya states that the unconverted carbon dioxide removed comprised the bulk of the amount used.
Clearly these two claims regarding the role performed by a significant component of a large machine employed in the papermaking industry are at odds. Absent some technical principle not presented to the Court on this record, one or the other view must be incorrect. Thus, in part for the reasons stated above regarding the respective experts' credentials, relevant *206 knowledge of and experience in the papermaking industry, and their overall persuasiveness, the Court credits Pelton's testimony on this point.
Pelton's view comports with a more technically sensible and practical understanding of the chemistry and operation of the papermaking system the parties described. The Court finds it doubtful that carbon dioxide injected into the system at a point located a relatively short distance from the deculator, while the slurry was moving at a speed of approximately 50 miles per hour, would all promptly dissolve, only to be pumped immediately thereafter into the deculator, where the bulk of the gas would then be removed from, the furnish, leaving only a minimal amount of it enough time to convert to carbonic acid.
2. Reaction Time and Amounts of Converted Carbon Dioxide in the System
The proper function that the deculator performed at the SENA August Trial significantly shapes the determination of the other major issue about which the parties and their experts acutely differ: the time during which the carbon dioxide used in the test remained dissolved in the paper furnish and available to react with the water in the system and, as a result, the amount of carbonic acid formed during that period. For the reasons described above, even if Omya's view of the function of the deculator were correct, the Court remains more persuaded by Pelton's explanation and does not find Omya's analysis regarding the central issues compelling. Omya posits that all of the carbon dioxide injected immediately dissolved in the paper furnish and was then removed by the deculator, and that the carbon dioxide was thus present in the slurry for only a very limited period of time, not long enough to convert to carbonic acid in an amount sufficient to meet the limitation of the Weak Acid Requirement. This theory leaves open to question how the carbon dioxide could have performed its chemical purpose of reacting with water to produce enough carbonic acid to regulate the pH of the slurry. In this regard, the Court notes, as also pointed out by MTI, that Waller's presentation was not consistent.
At trial Waller repeatedly and unequivocally stated that all of the carbon dioxide added to the slurry dissolved. (See Trial Tr. at 238,11. 21-22; 239,11. 9-10.) In his report, however, Waller stated that "only a small percentage of carbon dioxide dissolves in water. . . ."[15] (See id. at 4 ("Only some of the CO2 that is injected into the furnish will dissolve.").) In another part of the report Waller states: "Assuming that 25% of the CO2 used dissolved in the furnish (in fact, far less than that), closer to 1% would have dissolved." (Id. at 5.) Omya does not address this large discrepancy in its expert's testimony. But the inconsistency is important because it touches upon another major point which bears on the calculation of the amount of carbonic acid formed and on which the experts' presentations clashed.
The amount of carbon dioxide dissolved in the furnish, the time it takes for it to react with the water, and the duration of the dissolved carbon dioxide in the system should be major factors determining how much carbonic acid was formed. In this regard, Waller testified that the reaction time is approximately one minute. (See Trial Tr. at 250, ll. 7-9). This assumption *207 is not consistent with other aspects of his analysis. There is evidence from Stora Enso officials who conducted the test that it took the furnish under one minute, and most likely between 15 and 45 seconds, to travel to the headbox from the point where the carbon dioxide was injected into the system. (See Deposition of Jesse A. De-Witte, dated November 20, 2005, at 29, 11. 1-13.) Waller's testimony that the conversion reaction takes approximately one minute suggests that the carbon dioxide would not have had sufficient time to fully dissolve before it reached the headbox. However, Waller testified at trial that all of the carbon dioxide injected into the slurry dissolved (see Trial Tr. at 239) and that the carbon dioxide conversion reached a state of equilibrium. (See Trial Tr. at 214, 11. 19-21; 243, 11. 5-9). This apparent inconsistency raises substantial questions about Waller's assumptions and analysis.
Pelton, supported by references to other chemistry literature, stated that the reaction time for carbon dioxide to dissolve and react with water takes only a matter of seconds, thus allowing longer opportunity for more of the dissolved carbon dioxide to convert into carbonic acid. (See Trial Tr. at 80, 11. 3-17.) Thus, the analysis contained in Waller's report effectively assumed a static system, and his computation of the amount of carbonic acid formed seems based on a snapshot of any single moment, rather than the aggregate over the course of the entire test. At trial, however, Waller appeared to have modified this position by stating the carbonic acid amount he calculated extended over the duration of the entire experiment. (See Trial Tr. at 222.) In fact, the paper furnish had water recycling and carbon dioxide continually being injected into it. As noted above, it took the furnish under one minute and more like 15 to 45 seconds to travel to the headbox from the point where the carbon dioxide was injected into the system. (See Trial Tr. at 118.) These discrepancies again raise questions about whether under Waller's theory there was sufficient reaction time for all of the carbon dioxide to dissolve before the portion of it that remained unconverted was removed, even if the Court accepted his version of how the deculator functioned.
On these points as well the Court finds Pelton's report and testimony explaining the chemistry of the system more persuasive. If all of the carbon dioxide did dissolve in the slurry but, contrary to Waller's testimony, it was not removed by the deculator, but rather, as Pelton argued, the carbon dioxide remained in the system through fresh injections and by continuous recirculating in the furnish, it would have been available for reaction long enough to create in the aggregate greater quantities of carbonic acid, which in turn promptly disassociated to generate bicarbonate. The process would continue recycling until all of the dissolved carbon dioxide would have been consumed by the chemical reactions. By this means, the amount of carbonic acid created would have been greater than that resulting from Waller's assumptions and analysis, and more consistent with Pelton's calculation.
The Court's acceptance of Pelton's theory and analysis of the chemistry and operation of the paper furnish at the 2004 SENA Trial serves as the technical foundation for the Court's own determinations of the questions it is asked to resolve. With this scientific support as framework for its determination, and upon consideration of the entire record before it, the Court concludes that the Weak Acid Requirement was met at the 2004 Stora Enso Trial, both literally and under the doctrine of equivalents. The Court addresses these findings and explains its reasoning below.
*208 IV. FINDINGS
A. CARBON DIOXIDE AND THE WEAK ACID REQUIREMENT
The Court finds the evidence mixed, perhaps at best evenly divided and thus inconclusive, on the issue of whether the carbon dioxide used at the 2004 SENA Trial by itself literally met the Weak Acid Requirement. MTI produced evidence, through Pelton's testimony and scientific literature, supporting the proposition that carbon dioxide may be considered a Lewis acid. The issue before the Court, however, entails a broader inquiry: whether, giving the terms of MTI's patent claims their ordinary and customary meaning, the phrase "weak acid" would have been regarded by a person of ordinary skill in the chemical arts in 1991 as encompassing the classification of carbon dioxide as a weak acid, and whether "weak acid" referred to a Lewis acid, rather than only a Bronsted acid.
A preliminary step of the analysis is whether the skilled person the standard refers to is one possessing sufficient technical knowledge and ordinary skill relating to the general art in question, here the "chemical arts," or whether the inquiry may be further confined to a narrower sub-specialty within a particular technical field or industry. MTI's argument suggests this more limited standard: that persons such as Pelton and Passaretti skilled in the specialized chemistry of papermaking would understand that carbon dioxide is a Lewis acid within the literal meaning of the weak acid element of the Patents and would function as such in a paper furnish. (See Trial Tr. at 91, 11. 1-14; 302, 11. 12-25; 303, 11. 1-7.) However, MTI's argument is somewhat undercut in that, in its application to the Patent and Trademark Office ("PTO") for the Patents, MTI noted that the term "weak" in the reference to "weak acid" is well known to those "skilled in the chemical arts" and has a well-established meaning in that context. There is no indication that MTI sought to narrow the relevant technical field to the chemical arts specifically associated with the papermaking industry.
Omya, on the other hand, implicitly suggests the application of a more general standard, enlarging the field more broadly to encompass persons skilled in the chemical arts, not necessarily those involved in papermaking. By this measure, Omya, citing the testimony of Waller and Cummins, contends that the reference to weak acids means only a Bronsted acida proton donator that partially ionizes in waterand points out that only Bronsted acids are chemically classified as "weak" or "strong" in accordance with the scale of pKa values, as opposed to the "soft" and "hard" terminology applied to Lewis acids.
The Court concludes that the skilled person the standard refers to is appropriately defined here as a person with skill in the specialized art of papermaking. A "person of ordinary skill in the art" is defined as "a hypothetical person who is presumed to be aware of all the pertinent prior art." Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 962 (Fed.Cir.1986). "Prior art" is elsewhere defined as that which is "reasonably pertinent to the particular problem with which the inventor was involved." Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1535 (Fed.Cir.1983). These definitions, together with case law applying the "person of ordinary skill in the art" standard, suggest that the more restrictive formulation of the standard is appropriate. See, e.g., Cargill, Inc. v. Sears Petroleum & Transp. Corp., 334 F.Supp.2d 197, 215-16 (N.D.N.Y.2004). In Cargill, which involved a patent for a chemical composition used in road de-icing, the court weighed the parties' competing definitions of "one *209 with ordinary skill in the art" and concluded that the skilled person possessed specialized experience in road de-icing and training in chemistry, rather than chemistry training alone. See id.
If, as this authority suggests, the more restrictive field were the applicable test, MTI's position would be somewhat undercut by evidence emanating from its own sources. As Omya points out, at his deposition in an earlier phase of this litigation, apparently before the question of whether carbon dioxide may qualify as a Lewis acid arose, Pelton, a person with skill in the specialized art of papermaking, offered a definition of. an acid that reflected the Bronsted definition; he made no mention then of a Lewis acid. Likewise, Bruce Evans, another MTI representative, testified at a deposition that an acid is a compound that in an aqueous solution donates protons.
The Court concludes that the record does not contain sufficient evidence to support a compelling determination with regard to whether, in the context of the Patents, carbon dioxide alone would have been classified as a weak acid within the ordinary and customary meaning of the term to a person of ordinary skill in the papermaking arts at the time of issuance. To this extent, MTI did not meet its burden to establish by a preponderance of the evidence its claim that the Weak Acid Requirement was literally met at the 2004 SENA Trial by the use of carbon dioxide alone.
B. CARBONIC ACID IN COMBINTION WITH OTHER WEAK ACIDS
The Agreement calls for the Court to determine whether the Weak Acid Requirement was satisfied at the 2004 SENA Trial by the use of carbonic acid alone or in combination with other weak acids. The parties agree that carbonic acid falls within the chemical definition of a weak acid. It seems undisputed as well, since Waller testified to this effect (see Trial Tr. at 253), that bicarbonate may also be classified as a weak acid. MTI contends that all of the carbon dioxide infused into the paper furnish during the 2004 SENA Trial remained dissolved and that during the time it was present in the system the requisite amount of carbonic acid formed, which then disassociated and converted to bicarbonate. According to MTI, the entire amount of carbon dioxide was consumed, in the process forming enough carbonic acid, and an equivalent amount of bicarbonate, to meet the Weak Acid Requirement, alone or in combination. Pelton calculated the amounts of carbonic acid and bicarbonate yielded to be 4.9 weight percent of the calcium carbonate in the furnish.
The Court credits the testimony of Pelton on this point. Accepting Pelton's theory of the chemistry of the reaction of carbon dioxide in the paper furnish during the 2004 SENA Trial, as supported by other evidence in the record, the entire amount of carbon dioxide used in the test dissolved in the water circulating in the system and, through continuous recycling and fresh injections during the course of the seven-day trial, had sufficient reaction time in the furnish to disassociate and to be fully consumed in converting to carbonic acid, which in turn formed bicarbonate, in amounts that in the aggregate exceeded 0.1 weight percent of the calcium carbonate in the slurry. Accordingly, the Court finds that the carbonic acid generated by the reaction of carbon dioxide and water, alone or in combination with the bicarbonate that the carbonic acid in turn produced, satisfied the literal terms of the Weak Acid Requirement.
C. THE DOCTRINE OF EQUIVALENTS AND PROSECUTION HISTORY ESTOPPEL
The Agreement asks the Court to address the proper application of the doctrine *210 of equivalents and prosecution history estoppel as they relate to the Weak Acid Requirement, to the extent raised by the parties. MTI claims that under the doctrine of equivalents, by means of the carbon dioxide used at the 2004 SENA Trial, Omya infringed the Patents, insofar as the carbon dioxide or the bicarbonate to which it ultimately converted, through an intermediate state as carbonic acid, performed substantially the same function of the weak acid substantially the same way to achieve substantially the same result that the Patents teach. Omya counters that in statements MTI made to the PTO to obtain issuance of the Patents, MTI asserted that the terms "weak" and "weak acid" were well established in the chemical arts' and were to be read in accordance with their ordinary and customary meaning in that context. On this basis Omya contends that because at that time the recognized definition of a weak acid to persons skilled in the chemical arts was a Bronsted acid, MTI is therefore bound by those representations and should now be estopped from claiming that carbon dioxide may be classified as a Lewis acid and a weak acid. To address this dispute the Court reviews the standards that govern the application of these doctrines.
1. Doctrine of Equivalents
The judicial doctrine of equivalents emerged as a means to recognize patent infringement in the case of a product or process that "does not literally infringe upon the express terms of a patent claim [but] may nonetheless be found to infringe if there is `equivalence' between the elements of the accused product or process and the claimed elements of the patented invention." Warner-Jenkinson Co., Inc. v. Hilton Davis Chem. Co., 520 U.S. 17, 21, 117 S.Ct. 1040, 137 L.Ed.2d 146 (1997) (citing Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 70 S.Ct. 854, 94 L.Ed. 1097 (1950)). Thus, the doctrine recognizes that if a patent were interpreted unremittingly by the express language of its claims alone, the value to the inventor would be diminished. The rule thus serves to acknowledge and mitigate the limitations of literalism, and to enlarge the scope of patent protection the inventor can claim. As the Supreme Court noted in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki, Co., Ltd.: "[T]he nature of language makes it impossible to capture the essence of a thing in a patent application." 535 U.S. 722, 731, 122 S.Ct. 1831, 152 L.Ed.2d 944 (2002).
Implicitly, the enhanced patent rights that the doctrine of equivalents warrant encompass two basic concepts. First is that at the time of prosecution of the patent the applicant cannot reasonably be expected to foresee and express in anticipatory language every technical advance and interchangeable element by which the invention may later be altered, however insubstantially, to achieve essentially the same product or process. Second, in going beyond the literal terms of the patent to validate claims to equivalents, what the doctrine endeavors to embody within its protection is the "essence" of the concept and the "range of its novelty" to which the inventor seeks to give expression in the wording of the claims, but that the constraints of language and foresight do not allow capturing those qualities with complete precision. Id.; see also Atlas Powder Co. v. E.I. du Pont De Nemours & Co., 750 F.2d 1569, 1582 (Fed.Cir.1984) ("Although there is no legally recognized `essence' or `heart' of the invention in determining validity . . . it can be applicable in a determination of infringement under the doctrine of equivalents.") (internal citations omitted) (citing Medtronic, Inc. v. Cardiac Pacemakers, Inc., 721 F.2d 1563, 1567 (Fed.Cir.1983)).
*211 Accordingly, an accused device or method should be deemed equivalent, and thus not an insubstantial alteration of an element of a patented technology, if in its basic elements it employs the essence of the concept on which the claimed novelty of the original invention is fundamentally grounded, as evidenced by substantial similarities in the role each element plays in the operation of the claimed product, the way it functions and the result obtained. See id. ("Unimportant and insubstantial substitutes for certain elements could defeat the patent and its value to investors could be destroyed by simple acts of copying.").
What constitutes equivalency, the Supreme Court counseled in Graver Tank, "is not the prisoner of a formula and is not an absolute to be considered in a vacuum," nor does it "require complete identity for every purpose and in every respect." 339 U.S. at 609, 70 S.Ct. 854. Rather:
In determining equivalents, things equal to the same thing may not be equal to each other and, by the same token, things for most purposes different may sometimes be equivalents. Consideration must be given to the purpose for which an ingredient is used in a patent, the qualities it has when combined with the other ingredients, and the function which it is intended to perform. An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was.
Id. (emphasis added).
As it developed in early applications, the doctrine was invoked in patent disputes in which the claimed equivalence pertained to mechanical components employed in the competing devices. Particularly germane to the matter at hand, in later extensions, as the chemical arts advanced, the same principles were also applied to inventions entailing chemical compositions and processes, where the claim of equivalence involved chemical ingredients or processes that embodied the essence of a component of the patented product or method. Id.
Two expressions of the doctrine of equivalents are generally articulated by the courts. The earlier version, ordinarily more apt for mechanical devices, enabled the patentee to invoke equivalency if the accused product "`performs substantially the same function in substantially the same way to obtain the same result.'" Graver Tank, 339 U.S. at 608, 70 S.Ct. 854 (quoting Sanitary Refrig. Co. v. Winters, 280 U.S. 30, 42, 50 S.Ct. 9, 74 L.Ed. 147 (1929)). As refined by Graver Tank, a case involving chemical compositions, a second formulation places greater emphasis on the substantiality of the alteration: "whether under the circumstances the change was so insubstantial that . . . invocation of the doctrine of equivalents was justified." Id. at 610, 70 S.Ct. 854. In the most recent applications of the doctrine, the Federal Circuit has framed the basic inquiry of equivalency as grounded on the insubstantiality standard, while employing the function-way-result test as one consideration to be weighed. See Eagle Comtronics, Inc. v. Arrow Communication Labs., Inc., 305 F.3d 1303, 1315 (Fed.Cir. 2002). In either event, the theory recognizes that if two products operate substantially the same way and achieve substantially the same result, "`they are the same, even though they differ in name, form or shape.'" Graver Tank, 339 U.S. at 608, 70 S.Ct. 854 (quoting Union Paper-Bag Mach. Co. v. Murphy, 97 U.S. 120, 125, 24 L.Ed. 935 (1877)).
Recognizing the conflict that broad application of the doctrine of equivalents poses for the definitional and public notice purposes of the patent statute's claiming *212 requirement, the Supreme Court in Warner-Jenkinson elaborated a further limitation. It declared that the doctrine "must be applied to individual elements of the claim, not to the invention as a whole." 520 U.S. at 29, 117 S.Ct. 1040. Accordingly, the Supreme Court instructed that the essential inquiry in applying the test of substantiality is:
Does the accused product or process contain elements identical or equivalent to each claimed element of the patented invention. . . . [A]n analysis of the role played by each element in the context of the specific patent claim will thus inform the inquiry as to whether a substitute element plays a role substantially different from the claimed element.
Id. at 40, 117 S.Ct. 1040.
Unlike the temporal rules that govern literal infringement, which are designed to prevent enlargement of the scope and protection for an invention by construing its language in accordance with the ordinary and customary meaning of the terms of the claims as of the time the patent issued, the doctrine of equivalents focuses on a different point in time: knowledge of the art and interchangeability of elements as of the date of the alleged infringement. See id. at 37, 117 S.Ct. 1040 ("Insofar as the question under the doctrine of equivalents is whether an accused element is equivalent to a claimed element, the proper time for evaluating equivalency . . . and thus knowledge of interchangeability between elementsis at the time of infringement, not at the time the patent was issued."); Atlas Powder Co., 750 F.2d at 1581 ("It is not a requirement of equivalence . . . that those skilled in the art know of the equivalence when the patent application is filed or the patent issues. That question is determined as of the time infringement takes place.").
Moreover, knowledge of the interchangeability of elements is determined by objective factors. See Graver Tank, 339 U.S. at 608, 70 S.Ct. 854 ("An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was."); see also Warner-Jenkinson, 520 U.S. at 36, 117 S.Ct. 1040 (noting that though independent experimentation by an infringer may not always reflect on the objective question of whether a person skilled in the art would have known of the interchangeability between two elements, "in many cases it would likely be probative of such knowledge"). These rules recognize that judging the alleged equivalency of elements of a device or process as of the point of patent issuance would unduly curtail the coverage of patent rights by barring the original inventor from enforcing approved claims against methods or devices later developed with refinements of the technology. Absent application of equivalence, such an adverse result would occur even if fundamentally the accused product incorporates the creative essence and technology embodied in the original invention and is thus not substantially different, insofar as it demonstrably employs substantially the same elements and operates substantially the same way to achieve substantially the same result as the patented product.
2. Prosecution History Estoppel
Prosecution history estoppel is a rule of patent construction that works in tandem with the doctrine of equivalents, ensuring that the latter "remains tied to its underlying purpose." Festo, 535 U.S. at 734, 122 S.Ct. 1831. While the rule of equivalence extends protection to a patent owner over insubstantial modifications of the invention that may not be literally expressed in the claim as patented, but *213 that could be developed by minor alterations, "when . . . the patentee originally claimed the subject matter alleged to be infringed but then narrowed the claim in response to a rejection, he may not argue that the surrendered territory comprised unforeseen subject matter that should be deemed equivalent to the literal claims of the issued patent." Id. at 733-34, 122 S.Ct. 1831.
As most recently elaborated by the Supreme Court in Festo, application of prosecution history estoppel takes into account several considerations. These standards provide that: (1) the inventor knew of the terms describing both a broader and the narrower claim; (2) the choice to narrow the claim or disavow or surrender claim territory or particular equivalents must be made by the applicant affirmatively; (3) ordinarily the narrowing amendment or statement was made as a condition for obtaining the patent to protect its validity, or to comply with any requirement of the Patent Act, especially in the face of a claim rejection by the PTO that would have rendered the invention unpatentable; (4) the patentee's decision to narrow the particular claim raises a presumption that the territory surrendered by the claim amendment is not the equivalent of the territory claimed; and, (5) estoppel should not apply to bar claims of equivalents that the patent application could not reasonably be held to have literally expressed and surrendered in an amendment or representation made during prosecution, in particular where the equivalents may have been unforeseeable at the time of the narrowing statement. See id. at 735-40, 122 S.Ct. 1831. "[T]he patentee must show that at the time of the amendment one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent." Id. at 741, 122 S.Ct. 1831. Thus, the scope of prosecution history estoppel is limited to claim-narrowing amendments and representations that were foreseeable and that affirmatively surrendered the particular equivalents in contention. "There is no reason why a narrowing amendment should be deemed to relinquish equivalents unforeseeable at the time of the amendment and beyond a fair interpretation of what was surrendered." Id. at 738, 122 S.Ct. 1831.
In synthesis, viewed together, the doctrines of equivalents and prosecution history estoppel encapsulate various central principles that go to the core and mark the contours of patent rights, a body of law which as a whole reflects a great confluence of human energies, ends and limitations. These principles are given expression through several concepts fundamental to the law of patents that are prominent in the issues the instant case presents, and are touched upon here as a helpful backdrop to their application in the discussion that follows. First, patent doctrines are ultimately designed to validate original invention, to this end conferring a bounty on inventors' creativity and innovation, rewarding their ambition, initiative and diligence, and thereby providing incentive for novel contributions to useful arts. Second, they acknowledge the shortcomings of language, underscoring the limitations of words to capture with precision the full scope, both actual and potential, of the novelty and operation of new technology. Third, they recognize the practical bounds of foresight, in other words, the limited ability of an inventor, prior to prosecuting a patent application, to anticipate advancements of the art and to experimentally test every conceptual variation and mechanical configuration by which a new product or process may also function to achieve a claimed result.
*214 Fourth, through claim disclosure, equivalents, estoppel and related principles, patent law also reaffirms the proposition that truly new ideas are a free commodity and that no one should possess an unbounded monopoly on any particular unique concept. In consequence, the creation and advancement of original arts reflect the practical workings of an extensive process akin to a conceptual marketplace. Given enough passage of time, combined with ever-expanding spheres of knowledge, the outer reaches of human imagination, the virtually infinite variety of natural and synthetic ingredients supplied by the world around us, and a large pool of persons similarly animated by ambition and creative forces, new products and processes are bound to develop. Hence, it is not unusual that, by operation of the laws of probability and contingencies, out of this amalgamation of circumstances an inspired mix would evolve from which one or more inventions could emerge independently that operate to attain a result closely similar to that achieved by another known device employing substantially different means and innovative concepts.
By the same token, these principles also recognize certain commonplace realities, the real world of expediency borne of human competition and commerce. The same creative energies can also be harnessed to motivate tinkering at the margins of existing technology and impel inventiveness to devise a product ostensibly novel, but that in reality amounts to a minor modification of one already patented. In this instance, creativity is more derivative than original; the inventor is moved less by uncharted novelty than by the known or potential success of a concept engendered by another. Craft and language claiming a technological breakthrough is then employed not to innovate, but to imitate, edging as close to the line, and tapping as much of the creative essence of prior art, as verisimilitude might lawfully allow.
The challenge in patent controversies arising from the operation of these principles, as is the case of the dispute now before the Court, is to ascertain on which side of the line the doctrinal circumstances and the parties' conduct fall.
3. Application of Doctrines
As a backdrop for application of the doctrines of equivalents and prosecution history estoppel, the Court notes some aspects of the parties' dispute that present novel points. At the 2003 SENA Trial, Omya employed phosphoric acid in the paper furnish as the substance designed to function as the weak acid feature of the system tested. The parties agree that the experiment worked to lower the pH of the slurry and that the Weak Acid Requirement was met on that occasion. During the 2004 test, although carbon dioxide was used for the purpose of controlling the pH of the slurry through the formation of carbonic acid, a supply of phosphoric acid was kept in hand to serve as a backup in the event the carbon dioxide did not perform properly. The parties do not dispute, and the Court finds, that at the time of the Stora Enso trials a person skilled in the chemical arts would know that the injection of carbon dioxide into a paper furnish would cause a chemical reaction in which some carbon dioxide would dissolve in the water and react to convert to some amount of carbonic acid, which in turn would disassociate to produce bicarbonate. There is also no disagreement here that carbonic acid and bicarbonate both satisfy the definition of "weak acid," and thus that if either of these compounds were found to have been present in the slurry at the 2004 SENA Trial in amounts exceeding the 0.1 weight percent limitation claimed in the *215 Patents, the experiment would satisfy the Weak Acid Requirement.
Theoretically, therefore, if either carbonic acid or bicarbonate could have been produced and practically introduced into the paper furnish at the 2004 SENA Trial as a free-standing substance in the requisite amount, the test presumably would have met the literal terms Weak Acid Requirement. In response to a question by the Court on this point the parties indicated that it would be difficult or impossible to maintain pure carbonic acid in an aqueous form suitable for injection into the slurry. (See Trial Tr. at 82, 11. 18-25 and 83, ll. 1-3, and 221, ll. 15-22.) Instead, as the parties acknowledged, because the amount of these acids needed for the purposes of lowering the pH of the slurry at the 2004 SENA Trial could more practically and economically be produced in the system through an antecedent stepthe conversion of carbon dioxide injected into the paper furnish as a gasthe process went through a transitional reaction. During that process the admitted weak acid was formed in some amount and used to achieve the claimed pH lowering function not initially, but indirectly; it was introduced into the system in two steps rather than one, in effect, as the byproduct of a prior chemical reaction. In this respect, the carbonic acid, in combination with the carbon dioxide used to produce it, played a role in satisfying the weak acid element of the technology either literally or essentially as an equivalent.
There are thus two ways to frame the issue in dispute for the purposes of an equivalency determination. First is whether the carbon dioxide itself may be objectively considered a weak acid that served at the 2004 SENA Trial as an interchangeable substance to satisfy the weak acid component of the process that operated to lower and maintain the pH of the slurry. A second formulation is whether carbon dioxide, even if not independently considered a weak acid, may reasonably be held to be an equivalent of the claimed ingredient when employed to serve an indirect functionas an agent for the formation of another substance that undisputably qualifies as a weak acid performing the claimed function.
4. Prosecution History Estoppel
To respond to these questions the Court first addresses Omya's invocation of the doctrine of prosecution history estoppel to bar MTI's equivalency claims. The Court does not accept Omya's argument as a proper application of the theory of estoppel. In asserting during the prosecution of its applications for the Patents that the terms "weak" and "weak acid" were to be understood in accordance with their well-established, ordinary and customary meaning, MTI essentially stated a truism, providing a common reference point for the definition of those words that in fact generally applies to all language employed in patent claims. See Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed.Cir.2005) (noting that the claims of a patent should be construed in accordance with the ordinary and customary meaning of the terms as understood by a person of ordinary skill in the art). Declaring that particular terms are to be given their ordinary and customary meaning cannot reasonably be construed to encompass every specific example or embodiment that may (or may not) satisfy the accepted general definitionan indefinite and potentially large number of substancesand thus to affirmatively surrender those particular applications. See Festo, 535 U.S. at 741, 122 S.Ct. 1831.
It would be peculiar indeed that by representing that the words of a patent are to be read according to the rule of interpretation *216 the law itself would adopt, an applicant would be later barred by estoppel from claiming the fuller scope of the terms that would encompass particular embodiments which could not be considered insubstantial differences in the technology. What MTI is claiming now is not a different general definition of the term "weak acid" narrower than the one it adopted during patent prosecution, but rather that three particular substances may be so classified within an accepted ordinary and customary definition. Moreover, under the Festo standards stated above, there is no compelling evidence on the record before the Court that in making the general definitional statements in question MTI's representations were made affirmatively to narrow the scope of the Patents' claims and to surrender a broader scope that would have extended to carbon dioxide or bicarbonate as specific embodiments of weak acids interchangeable with the weak acid requirement of the Patents. See id.
5. Equivalents
MTI argues that carbon dioxide itself served as a weak acid at the 2004 SENA Trial under the doctrine of equivalents because in a paper furnish it reacts with the water and functions to reduce the pH in the same manner as four other conceded weak acids: (1) boric acid, which is identified in the Patents as a substance that could serve the weak acid component of the system, and which in an aqueous solution operates as a Lewis acid; (2) phosphoric acid, the weak acid that the Patents claim as the preferred embodiment and that was successfully used in the 2003 SENA Trial, at which the parties agree the Weak Acid Requirement was satisfied; (3) carbonic acid, which is generated by the infusion of carbon dioxide and its reaction with water in the paper furnish, and which functions as a Bronsted acid by donating protons to the solution, thereby lowering the pH; and (4) bicarbonate, which forms from the disassociation of carbonic acid and, like carbonic acid, donates protons and also serves the function of lowering the pH of the slurry.
Omya responds that carbon dioxide does not satisfy any of the criteria of the equivalency test in that it is neither a Bronsted or a Lewis acid, a weak acid, or indeed any kind of acid, and that there are substantial differences between carbon dioxide and weak acids. Specifically, Omya argues that references to other weak acids, some of which may represent the preferred embodiments of the claim, are not germane; that there is no evidence that the carbon dioxide used at the 2004 SENA Trial functioned as the claimed "weak acid" term of the Patents properly construed, that the carbon dioxide did not work in combination with a calcium-chelating agent to form an acid-stabilized calcium carbonate in substantially the same way a weak acid would perform that function, or that the carbon dioxide not converted to carbonic acid had any effect on the acid stability of the calcium carbonate or acted to lower the pH of the furnish; and that the 0.0129 weight percent amount of carbonic acid formed at the 2004 SENA Trial that Waller's computation produced is substantially different from the 0.1 limitation the Patents specify.
The Court is persuaded that MTI's invocation of equivalency satisfies the prerequisites for application of the doctrine. The conceptual essence of the technology the Patents describe calls for a papermaking system that employs a paper furnish consisting of a mixture of calcium carbonate, a calcium-chelating agent and/or conjugate base, and weak acid used to lower the pH of the system, resulting in the calcium carbonate reaching equilibrium. Here, the 2004 SENA Trial undisputably employed the first two elements of the *217 technology as claimed. The only dispute relates to whether the claimed weak acid component was satisfied. In this regard the Court returns to the discussion above concerning the formation of carbonic acid at the 2004 SENA Trial. The Court determined that the evidence MTI introduced through the testimony of Pelton and other materials was sufficient to warrant a finding that the carbon dioxide used in the test remained dissolved and recycling in the paper furnish in quantities and duration long enough to generate carbonic acid in an amount that satisfied the Weak Acid Requirementas much as 4.9 weight percent in relation to the calcium carbonate in the system. By the same token, the Court rejected the analysis of Waller, whose calculation indicated formation of a much lower amount of carbonic acid, 0.0129 weight percent. Because Omya concedes that carbonic acid is a weak acid that functioned as a proton donor to lower the pH of the paper furnish, the use of carbonic acid in amounts approximating the 0.1 weight percent limitation specified in the Patents would perform substantially the same function in substantially the same way as the weak acid component of the claim to achieve substantially the same result. If, as the Court found above, Waller's explanation of the technology and the chemistry of the Stero Enso paper furnish is materially flawed as regards the operation of the deculator or the reaction time of the carbon dioxide, and Pelton's comparable analysis and computations are more correct, the amount of carbonic acid present in the slurry would be higher than Waller's measure, and closer to an amount that would either satisfy the Weak Acid Requirement literally, or operate substantially as an equivalent to perform the same weak acid function called for by the terms of the Patents.
Accordingly, whether or not carbon dioxide itself may properly be classified as an acid or a weak acid, and whether any unconverted carbon dioxide in the slurry directly played any role in lowering the pH of the paper furnish, the carbon dioxide served indirectly as the chemical agent that generated carbonic acid, which in turn formed bicarbonate, both conceded weak acids whose presence in the slurry would serve to lower the pH level. Thus, however carbon dioxide may properly be classified in this context, it played a central role at the 2004 Stora Enso Trial as a critical component of performing the weak acid function. Recalling the pragmatic and flexible guidance of Graver Tank that the test of equivalency "is not the prisoner of a formula," that it "does not require complete identity for every purpose and in every respect," and that "things for most purposes different may sometimes be equivalents," 339 U.S. at 609, 70 S.Ct. 854, a finding that the Weak Acid Requirement was met at the 2004 Stora Enso Trial by the use of carbon dioxide as a weak acid equivalent to lower the pH of the system indirectly through the formation of carbonic acid would not be unwarranted under these circumstances.
In connection with the amounts of carbonic acid formed Omya makes two points. First, it argues that at both Stora Enso tests the pH of the paper furnish was maintained at approximately 7.2, which falls within the alkaline range and therefore outside of the scope of the Patents' claim specifying that the calcium carbonate, in combination with the calcium-chelating agent and weak acid, would be acidstabilized and used in a mildly acidic environment. Second, Omya contends that the order of magnitude between the amount of carbonic acid present in the paper furnish at the 2004 SENA trial and what the Patents describe-0.0129 weight percent by Waller's calculation as opposed to the *218 claimed 0.1 limitationcannot be considered an insubstantial difference.
The Court already determined above that it would not accept Waller's analysis of the amount of carbonic acid formed at the 2004 SENA Trial, and found that the quantity was higher, probably closer to the figure in Pelton's analysis. As discussed below, the Court need not decide exactly how much less than 0.1 weight percent an amount of weak acid substitute may reach to be deemed sufficient to warrant a finding of equivalence.
Before addressing Omya's objections to the applicability of the doctrine of equivalents in this case, the Court finds some instructive analogies to the instant dispute in the facts of Warner-Jenkinson. The patented invention in that case entailed a process for the purification of dyes by means of ultrafiltration of an aqueous solution through a membrane of a specified diameter at a specified range of pressures and at a pH varying from approximately 6.0 to 9.0. See 520 U.S. at 22, 117 S.Ct. 1040. The claim regarding the pH level was added during prosecution of the patent to distinguish the invention from a previous patent for an ultrafiltration process operating at a pH above 9.0. There was disagreement as to why the applicant added the lower pH limit of 6.0.[16] The accused system involved an ultrafiltration process for dyes employing a membrane and pressures within the same range of the patent's specifications, but functioning at a pH of 5.0. The plaintiff conceded that there was no literal infringement and grounded its lawsuit solely on the doctrine of equivalents. The defendant argued that because the plaintiff, during the prosecution of the patent application, had limited the pH element of the claim to levels of 6.0 to 9.0, that range formed limits beyond which claims of equivalents would be barred.
Holding that the doctrine of equivalents applied to individual elements of a claim rather than to the invention as a whole, the Supreme Court noted that the lower 6.0 pH limit the invention claimed did not distinguish it from the earlier patent's 9.0 limit, which did not address pH levels below 6.0. The Court then added: "thus, while a lower limit of 6.0, by its mere inclusion, became a material element of the claim, that did not necessarily preclude the application of the doctrine of equivalents as to that element." Id. at 40, 117 S.Ct. 1040 (emphasis in original). In assessing whether an accused element is equivalent to an element claimed in the patented invention, the Court suggested that "an analysis of the role played by each element in the context of the specific patent claim will thus inform the inquiry as to whether a substitute element matches the function, way, and result of the claimed element, or whether the substitute element plays a role substantially different from the claimed element." Id.
In the matter at hand, although the Patents indicate that the Passaretti technology operates in a "mildly acidic environment," the claims do not specify any particular pH or range of pH at which the system is to function. Moreover, just as in Warner-Jenkinson the 6.0 lower limit of the pH range the patent described did not preclude a claim of equivalence for a lesser pH level, the limitation of 0.1 weight percent of weak acid to calcium carbonate in the instant case does not function categorically as a bright line barring equivalency at lower relative levels of weak acid. Rather, this element of the claim could be satisfied by some smaller weight percent *219 of a weak acid that would operate to satisfy the weak acid element of the claim in a manner not substantially different from the process the Patents claim. Omya appears to acknowledge as much, insofar as it concedes that carbonic acid is a weak acid and that it functioned at the 2004 SENA Trial to lower the pH of the paper furnish by donating protons to the system. Omya's only challenge to the application of the doctrine of equivalents as it pertains to carbonic acid seems to be based on a quantitative test, a measure of "order of magnitude" between the relative weight of weak acid the Patents claim as a limitation and the amount of the carbonic acid the 2004 SENA Trial produced.
This case thus presents an instance of the shortcomings which the Warner-Jenkinson Court noted in the application of both formulations of the doctrine of equivalents, and in particular of the insubstantiality test as applied to products or processes other than mechanical devices. See id. at 40, 117 S.Ct. 1040 ("[T]he insubstantial differences test offers little additional guidance as to what might render any given difference `insubstantial.'"). If, as Omya contends, 0.01 weight percent weak acid used at the 2004 Stora Enso Trial process cannot be considered sufficiently substantial to qualify as a substitute for the claimed element, would an amount of 0.03 be enough? Or what about 0.05 or 0.075?
The Court does not deem it particularly enlightening or productive in the resolution of the matter at hand to decide at which precise point along the line between 0.01 and 0.1 weight percent an amount of carbonic acid employed as the weak acid element of the Passaretti system would serve as the demarcation of what constitutes a substantial or insubstantial difference in the technology. The Court does not read the test of equivalency to turn on absolute numerical differences or quantitative formulas. See Graver Tank, 339 U.S. at 609, 70 S.Ct. 854. Instead, the standard is more properly grounded on qualitative differences between the elements of the accused product and those claimed by the patent, in other words, whether, assessed element by element, the two inventions creatively derive from and rely upon the same conceptual "essence." See Festo, 535 U.S. at 731, 122 S.Ct. 1831. On this point, as Warner-Jenkinson suggests, the more instructive inquiry is "the role played by each element," and thus whether the substitute element "matches or plays a role substantially different from the claimed element." 520 U.S. at 40, 117 S.Ct. 1040.
Applying this formulation, the Court finds that the carbonic acid used at the 2004 SENA Trial, even if in amounts below the weight percent limitation claimed, served as a substitute for the weak acid element of the Patents in that the substance played the role of lowering the pH of the paper furnish by disassociating and donating protons to the mixture and in the process, in combination with the calcium-chelating agent, stabilizing the calcium carbonate in the system. To this extent, the role the amount of carbonic acid present in the paper furnish played in that experiment was not substantially different from the role of the weak acid element the Patents describe. By the same token, crediting Pelton's analysis, the carbonic acid in the slurry further disassociated to form a corresponding amount of bicarbonate, another undisputed weak acid that in an aqueous solution operates as a proton donor. Thus, the bicarbonate may also be found to satisfy the claims of the Patents as an equivalent of the weak acid component. That the technology would also work successfully at a pH level of 7.2, and thus at a mildly alkaline rather than mildly acidic range, represents an insubstantial difference in operation by an interchangeable *220 weak acid element that may not have been reasonably foreseeable at the time the Patents issued, given the state of the art, but that became known through later technological development. See Festo, 535 U.S. at 731, 122 S.Ct. 1831.
In support of its conclusion the Court has taken into account several evidentiary and legal considerations. First, the Court considered Omya's extensive experimentation at the two Stora Enso tests. Second, as a related matter, the Court weighed the interchangeability of elements known at that time to satisfy the Patents' weak acid component. In response to MTI's pointing to several ..other acknowledged weak acids as equivalents of the Patents' weak acid requirement, Omya dismisses the argument as inapposite to the application of the equivalency doctrine. This reference, however, does have some relevance; it bears on the issue of other substances then known to persons skilled in the chemical arts of papermaking that would satisfy or be interchangeable with the weak acid component. See Warner-Jenkinson, 520 U.S. at 36, 117 S.Ct. 1040 ("The known interchangeability of substitutes for an element of a patent is one of the express objective factors . . . bearing upon whether the accused device is substantially the same as the patented invention.").
In this regard Omya concedes that at the 2003 SENA Trial phosphoric acid, a known weak acid identified by the Patents as the preferred embodiment of the claim, was used to control the pH of the paper furnish in an alkaline range of 7.2 to 7.4. Omya also admits that at the 2004 test, "in place of phosphoric acid" carbon dioxide was used "to help control the pH of the furnish in the same approximate alkaline pH range." (Def.'s Pre-Trial Mem. at 4-5.) At the same time, Omya also acknowledged that the Patents teach that "when phosphoric acid (the weak acid) and . . . [the chelant] are added to the calcium carbonate slurry, the [chelant] will chelate with the calcium on the surface of the calcium carbonate, and the system will reach an equilibrium . . . and the equilibrium pH is acidic." (Def.'s Post-Trial Mem. at 14.)
The Court regards these statements, together with Omya's actual experimentation at Stora Enzo, as evidence circumstantially demonstrating Omya's knowledge of the interchangeability of carbon dioxide with phosphoric acid as an equivalent to the weak acid component, even if the carbon dioxide served that function only indirectly as an agent to produce carbonic acid, a known weak acid. See Warner-Jenkinson, 520 U.S. at 36, 117 S.Ct. 1040 (noting that "the need for independent experimentation thus could reflect knowledgeor lack thereofof interchangeability possessed by one presumably skilled in the art," and that even if such experimentation may not always reflect on the objective interchangeability between two elements, "in many cases it would likely be probative of such knowledge.").[17]
*221 Thus, the evidence sufficiently demonstrates that at the time of the alleged infringement at issue here, objective knowledge existed regarding the interchangeability of carbon dioxide, as an agent for the production of carbonic acid, and the weak acid described in the terms of the Patents. The Court further concludes that by a preponderance of the evidence before it MTI has demonstrated equivalency, under the circumstances discussed above, between the carbonic acid and the bicarbonate formed by the use of carbon dioxide at the 2004 SENA Trial and the weak acid component of the Patents.
V. CONCLUSION
To summarize, in response to the specific tasks the Agreement requests the Court to address, the Court concludes as follows. The ordinary and customary meaning of "weak acid," as used in the Passaretti technology described in the Patents and as the term would have been understood by a person of ordinary skill in the chemical arts relating to papermaking in 1991, at minimum[18] would encompass Bronsted acids: compounds that in an aqueous solution partially disassociate and donate protons to the mix.
The record before the Court is not sufficient to support by preponderance of the evidence a determination that carbon dioxide by itself when used in the context of the Patents objectively would have been classified as a weak acid by a person of ordinary skill in the chemical arts relating to papermaking in 1991. However, when injected into a paper furnish, some amount of carbon dioxide dissolves relatively quickly, reacts with the water in the mixture and forms carbonic acid. The latter compound then does function as a weak acid in the technology of the Patents in that it ionizes in the water and donates protons to the solution, thereby lowering and maintaining the pH of the system at a given level. Thus, the addition of carbon dioxide to a paper furnish consisting of calcium carbonate and a calcium-chelating agent and/or conjugate base would meet the Weak Acid Requirement by application of the doctrine of equivalents. This conclusion follows insofar as the injection of carbon dioxide into the slurry to perform the role of the claimed weak acid constitutes an insubstantial difference in the technology, even though the carbon dioxide would achieve the weak acid function indirectly. In reacting with the water in the furnish it would serve as an agent for the production of carbonic acid, which in turn operates as a weak acid. In that role, the carbonic acid donates protons to the solution, and lowers the pH of the paper furnish, thereby accomplishing substantially the same desired result of stabilizing the calcium carbonate filler.
Carbonic acid produced in the requisite amount described in the Patents could meet the Weak Acid Requirement by itself, *222 or in combination with bicarbonate, which forms through the consumption of the carbon dioxide dissolved in the paper furnish and its conversion to carbonic acid, followed by the further disassociation of carbonic acid. This result occurs through the continuous injection, dissolving and recycling of carbon dioxide in the paper furnish. Under these circumstances the carbon dioxide, given sufficient reaction time through continuous injection and recirculation in the system, would produce an amount of carbonic acid and/or bicarbonate sufficient to satisfy the Weak Acid Requirement, as the Court has determined occurred at the 2004 Stora Enso Trial.
Finally, even if the amount of carbonic acid and/or bicarbonate formed in a paper furnish by the addition of carbon dioxide were not sufficient to satisfy the requisite 0.1 weight percent limitation claimed by the Patents, the presence of those substances in the system nonetheless would meet the Weak Acid Requirement by application of the doctrine of equivalents. This conclusion follows to the extent that the use of carbonic acid and/or bicarbonate to perform the weak acid function of lowering the pH of the slurry constitutes an insubstantial alteration of that element of the Passaretti technology. Those substances, even in relative weight amounts below the 0.1 limitation claimed by the Patents, perform substantially the same role of lowering the pH of the system, the function the Patents claim as the role of the weak acid, in substantially the same way by donating protons to the mixture, thereby achieving substantially the same result of stabilizing the calcium carbonate in the system.
VI. ORDER
For the reasons discussed above it is hereby
ORDERED that the Court's determinations and explanations set forth herein respond to the requests contained in the Agreement dated November 22, 2005 between the parties to this action; and it is further
ORDERED that within twenty (20) days of the date of this Order the parties submit to the Court for approval a stipulated Order necessary to give effect to the parties' Agreement in the light of the Court's determinations herein.
SO ORDERED.
NOTES
[1] Facts describing the issues involved in the underlying action as originally filed are discussed in the Court's Decision and Order dated October 8, 2004, reported as Minerals Technologies Inc. v. Omya AG, 339 F.Supp.2d 528 (S.D.N.Y.2004) ("Minerals Tech. II"). Insofar as relevant to the Court's determinations of the remaining issues, those facts are summarized below.
[2] The related action, involving alleged antitrust violations, was filed as Specialty Minerals, Inc. v. Pluess-Staufer AG, Pluess-Staufer Industries, Inc., and Omya Inc., Docket No. 98 Civ. 7775(VM). The matters the parties presented to the Court for adjudication in the proceeding at hand pursuant to the Agreement are described in the Court's Decision dated December 19, 2005, reported as Minerals Technologies, Inc. v. Omya AG, 406 F.Supp.2d 335 (S.D.N.Y.2005) ("Minerals Tech. II").
[3] According to the parties' briefs, calcium carbonate has a number of important uses as a filler in the papermaking industry. Among other things, it brightens and improves the optical quality of the paper and, as a less expensive material than wood pulp, when mixed with pulp, reduces paper production costs.
[4] At higher pH levels in the alkaline range the paper product begins to undergo an undesirable effect referred to as "alkaline darkening" that adversely affects the color of the paper.
[5] A calcium-chelating agent, or "chelant" is a compound that "when applied to the surface of the calcium carbonate, acts to reduce the solubility of the surface of the calcium carbonate." '017 Patent, attached as Exhibit A to Minerals Technologies Inc. and Specialty Minerals Inc.'s Pre-Trial Memorandum for Weak Acid Mini-Trial, dated December 9, 2005 ("MTI Mini-Trial Mem."), at col. 4, 11. 1-4.
[6] Id. at col. 7, ll. 65col. 8, ll. 6.
[7] The Weak Acid Requirement as defined by the parties refers to the weight percent of the amount of weak acid in relation to the amount of calcium carbonate in the paper furnish at the 2004 SENA Trial. The weight percent is determined by a fractional formula in which the numerator is the weight of the weak acid used and the denominator that of the calcium carbonate. (See MTI Mini-Trail Mem. at 7.) To meet the literal terms of the Patents the relationship of the components to which this formula is applied must exceed 0.1.
[8] A Lewis acid is a compound that can act as an electron pair acceptor. (See MTI Mini-Trial Mem. at 14.)
[9] A Bronsted-Lowry acid is a compound that in an aqueous solution donates a proton in a reversible manner. (See MTI Mini-Trial Mein. at 10; Trial Tr. at 128, 11. 21-25; 129, 11. 14-16.)
[10] The Agreement is attached as Exhibit A to Minerals Technologies Inc. and Specialty Minerals Inc.'s Pre-Trial Memorandum Regarding Scope of Issues at and Timing of Mini-Trial, dated December 16, 2005.
[11] Pelton has a Ph.D. in Colloid Chemistry from Bristol University and has held research scientist positions at the Pulp and Paper Research Institute of Canada (PAPRICAN) and Union Carbide. Pelton is currently a full professor of Chemical Engineering at McMaster University, where he is the founder and director of the McMaster Centre for Pulp and Paper Research. (See Rebuttal Expert Report of Dr. Robert H. Pelton Concerning Conversion of Carbon Dioxide to Carbonic Acid during August 2004 Store Enso Trial, dated December 7, 2005, attached as Exhibit C to MTI's Mini-Trial Mem.)
[12] For convenience and judicial economy the Court, having reviewed the citations to factual materials on record for accuracy, rather than citing the source directly, except as otherwise appropriate, relies on the parties' references to the Trial Transcript ("Trial Tr.") and other evidence as set forth in their post-trial submissions.
[13] Waller's professional credentials include a masters of science and a masters of professional mechanical engineering degree from the Massachusetts Institute of Technology. He is a professor in the Paper and Chemical Engineering Department of Miami University. He is the author of over 50 journal articles and a book. (See Curriculum Vitae of Michael H. Waller, attached as Attachment 1 to Proposed Joint Pre-Trial Order, filed December 12, 2005, at 1.)
[14] Cummins holds a Ph.D. in inorganic chemistry from the Massachusetts Institute of Technology. He is a full professor of chemistry at MIT. He was awarded the National Science Foundation Alan T. Waterman Award for scientists or engineers age 35 or younger. (See Trial Tr. at 277-8.)
[15] Supplemental Expert Report of Michael H. Waller Concerning Carbonic Acid Amounts During August 2004 Stora Enso Trial, dated November 11, 2005, attached as Exhibit 1 to Def.'s Pre-Trial Mem., at 3.
[16] The patentee asserted that the process had been successfully tested at a pH level of 2.2, but did not explain its choice to place a lower limit of 6.0. See id. at 22 n. 2.
[17] MTI cites to certain third-party patents relating to the use of carbon dioxide in papermaking issued in September 2003, after the Patents and prior to Omya's Stora Enzo trials, that make reference to the effect carbon dioxide in an aqueous solution produces in lowering the pH of a pulp suspension. See MTI Mini-Trial Mem. at 14-5. One such patent provides:
Thus, decreasing the pH with carbon dioxide does not have the same negative effects on calcium carbonate as decreasing the pH With other acid. . . . As mentioned above, carbon dioxide has an inherent capacity of decreasing the pH and this capacity may be utilized in the present invention in order to provide a desired decrease in the pH of a pulp suspension. Thus, carbon dioxide may be introduced in an amount sufficient for lowering the pH of said pulp suspension below the critical level of pH 8, or when another acid has been used for decreasing the pH, carbon dioxide may preferably be used to decrease the pH further. The pH of the pulp suspension may, for instance, be adjusted with carbon dioxide to a pH of 5.5 to 7.6, preferably, 6.5 to 7.5.
Id. (quoting U.S. Patent No. 6, 623, 599, col. 4, ll. 24-30 and col. 5, ll. 6-14 (emphasis added by MTI)).
[18] The Court uses this qualifier in recognition of the parties' unresolved dispute as to whether a Lewis acid may also be properly classified as a weak acid. In support of that proposition MTI points out that the Patents themselves list boric acid, known to react in an aqueous solution as a Lewis acid, as an example of a substance that would satisfy the weak acid component of the claimed system. Omya responds, through Cummins's testimony, that in fact boric acid is scientifically classified as both a Bronsted acid and a Lewis acid. (See Trial Tr. at 287, ll. 3-25.)
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195 P.3d 438 (2008)
223 Or. App. 169
STATE of Oregon, Plaintiff-Respondent,
v.
Matthew Abram RADER, Defendant-Appellant.
05C48687, A132153.
Court of Appeals of Oregon.
Argued and Submitted February 27, 2008.
Decided October 15, 2008.
*439 Kristin A. Carveth, Deputy Public Defender, argued the cause for appellant. With her on the brief was Peter Gartlan, Chief Defender, Legal Services Division, Office of Public Defense Services.
Douglas F. Zier, Assistant Attorney General, argued the cause for respondent. With him on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.
Before LANDAU, Presiding Judge, and ORTEGA, Judge, and CARSON, Senior Judge.
ORTEGA, J.
Following a bench trial, defendant was convicted on several charges arising from two incidents of domestic violence involving his girlfriend. On appeal, defendant challenges only his conviction for assault in the fourth degree, ORS 163.160. The assault was elevated from a misdemeanor to a felony offense based on the state's allegation, and the trial court's finding, that a minor child witnessed the assault. ORS 163.160(3)(c). Defendant contends that the state's evidence was legally insufficient to prove the aggravating element and that, as a result, he could be convicted only of misdemeanor assault. We agree. Accordingly, we reverse in part, remand for entry of a judgment of conviction for misdemeanor assault in the fourth degree and for resentencing, and otherwise affirm.
Because the state prevailed at trial, we examine the evidence in the light most favorable to the state, accepting reasonable inferences and reasonable credibility choices that the factfinder could have made, to determine whether a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. State v. Dunlap, 215 Or.App. 46, 60, 168 P.3d 295 (2007) (stating the standard of review of a trial court's denial of a defendant's motion for a judgment of acquittal). So viewed, the record establishes the following facts.
Defendant and the victim lived in a two-bedroom apartment with the victim's two daughters. The assault charge at issue arose from an argument between defendant and the victim that began in one of the bedrooms. The victim's younger daughter, Laged three at the timewas in the other bedroom during the beginning of the dispute; her bedroom door was about halfway open. The argument soon moved out into the hallway and, at that point, became physical as defendant began using his body to push the victim down the hallway. The victim, concerned that L could hear the parties shouting, entered L's room and turned up the volume on the television in an attempt to distract her from the argument. As the victim left L's room, defendant reached behind her and closed the bedroom door. He then held the victim's head between his hands and headbutted her, causing a "very loud" bang as her head slammed against the door. The victim cried out and fell to the floor.
At trial, the state did not call L to testify about what she had witnessed. To establish what L had heard, the state elicited testimony about the size and acoustics of the apartment. The victim testified that the apartment is not very large; it measures between 800 and 900 square feet. She also testified that, if a person stood in the living room and spoke loudly, a person in the bedroom would be able to hear, even if the bedroom door were closed.
At the end of the state's evidence, defendant moved for a judgment of acquittal and, *440 relying on our decision in State v. Bivins, 191 Or.App. 460, 83 P.3d 379 (2004), argued that the evidence was insufficient to establish that L had perceived the assault or had recognized the assaultive conduct as it occurred. The trial court denied the motion. On appeal, defendant renews that argument, asserting that the state's evidence concerning whether L witnessed the assault was merely speculative. Defendant contends that no reasonable factfinder could infer from the evidence that L either perceived the assault or recognized defendant's conduct as assaultive. The state counters that, when the evidence is properly viewed in the light most favorable to the state, a factfinder could reasonably infer that L "perceived that the `very loud' bang against her bedroom door, accompanied by her mother's immediate cries of pain, was the product of an assault by defendant against her mother, * * * especially when it came in the midst of the heated argument she had just witnessed."
ORS 163.160 provides, in part:
"(1) A person commits the crime of assault in the fourth degree if the person:
"(a) Intentionally, knowingly or recklessly causes physical injury to another[.]
"* * * * *
"(2) Assault in the fourth degree is a Class A misdemeanor.
"(3) Notwithstanding subsection (2) of this section, assault in the fourth degree is a Class C felony if the person commits the crime of assault in the fourth degree and:
"* * * * *
"(c) The assault is committed in the immediate presence of, or is witnessed by, the person's or the victim's minor child or stepchild or a minor child residing within the household of the person or victim.
"(4) For the purposes of subsection (3) of this section, an assault is witnessed if the assault is seen or directly perceived in any other manner by the child."
Factors that elevate fourth-degree assault to a felony are material elements of the offense and must be proved beyond a reasonable doubt. State v. Reynolds, 183 Or.App. 245, 251, 51 P.3d 684, rev. den., 335 Or. 90, 58 P.3d 821 (2002).
In Bivins, we construed ORS 163.160(3)(c) as requiring the state, in order to elevate fourth-degree assault to a felony, to prove that "the child personally saw or through some other first-hand sense or sensation was conscious of and recognized the assaultive conduct as it occurred." 191 Or. App. at 466, 83 P.3d 379. When the state relies on an inferred fact to establish the element of an offense, the factfinder may infer the fact only when (1) the state has offered sufficient evidence of the existence of the fact(s) giving rise to an inference to allow a rational factfinder to find the underlying fact(s) beyond a reasonable doubt; and (2) a rational factfinder could find, beyond a reasonable doubt, that the inferred fact follows from the fact(s) giving rise to the inference. State v. Rainey, 298 Or. 459, 466, 693 P.2d 635 (1985). However, a particular inference need not follow inexorably from the established facts. State v. Beason, 170 Or.App. 414, 422-24, 12 P.3d 560 (2000), rev. den., 331 Or. 692, 26 P.3d 149 (2001). An established fact may support multiple reasonable inferences; it is for the finder of fact to decide which inference to draw. Id.
Nevertheless, whether particular circumstantial evidence is sufficient to support a particular inference is a question of law. Bivins, 191 Or.App. at 467, 83 P.3d 379 (citing Delgado v. Souders, 334 Or. 122, 135, 46 P.3d 729 (2002)). "There is a difference between inferences that may be drawn from circumstantial evidence and mere speculation." State v. Vaughn, 175 Or.App. 192, 201, 28 P.3d 636 (2001). As we have noted, the distinction between permissible inferences and impermissible speculation is "sometimes faint," Hutchinson and Hutchinson, 187 Or. App. 733, 741, 69 P.3d 815 (2003), but is ultimately "drawn by the laws of logic," Bivins, 191 Or.App. at 467, 83 P.3d 379 (internal quotation marks omitted).
We previously considered the issue whether circumstantial evidence offered by the state was legally sufficient under similar circumstances in Bivins. Much like here, the charges against the defendant in Bivins arose in the context of a domestic disturbance *441 between the defendant and the victim in her home, where her two young children (ages five and three) were also present. In the course of an argument, the defendant threw a telephone against the wall, breaking it. Pushing and shoving followed, and the defendant struck the victim's face with an open hand. 191 Or.App. at 462-63, 83 P.3d 379.
At trial, the state did not call the defendant's older child to testify about what she had witnessed, but instead relied on the victim's testimony that the children had been at home and that, despite being sent to their room when the argument began, the children had wandered out during the fight. The state also established, through testimony from the victim and investigating officers, that the house was very small and that noises from one area of the house could easily be heard in other areas of the house. By the time of trial, however, the victim was no longer a cooperative witness for the state. As a result, she was never asked about the noise level of the fight, the sound made when defendant struck her, whether the bedroom door was open, and whether she knew what the children were doing in their bedroom. Id. at 464-65, 83 P.3d 379.
The state contended that, because the children were in the house, they could have heard or seen the defendant strike the victim, and thus the jury could infer that the defendant's older daughter heard or saw the assault with sufficient awareness to have witnessed it. Id. at 468, 83 P.3d 379. We concluded that the state's evidence was speculative because it required stacking of inferences. Although the first two steps in the state's reasoning were sound, its logic failed at the final step. We explained that, although a jury could infer from common experience that the sound of an open palm striking a face makes a distinctive sound, that inference alone could not establish that the children had actually heard the assault. We reasoned that, although the record showed a protracted fight between the defendant and the victim, the slap was a fleeting occurrence, and nothing in the record allowed an inference that the sound of the slap rose above the noise of the argument, that the children saw or heard the slap, or that, even if they did, they identified it as the sound of the defendant striking the victim. Id. at 468-69, 83 P.3d 379.
With that guidance in mind, we turn to the facts of this case. As we explained earlier, ORS 163.160(3)(c) requires the state to prove, in order to elevate fourth-degree assault to a felony, that a child "personally saw or through some other first-hand sense or sensation was conscious of and recognized the assaultive conduct as it occurred." Bivins, 191 Or.App. at 466, 83 P.3d 379. The state argues that it has met that burden. Although L did not see defendant's assaultive conduct, the state posits that a reasonable factfinder could permissibly infer that, as required by ORS 163.160(3) and (4), L "directly perceived" the assault because (1) there was a "very loud" bang against her bedroom door immediately after the victim left L's room, (2) the victim cried out in pain, and (3) defendant and the victim had been engaged in a heated argument. Implicit in the state's argument are the assumptions that L had heard the "very loud" bang and her mother's cry of pain and was sophisticated enough to recognize that those sounds were caused by defendant's assaultive conduct.
We are not confident, however, that a factfinder could permissibly infer that L heard the described noise at all. We agree that a factfinder could reasonably infer, from common experience, that a sudden, "very loud" bang that occurs when a person's head strikes the door to a room would generally be audible to the room's occupant. Cf. State v. McWilliams, 29 Or.App. 101, 107, 562 P.2d 577, rev. den., 279 Or. 1 (1977) (evidence that the victim had been shot with a large caliber handgun from a distance of less than three feet and that the bullet had passed directly through the victim's chest was sufficient to raise a jury question regarding whether the injury posed a substantial risk of death because it is within "common experience to so infer"). Nevertheless, under the circumstances presented here, where the television's volume was set to some unspecified level, reaching that inference is more problematic. To do so, the factfinder would have to *442 conclude that, although the victim turned up the volume of the television in order to drown out the sound of the argument, the volume was not so loud as to mask the sounds of the victim's head striking the door and then her cry of pain. The factfinder would also have to infer, without any basis in this record for doing so, that L had been paying attention to the dispute outside her bedroom.
Assuming that we could accept the inferences that L heard the sounds of her mother's head striking the door and her mother's cry of pain, those inferences, without more, do not support the further inference that L, a three-year-old child, was sufficiently mature and discerning to recognize the noise as arising from defendant's assaultive conduct toward the victim. Again, the inference that L had been paying attention to the argument is also required.
Nor is the fact that defendant and the victim were in the midst of a heated argument helpful to the state. The state contends that, because the very loud bang and the victim's cries of pain occurred during that argument, L perceived that the sounds were the product of defendant's assaultive conduct. This, too, requires an additional inference: that three-year-old L was sufficiently mature and discerning to formulate such a perception.
Ultimately, too many intermediate inferences are required in order to reach the conclusion that L "directly perceived" defendant's assaultive conduct. ORS 163.160(4). The state's evidence is therefore legally insufficient to permit a reasonable inference that L was "conscious of and recognized [defendant's] assaultive conduct as it occurred." Bivins, 191 Or.App. at 466, 83 P.3d 379. Accordingly, defendant's motion for a judgment of acquittal should have been granted.
Conviction for felony assault in the fourth degree reversed; remanded for entry of judgment of conviction for misdemeanor assault in the fourth degree and for resentencing; otherwise affirmed.
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NUMBER 13-09-00111-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
CLAUDIA GARZA, Appellant,
v.
JAVIER A. SAENZ, M.D., IMPROPERLY NAMED
JAVIER A. SAENZ, D/B/A JAVIER A. SAENZ, M.D., P.A.,
AND F/K/A SAENZ MEDICAL CENTER, Appellee.
On appeal from the County Court at Law No. 1
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza, and Benavides
Memorandum Opinion by Justice Rodriguez
Appellant Claudia Garza challenges the trial court's dismissal of her health care
liability claims against appellee Javier A. Saenz, M.D. Improperly Named Javier A. Saenz,
d/b/a Javier A. Saenz, M.D., P.A., and f/k/a Saenz Medical Center (Dr. Saenz) for failure
to file an expert report within 120 days of the filing of her case, as required by section
74.351. See TEX . CIV. PRAC . & REM . CODE ANN . § 74.351(a)-(b) (Vernon Supp. 2009). By
two issues, Garza complains that: (1) Dr. Saenz's failure to provide medical records to
Garza waived his right to dismissal under section 74.351; and (2) a "motion to dismiss" is
not the proper vehicle for dismissal of Garza's claims. We affirm.
I. BACKGROUND
Garza states that, in August 2006, she underwent a dermabrasion procedure at Dr.
Saenz's offices for the treatment of acne scars on her face.1 Garza alleges that the
treatment was performed negligently, and as a result, she suffered severe burns on her
face. Garza claims that she sent three requests for her medical records to Dr. Saenz but
that Dr. Saenz never provided any records to her. See id. § 74.051(d) (Vernon 2005).
These requests do not appear in the record.2
On October 24, 2007, Garza filed her original petition against Dr. Saenz, alleging
health care liability claims in connection with the dermabrasion treatment.3 No expert
1
Derm abrasion is a cosm etic procedure that surgically rem oves a "superficial layer of the skin with
a rapidly turning wire brush or gritty paper or cloth." ID A G. D OX ET AL ., A TTO R N EY 'S ILLUSTR ATED M ED IC AL
D IC TIO N AR Y D13 (1997).
2
The record does, however, contain three letters from Dr. Saenz to Garza inform ing her that her
requests for m edical records did not com ply with section 74.052 of the civil practice and rem edies code. See
T EX . C IV . P R AC . & R EM . C O D E A N N . § 74.052(c) (Vernon 2005) (prescribing the requisite form and content for
all requests for m edical records in health care liability claim s). Despite these notices from Dr. Saenz, nothing
in the record indicates that Garza ever am ended her requests to com ply with the provisions of section 74.052.
Moreover, once suit was filed, Garza filed no m otion to com pel production of the records.
3
The parties do not dispute that Garza's claim s are health care liability claim s covered by chapter 74
of the civil practice and rem edies code. See id. § 74.001(c)(13) (Vernon 2005).
For reasons unclear from the record, Garza filed a second "original" petition on March 18, 2008, that
was recorded by the trial court under a separate cause num ber but contained the sam e allegations as the
original petition filed on October 24, 2007. The parties seem to agree that the case filed in 2008 was
consolidated with the case filed in 2007 and that the trial court considered the cases together, albeit under the
cause num ber of the second-filed case. For our purposes on appeal, however, we consider October 24, 2007
2
report appears in the record.4 Dr. Saenz filed his answer and motion to dismiss pursuant
to section 74.351 for failure to serve an expert report within 120 days of the filing of the
original petition. See id. § 74.351(a)-(b). Thereafter, the trial court granted Dr. Saenz's
motion and dismissed Garza's claims against Dr. Saenz with prejudice. This appeal
ensued.
II. STANDARD OF REVIEW AND APPLICABLE LAW
We review a trial court's decision on a motion to dismiss under section 74.351 of the
civil practice and remedies code for abuse of discretion. Jernigan v. Langley, 195 S.W.3d
91, 93 (Tex. 2006); Am. Transitional Care Ctrs. of Tex., Inc. v. Palacios, 46 S.W.3d 873,
878 (Tex. 2001). The trial court abuses its discretion if it acts unreasonably or arbitrarily
or without reference to any guiding rules or principles. Walker v. Gutierrez, 111 S.W.3d
56, 62 (Tex. 2003).
Under section 74.351 of the Texas Civil Practice and Remedies Code, a claimant
must "serve on each party or the party's attorney" an expert report and curriculum vitae
"not later than the 120th day after the date the original petition was filed." TEX . CIV. PRAC .
& REM . CODE ANN . § 74.351(a). Where no report has yet been filed, an extension of the
to be the date of the original petition in this case. See Mokkala v. Mead, 178 S.W .3d 66, 68, 76 (Tex.
App.–Houston [14th Dist.] 2005, pet. denied) (holding that a plaintiff's 120-day expert report period runs from
the inception of her first lawsuit against the sam e health-care provider and that she cannot revive an expired
expert report deadline through a new suit raising the sam e claim s); see also Outpatient Ctr. for Interventional
Pain Mgmt., P.A. v. Garza, Nos. 13-07-00411-CV, 13-07-00762-CV, 2008 W L 2525609, at *5 (Tex.
App.–Corpus Christi June 26, 2008, no pet.) (m em . op.).
4
In her brief on appeal, Garza alleges that she served a "doctor's affidavit" within 120 days of the
March 18, 2008 petition. However, the record contains no such docum ent. Even if it did, the relevant date
for purposes of the expert report deadline is October 24, 2007, the date Garza's original petition was filed.
See Mokkala, 178 S.W .3d at 68, 76; see also Outpatient Ctr., 2008 W L 2525609, at *5. Moreover, Garza
m akes no argum ent on appeal that she filed a tim ely expert report in this case; her only contention is that, by
failing to provide m edical records to her, Dr. Saenz waived the protections of section 74.351. See T EX . C IV .
P R AC . & R EM . C O D E A N N . § 74.351 (Vernon Supp. 2009).
3
expert report deadline is available only by agreement of the parties. See id. § 74.351(a),
(c) (providing for an extension in the event a report has been filed but is deemed deficient
by the trial court); Valley Baptist Med. Ctr. v. Azua, 198 S.W.3d 810, 814 (Tex.
App.–Corpus Christi 2006, no pet.). However, absent any agreement, if the claimant fails
to serve the report within 120 days, "the court, on the motion of the [defendant], shall . . .
enter an order that dismisses the claim with respect to the [defendant], with prejudice to
the refiling of the claim." TEX . CIV. PRAC . & REM . CODE ANN . § 74.351(b)(2) (emphasis
added). In other words, the trial court has no discretion to do anything but dismiss the case
when there is no agreement between the parties and the claimant fails to meet the 120-day
deadline. Estate of Regis v. Harris County Hosp. Dist., 208 S.W.3d 64, 67 (Tex.
App.–Houston [14th Dist.] 2006, no pet.); see Azua, 198 S.W.3d at 815.
III. DISCUSSION
By two issues, Garza complains of the trial court's dismissal of her health care
liability claims for failure to serve an expert report within 120 days of filing her case. See
TEX . CIV. PRAC . & REM . CODE ANN . § 74.351(a)-(b).
A. Dismissal Under Section 74.351
In her first issue, Garza contends that Dr. Saenz waived his right to seek dismissal
for failure to timely file an expert report because Dr. Saenz did not provide to Garza
medical records sought under section 74.051 of the civil practice and remedies code. See
id. § 74.051(d) ("All parties shall be entitled to obtain complete and unaltered copies of the
patient's medical records from any other party within 45 days from the date of receipt of a
written request for such records."). Citing Jernigan v. Langley, Garza reasons that Dr.
4
Saenz's failure to provide the allegedly properly-requested records is conduct inconsistent
with an intent to rely upon the protections of chapter 74, including the right to dismissal
under section 74.351. 111 S.W.3d 153, 157 (Tex. 2003); see also TEX . CIV. PRAC . & REM .
CODE ANN . § 74.351(a)-(b). The case law does not support her reasoning, however. A
claimant's efforts to obtain medical records under section 74.051 do not serve to toll or
extend the expert report deadline. See Estate of Regis, 208 S.W.3d at 68 (holding that the
plaintiff was not entitled to an equitable extension of the deadline for filing her medical
report on the basis that she made a good-faith effort to obtain her medical records from the
defendant and the defendant did not provide them); see also Offenbach v. Stockton, 285
S.W.3d 517, 521 (Tex. App.–Dallas 2009, no pet.) (noting that section 74.351 does not
contain a "good faith" or "due diligence" exception to the 120-day expert report deadline);
Gulf Coast Med. Ctr., LLC v. Temple, No. 13-09-00350-CV, 2010 WL 196972, at *5 (Tex.
App.–Corpus Christi Jan. 21, 2010, no pet. h.) (mem. op.).
Here, the deadline for service of Garza's expert report was February 24, 2008, 120
days after the October 24, 2007 filing of her original petition in the case. It is undisputed
that no expert report was filed on or before this date. It is also undisputed that the parties
had no agreement to extend the expert report deadline. Absent such an agreement
between the parties, the trial court here had no discretion but to dismiss the case because
Garza failed to file a timely report. See Estate of Regis, 208 S.W.3d at 68; Azua, 198
S.W.3d at 815. We therefore conclude that the trial court did not abuse its discretion in
dismissing Garza's health care liability claims against Dr. Saenz. Garza's first issue is
overruled.
5
B. Propriety of "Motion to Dismiss"
Although she never expressly argues as much in her brief to this Court, by her
second issue Garza appears to contend that a "motion to dismiss" is not the proper vehicle
by which to dismiss a health care liability claim for failure to file the requisite expert report.
Garza seemingly claims that Dr. Saenz was required to file either a motion for summary
judgment or a plea to the jurisdiction to obtain dismissal of Garza's claims under section
74.351 of the civil practice and remedies code. However, Garza cites no authority, and we
find none, supporting this proposition. Rather, Texas law is clear that a defendant properly
invokes the protections of chapter 74 by filing a "motion to dismiss" the plaintiff's health
care liability claims. See TEX . CIV. PRAC . & REM . CODE ANN . § 74.351(b)(2) (providing that
"on the motion of the affected physician," the court shall dismiss the claim with prejudice);
see, e.g., Hill Reg'l Hosp. v. Runnels, 253 S.W.3d 213, 214 (Tex. 2008) (reviewing a
defendant physician's "motion to dismiss"); Lewis v. Funderburk, 253 S.W.3d 204, 206
(Tex. 2008) (same); Carreras v. Trevino, 298 S.W.3d 721, 722 (Tex. App.–Corpus Christi
2009, no pet.) (same). We therefore overrule Garza's second issue.
IV. CONCLUSION
The judgment of the trial court is affirmed.
NELDA V. RODRIGUEZ
Justice
Delivered and filed the
4th day of March, 2010.
6
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139 F.3d 908
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.United States of America, Plaintiff-Appellee,v.Curt G. ELLISON, Defendant-Appellant.
No. 97-30012.D.C. No. CR-93-00279-FVS.
United States Court of Appeals, Ninth Circuit.
Submitted Feb. 4, 1998**.Decided Feb. 9, 1998.
1
Appeal from the United States District Court for the Eastern District of Washington Fred L. Van Sickle, District Judge, Presiding.
2
Before BROWNING and O'SCANNLAIN, Circuit Judges, and MARQUEZ***.
3
MEMORANDUM*
4
Curt Ellison appeals from the district court's modification of his probation. We affirm.
5
The district court did not err when it determined that Curt Ellison violated a condition of his probation by engaging in a business transaction with Craig Ellison. Craig Ellison was involved in Curt Ellison's agreement to loan Norma Gloyn money and sell her a mobile home, was the motivating factor for Curt Ellison's involvement in those deals, and would have benefitted from the deals if he and Norma Gloyn had stayed together.
6
Curt Ellison received adequate notice and fair warning, from the formal conditions of his probation and from the personal reminders provided by his probation officer, that his business transaction with Craig Ellison would violate a condition of his probation. See United States v. Simmons, 812 F.2d 561, 565 (9th Cir.1987); United States v. Dane, 570 F.2d 840, 843-44 (9th Cir.1977).
7
The district court did not abuse its discretion when it denied Curt Ellison's motion to reopen evidence. The Federal Express receipt was of little relevance and import, because in reaching its decision that Curt Ellison engaged in a business transaction with Craig Ellison, the district court apparently did not rely on Ms. Molovik's equivocal testimony regarding whether she gave the check to Craig Ellison or sent it to Curt Ellison. Moreover, Curt Ellison only brought the Federal Express receipt to the district court's attention after a substantial delay.
8
AFFIRMED.
**
The panel finds this case appropriate for submission without oral argument pursuant to 9th Cir. R. 34-4 and Fed. R.App. P. 34(a)
**
* The Honorable Alfredo C. Marquez, Senior Judge, United States District Court for the District of Arizona, 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
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867 F.2d 391
51 Ed. Law Rep. 795
Michael BICANIC, Plaintiff-Appellant,v.Thomas M. McDERMOTT, Individually and as the Mayor of theCity of Hammond, Indiana, et al., Defendants-Appellees.
No. 88-2147.
United States Court of Appeals,Seventh Circuit.
Argued Jan. 12, 1989.Decided Jan. 31, 1989.
Michael C. Adley, Hammond, Ind., for plaintiff-appellant.
William J. Moran, Highland, Ind., for defendants-appellees.
Before FLAUM, EASTERBROOK, and RIPPLE, Circuit Judges.
EASTERBROOK, Circuit Judge.
1
We must decide a case that has visited too many courts already. At the end of 1983 the City of Hammond, Indiana, fired Michael Bicanic, its Administrator of Parks and Recreation. He filed suit in August 1984 in the Circuit Court of Lake County, Indiana, contending that the discharge was politically motivated and violated the first amendment to the Constitution, applicable to the states through the fourteenth and implemented by 42 U.S.C. Sec. 1983. The complaint also presented claims based on state law. Concerned that things might not come out to his liking in state court, Bicanic filed this identical action in federal court in January 1986. Bicanic's lawyer (who no longer represents him) did not tell the federal judge that the same claims had been pending in state court for almost two years; neither did the defendants.
2
Discovery proceeded in both judicial systems. In January 1987 the defendants moved for summary judgment in the federal case, again omitting to mention the state case. Briefing and argument followed, during which the federal judge learned about the state case. Meanwhile the state case went to trial. On January 28, 1988, the jury returned a verdict in Bicanic's favor. No one told the federal judge. The defendants filed a post-judgment motion, asking the court to dismiss Bicanic's complaint because he had not filed a notice of tort claim with the City. The judge did so on May 6, 1988, on the authority of Werblo v. Hamilton Heights School Corp., 519 N.E.2d 185 (Ind.App. 1st Dist.1988), and City of Gary v. Kellogg, 519 N.E.2d 570 (Ind.App. 3d Dist.1988), decided in February. The defendants moved to "dismiss" the federal complaint on the basis of this decision. The district judge ignored this motion and on May 23, 1988, released an opinion--doubtless written in large measure before the motion arrived--granting summary judgment on the merits in defendants' favor on the constitutional claim and relinquishing pendent jurisdiction of the claims based on state law.
3
While the parties briefed Bicanic's federal appeal, the worm turned in state court. Felder v. Casey, --- U.S. ----, 108 S.Ct. 2302, 101 L.Ed.2d 123, decided in June 1988, held that states may not make a notice-of-claim form a condition of Sec. 1983 suits. The Court of Appeals of Indiana then summarily reversed the order dismissing the suit, remanding so that the trial judge could "consider and rule on the other errors set out in the defendants' motion". So far as we can tell, the state courts are unaware of the federal litigation. (Counsel for the City informed us at oral argument that neither side had notified them of the federal case.) The Circuit Court of Lake County has yet to consider the defendants' remaining arguments--which has not prevented Bicanic from arguing on appeal that we should give preclusive force to the verdict in his favor, on the assumption that the Circuit Court will reject the City's remaining arguments.
4
One judicial system or another has wasted its time. A single adjudication is sufficient; courts are hard pressed to deliver even that much. Duplication of effort on one dispute means that less time remains to give other litigants their first hearing. Had the district judge known of the state case, under way for 18 months before the federal filing, he would have stayed proceedings to await its outcome. As things happened, our case appears to have been caught in a transition between judges. The judge who ultimately granted summary judgment joined the federal bench in March 1988 and may not have had access to the transcripts of arguments in 1987 during which counsel informed his predecessor about the state case.
5
What's done is done, however. The state court rendered judgment in January 1988, but Bicanic did not then dismiss the federal complaint or plead the state judgment as preclusive. The City attempted to rely on the state's decision in May 1988, but the judgment of May 1988 it has no longer. Bicanic cannot rely on the current state of things--not only because he did not raise the subject in the district court but also because the state court has not re-entered judgment on the jury's verdict and may never do so. The only judgment outstanding at the moment is the one entered by the district court, so we must resolve the appeal on the merits.
6
The district judge concluded that Bicanic held a politically sensitive position and therefore could be fired for political reasons. See Branti v. Finkel, 445 U.S. 507, 517-20, 100 S.Ct. 1287, 1294-96, 63 L.Ed.2d 574 (1980); Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976); Tomczak v. City of Chicago, 765 F.2d 633 (7th Cir.1985); Lindahl v. Bartolomei, 618 F.Supp. 981, 987 (N.D.Ind.1985). After his appointment as Administrator in 1981, Bicanic organized and coordinated the park and recreation program for both the City and its school system. He prepared budgets. After interviewing candidates for employment, he recommended who should be hired. He negotiated and signed contracts for the construction of a new civic center and all other contracts and leases executed by the Park and Recreation Commission, a five-member board with formal powers over these endeavors.
7
The fall of 1983 saw a mayoral election. Thomas M. McDermott won, replacing Edward J. Raskosky, who had held the office the preceding eight years. McDermott sent Bicanic a letter as "mayor-elect" discharging him effective the last day of Raskosky's term. Bicanic says that the dismissal was politically inspired; the City contends that the dismissal was precipitated by Bicanic's indisposition during 1983 (he concedes that he did not come to work for several months). The City maintains that while on sick leave from his job as Administrator, Bicanic was working full time for Superior Rigging and Erecting Co. of Elkhart, Indiana, which Bicanic denies. The district court concluded that this dispute is not material to the outcome, because the Administrator's job is one in which "party affiliation is an appropriate requirement for the effective performance of the public office involved." Branti, 445 U.S. at 518, 100 S.Ct. at 1295. That means a job in which there may be "principled disagreement on goals or their implementation", Nekolny v. Painter, 653 F.2d 1164, 1170 (7th Cir.1981). The political officials must be able to count on the support of those who prepare budgets, negotiate and sign contracts, and generally run the show at a substantial component of the government. The Commission had the last formal word on some of these subjects, but members of the President's cabinet may be political appointees notwithstanding their formally subordinate status on the organization chart of the executive branch; so too with responsible subordinates in the City of Hammond. See Tomczak, 765 F.2d at 641-43; Nekolny, 653 F.2d at 1170.
8
Bicanic all but concedes this but maintains that before his discharge he was stripped of important duties. His job no longer corresponded to his title, he submits, and once he lost his discretionary tasks the City lost the ability to sack him on political grounds. Bicanic's affidavit states:
9
When I was originally hired as Administrator, I was treated as a department head and had the authority to organize, plan, and coordinate the Park and Recreation Program for the Civil City and the School City. However, these duties were withdrawn from me and I did not exercisee [sic] such authority during the year 1983.... I was not even permitted to express my opinions on any occasions.
10
If this creates a material dispute about the nature of Bicanic's duties, summary judgment is inappropriate. Wrigley v. Greanias, 842 F.2d 955 (7th Cir.1988).
11
Bicanic does not tell us why he lost his principal duties. If the City of Hammond reorganized its parks department so that all of Bicanic's duties were distributed elsewhere, then the City had no need of his services no matter what his politics. A political appointee does not acquire tenure as a civil servant when the tasks of the job are abolished or redistributed--for the abolition of a political job is itself a political deed, no more actionable than firing the holder of a job whose duties are unchanged. If, instead, Hammond wants the Administrator to hold discretionary powers but withdrew them because Bicanic was the incumbent--perhaps because he did not come to work, perhaps because he was deemed politically untrustworthy--again the discharge gives no cause for complaint. It cannot be that if a mayor so distrusts an appointee that he first strips away the person's duties and then, when the appointee does not get the message, pulls the rug out from under him, the Constitution treats the initial step (deprivation of responsibility) as interdicting the second (discharge). See also Tomczak, 765 F.2d at 640, holding that the powers of the office, not the tasks of its occupant, determine whether the occupant may be dismissed on political grounds. The erosion of power and the fall of the ax may be two symptoms of the same dissatisfaction; one does not prevent the other. So it does not make a difference whether the City eliminated the job (and then Bicanic) or instead wanted a potent Administrator but not Bicanic; in either case the change in duties would not give tenure to a political official.
12
Bicanic the deponent was more forthcoming than Bicanic the affiant. Part of a deposition taken during the state litigation and attached to the defendants' motion for summary judgment reads:
13
Q. ... Do you consider yourself a political opponent of all the defendants?
14
A. Yes.
15
* * *
16
Q. You would consider, then, all the Park Board members prior to January of '84 and the--
17
A. Especially Ray Kenda and Bill Irby. [Defendants Ray Kenda and E. William Irby, two members of the Board of Parks and Recreation.] The other two [members at the time] were--went along with those two....
18
* * *
19
A. Well, I feel as administrator, I was denied making certain decisions that the Board members, Ray Kenda and Bill Irby had taken upon themselves to serve as administrators. There wasn't anyone I could turn to. I couldn't go to the Board to seek aid, I couldn't go to the mayor [Raskosky].
20
* * *
21
Q. [Your position is that] certain Board members, I believe you named Mr. Irby and Mr. Kenda, either interfered or usurped decisions that you felt should be--
22
A. You're absolutely right.
23
* * *
24
A. ... [N]ow, we had a meeting with Ray Kenda, Bill Irby and--what is it--Steve Goot, the attorney, and Mayor McDermott. Well, he was Bob McDermott at that time or whatever. On December the 1st [1983] we met in the board room and at that time Kenda and Irby had given the mayor elect a snow job, I would say, and at that meeting McDermott had mentioned that I would be relieved as administrator of Parks and Recreation....
25
This deposition narrates a political struggle: Bicanic against his political opponents Irby and Kenda, who consolidated power on the board, took away duties Bicanic thought were rightfully his, and persuaded the incoming Mayor to get rid of him. Bicanic's duties, their erosion, and the denouement were all political in nature.
26
The first amendment does not forbid such a sequence under the approach of Elrod and Branti. Those the people elect are entitled to employ others who hold their confidence; they must do so if they are to carry out the programs they promised to pursue. Bicanic wanted both to exercise discretionary powers of government and to be insulated from politics. Such an approach would put the first amendment athwart the ability of the people to have their way through elections.
27
AFFIRMED.
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89 Ariz. 361 (1961)
362 P.2d 737
Eugene PUNTEL, Appellant,
v.
Stephen KIRTIDES, and Olympia Kirtides, his wife, Appellees.
No. 6619.
Supreme Court of Arizona. En Banc.
June 21, 1961.
Rehearing Denied September 26, 1961.
*362 Charles Christakis and Douglas O. Peterson, Phoenix, for appellant.
John M. Levy and William C. Fields, Phoenix, for appellees; Emmett R. Feighner, Phoenix, of counsel.
FRANCIS J. DONOFRIO, Superior Court Judge.
This is an action by Eugene Puntel, hereinafter called plaintiff, against Stephen Kirtides and Olympia Kirtides, his wife, hereinafter called defendants. The case was tried to the court sitting with a jury, and at the close of plaintiff's evidence defendants moved for an instructed verdict on each count of the complaint. The court below granted the motion and plaintiff has appealed.
The plaintiff has several assignments of error which may be summarized into three categories:
1. That the court erred in directing a verdict for the reason that a prima facie case was established in that there was enough evidence to take the case to the jury on the issue as to whether there was a partnership between the parties, and that a prima facie case was made on the count alleging actionable fraud against the defendants and that there was enough evidence to take the case to the jury on this issue.
2. That the court erred in denying plaintiff's motion to amend the complaint for money had and received and for breach of contract and for constructive trust.
3. That the court erred in denying plaintiff's motion to reopen his case, and erred in not admitting plaintiff's Exhibit I in evidence.
Under these circumstances, first it is necessary that we examine the evidence, for if there is evidence in the record from which a jury could reasonably have found in favor of plaintiff on any of the causes of action of the complaint it was error to direct a verdict. Golfinos v. Southern Pacific Company, 86 Ariz. 315, 318, 345 P.2d 780, 781.
The trial proceeded on an amended complaint alleging two causes of action. The first cause of action alleged a partnership and prayed for an accounting and a distribution of the partnership business. The second cause of action was based on fraud concerning the same matter and asked for damages. The defendants denied both the allegations of partnership and fraud.
The facts, taken as strongly in favor of plaintiff's case as they may be from the evidence, show the following: The plaintiff, an unmarried man in his seventies, was illiterate, and unable to speak English very well. He met the defendants, a young married couple, on or about the 22nd day of March, 1954. At this time defendants employed plaintiff as a dishwasher in their restaurant located on Madison Street in *363 Phoenix. Both parties spoke Greek and carried on much of their conversations in the Greek language.
The plaintiff worked for defendants as a dishwasher for approximately 10 months, receiving a salary of $30 a week which he claims to have given back to defendants. Soon after going to work he claims that he gave them approximately $279, and thereafter the sum of $100 which the plaintiff borrowed from his cousin in California. There were other items such as social security checks, salaries and the obtaining of a $1,000 loan from a local bank, together with work in the construction of a diner trailer which plaintiff claims to have given the defendants. The defendants admit borrowing some money from plaintiff, but the record is silent as to whether any of it was ever paid back.
The theory of plaintiff's first cause of action was that the plaintiff and defendants orally entered into a partnership agreement, in March, 1954, whereby both agreed that they would together build a diner and thereafter open it for business, each to contribute his share of services. The theory of the second cause of action was that when defendants entered into this oral agreement they never intended to have plaintiff as a partner but with intent to defraud, made representations to enter into a partnership, which representations were false and material and made solely to obtain plaintiff's monies.
We think the first and vital question is: Is there any evidence of partnership? There are many definitions of a partnership but perhaps none are more comprehensive and precise than the often quoted definition of Chancellor Kent:
"A Contract of two or more competent persons to place their money, effects, labor and skill, or some or all of them, in lawful commerce or business, and to divide the profit and bear the loss in certain proportions." 3 Kent Comm. 23.
In harmony with this definition is our own statute A.R.S. § 29-206, subsection A:
"A partnership is an association of two or more persons to carry on as co-owners a business for profit."
The transcript does not contain evidence that the parties agreed upon a partnership. From the very beginning the plaintiff could give no clear picture of any agreement or understanding which could be interpreted as a partnership. Illustrative of this are the following questions and answers:
"Mr. Christakis: Now, Mr. Puntel, in March of 1954, did you have a conversation with Mr. and Mrs. Kirtides here concerning any sort of any agreement? A. I don't understand.
"The Court: In March of this year did you have some kind of conversation *364 or talk with Mr. and Mrs. Kirtides about having an agreement of some kind in 1954? A. No agreement.
"Q. Did you have a conversation with them about such an agreement? A. If I start work, he told me to trust him, he said turn back the money, my wife bookkeeper, mark it down.
"Mr. Christakis: What else did Mr. Kirtides say to you then at that conversation? A. I don't understand that.
"The Court: What else did they say to you at that time? Did they say something else to you at that time? A. He told me to turn back the money any time, his wife mark it down in the book. He said I go buy stock and trust him.
"Q. Did you let him have money? A. Every time I give him money back, my check, he pay me.
"Q. That you gave him the money? A. Yes.
"Q. Then what happened? A. Then he said he mark it down in the book, then I paid it back."
A detailed examination of the testimony reflects that plaintiff's counsel asked some leading questions of plaintiff using the word "partnership" and in some instances assumed the fact of partnership, never laying the foundation for the conversation. However, in the answers given by plaintiff he was never able to give any conversation, writing or account of any incident where there was any specific understanding to form a partnership.
It goes almost without saying that where there is no evidence of any agreement to enter into a partnership, there is no evidence to support the theory of the second cause of action that the defendants entered into an oral agreement of partnership with the plaintiff with the intent to defraud him. Certainly the evidence is devoid of any of the nine elements of a fraud case repeatedly announced by this Court as necessary to be proved. Moore v. Meyers, 31 Ariz. 347, 253 P. 626; Waddell v. White, 56 Ariz. 420, 108 P.2d 565, 108 P.2d 843.
We do not consider that plaintiff's proposed Exhibit I, being a loan application filled in by the assistant manager of the bank and signed by the plaintiff, contains anything to show a partnership between the parties. Therefore, the assignment of error based on its failure to be admitted will not be considered further.
We are of the opinion that there is not evidence in the record sufficient to go to the jury on the causes of action alleged in the amended complaint. Such being the case, the court properly granted an instructed verdict.
*365 We next consider plaintiff's assignment that the court erred in denying his motion to amend the complaint to recover on the theory of money had and received, breach of contract, or a constructive trust. Plaintiff urges that amendments should be allowed liberally in the interest of justice so that the case ultimately should be tried on its merits in order that the parties to the litigation in one trial may receive all the relief to which they are entitled. Plaintiff contends that the court abused its discretion in denying the motion to amend. Amendments to conform to the evidence should be liberally allowed in the interest of justice and are within the discretion of the trial court. Leigh v. Swartz, 74 Ariz. 108, 245 P.2d 262; Aiken v. Protis, 59 Ariz. 101, 123 P.2d 169.
A review of the testimony given by defendant Kirtides shows that on occasions he admitted having borrowed money and received loans from the plaintiff. He testified that he wrote a letter in Greek asking for a $300 loan and that later he had a long distance conversation concerning the matter. He admits driving the plaintiff to Blythe, California, to obtain money from a cousin.
One of defendants' grounds for defendants' motion for a directed verdict was stated as follows:
"* * * that the evidence of the plaintiff affirmatively shows that the money advanced, if any, was advanced with the understanding that the plaintiff could recover such money from the defendants and not from any partnership or partnership property or funds."
The modern trend in the trial of lawsuits is to render justice upon the merits of the controversy rather than to defeat justice upon technicalities. Bowman v. Hall, 83 Ariz. 56, 316 P.2d 484; Rawls v. Brotherhood of Railroad Trainmen Ins. Dept., 213 La. 899, 35 So.2d 809. Applying the foregoing legal principles to the facts shown by this record it appears to us that the court did abuse its discretion in denying plaintiff's motion to amend and reopen his case.
This Court affirms the judgment in favor of the defendants on the partnership issues. The case is reversed with directions that the plaintiff be permitted to file an amended complaint setting forth claims for relief based only upon debt and/or money had and received, and for a new trial in accordance with this opinion.
Reversed with directions.
STRUCKMEYER, C.J., BERNSTEIN, V.C.J., and UDALL and LOCKWOOD, JJ., concur.
JENNINGS, J., being disqualified, FRANCIS J. DONOFRIO, Superior Court Judge, was called to sit in his stead.
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234 Ga. 635 (1975)
217 S.E.2d 152
THOMAS
v.
THE STATE.
29827.
Supreme Court of Georgia.
Submitted April 8, 1975.
Decided June 24, 1975.
*637 Robert D. Peckham, Jack H. Affleck, John W. Timmons, Jr., for appellant.
Harry N. Gordon, District Attorney, James Wilson Smith, Assistant District Attorney, Arthur K. Bolton, Attorney General, Kirby G. Atkinson, for appellee.
PER CURIAM.
This is an appeal from a conviction for rape and a fifteen-year sentence. Three errors are enumerated in this court. Having reviewed the record, we conclude that all three enumerated errors are without merit, and the judgment must be affirmed.
1. The first enumerated error complains of the admission of evidence, over objection, tending to show that the appellant committed an offense wholly independent of that for which he was being tried. During the course of the trial a "surprise witness" came to the attention of the district attorney. This witness testified that she was the victim of similar treatment by the accused on a prior occasion to that for which he was being tried in the instant case. The name and address of this witness had not been furnished to the defendant prior to trial, but the district attorney stated in his place that the testimony sought to be presented by the witness was *636 newly discovered and that opposing counsel had been made aware of the identify of the witness immediately upon learning that she possessed information relevant to the case on trial. Under the facts stated in this record, it was not error to permit this witness to testify. Scott v. State, 230 Ga. 413 (197 SE2d 338) (1973).
Acknowledging that Hunt v. State, 233 Ga. 329 (211 SE2d 288) (1974), holds otherwise, the appellant urges that the testimony elicited from this "surprise witness" was inadmissible under the rule laid down in Larkins v. State, 230 Ga. 418 (197 SE2d 367) (1973). We need only say here that Hunt overruled Larkins and Hunt now sets forth the applicable rule. Since the evidence elicited from the witness in this case "would show the intent, motive, plan, scheme, and bent of mind of the appellant, and was relevant on the issue of whether or not the prosecutrix consented to the sexual acts," its admission was not erroneous.
2. The second enumerated error complains of the victim's description of the details of the alleged rape reported by her to an officer, such testimony by the officer of the reported details being hearsay and not within any recognized exception to the hearsay rule.
The facts contained in this record show that the rule laid down in the second division of Price v. State, 233 Ga. 332, 334 (211 SE2d 290) (1974), is applicable, and the details of the complaint or report to the officer were admissible in evidence.
3. The third enumerated error complains that the trial judge severely restricted defense counsel's cross examination of the victim of the alleged crime in violation of Code § 38-1705.
The trial judge merely restricted cross examination by defense counsel upon objection by the district attorney. In doing so he properly followed the decisions of this court in Lynn v. State, 231 Ga. 559 (203 SE2d 221) (1974), and Price v. State, 233 Ga. 332, supra. The victim of an alleged rape may not be cross examined as to specific acts of prior sexual intercourse with men other than the accused.
Judgment affirmed. All the Justices concur, except Gunter, J., who dissents from Division 1 and from the judgment.
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456 F.2d 219
Quintin LITTLE, Plaintiff-Appellant,v.TEXACO, INC., Defendant-Appellee.
No. 71-1209.
United States Court of Appeals,Tenth Circuit.
Feb. 22, 1972.
George N. Otey, Ardmore, Okl. (Otey & Evans, Ardmore, Okl. of counsel, on the brief), for plaintiff-appellant.
Elmer W. Adams, Tulsa, Okl. (Philip R. Wimbish, Tulsa, Okl. on the brief), for defendant-appellee.
Before LEWIS, Chief Judge, and HOLLOWAY and DOYLE, Circuit Judges.
WILLIAM E. DOYLE, Circuit Judge.
1
This is a diversity suit in which the plaintiff-appellant sought to cancel an oil and gas lease on one of two 100 acre tracts in Love County, Oklahoma. The cause was removed by defendant-appellee to the United States District Court for the Eastern District of Oklahoma. Appellant moved for summary judgment as did Texaco, the appellee. The latter motion was granted and the court dismissed the action.
2
The suit started out as a cancellation action in which the petitioner sought to void the lease, alleging breach of implied covenants to further develop and to prevent drainage. Texaco denied the breach and alleged affirmatively a lease provision which prohibited cancellation even for breach of a lease obligation. Appellant thereupon abandoned his claim that Texaco had violated the implied covenants to further develop and to prevent drainage. His motion for summary judgment was based solely on his contention that the invoking of the noncancellation provision constituted in law an admission that Texaco had violated the lease, whereby he was entitled to damages in the amount of $17,500.00, the value of the lease to Texaco on the second tract. Judge Langley could find no merit in appellant's contention and dismissed the action. We agree with this holding and affirm the judgment.
The clause in controversy provides:
3
The breach by Lessee of any obligation hereunder shall not work a forfeiture or termination, in whole or in part, of this lease.
4
Texaco has at every turn in these proceedings emphatically denied the commission of any breach, but this has not deterred appellant in the least. He continues to argue the point notwithstanding that the lease does not contain an express damage provision for invoking the above clause, and despite the fact that Texaco paid $70,000.00 for the lease, some part of which was presumably paid for this provision.
5
An answer may contain inconsistent defenses, and a defendant is at liberty to deny and at the same time advance an affirmative defense. Rule 8(e) (2) Federal Rules of Civil Procedure.1 Elgin Corporation v. Atlas Building Products Company, 251 F.2d 7, 9, 10 (10th Cir. 1958). Professor Moore points out that the pleading of inconsistent defenses was permissible at common law.2
6
It follows that one does not plead an inconsistent defense at his peril. He does not thereby run the risk of being held to have unwittingly pleaded himself into a $17,500.00 judgment.
7
We noted above that the appellant made no effort to prove a breach of implied covenants in accordance with the applicable Oklahoma law.3 Presumably he did not have evidence to establish that the defendant did not come up to the standard of a prudent operator in like circumstances.4
8
The cause is wholly lacking in merit, and the district court was correct in granting summary judgment. Its judgment is affirmed.
1
"A party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal, equitable or maritime grounds."
2
"Inconsistent defenses may also be pleaded. This was the rule at common law under the statute of Anne, and although there was some difficulty on the point in early decisions under the codes, the modern decisions are in accord with Rule 8(e) (2)
2A Moore's Federal Practice 1891 p 8.32.
3
See Wilcox v. Ryndak, 174 Okl. 24, 49 P.2d 733, 736 (1935); Sunray Mid-Continent Oil Company v. McDaniel, 361 P.2d 683, 685 (Okl.1961); Townsend v. Creekmore-Rooney Co., 358 P.2d 1103, 1104 (Okl.1960); Jordan v. Texaco, Inc., 297 F.Supp. 1140, 1142 (W.D.Okl.1969); Spiller v. Massey & Moore, 406 P.2d 467, 471-472 (Okl.1965)
4
Wilcox v. Ryndak, supra; Chenoweth v. Pan-American Petroleum Corporation, 314 F.2d 63, 66 (10th Cir. 1963)
| {
"pile_set_name": "FreeLaw"
} |
17‐1896‐cr
United States v. Walker
1 UNITED STATES COURT OF APPEALS
2
3 FOR THE SECOND CIRCUIT
4
5 August Term, 2018
6
7 (Argued: December 12, 2018 Decided: April 4, 2019)
8
9 Docket No. 17‐1896‐cr
10
11
12 UNITED STATES OF AMERICA,
13
14 Appellee,
15
16 – v. –
17
18 TYRONE WILSON, AKA BISCUIT, AKA YOUNG BRICKY, JOSEPH GARCIA,
19 AKA JO JO, MUSA MARSHALL, AKA SLIM, CRYSTAL LEWIS, AKA EBB,
20 VERDREEA OLMSTEAD, AKA AUNTIE, JOSEPH RANDOLPH, AKA RIZZLE,
21 JOSEPH VALENTIN, AKA J., TYHE WALKER, AKA G.I.B., AKA GUY IN THE
22 BUSHES, ALGENIS CARABELLO, AKA HIGH‐HENNY, JORGE MEJIA, AKA
23 MOOSE, AKA MUSSOLINI, RONALD HERRON, AKA RA, AKA RA DIGGS,
24 AKA RA DIGGA, AKA RAHEEM,
25
26 Defendants,
27
28 SHONDELL WALKER, AKA M‐DOT,
29
30 Defendant‐Appellant.
31
32
33 Before: JACOBS, CALABRESI, Circuit Judges, RAKOFF, District Judge. *
34
*Judge Jed S. Rakoff, of the United States District Court for the Southern District of New York,
sitting by designation.
1
1 Appeal from the judgment of the United States District Court for the Eastern
2 District of New York (Garaufis, J.) sentencing Defendant Walker to 360 months in
3 prison and five years of supervised release for a single count of conspiring to
4 distribute at least 200 grams of crack cocaine in violation of 21 U.S.C. § 846.
5 Walker pled guilty in October 2011 pursuant to a plea agreement in return for an
6 estimated sentence of 108 to 135 months in prison. The District Court, at the
7 Government’s request, then postponed Walker’s sentencing hearing while a trial
8 proceeded against Walker’s co‐defendant. After that trial concluded, Walker’s
9 sentencing hearing was held in May 2017. At the hearing, the Government asked
10 for a significant sentence increase based in part on information that arose during
11 the co‐defendant’s trial but which the Government knew about at the time it
12 negotiated Walker’s plea agreement. The District Court accepted the
13 Government’s new estimate and sentenced Walker to 360 months in prison. We
14 now vacate Walker’s sentence. We hold that the Government breached Walker’s
15 plea agreement when the Government, based on information that it knew at the
16 time of the plea, sought a substantially higher sentence than that estimated in
17 Walker’s plea agreement. Accordingly, we VACATE Walker’s sentence and
18 REMAND the case to a different district court judge for resentencing under
19 Walker’s plea agreement.
20
21
22 JILLIAN S. HARRINGTON, Monroe Township,
23 NJ (Martin J. Siegel, on the brief, New York, NY),
24 for Defendant‐Appellant.
25
26 RENA PAUL, Assistant United States Attorney
27 (Richard P. Donoghue, United States Attorney for
28 the Eastern District of New York, Amy Busa,
29 Samuel Nitze, David Lizmi, Assistant United
30 States Attorneys, on the brief), Brooklyn, NY, for
31 Appellee.
32
33
34
35
2
1 GUIDO CALABRESI, Circuit Judge:
2 This case presents the question of whether the Government breaches a plea
3 agreement when it agrees to an estimated sentence—known as a “Pimentel
4 estimate”—in a defendant’s plea bargain, then advocates for a substantially
5 higher sentence at the defendant’s sentencing hearing on the basis of information
6 known to the Government at the time of the agreement.
7 We have previously held that allegations of breached plea agreements
8 depend on what “the reasonable understanding and expectations of the
9 defendant [were] as to the sentence for which he had bargained.” Paradiso v.
10 United States, 689 F.2d 28, 31 (2d Cir. 1982) (per curiam). Here, Defendant‐
11 Appellant Shondell Walker agreed to a Pimentel estimate of 108‐135 months’
12 imprisonment when he pled guilty in 2011, and the Government agreed that it
13 would not deviate from this estimate in the absence of new information.
14 Walker’s sentencing hearing was then delayed for six years, in substantial part
15 due to the Government’s request that sentencing be postponed while a trial
16 proceeded against a co‐defendant. At the end of this trial, the Government
17 sought several sentencing enhancements based on information that became
18 evident during trial but which the Government knew about at the time it
3
1 negotiated Walker’s plea deal. Ultimately, the Government argued that Walker
2 ought to be sentenced to 360 months to life in prison.
3 We hold that, under these circumstances, Walker could not have
4 reasonably expected that the Government would change its position in such a
5 manner when he consented to the Pimentel estimate in his plea bargain, and
6 therefore that the Government breached the plea agreement. Accordingly, we
7 VACATE Walker’s sentence and REMAND for resentencing under the original
8 plea agreement.
9 BACKGROUND
10 On October 5, 2010, pursuant to a surveillance operation conducted by the
11 New York Police Department (“NYPD”) and the Drug Enforcement Agency
12 (“DEA”), defendant Shondell Walker and two others were arrested during a
13 traffic stop.
14 That same day, the Government filed a criminal complaint against Walker
15 in the United States District Court for the Eastern District of New York. The
16 complaint stated that “[f]or the past several years, the NYPD and the DEA have
17 been investigating a violent criminal organization based in the Gowanus Houses,
18 a public housing development in the Boerum Hill section of Brooklyn.” Compl. ¶
19 2. “For the better part of the last three years, these defendants have controlled the
4
1 distribution of crack cocaine and heroin in the Gowanus Houses.” Id. ¶ 2.
2 “During the course of this investigation, law enforcement has, among other
3 things, made numerous undercover purchases of crack cocaine directly from
4 members of this crew.” Id. ¶ 3. “In addition, . . . NYPD has executed various
5 search warrants and arrested various individuals associated with this
6 organization. These search warrants . . . have resulted in the seizure of . . .
7 substantial quantities of crack cocaine . . . .” Id. ¶ 4.
8 The complaint explained that Walker was “regularly involved in the
9 distribution of crack cocaine in the Gowanus Houses for an individual identified
10 as Ronald Herron, who was the leader of this criminal organization.” Id. ¶ 6
11 (capitalization and footnotes removed). Walker “worked with this organization
12 and served as one of Herron’s primary security guards and enforcers.” Id. ¶ 7.
13 For instance, Walker would “regularly accompany Herron to narcotics
14 transactions and carry firearms for Herron.” Id. ¶ 7. “Walker would also help to
15 protect Herron’s narcotics territory . . . by, for example, robbing or attacking rival
16 narcotics traffickers.” Id. ¶ 7. And one cooperating witness “stated that he and
17 Walker participated in a shooting against a rival narcotics trafficker.” Id. ¶ 7.
18 Moreover, Walker had previously been arrested in association with this criminal
5
1 organization when he was discovered in an apartment where the NYPD also
2 found heroine and crack cocaine. Id. ¶ 5.
3 Walker and eleven other co‐defendants were eventually charged in a
4 multi‐count indictment for participation in the Gowanus Houses drug
5 conspiracy.
6 On October 6, 2011, Walker pled guilty—pursuant to a plea agreement
7 with the Government—to a single count of conspiring to distribute at least 200
8 grams of crack cocaine in violation of 21 U.S.C. § 846. In turn, the Government
9 “estimate[d] [Walker’s] likely adjusted offense level under the Guidelines to be
10 level [29], which is predicated on the following Guidelines calculation:” (1) a base
11 offense level of 30 points derived from the 200 grams of crack cocaine
12 distribution, see U.S.S.G. §§ 2D1.1(a)(5), (c)(5); (2) a 2‐point enhancement for
13 possession of a weapon based on a firearm recovered from the vehicle during
14 Walker’s arrest, see id. § 2D1.1(b)(1); and (3) a 3‐point reduction for acceptance of
15 responsibility, see id. §§ 3E1.1(a), (b). App. 90‐91. This resulted in an estimated
16 Guidelines sentence of 108‐135 months.
17 The plea agreement also stated, in relevant part:
18 3. The Guidelines estimate set forth . . . is not binding on the Office, the
19 Probation Department or the Court. If the Guidelines offense level
6
1 advocated by the Office, or determined by the Probation
2 Department or the Court, is, for any reason, including an error in the
3 estimate, different from the estimate, the defendant will not be
4 entitled to withdraw the plea and the government will not be
5 deemed to have breached this agreement.
6 . . .
7
8 5. The Office agrees that . . . based upon information now known to the
9 Office, it will . . .
10 b. take no position concerning where within the Guidelines range
11 determined by the Court the sentence should fall; and
12 c. make no motion for an upward departure under the Sentencing
13 Guidelines.
14
15 If information relevant to sentencing, as determined by the Office,
16 becomes known to the Office after the date of this agreement, the Office
17 will not be bound by paragraphs 5(b) and 5(c).
18
19 App. 91‐93.
20 The Probation Department subsequently prepared a Pre‐Sentence Report
21 (“PSR”) for Walker on January 3, 2012, in which it agreed with the Government’s
22 estimated Guidelines sentence. According to the PSR, Walker worked as an
23 “enforcer” for the conspiracy and “carried a firearm as part of his role in the
24 organization in order to protect himself, the drug proceeds, and the locations on
25 the block where the crack cocaine was sold.” PSR ¶ 11. The PSR also reported
26 that, “[p]er the Government, Walker is responsible for distributing 200 grams of
27 crack cocaine during the course of the conspiracy between 2007 and 2010,” id.—
7
1 although the Government “conservatively estimates that Herron’s organization
2 distributed in excess of 1 kilogram of crack cocaine,” id. ¶ 6. The PSR also noted
3 that, “[b]ased on the instant investigation, post‐arrest statements, as well as
4 intelligence provided by confidential informants, agents determined that . . .
5 [Herron’s] enforcers[] are responsible for the entire amount of narcotics and
6 firearms involved in this conspiracy, as they were aware of the full scope of this
7 jointly undertaken criminal activity, and the actions of others were reasonably
8 foreseeable to them.” Id. ¶ 10.
9 After several delays, Walker’s sentencing hearing was scheduled for
10 September 10, 2013.
11 On the day of the hearing, the District Court—at the Government’s
12 request, and over defense counsel’s objection—postponed Walker’s sentencing
13 until after the trial of Walker’s co‐defendant, Ronald Herron. See United States v.
14 Herron, Docket No. 1:10‐cr‐00615‐NGG‐2. At Herron’s trial, several witnesses
15 testified about Walker’s role in the drug conspiracy: one stated that Walker had
16 said Herron had given Walker “a gun, so he could protect himself,” Trial Tr.
17 2925, June 16, 2014; another testified that Walker served as “muscle” for Herron,
18 Trial Tr. 1724, June 3, 2014; three witnesses said that Walker threatened people to
8
1 keep them from selling drugs on Herron’s turf; and one witness testified that
2 Walker “car[ried a] gun” for Herron, which Walker twice “flashed” in front of
3 the witness, Trial Tr. 2706‐14, June 10, 2014. Witnesses also testified that, at the
4 time of Walker’s participation in the conspiracy, the organization regularly sold
5 substantial amounts of cocaine.
6 Walker himself also testified at Herron’s trial as a witness for Herron.
7 Walker claimed that he sold drugs only to support himself; denied Herron’s
8 involvement in the conspiracy; and stated that Herron was “a positive role
9 model.” Trial Tr. 3762‐3780, June 23, 2014.
10 After the Herron trial ended, on October 19, 2016, the Government
11 submitted a second sentencing memorandum to the District Court advocating for
12 a “revised” Guidelines sentence for Walker based on allegedly new information
13 that surfaced during Herron’s trial. App. 68, 72, 78. Specifically, the Government
14 asserted (1) that the trial testimony established that “a reasonable estimate of the
15 narcotics attributable to [Walker] would be no less than one kilogram of crack‐
16 cocaine, which would result in a base‐offense level increase to level 32” from 30,
17 id. at 80 (citing U.S.S.G. § 2D1.1(c)(4)); (2) that Walker “undoubtedly ‘used
18 violence, made a credible threat to use violence, or directed the use of violence’
9
1 in the commission of the offense, which would result in a two‐level upward
2 adjustment of his Guidelines,” App. 80 (quoting U.S.S.G. § 2D1.1(b)(2)); and (3)
3 that “given Walker’s role as an enforcer in Herron’s organization, a two‐level
4 upward adjustment, pursuant to [U.S.S.G. §] 3B1.1 is appropriate,” App. 80. In
5 addition, the Government argued that Walker’s perjurious testimony at Herron’s
6 trial warranted a 2‐point enhancement for obstruction of justice. App. 78‐79
7 (citing U.S.S.G. § 3C1.1).1 On this basis, the Government concluded that a
8 Guidelines sentence of 360 months to life in prison was appropriate.
9 Roughly contemporaneously, Walker’s counsel submitted a second
10 sentencing memorandum objecting to the “drastic modification of the original
11 advisory sentencing guidelines” and requesting a Fatico hearing. Id. 62.2
1 The Government also asked that Walker’s reduction for acceptance of responsibility be
removed and that the enhancement contained in the plea agreement for possession of a
dangerous weapon be preserved.
2 Walker’s counsel submitted his second sentencing memorandum on June 14, 2016, in response
to an amended PSR that the Probation Department submitted following Herron’s trial and in
anticipation of a similar submission by the Government. The Probation Department had, in its
amended PSR, recommended that Walker’s Guidelines sentence be increased following the
events at Herron’s trial. In Walker’s counsel’s second sentencing memorandum, counsel
objected to the Probation Department’s increase from the sentence originally agreed to in his
plea agreement, saying that he was “confident” that the Government would similarly advocate
for an increased sentence, and arguing that such an increase would also be improper. App. 65.
The Government then submitted its second sentencing memorandum on October 19, 2016,
arguing for an even higher sentence than that recommended by the Probation Department.
Walker’s counsel then submitted three supplements to his second sentencing memorandum on
April 18, April 24, and May 24, 2017, while maintaining the original substance of his second
10
1 Walker’s sentencing hearing was finally held on May 30, 2017—six years
2 after he had originally pled guilty. At the hearing, defense counsel objected to
3 each of the Government’s additional sentencing enhancements and requested
4 that Walker be sentenced according to the “original guideline range.” Id. at 116.
5 The Government acknowledged that it had originally advocated for a lesser
6 Guidelines sentence, but explained that “when the plea agreement, the initial
7 plea agreement, was first negotiated in the case, it was a number of years ago.”
8 Id. at 103. The Government argued that “over the course of [its] investigation, up
9 and through [Herron’s] trial, [it] learned loads more information” that justified a
10 new Guidelines sentence. Id. The Government further maintained that it was
11 required to “prove a disputed fact relevant to sentencing by a preponderance of
12 the evidence” only, and that “given the quantity of evidence adduced at the
13 trial,” it was “totally appropriate for the Court to rely on that [evidence] in
14 making the findings necessary to justify the enhancements.” Id. at 110.
15 The District Court agreed that “there [wa]s [a] preponderance of the
16 evidence to” support the Guidelines sentence adopted by the Government. Id. at
sentencing memorandum. It seems clear from this timeline that Walker’s counsel’s objections
covered the Government’s additions.
11
1 130. The Court then sentenced Walker to 360 months’ imprisonment and five
2 years of supervised release. Walker now appeals his sentence.
3
4 DISCUSSION
5 Walker appeals on two primary grounds. First, he asserts that the
6 Government breached his plea agreement by advocating for a higher sentence at
7 his sentencing hearing than it had agreed to when he pled. Second, Walker
8 argues that postponement of his sentencing hearing for four years while the
9 Government pursued a trial against his co‐defendant violated his Fifth
10 Amendment right to a speedy sentencing. See United States v. Ray, 578 F.3d 184
11 (2d Cir. 2009). Because we find that the Government breached Walker’s plea
12 agreement, and vacate the sentence and remand for resentencing on that basis,
13 we do not reach the alleged Fifth Amendment speedy sentencing violation.3
14 I
15 “We review interpretations of plea agreements de novo and in accordance
16 with principles of contract law.” United States v. Riera, 298 F.3d 128, 133 (2d Cir.
17 2002). “Moreover, because plea bargains require defendants to waive
3 Since Walker, in his Fifth Amendment argument, seeks only the same relief that we are
granting him for the Government’s breach of the plea agreement, we need not and do not
consider the merits of his Fifth Amendment claim.
12
1 fundamental constitutional rights, prosecutors are held to meticulous standards
2 of performance.” United States v. Vaval, 404 F.3d 144, 152‐53 (2d Cir. 2005). “[W]e
3 construe plea agreements strictly against the government and do not ‘hesitate to
4 scrutinize the government’s conduct to ensure that it comports with the highest
5 standard of fairness.’” Id. at 152 (quoting United States v. Lawlor, 168 F.3d 633, 637
6 (2d Cir. 1999)).
7 The Government argues that we should review this claim for plain error
8 because Walker failed to object before the District Court on the specific grounds
9 that the Government “breached” the plea agreement. But if a defendant objects at
10 a sentencing hearing in a manner “which fairly alerts the court and opposing
11 counsel to the nature of the claim,” the objection is “sufficient to preserve [the]
12 argument on appeal,” even if the defendant fails to “raise a specific rationale for
13 the objection.” United States v. Huggins, 844 F.3d 118, 121 n.3 (2d Cir. 2016)
14 (quoting United States v. Sprei, 145 F.3d 528, 533 (2d Cir. 1998)).
15 Walker objected multiple times to the Government’s change in position.
16 Walker also made clear that he was objecting to the “drastic modification of the
17 original advisory sentencing guidelines,” App. 62, and that he ought to be
18 sentenced according to the “original guideline range” contained in his plea
13
1 agreement, id. at 116. Moreover, the Government itself acknowledged, both in its
2 second sentencing memorandum and during Walker’s sentencing hearing, that it
3 was changing its position from the Guidelines sentence estimated in Walker’s
4 plea agreement. But it argued that such a change was justified because of
5 allegedly new information that it developed against Walker in the course of
6 Herron’s trial.
7 Under the circumstances, it is obvious that Walker’s objections, as
8 evidenced by the Government’s arguments in response, “w[ere] sufficient to
9 apprise the court and opposing counsel of the nature of [Walker’s] claims”
10 regarding the impropriety of the Government’s change in position. Sprei, 145
11 F.3d at 533 (internal quotation marks omitted). Therefore, we review the
12 argument that the Government breached Walker’s plea agreement for harmless
13 error. See United States v. Robinson, 634 F. App’x 47, 49 n.1 (2d Cir. 2016).
14 II
15 Walker argues on appeal that the Government breached his plea
16 agreement because it (1) advocated for a higher sentence at his sentencing
17 hearing than it had agreed to in his plea agreement, and did so (2) based on
18 information that the Government had in its possession at the time the plea was
19 negotiated. Specifically, Walker contends that the evidence the Government used
14
1 to support its post‐plea base offense level increase, use‐of‐violence enhancement,
2 and aggravating‐role enhancement—i.e., that Herron’s organization distributed
3 at least 1 kilogram of crack cocaine, that Walker used violence as part of his role
4 in the drug conspiracy, and that Walker worked as an “enforcer” for Herron—
5 was information that the Government had at the time the plea bargain was
6 struck. Walker contends that the Government’s later use of this evidence to
7 justify a revised Guidelines sentence violated the “estimate[]” contained in the
8 plea agreement. App. 90.
9 Walker concedes that his perjurious testimony on behalf of Herron is new
10 information that the Government did not have in its possession at the time it
11 negotiated his plea agreement. Walker nonetheless argues that the Government’s
12 removal of the reduction for acceptance of responsibility and application of an
13 obstruction‐of‐justice enhancement—both based on this perjury—also violated
14 the terms of his plea agreement. While we will find that the Government
15 breached Walker’s plea agreement when it advocated for an increased base
16 offense level, a use‐of‐violence enhancement, and an aggravating‐role
17 enhancement, and, on that basis, vacate Walker’s sentence and remand for
18 resentencing, we take no position on whether the enhancements based on
15
1 Walker’s perjury were also improper, and leave that issue to the resentencing
2 court.
3 III
4 Whether the Government breaches a plea agreement when it later
5 advocates for a higher sentence than that contained in the plea—based on
6 information that the Government knew about at the time the plea was
7 negotiated—is not an unfamiliar issue in this Circuit. See United States v.
8 MacPherson, 590 F.3d 215, 218‐19 (2d Cir. 2009) (per curiam); United States v.
9 Habbas, 527 F.3d 266, 269‐72 (2d Cir. 2008); United States v. Palladino, 347 F.3d 29,
10 32‐35 (2d Cir. 2003). The issue stems from our suggestion in United States v.
11 Pimentel, 932 F.2d 1029, 1034 (2d Cir. 1991), that it would be good practice for the
12 Government to provide pleading defendants with “the likely range of sentences
13 that their pleas will authorize under the Guidelines” (known as a “Pimentel
14 estimate”) in order to reduce blindsided defendants’ claims of “unfair surprise.”
15 But this practice has resulted in tension between, on the one hand, defendants’
16 “reasonable reliance” on the sentences as estimated in their plea agreements,
17 and, on the other, the Government’s need to maintain flexibility in its sentencing
18 decisions in the event of mistakes, oversights, or new information. See Habbas,
19 527 F.3d at 269‐71.
16
1 As with other questions of breached plea agreements, to resolve this
2 tension, we look both to the precise terms of the plea agreements and to the
3 parties’ behavior. We seek to determine what “the reasonable understanding and
4 expectations of the defendant [were] as to the sentence for which he had
5 bargained.” Paradiso, 689 F.2d at 31. In the specific context of an alleged breached
6 Pimentel estimate—because a Pimentel estimate is no more than that, an
7 estimate—the Government does not violate a defendant’s reasonable
8 expectations simply because it deviates from the estimate. A defendant’s
9 reasonable expectations may be breached, however, where the Government’s
10 deviation “produce[s] serious unfairness” for the defendant. Habbas, 527 F.3d at
11 271. This may occur if, for instance, the Government acts in bad faith (either in its
12 initial calculation of the Pimentel estimate or in its later change of position) or if
13 “the [G]overnment’s change of position (without new justifying facts) changed
14 the defendant’s exposure so dramatically as to raise doubts whether the
15 defendant could reasonably be seen to have understood the risks of the
16 agreement.” Id.
17 Because of this focus on the defendant’s reasonable expectations—“rather
18 than technical distinctions in semantics” surrounding the Pimentel estimate,
17
1 Gammarano v. United States, 732 F.2d 273, 276 (2d Cir. 1984)—our analysis can
2 produce divergent outcomes in cases that, at first glance, may seem similar. See
3 MacPherson, 590 F.3d at 219 (discussing the different outcomes in Palladino and
4 Habbas). In both Palladino, 347 F.3d at 32‐33, and Habbas, 527 F.3d at 269‐70, the
5 defendants alleged that the Government breached their plea agreements by
6 advocating for a higher sentence than that contained in their pleas. The
7 defendants’ plea agreements contained similar—though not identical—language
8 in these cases: both agreements stated that the Guidelines sentences in the pleas
9 were “estimate[s],” Palladino, 347 F.3d at 33; Habbas, 527 F.3d at 270; that these
10 estimates were “not binding” on the Government, Palladino, 347 F.3d at 33;
11 Habbas, 527 F.3d at 270; and that the defendants were not able to withdraw their
12 pleas if the Government ultimately advocated for an offense level that was
13 “different from the estimate,” Palladino, 347 F.3d at 33; Habbas, 527 F.3d at 270.
14 And in both cases, the Government justified its change in position from the
15 Pimentel estimate based on information that the Government knew about at the
16 time the pleas were negotiated. Palladino, 347 F.3d at 34; Habbas, 527 F.3d at 270.
17 Yet in Palladino, 347 F.3d at 34, we held that the Government breached the
18 plea agreement, while in Habbas, 527 F.3d at 270‐71, we held it did not.
18
1 In Palladino, the prosecutor who negotiated the plea agreement provided
2 the defendant with a Pimentel estimate that excluded a potentially applicable six‐
3 point sentencing enhancement. 347 F.3d at 31. Then, when “a new Assistant
4 United States Attorney [took] over the case and adopted a different view of the
5 matter,” the Government sought to apply the sentencing enhancement using
6 evidence that the Government knew about at the time the plea was negotiated.
7 Id. at 34. The plea agreement specifically stated that the Government’s Pimentel
8 estimate was “based on information known to [the Government] at [the time of
9 the plea],” id. at 33 (emphasis omitted), and that the Government would “make
10 no motion for an upward departure” nor take a position “concerning where
11 within the Guidelines range” the sentence should fall, id. Given “the[se]
12 circumstances,” we held that the “defendant had a reasonable expectation that
13 the Government would not press the Court for an enhanced offense level in the
14 absence of new information.” Id. at 34; see also Habbas, 527 F.3d at 272 n.1 (“The
15 problem in Palladino was . . . the combination of the passages of the plea
16 agreement conferring assurance that the government would not advocate for a
17 sentence higher than the estimate, with the aura of unfair dealing that underlay
18 the government’s change of position.”).
19
1 In Habbas, we held that the defendant had no such reasonable expectation.
2 In that case, the Government, “under the pressures of preparing a Pimentel
3 estimate after the defendant indicated readiness to plead,” simply neglected to
4 “notice the possible applicability of [a four‐level sentencing enhancement].” 527
5 F.3d at 271. When notified by the Probation Department of its oversight, the
6 Government promptly sought to include the enhancement. Id. at 270. The Habbas
7 defendant’s plea agreement included language that the Government “reserve[d]
8 the right to argue for a sentence beyond that called for by the Guidelines,” and
9 “clearly stated that the range set forth was merely a non‐binding estimate, and
10 warned in several different ways that the government was likely to advocate for
11 a higher sentence.” Id. The agreement did not, in contrast with Palladino, contain
12 the clause, “based on information known to the Government at the time”—or
13 indeed any language indicating that the Government would not advocate for a
14 higher sentence later. Id. at 272 n.1. Moreover, the proposed sentencing
15 enhancement ultimately made no difference to the defendant’s overall sentence.
16 Id. at 271. Under those circumstances, we concluded that the Government did not
17 “violate[] the ‘spirit’” of the defendant’s plea agreement when it later advocated
18 for a higher sentence. Id. at 272 (quoting Palladino, 347 F.3d at 30); see also
20
1 MacPherson, 590 F.3d at 219 (holding that it was not plain error for the
2 Government to advocate for a higher sentence than the Pimentel estimate when it
3 was clear from the language of the plea agreement and the defendant’s plea
4 colloquy that the defendant understood that his Pimentel estimate was subject to
5 change).
6 IV
7 Given this framework, we find that Walker’s reasonable expectations were
8 violated here. First, as in Palladino (and unlike in Habbas), Walker’s plea
9 agreement contained language indicating that the Government would, “based
10 upon information now known to the Office,” “make no motion for an upward
11 departure,” and it would change its position only if new information “bec[ame]
12 known to the [Government] after the date of th[e plea] agreement.” App. 92‐93.
13 The agreement also lacked any language like that in Habbas explicitly
14 “reserv[ing] the right” of the Government “to argue for a sentence beyond that
15 called for by the Guidelines.” 527 F.3d at 270. “It was thus logical for [Walker] to
16 believe that the [Pimentel] estimate, and the Government’s stance at the
17 sentencing hearing, would not be altered in the absence of new information.”
18 Palladino, 347 F.3d at 34.
21
1 Second, and significantly, the Government’s change in position came
2 about in a manner that Walker could not have reasonably expected when he
3 consented to the Pimentel estimate, and therefore produced “serious unfairness”
4 for Walker. Habbas, 527 F.3d at 271. Walker’s sentencing hearing was
5 unexpectedly delayed for four years while the Government put his co‐defendant
6 on trial. Then, the Government attempted to increase Walker’s sentence on the
7 basis of information that, although also established at the trial, had been well‐
8 known to the Government at the time it negotiated Walker’s plea. Finally, the
9 Government advocated for a sentence increase that changed Walker’s “exposure
10 so dramatically” that we may well question whether he “could reasonably be
11 seen to have understood the risks of the agreement.” Id. Walker may well have
12 been on notice that his Pimentel estimate was subject to change, but he could not
13 have been on notice about this particular degree and kind of change.4
4 For two cases that illuminate what is meant by a defendant’s “reasonable expectations,”
compare United States v. Riera, 298 F.3d 128, 133‐36 (2d Cir. 2002) (Government did not violate
defendant’s reasonable expectations when it agreed in the plea bargain not to seek an upward
departure, but then, in response to a specific request by the district court, explained that the
district court would be “well within its discretion in upwardly departing,” although the
Government repeatedly cautioned it was not advocating for such a departure), with Vaval, 404
F.3d at 152‐54 (Government breached defendant’s reasonable expectations when it agreed not to
advocate for an upward departure or a specific Guidelines sentence, then “volunteered highly
negative characterizations of [the defendant’s] criminal history” and strongly suggested that the
district court ought to adopt a higher criminal history category than that contained in the plea).
22
1 Despite these problems with Walker’s ultimate sentence, the Government
2 argues that it did not breach Walker’s plea agreement for two reasons.
3 First, the Government maintains that Walker’s sentence enhancements
4 were based on “new” information, and therefore that it was not bound under the
5 terms of the plea agreement to the original Pimentel estimate. Appellee’s Br. 51.
6 But—as shown by a straightforward comparison of (a) the October 2010 criminal
7 complaint and the January 2012 PSR with (b) the evidence produced at Herron’s
8 trial and enumerated in the Government’s October 2016 sentencing
9 memorandum—the information the Government used to justify the increased
10 base offense level, use‐of‐violence enhancement, and aggravating‐role
11 enhancement was in no way new.
12 1. In its 2016 sentencing memorandum, the Government argued that a
13 two‐point base offense level increase was justified based on witness
14 testimony at Herron’s trial that “a reasonable estimate of the narcotics
15 attributable to [Walker] would be no less than one kilogram of crack‐
16 cocaine.” App. 80. But the 2012 PSR said that the Government, at that
17 time, already “conservatively estimate[d] that Herron’s organization
18 distributed in excess of 1 kilogram of crack cocaine.” PSR ¶ 6. The PSR
19 also reported that law enforcement agents had concluded that
20 “enforcers” (as Walker was labeled) “[we]re responsible for the entire
21 amount of narcotics . . . involved in this conspiracy.” Id. ¶ 10. And the
22 2010 criminal complaint indicated that Walker was “regularly involved
23 in the distribution of crack cocaine in the Gowanus Houses,” Compl. ¶
24 6; that the execution of various search warrants resulted in the seizure
23
1 of “substantial quantities of crack cocaine” from Herron’s organization,
2 id. ¶ 4; and that Walker himself had already been arrested pursuant to
3 such a search warrant, id. ¶ 5.
4
5 2. In its 2016 sentencing memorandum, the Government contended that a
6 use‐of‐violence enhancement was appropriate because of witness
7 testimony at Herron’s trial that Walker carried a gun and threatened
8 people that they could not sell drugs on Herron’s turf. But the 2010
9 criminal complaint makes clear that the Government knew then that
10 Walker “served as one of Herron’s primary security guards and
11 enforcers”; that he “would thus regularly accompany Herron to
12 narcotics transactions and carry firearms for Herron”; that he “would
13 also help to protect Herron’s narcotics territory from rival narcotics
14 traffickers and also help to extend Herron’s narcotics territory by, for
15 example, robbing or attacking rival narcotics traffickers”; and that he
16 even “participated in a shooting against a rival narcotics trafficker.”
17 Compl. ¶ 7. Moreover, the 2012 PSR also described Walker as “an
18 enforcer” who “carried a firearm as part of his role in the organization
19 in order to protect himself, the drug proceeds, and the locations on the
20 block where the crack cocaine was sold.” PSR ¶ 11.
21
22 3. In its 2016 sentencing memorandum, the Government asserted that a
23 two‐point aggravating‐role enhancement was appropriate “given
24 Walker’s role as an enforcer in Herron’s organization.” App. 80. But
25 again, both the 2010 criminal complaint and the 2012 PSR specifically
26 characterized Walker as an “enforcer.” Compl. ¶ 7; PSR ¶ 11.
27
28 There is little daylight between the information that the Government
29 adduced in Walker’s 2016 sentencing memorandum and that contained in the
30 criminal complaint and the 2012 PSR. And the Government essentially admits as
24
1 much, conceding in its brief on appeal that while it may have had similar
2 information on Walker earlier, it was not “actionable” at the time the
3 Government drafted Walker’s plea agreement. Appellee’s Br. 53. Actionable or
4 not, the Government knew about Walker’s activities and, based on that, made
5 the conscious choice to exclude certain enhancements from Walker’s plea
6 agreement.5 Having made that determination, and bargained on that basis with
7 Walker in return for his guilty plea, the Government yielded much of its freedom
8 to incorporate those enhancements later. See Palladino, 347 F.3d at 34; Santobello v.
9 New York, 404 U.S. 257, 262 (1971) (“[W]hen a plea rests in any significant degree
10 on a promise or agreement of the prosecutor, so that it can be said to be part of
11 the inducement or consideration, such promise must be fulfilled.”).
12 Second, the Government argues that it did not breach Walker’s plea
13 agreement because, contrary to Walker’s assertions, the Government did not act
5 Indeed, the consciousness of the Government’s choice is demonstrated by its treatment of the
Section 2D1.1(b)(1) enhancement for possession of a weapon, which (unlike the other
enhancements at issue here) the Government chose to include in Walker’s original plea
agreement. The Government now explains to us that the Section 2D1.1(b)(1) enhancement was
based on similarly non‐actionable information, and that at the time of the plea, Walker had a
“credible argument” that it should not have applied. Appellee’s Br. 53 n.8. Yet the Government
chose to incorporate the Section 2D1.1(b)(1) enhancement in Walker’s Pimentel estimate
anyway—and, a fortiori, to exclude others. It is precisely that calculation that Walker consented
to in his Pimentel estimate and that he could reasonably expect would be upheld by the
Government.
25
1 in bad faith. But we need not find that the Government acted in bad faith in
2 order to hold that Walker’s reasonable expectations were violated. Of course, it is
3 “obvious[ly] importan[t]” for the Government to act in good faith when it
4 negotiates a plea agreement, and evidence to the contrary is a strong indicator
5 that the Government violated a defendant’s reasonable expectations. Habbas, 527
6 F.3d at 272. But bad faith is not the only factor relevant to an inquiry into
7 whether the Government breaches an agreement by deviating from a Pimentel
8 estimate. “[T]he number of significant variables potentially in play in such an
9 inquiry is enormous.” Id. In this case, all the variables lead us readily to conclude
10 that Walker’s ultimate sentence did not fall within the range of what he
11 reasonably could have expected given the Pimentel estimate contained in his plea
12 agreement and the circumstances under which the Government’s estimate
13 changed. Those circumstances on their own produced “serious unfairness” for
14 Walker, id. at 271, and, therefore, we need not reach Walker’s allegations that the
15 Government did, indeed, act in bad faith.
16 V
17 The Government further argues that, even if it did breach Walker’s plea
18 agreement, Walker cannot show that he suffered any harm from the breach. That
19 argument lacks merit. There is no doubt that the District Court relied on the
26
1 Government’s improperly “revised” Guidelines sentence calculation in imposing
2 Walker’s ultimate sentence. And the Supreme Court has instructed that “the
3 [district] court’s reliance on an incorrect range in most instances will suffice to
4 show an effect on the defendant’s substantial rights.” Molina‐Martinez v. United
5 States, 136 S. Ct. 1338, 1347 (2016). “Indeed, in the ordinary case a defendant will
6 satisfy his burden to show prejudice by pointing to the application of an
7 incorrect, higher Guidelines range and the sentence he received thereunder.
8 Absent unusual circumstances, he will not be required to show more.” Id. We
9 therefore conclude that the Government’s breach of Walker’s plea agreement was
10 harmful error which requires correction.
11 VI
12 “In general, the remedy for a breached plea agreement is either to permit
13 the plea to be withdrawn or to order specific performance of the agreement.”
14 Vaval, 404 F.3d at 154 (internal quotation marks and brackets omitted) (quoting
15 United States v. Brody, 808 F.2d 944, 947 (2d Cir. 1986)). “[T]he choice between the
16 remedies of resentencing or plea withdrawal ‘is generally a discretionary one
17 guided by the circumstances of each case.’” Vaval, 404 F.3d at 156 (quoting
18 Palladino, 347 F.3d at 34). In cases where specific performance is the appropriate
19 remedy, we typically remand the case for resentencing before a different district
27
1 judge because “[t]he effect of the government’s breach of its commitment is
2 difficult to erase” and “it is likely that the same judge would reach the same
3 result as he reached before.” United States v. Enriquez, 42 F.3d 769, 772 (2d Cir.
4 1994). But “where resentencing before another district judge would not cure the
5 taint caused by a government breach . . . we have held that plea withdrawal was
6 the appropriate remedy.” Vaval, 404 F.3d at 156 (internal quotation marks,
7 alterations, and citation omitted).
8 In this case, we believe that the appropriate remedy is to order specific
9 performance of the agreement. In Palladino, another case of a breached Pimentel
10 estimate, we concluded that plea withdrawal was the correct remedy because the
11 agreement itself was “hopelessly tainted by the introduction of new evidence
12 known to the Government at the time of the plea.” 347 F.3d at 35. The same is
13 true here. But as we recognized in Palladino, the result of such a withdrawal
14 could be “a conviction on remand that carries a longer sentence than that initially
15 imposed.” Id. If a new plea agreement cannot be negotiated, Walker could be
16 tried and convicted, and the sentencing judge could elect to impose a sentence
17 higher than that estimated in Walker’s plea agreement. Given that risk, and the
18 fact that Walker specifically requested resentencing as opposed to withdrawal of
28
1 his plea agreement on appeal, we think it appropriate to order specific
2 performance of Walker’s plea agreement.
3 CONCLUSION
4 For the foregoing reasons, we VACATE the judgment and REMAND to
5 the District Court for resentencing. We do not doubt Judge Garaufis’ capacity to
6 resentence Walker appropriately. But given our holding on the appropriate
7 remedy in the event of a Government breach in Enriquez and in all of the plea
8 agreement violation cases we have found,6 we deem it appropriate to have the
9 resentencing be before a different district judge.
6 See, e.g., Vaval, 404 F.3d at 156; United States v. Griffin, 510 F.3d 354, 369 (2d Cir. 2007); United
States v. Lawlor, 168 F.3d 633, 638 (2d Cir. 1999); United States v. Gaviria, 49 F.3d 89, 92 (2d Cir.
1995); United States v. Carbone, 739 F.2d 45, 48 (2d Cir. 1984); United States v. Corsentino, 685 F.2d
48, 52 (2d Cir. 1982).
29
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Case: 13-15345 Date Filed: 08/22/2014 Page: 1 of 11
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-15345
Non-Argument Calendar
________________________
D.C. Docket No. 8:13-cr-00266-SDM-TGW-1
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
JON LESLIE WILLIAMS,
a.k.a. Jon Lee,
a.k.a. Todd Hurt,
Defendants – Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Georgia
________________________
(August 22, 2014)
Before PRYOR, MARTIN, and JORDAN, Circuit Judges.
PER CURIAM:
Case: 13-15345 Date Filed: 08/22/2014 Page: 2 of 11
Jon Leslie Williams appeals his 71-month sentence after pleading guilty to
one count of failure to register as a sex offender, in violation of 18 U.S.C.
§ 2250(a). Mr. Williams contends that district court erred by admitting unreliable
hearsay evidence to impose a six-level enhancement to his offense level for
committing a sexual offense while in failure to register status.
Upon review of the record, and consideration of the parties’ briefs, we
affirm.
I
Mr. Williams pled guilty (without a plea agreement) to knowingly and
unlawfully failing to register as a sex offender and update his registration as
required by the Sex Offender Registration and Notification Act. See 18 U.S.C.
§ 2250(a). The district court sentenced him to 71 months’ imprisonment.
The presentence investigation report recommended that the district court
establish Mr. Williams’ total offense level at 19, with a criminal history category
of V and a corresponding advisory guideline range of 57 to 71 months’
imprisonment. The report recommended a six-level enhancement because
Mr. Williams had committed a sex offense against someone other than a minor
while in failure to register status. See U.S.S.G. § 2A3.5(b)(1)(A). Mr. Williams
objected to the proposed enhancement and the description of the underlying
2
Case: 13-15345 Date Filed: 08/22/2014 Page: 3 of 11
offense in the report. At sentencing, the government presented evidence to support
the challenged enhancement.
Kathy Daniels, an administrative nurse at Windmoor Healthcare, a
psychiatric hospital, testified that on April 4, 2013, an anxious, shaken, and tearful
patient, C.M., 1 told her she had been raped. Ms. Daniels notified the department
director and the police of C.M.’s statement. C.M. was admitted for inpatient
treatment, and she continued to receive treatment through May of 2013 for the
trauma associated with her rape.
The district court overruled Mr. Williams’ hearsay objection to Ms. Daniels’
testimony as to statements made by C.M. because they were being admitted for
non-hearsay purposes, such as her appearance and the time and place of the report.
The district court also admitted C.M.’s initial treatment plan as Government’s
Exhibit No. 5B, ruling that it was created as “part of the regular process of
admission” at Windmoor Healthcare for the “establishment of a medical or
treatment plan,” it was “retained for the purpose of being resorted to in the
treatment of patients,” and it “reliably contain[ed] the report of a treating
physician.” D.E. 48 at 23-24. It similarly admitted C.M.’s outpatient medical
records as Government’s Exhibit No. 5C.
1
Although the parties identified the victim by her full name at the sentencing hearing, we will
refer to her by her initials to protect her privacy.
3
Case: 13-15345 Date Filed: 08/22/2014 Page: 4 of 11
Detective Colin Brooks, who investigated C.M.’s alleged rape, testified that
he interviewed C.M. on April 4, 2013, at Windmoor Hospital. Mr. Williams again
objected to any testimony containing hearsay statements made by C.M., but the
district court overruled the objection. According to Detective Brooks, C.M. stated
that she lived with her boyfriend, Justin Odey, Bette Bodenhorn (Mr. Odey’s
mother), and Mr. Williams (Ms. Bodenhorn’s boyfriend at the time). On the night
of April 3, 2013, or the early morning hours of April 4, 2013, C.M. woke up
disoriented to someone removing her clothing and performing oral sex on her. She
began to scream, but the assailant covered her mouth and forcibly raped her.
Detective Brooks explained that C.M. is legally blind, cannot see in the dark,
and uses a hearing aid. Although C.M. was not able to see her rapist, she believed
it was Mr. Williams because her assailant had a beard during the attack,
Mr. Williams also had a beard at the time, and her boyfriend was in the hospital.
Moreover, earlier that night Mr. Williams had asked C.M. to clean up, and while
she was in the kitchen, Mr. Williams—the only male in the house—rubbed his
penis against her leg. C.M. admitted to consuming alcohol, taking sleeping pills,
and smoking marijuana throughout the night of the rape.
After the interview, Detective Brooks ordered a rape examination. DNA
swabs were taken from C.M.’s genital areas and underpants. The DNA in the
semen from the swabs matched Mr. Williams’ DNA.
4
Case: 13-15345 Date Filed: 08/22/2014 Page: 5 of 11
When other police officers arrived at Mr. Williams’ residence on April 4,
2013, he provided them with a false name. The officers therefore arrested him. In
his post-arrest interview, Mr. Williams admitted to being at Mrs. Bodenhorn’s
house on April 3, 2014, but denied that he had sex with C.M.
A senior inspector with the United States Marshal’s Service, Gary Scevola,
testified that he listened to phone conversations between Mr. Williams and
Ms. Bodenhorn after he was arrested. In those calls, Mr. Williams denied having
sex with C.M.
After all the evidence had been admitted, the district court invited arguments
as to whether the government had proven by a preponderance of the evidence that
Mr. Williams had committed a sex offense against C.M. warranting the six-level
enhancement. The government argued that the evidence showed that Mr. Williams
performed oral and vaginal sex on C.M. without her consent. Mr. Williams argued
that the government failed to show that the hearsay evidence was sufficiently
reliable to prove that he had committed a sexual battery or rape by a preponderance
of the evidence.
After hearing all the arguments, the district court overruled Mr.Williams’
objections based, in part, on the DNA evidence. The district court found that the
circumstances demonstrated that the event that occurred between the night of April
3 and the early morning of April 4 was, more likely than not, a sexual battery. The
5
Case: 13-15345 Date Filed: 08/22/2014 Page: 6 of 11
court further found that the weight of the evidence pointed to the fact that
encounter was nonconsensual. The incident occurred over the night and was
promptly reported the following morning. There was, moreover, no evidence that
C.M. recanted her report. With respect to the testimony regarding C.M.’s out-of-
court statements, the district court ruled that it “considered none of them in their
hearsay capacity,” but only as “evidence that reports were made at the time and
place stated.” D.E. 48 at 181-82.
The district court adopted the factual statements and guideline calculations
in the presentence investigation report. It sentenced Mr. Williams to 71 months’
imprisonment after considering the applicable advisory guideline range and the
factors in 18 U.S.C. § 3553(a). Mr. Williams objected to the six-level
enhancement for committing a sexual offense while unregistered.
II
Mr. Williams objects on due process grounds to the use of hearsay evidence
in applying a six-level enhancement for being an unregistered sex offender who
committed a sex offense against someone other than a minor pursuant to U.S.S.G.
§ 2A3.5(b)(1)(A). We review constitutional challenges to a defendant’s sentence
de novo. See United States v. Ghertler, 605 F.3d 1256, 1268 (11th Cir. 2010).
Hearsay is a declarant’s out-of-court statement that “a party offers in
evidence to prove the truth of the matter asserted.” Fed. R. Evid. 801(c).
6
Case: 13-15345 Date Filed: 08/22/2014 Page: 7 of 11
Although hearsay is generally inadmissible under Rule 802 of the Federal Rules of
Evidence, hearsay evidence that has sufficient indicia of reliability may be
considered by a sentencing court regardless of its admissibility at trial “‘in
determining whether factors exist that would enhance a defendant’s sentence.’”
Ghertler, 605 F.3d at 1269 (quoting United States v. Baker, 432 F.3d 1189, 1253
(11th Cir. 2005)). So long as the defendant is given the opportunity to refute the
evidence and the evidence bears a minimal indicia of reliability, there is no
violation of the defendant’s due process rights. See United States v. Reme, 738
F.2d 1156, 1167 (11th Cir. 1984). In order to show that a district court has relied
on false or unreliable information during sentencing, the defendant must show (1)
that the challenged evidence is materially false or unreliable, and (2) that it actually
served the basis for the sentence. Id.
III
Under the doctrine of invited error, “if a party . . . agrees to the admissibility
of certain evidence, he cannot later complain that any resulting error is reversible.”
United States v. Brannan, 562 F.3d 1300, 1306 (11th Cir. 2009) (“In the Eleventh
Circuit, ‘[t]he doctrine of invited error is implicated when a party induces or
invites the district court into making an error.’”) (quoting United States v. Stone,
139 F.3d 822, 838 (11th Cir.1998)). Although Mr. Williams objected to Detective
Brooks’ testimony concerning C.M.’s out-of-court statements, his counsel agreed
7
Case: 13-15345 Date Filed: 08/22/2014 Page: 8 of 11
that the statements could be “offered to show that [they were] made at a time and
place to an officer.” See D.E. 48 at 58 (“THE COURT: . . . [Y]ou objected to the
officer’s saying what the putative victim said to him. . . . [I]f that statement is
being offered to show that it was made at a time and place to an officer, it is not
hearsay, because it is not being offered for its substance, but the fact of its having
been made. MR. TANENBAUM: I agree, Your Honor.”). We take the district
court at its word when it said that it admitted Detective Brooks’ testimony for this
limited purpose only. See also D.E. 48 at 181-82 (“And so far as the various
hearsay things, I considered none of them in their hearsay capacity, only that they
made reports, that they were evidence that reports were made at the time and place
stated . . . .”).
On appeal, Mr. Williams contends that it was error for the district court to
consider these reports for the fact that they were made because “C.M.’s reports of
her encounter with Mr. Williams have significance only to the extent that her
asserted claim of rape was considered for its truth.” Appellant’s Br. at 15.
Mr. Williams, however, invited the district court to make this alleged error by
agreeing that the statements were admissible to prove that C.M. reported the
alleged rape to the police. He, therefore, cannot challenge the admissibility of this
evidence on appeal. See Krutzig v. Pulte Home Corp., 602 F.3d 1231, 1234 (11th
Cir. 2010) (“This court may affirm a decision of the district court on any ground
8
Case: 13-15345 Date Filed: 08/22/2014 Page: 9 of 11
supported by the record.”). “[E]ven plain error review is unavailable in cases
where a criminal defendant ‘invites’ the constitutional error of which he
complains.” United States v. Jernigan, 341 F.3d 1273, 1289 (11th Cir. 2003).
We further conclude that the district court did not err by admitting C.M.’s
hospital records from Windmoor Healthcare and the testimony of Nurse Daniels.
Statements made for medical diagnosis or treatment “are not excluded by the rule
against hearsay, regardless of whether the declarant is available as a witness.” Fed.
R. Evid. 803(4) (“The following are not excluded by the rule against hearsay,
regardless of whether the declarant is available as a witness. . . . A statement that:
(A) is made for—and is reasonably pertinent to—medical diagnosis or treatment;
and (B) describes medical history; past or present symptoms or sensations; their
inception; or their general cause.”). The advisory committee notes explain that
Rule 803(4) “extends to statements as to causation, reasonably pertinent to
[purposes of diagnoses and treatment]. . . . Statements as to fault would not
ordinarily qualify under this latter language. Thus a patient’s statement that he was
struck by an automobile would qualify but not his statement that the car was driven
through a red light.” Fed. R. Evid. 803(4) advisory committee’s note (citations
omitted).
In United States v. Belfast, 611 F.3d 783, 819 (11th Cir. 2010), we held that
the district court did not abuse its discretion in admitting into evidence unredacted
9
Case: 13-15345 Date Filed: 08/22/2014 Page: 10 of 11
medical records that contained statements by medical professionals indicating that
the victim’s wounds and burns resulted from abuse or torture (as opposed to, for
example, a vehicular or workplace accident). We explained that these statements
were admissible because they did not assign any fault or suggest that the “abuse”
or “torture” met the legal or statutory definition of these terms. Id. In support of
our holding, we favorably cited an Eighth Circuit decision, which held that medical
records containing a statement that the victim was “raped” were admissible under
Rule 803(4) as a statement of causation, not fault. See id. (discussing United States
v. Iron Thunder, 714 F.2d 765, 772-73 (8th Cir. 1983)).
Mr. Williams does not contest that C.M.’s statements that she was raped,
made to Nurse Daniels and documented in her medical reports, were made for the
purpose of medical diagnosis and treatment. As the district court found,
Government’s Exhibit No. 5B was created as “part of the regular process of
admission” at Windmoor Healthcare for the “establishment of a medical treatment
plan, and reliably contains the report of the treating physician and the purpose for
treating the patient. D.E. 48 at 23-24. Accordingly, these statements were
admissible under Rule 803(4).2
2
We reject Mr. Williams’ arguments that the evidence in question was not reliable.
10
Case: 13-15345 Date Filed: 08/22/2014 Page: 11 of 11
IV
For the foregoing reasons, we affirm the imposition of the six-level
enhancement. 3
AFFIRMED.
3
Because Mr. Williams does not challenge the sufficiency of the evidence, we do not address it.
See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004) (“[T]he law is by
now well settled in this Circuit that a legal claim or argument that has not been briefed before the
court is deemed abandoned and its merits will not be addressed.”).
11
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104 B.R. 489 (1989)
In re SOUTH FLORIDA TITLE, INC., German Luengo and Caridad Luengo, Debtors.
Steven FRIEDMAN, Trustee, Plaintiff,
v.
German LUENGO and Caridad Luengo, Defendants.
Bankruptcy Nos. 88-03891-BKC-TCB, 88-03896-BKC-TCB and 88-04348-BKC-TCB, Adv. No. 89-0267-BKC-TCB-A.
United States Bankruptcy Court, S.D. Florida.
July 31, 1989.
*490 Steven H. Friedman, Miami, Fla., trustee, pro se.
William Manker, Miami, Fla., for defendants.
MEMORANDUM DECISION
THOMAS C. BRITTON, Chief Judge.
The trustee in these three related involuntary bankruptcies seeks avoidance under 11 U.S.C. § 548(a)(1) and recovery under § 550 of the allegedly fraudulent transfer of $102,843 on August 17, 1988 from an escrow account owned by the debtor South Florida Title, Inc. ("SFT") to the principals of that company, the debtors German and Caridad Luengo, husband and wife.
In a second count, the trustee seeks imposition under § 544 of a lien in the amount of the transfer upon the Luengo homestead, because the entire transfer was used to pay off the second mortgage on that property.
The matter was tried on July 13. The Luengos, who both invoked the Fifth Amendment and interspousal privilege, offered no evidence and no argument. By their Answer (CP 12), they have admitted all of the trustee's factual allegations.
The Relevant Facts
The facts are simple. In 1986, the Luengos purchased and remain the owners of a single-family home and an adjoining lot on Sunset Drive in Miami, executing a purchase money second mortgage on the property in favor of a mortgage company.
On August 17, 1988, less than three months before involuntary bankruptcy petitions were filed against SFT and each of the Luengos, the Luengos, who were the officers and directors of SFT and the sole signatories on SFT's escrow account, paid off and satisfied the second mortgage with a cashier's check in the amount of $102,843 purchased that day with a check drawn *491 upon the SFT escrow account and signed that day by German Luengo. No consideration was received by SFT for the transfer, and no explanation or justification for that withdrawal has ever been proffered by the Luengos.
Liens in the total amount of $184,291 which should have been satisfied with funds entrusted to the Luengos on behalf of SFT, were not satisfied and the title insurance underwriter, Commonwealth, was required in each instance to make good the loss resulting from the Luengos' failure to do so. The funds to satisfy these liens have been traced into the SFT escrow account, which was under the complete and exclusive control of the Luengos. SFT was rendered insolvent by the August 17 transfer.
Discussion
From the foregoing facts and the negative inference arising from defendants' invocation of their Fifth Amendment privileges, Baxter v. Palmigiano, 425 U.S. 308, 96 S.Ct. 1551, 47 L.Ed.2d 810 (1976), I find that the foregoing transfer was made with actual intent to hinder, delay and defraud SFT and the creditors of SFT.
The trustee has proved each of the statutory elements of § 548(a)(1) with respect to the transfer which was, therefore, fraudulent, and is avoidable by the plaintiff.
The trustee has also proved that the Luengos were the persons for whose benefit the fraudulent and voidable transfer was made. He is, therefore, entitled, under § 550(a)(1) to judgment in the amount of $102,843 against the Luengos, jointly and severally.
The trustee is also entitled to the imposition of an equitable lien against the Luengos' property on Sunset Drive. This is a matter governed by State law. Beall v. Pinckney, 150 F.2d 467 (5th Cir.1945). Florida law clearly entitles the trustee to the lien he seeks. Jones v. Carpenter, 90 Fla. 407, 106 So. 127 (1925) (affirming bankruptcy trustee's equitable lien for sums drawn by defendant from account of a corporation and traced to improvements made on defendant's homestead).
The Florida Supreme Court said:
"This case presents an instance of injustice and hardship on creditors that the homestead exemption should not be extended to, and we think appellee must make restitution." Id. 106 So. at 130.
Conclusion
As is required by B.R. 9021, a separate judgment will be entered under 11 U.S.C. § 548(a)(1) and § 550(a) for plaintiff in the amount of $102,843 against the defendants jointly and severally, and imposing an equitable lien in that amount in favor of the plaintiff against the real property specifically described in ¶ 8 of the Complaint (CP 1). Costs may be taxed on motion.
DONE and ORDERED.
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835 F.2d 1434
Chernysh (Randi Cooper)v.Prudential Insurance Company of America, Holman (Tracy L. Chernysh)
NO. 87-5588
United States Court of Appeals,Ninth Circuit.
DEC 17, 1987
1
Appeal From: S.D.Cal.
2
AFFIRMED.
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109 N.W.2d 305 (1961)
172 Neb. 308
Rod GILLESPIE, Appellee,
v.
STATE REAL ESTATE COMMISSION of the State of Nebraska, Appellant.
No. 34947.
Supreme Court of Nebraska.
June 2, 1961.
Clarence A. H. Meyer, Atty. Gen., Gerald S. Vitamvas, Deputy Atty. Gen., for appellant.
Maupin, Dent, Kay & Satterfield, Beatty, Clarke, Murphy, Morgan, Pederson & Piccolo, North Platte, for appellee.
Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.
YEAGER, Justice.
The proceeding out of which the action in this court grew was a complaint filed June 18, 1959, before the State Real Estate Commission of the State of Nebraska, entitled State of Nebraska ex rel. State Real Estate Commission of the State of Nebraska, complainant, v. Rod Gillespie, Alyce Brodbeck, and Kenneth Tetro, respondents, who were the holders of real estate licenses issued by the State Real Estate Commission of the State of Nebraska, which will be referred *306 to hereinafter as the commission, and were associated in business under the name of Action Agency, the place of business of which was North Platte, Nebraska.
Prior to the filing of this complaint by the commission a complaint had been filed on April 7, 1959, against the respondents by one Walter C. Wilkening.
The proceedings from the outset were regular. No substantial dispute as to this is presented here. They were instituted and carried on in conformity with statutory provisions for the creation and functioning of the State Real Estate Commission of the State of Nebraska. By sections 81-867 and 81-868, R.R.S.1943, real estate brokers and real estate salesmen respectively are defined. Section 81-869, R.R.S.1943, provides for the issuance of licenses. Section 81-879, R.R.S.1943, provides for the revocation and suspension of licenses. Section 81-881, R.R.S.1943, specified the grounds on which revocation and suspension might be ordered by the commission. This section was amended which amendment became effective after the date of the acts alleged in the complaint, but none of the grounds of revocation contained in section 81-881, R.R. S.1943, were removed.
This statutory provision contained 15 separate grounds for revocation but only 4 of them have any significance here. The four are (1) accepting, giving, or charging undisclosed commission, (2) acting as undisclosed principal, (3) inducing a party to a contract of sale to break the contract for the purpose of substituting a new contract with another principal, and (4) demonstrated unworthiness.
By the complaint of the commission it was charged in much greater detail than it is necessary to set out herein that respondent Gillespie entered into an agreement with Walter C. Wilkening, the owner of 320 acres of land, whereby Gillespie was given the exclusive right of sale of the land for 60 days from January 10, 1959, for which, in the event of sale, the Action Agency would be entitled to receive a commission of 5 percent; that on January 12, 1959, respondent Tetro obtained an offer of $40,000 in writing and $3,000 as a down payment from one Paul Potter for the land; that on the same day and before any acceptance was made by Wilkening, respondent Gillespie received an offer from John Washa of $43,200; that this offer was never communicated to Wilkening until January 14, 1959, after he had been caused to accept in writing the offer of $40,000 made by Potter; that after Wilkening had signed the offer in writing he was induced to cancel the Potter contract, a copy signed by him having never been delivered to Potter, on agreement that he would receive $500 in addition to what he would receive out of the sale for $40,000 after deduction of 5 percent commission; that he was further induced to execute and deliver a contract of sale to John Washa for $43,500 which also exacted of Wilkening the payment of a commission on that amount to the Action Agency; and that Wilkening received no information from any of the respondents that prior to the execution by him of the Potter contract they or any of them had an offer of $43,200 from Washa.
A notice of hearing and place thereof was contained in the complaint. The purpose of hearing was to ascertain whetheror not the licenses of the respondents should be revoked or suspended.
Tetro filed no answer to the complaint by Wilkening to the commission. Brodbeck and Gillespie did file answers. Tetro filed an answer to the complaint of the commission. Brodbeck and Gillespie did not. Their answers to the complaint of Wilkening were treated for all purposes as answers to the complaint of the commission.
By his answer Gillespie admitted that he was a licensed real estate broker doing business as the Action Agency. He admitted the transactions described in the complaint, but denied substantially that he was guilty of any act which was improper or illegal. There is much detail in the answer but it is not deemed necessary to set out the details herein.
*307 Alyce Brodbeck in her answer admitted that she was a real estate saleswoman employed by Rod Gillespie. She also denied any wrongdoing.
Kenneth Tetro in his answer admitted that he was a real estate salesman employed by Rod Gillespie. He denied any wrongdoing.
A hearing was had on the complaint before the commission and on November 30, 1959, an order was entered dismissing the complaint as against Alyce Brodbeck and Kenneth Tetro. By the same order it was found that the charges made against Gillespie were true and accordingly his license as a real estate broker was revoked and canceled.
By action of Gillespie a proceeding for review of the action of the commission was instituted in the district court. It was presented to the district court on the record made before the commission including the evidence there adduced, and some additional evidence adduced at the hearing in the district court.
At the conclusion a judgment was rendered reversing the order of the commission and reinstating the real estate license of Gillespie. A motion for new trial was made. This motion was overruled. From the judgment and the order overruling the motion for new trial the commission has appealed.
As grounds for reversal of the judgment of the district court the commission says that (1) the district court erred in finding that the evidence failed to establish any violation of the provisions of section 81-881, R.R.S.1943, and (2) the district court erred in finding that the order of the commission under date of November 30, 1959, should be reversed and set aside, and in ordering the real estate license of Rod Gillespie reinstated.
From an examination of the record it becomes apparent that the decision herein must depend upon what has been disclosed by the evidence in the light of established principles of law.
In reviewing the action of the State Real Estate Commission the district court and the Supreme Court are required to consider the matter de novo. See, Section 81-884.02, R.R.S.1943; Feight v. State Real Estate Commission, 151 Neb. 867, 39 N.W.2d 823; Rhoades v. State Real Estate Commission, 152 Neb. 701, 42 N.W.2d 610.
In general the duties and liabilities of a real estate broker are essentially the same as those which an agent owes to his principal. See Gesselman v. Phillips, 110 Neb. 416, 193 N.W. 750.
It is also true that a real estate broker who fails to disclose to his principal every material fact in the transaction which is the subject matter of the agency is guilty of fraud and bad faith. See Ericson v. Nebraska-Iowa Farm Investment Co., 134 Neb. 391, 278 N.W. 841.
The pertinent facts in this case are in large measure not in dispute. The 320 acre farm of Walter C. Wilkening was listed with Action Agency, or Rod Gillespie, a licensed real estate broker and sole owner of the Action Agency, for sale under an exclusive agreement for 60 days after January 10, 1959. Alyce Brodbeck and Kenneth Tetro were licensed as real estate salesmen and employed as such to engage in the sale of real estate for Gillespie. On January 12, 1959, Tetro went with one Paul Potter, a prospective purchaser, to see the land. They returned to Potter's home where an agreement to purchase the land for $40,000 was signed by Potter and his wife. Tetro then took both Potter and his wife to see the land about 5 p. m. When they arrived Gillespie was there showing the land to one John Washa, also a prospective purchaser. Tetro told Gillespie he had sold the land. On his way back to Gothenburg Tetro called Brodbeck at the office by telephone and told her he had sold the land to Potter *308 for $125 an acre, or $40,000. On their arrival in Gothenburg Potter gave Tetro a check for $3,000 as a down payment. Gillespie and Washa left the farm. Washa testified that as they drove back to town Gillespie told him the land had been sold but the buyer might have difficulty raising the money. Washa said he offered Gillespie $135 an acre with 2 days to accept the offer. Gillespie denies he received such an offer on January 12th. The testimony of Brodbeck and Tetro as to whether or not the offer was discussed is, to say the least, equivocal. The testimony of Brodbeck indicates that Gillespie did have such an offer.
On January 14, 1959, about 11 a. m., Tetro and Gillespie presented the Potter agreement to Wilkening at which time he and his wife signed it. About 12:30 p. m., Tetro called Potter at the suggestion of Gillespie to inquire if he would resell the farm for a profit and Potter agreed to take $1,000. No copy of Wilkening's acceptance had yet been delivered to Potter. About 1:30 p. m., Gillespie and Brodbeck met Washa and secured from him a written agreement to purchase the land for $43,500 and a check for $4,000 as a down payment.
The evident purpose was to obtain Wilkening's acceptance of the Potter contract, get the consent of Potter to destroy the completed contract for a consideration of $1,000, and then have Wilkening accept the offer of Washa for $43,500 for payment to him of $500 above what he had agreed to accept from Potter. Brodbeck demurred to this until legal advice was obtained. Such advice was obtained and in the late afternoon Gillespie and Brodbeck presented the matter to Wilkening and offered him $500 to cancel the Potter agreement and accept the Washa agreement. Wilkening testified that he was induced to sign the Washa agreement on the substantial representation that he had already sold to Potter and there was nothing he could do about it and he might as well take the offered $500, which amounted to that much more than that to which he was entitled. The Potter agreement was surrendered and the Washa agreement accepted.
If the testimony of Brodbeck is true, from this, the testimony of Washa, the evidence of speed in effecting the Washa transaction, and the fact that this was in its primary aspect a matter of which Gillespie should have had knowledge, a reasonable conclusion is that he did have knowledge and that his design was to evade his proper duty and to unjustly and improperly enrich himself.
A design and purpose of his which flows without question from his own testimony was to charge and retain for himself a commission of $2,000, or 5 percent, on the transaction of Wilkening with Potter and in addition a commission of 5 percent on the completed sale from Wilkening to Washa, out of which he agreed to pay Potter $1,000 and Wilkening $500.
Another incident attended the ultimate closing of the sale from Wilkening to Washa which has no controlling significance but which has significance on the question of whether or not Gillespie acted in good faith toward Wilkening. After obtaining legal advice Wilkening filed a complaint with the State Real Estate Commission relative to the conduct of Gillespie, Brodbeck, and Tetro. He also instituted legal action against these three parties. The legal action was settled by what amounted to waiver of all commission by Gillespie, by allowing Potter to retain the $1,000 paid to him by Gillespie, and by agreement of Wilkening, which was performed, that he would withdraw the complaint he had made to the commission. This represented a loss to Gillespie, in addition to entire loss of commission, of $1,000 to Potter, $800 to Tetro, and at least $350 in advertising cost. The reason given for this by Gillespie was substantially that it was to avoid unfavorable publicity.
Incidentally after withdrawal of complaint by Wilkening the commission refused to let the matter drop, but filed on its *309 own behalf the complaint which is the one on which the present action is predicated.
The review of evidence contained herein, it is believed, presents a fair ultimate analysis of the true intent, motive, and purpose of Gillespie with regard to the matters presented by the complaint. It appears from this analysis that he was guilty of violating each and all of the four inhibitions of section 81-881, R.R.S. 1943, named hereinbefore in this opinion. It also appears he violated his general duty as an agent of Wilkening.
It appears further and specifically that he failed to disclose to Wilkening material facts which had a bearing on the transaction and accordingly was guilty of fraud and bad faith.
Accordingly the judgment of the district court is reversed and the cause remanded with directions to render judgment sustaining the order of the State Real Estate Commission whereby the license of Rod Gillespie was revoked and canceled.
Reversed and remanded with directions.
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529 F.Supp. 194 (1981)
NATIONWIDE MUTUAL INSURANCE COMPANY
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY.
Civ. A. No. 77-3237.
United States District Court, E. D. Pennsylvania.
December 8, 1981.
Curtis P. Cheyney, III, Swartz, Campbell & Detweiler, Philadelphia, Pa., for plaintiff.
Albert J. Schell, Jr., Philadelphia, Pa., for defendant.
MEMORANDUM
RAYMOND J. BRODERICK, District Judge.
This action was originally a declaratory judgment action which came before the Court on the parties' cross-motions for summary judgment. The parties now agree that in the event that the plaintiff, Nationwide Mutual Insurance Company (Nationwide), is entitled to summary judgment, that judgment may be entered in the amount of $175,531.66, the amount of benefits paid by Nationwide as a result of an *195 accident involving a minor, Robert Treegoob, now deceased, which occurred on May 21, 1976. Nationwide asks this Court to determine that the defendant, United States Fidelity and Guaranty Company (USF&G), must reimburse it for these loss benefits on the ground that USF&G was responsible for the payment of these benefits under § 204(a) of the Pennsylvania No-Fault Motor Vehicle Insurance Act (No-Fault Act), 40 P.S. § 1009.101 et seq. The facts material to a resolution of the issue before the Court are undisputed and for the reasons set forth below the Court has determined that summary judgment must be granted in favor of Nationwide in the amount of $175,531.66.
There is no dispute as to the facts precipitating this litigation. Robert S. Treegoob was struck and severely injured by an automobile while crossing Stoneridge Road in Villanova, Pennsylvania on May 21, 1976. Robert was the minor son of Warren Treegoob and resided with him. At the time of the accident Nationwide had issued and in full force and effect an automobile liability policy covering the automobile which struck Robert Treegoob, which policy provided no-fault insurance coverage under the provisions of the No-Fault Act. USF&G had issued and in full force and effect at the time of the accident, a comprehensive general-automobile liability insurance policy covering two automobiles owned or leased by Valient Finance Company and/or Treegoob Appliances, Inc., which were available to Warren Treegoob for pleasure and business purposes.
Endorsement # 4 of the USF&G policy identifies the "named insured" of that policy as follows:
It is hereby agreed and understood that the Named Insured is:
Harold and Warren Treegoob T/A Treegoob's;
Treegoob's Appliances, Inc.;
Warren Mark Corporation;
Valient Finance Company, Inc.; and
Valient Consumer Discount Company, A.T.I.M.A.
[as their interests may appear]
Beneath the designation of the named insured appears the following addendum:
It is also agreed and understood that the five above mentioned entities are of common financial ownership and control.
The USF&G policy contains a number of endorsements defining the type and scope of coverage provided by the policy. Endorsement # 10, entitled Basic Personal Injury Protection Endorsement, which was "rolled on" to the pre-existing policy in 1975 pursuant to the No-Fault Act, provides, in part:
In accordance with the Pennsylvania No-Fault Motor Vehicle Insurance Act, the Company will pay any or all personal injury protection benefits for:
(a) medical expenses,
(b) work loss,
(c) replacement services loss,
(d) funeral expenses and
(e) survivor's loss
for bodily injury to an eligible person due to an accident resulting from the maintenance or use of a motor vehicle as a vehicle.
An "eligible person" is defined in Endorsement # 10 as:
(a) the named insured or any relative who sustains injury while occupying or as a pedestrian struck by, any motor vehicle,
(b) any other person who sustained injury
(1) while occupying, or as a pedestrian struck by, the insured motor vehicle; or
(2) while occupying a motor vehicle not owned by, but operated by the named insured or relative, other than a public livery or conveyance, if bodily injury results from the operation of the motor vehicle by the named insured or relative. (emphasis in the original).
The Warren Treegoob family, at the time of the accident, did not own or have available for their use any automobiles other than those covered by the USF&G policy, nor did they maintain any automobile liability or no-fault insurance coverage other than that provided by the USF&G policy.
*196 The question now before the Court is whether under the policy issued by USF&G, USF&G is responsible for the payment of basic loss benefits to the family of Robert Treegoob. Both parties agree that this question must be decided in accordance with Pennsylvania law and that the applicable statutory provision is § 204(a) of the Act, 40 P.S. § 1009.204(a), which establishes categories and priorities as between insurers responsible for the payment of loss benefits, provides
§ 1009.204 Source of basic restoration benefits
(a) Applicable security. The security for the payment of basic loss benefits applicable to an injury to:
(1) an employee, or to the spouse or other relative of any employee residing in the same household as the employee, if the accident resulting in injury occurs while the victim or deceased victim is driving or occupying a motor vehicle furnished by such employee's employer, is the security for the payment of basic loss benefits covering such motor vehicle or, if none, any other security applicable to such victim;
(2) an insured is the security under which the victim or deceased victim is insured;
(3) The driver or other occupant of a motor vehicle involved in an accident resulting in injury who is not an insured is the security covering such vehicle;
(4) an individual who is not an insured or the driver or other occupant of a motor vehicle involved in an accident resulting in injury is the security covering any motor vehicle involved in such accident. For purposes of this paragraph, a parked and unoccupied motor vehicle is not a motor vehicle involved in an accident, unless it was parked so as to cause unreasonable risk of injury; and
(5) any other individual is the applicable assigned claims plan.
Under the system of priorities established by § 204(a), each subparagraph only becomes applicable after it has been determined that the prior subparagraph is inapplicable. See Gradler v. Prudential Property & Casualty Insurance Company, 464 F.Supp. 575, 577-78 (W.D.Pa.1979); Schimmelbusch v. Royal-Globe Insurance Co., 247 Pa.Super. 28, 371 A.2d 1021, 1023 (1977).
Nationwide contends that the USF&G policy is the applicable security under § 204(a)(2) for the payment of basic loss benefits to Robert Treegoob. USF&G, on the other hand, asserts that the Nationwide policy is the applicable security under § 204(a)(4). These contrary positions result from the parties' differing interpretations of the named insured endorsement appearing in the USF&G policy.
Nationwide asserts that Warren Treegoob is a named insured under the USF&G policy by virtue of the designation "Harold and Warren Treegoob T/A Treegoobs" appearing in Endorsement # 4 of the USF&G policy. Both parties agree that if Warren Treegoob is in fact a named insured under the policy, his son, Robert Treegoob, is eligible for personal injury protection under Endorsement # 10 of the USF&G policy and that the USF&G policy is the applicable security under § 204(a)(2) as "the security under which the victim is insured".[1]
USF&G, however, denies that Warren Treegoob is a named insured under Endorsement # 4 and asserts that the phrase "Harold and Warren Treegoob T/A Treegoobs" designates only the partnership "Treegoobs" as a named insured and since a partnership does not have relatives, Robert Treegoob, under the given facts, is not eligible for personal injury protection under Endorsement # 10 of the USF&G policy and *197 is not an "insured" under § 204(a)(2) of the No-Fault Act.
Nationwide offers three principal arguments in support of its interpretation of the policy. First, Nationwide argues that Endorsement # 4 read as a whole clearly designated Warren Treegoob as a named insured or, at the very least, is ambiguous and must be construed against the insurer USF&G, the company which drafted the policy. Second, Nationwide argues that under Pennsylvania law the designation of a partnership as the named insured operates to insure the partners as individuals. Lastly, Nationwide argues that Robert Treegoob is entitled to personal injury protection benefits under the so-called "reasonable expectations rule" because "insurance contracts should provide that coverage one would reasonably expect upon a reading of the policy."
In support of its motion and in response to Nationwide's arguments, USF&G asserts: that the policy, read as a whole, unambiguously designates the partnership entity as the named insured; that under Pennsylvania law a partnership is an insurable entity independent of the individual partners and; that the reasonable expectations rule is not applicable in this instance because coverage was not denied on the basis of an exclusionary provision.
Neither party has been able to provide the Court with a Pennsylvania decision addressing the question now before the Court. However, the rules relating to the construction of insurance policies in Pennsylvania are well established.
Since the policy is a contract, the court's duty is to ascertain the intent of the parties as manifested in the language of the agreement. Mohn v. American Cas. Co. of Reading, 458 Pa. 576, 326 A.2d 346 (1974); Lovering v. Erie Indem. Co., 412 Pa. 551, 195 A.2d 365 (1963); Treasure Craft Jewelers, Inc. v. Jefferson Ins. Co., 583 F.2d 650, 652 (3d Cir. 1978). The court should read policy provisions so as to avoid ambiguities, if the plain language of the contract permits. Pennsylvania Manufacturers' Association Ins. Co. v. Aetna Casualty & Sur. Ins. Co., 426 Pa. 453, 457, 233 A.2d 548, 551 (1967); Kattelman v. National Union Fire Ins. Co., 415 Pa. 61, 64, 202 A.2d 66, 67 (1964). A court should not torture the language of the policy in order to create ambiguities. Urian v. Scranton Life Ins. Co., 310 Pa. 144, 165 A. 21 (1933). If the language is unambiguous, interpretation of the contract is a matter of law for the court. Adelman v. State Farm Mut. Auto. Ins. Co., 255 Pa.Super. 116, 123, 386 A.2d 535, 538 (1978); Blocker v. Aetna Cas. & Sur. Co., 232 Pa.Super. 111, 114, 332 A.2d 476, 477-78 (1975). If an ambiguity does exist and if the insurer wrote the policy or is in a stronger bargaining position than the insured, the ambiguity is generally resolved in favor of the insured and against the insurer. Mohn v. American Cas. Co. of Reading, supra; Lovering v. Erie Indem. Co., supra at 556, 195 A.2d at 368; Hionis v. Northern Mut. Insurance Co., 230 Pa.Super. 511, 516, 327 A.2d 363, 365 (1974). However, the principle that ambiguities in policies should be strictly construed against the insurer does not control the situation where large corporations, advised by counsel and having equal bargaining power, are the parties to a negotiated policy. Eastcoast Equipment Co. v. Maryland Cas. Co., 38 Pa.D. &C.2d 499, 511-12 [207 Pa.Super. 383], 218 A.2d 91, 98 (Pa.C.P.1965), aff'd per curiam on opinion below, 207 Pa.Super. 383, 218 A.2d 91 (1966); 13 Appleman, Insurance Law and Practice § 7402, at 301 (1976).
Eastern Associated Coal v. Aetna Casualty and Surety, 632 F.2d 1068, 1075 (3d Cir. 1980). A provision of an insurance contract is ambiguous if reasonably intelligent individuals on considering it in the context of the entire policy would honestly differ as to its meaning and if alternative or more precise language, if used, would have put the meaning of the language beyond a reasonable question. Disanto v. Enstrom Helicopter Corporation, 489 F.Supp. 1352, 1359 (E.D.Pa.1980); Celley v. Mutual Benefit Health and Accident Association, 229 Pa. Super. 475, 324 A.2d 430 (1974).
*198 Having reviewed Endorsement # 4 in the context of the entire policy the Court finds the meaning of the phrase "Harold and Warren Treegoob T/A Treegoobs" is ambiguous in that reasonable individuals could differ as to whether this provision designates the partnership, the individuals, or both as the named insured.
USF&G asserts that Endorsement # 4 is not ambiguous and that if Harold and Warren Treegoob were intended to be insured as individuals the addendum to Endorsement # 4 which states "It is also agreed and understood that the five above mentioned entities are of common financial ownership and control" would have read "the five above mentioned entities and individuals ...."
Although USF&G's interpretation of the addendum is consistent with its interpretation of the named insured being the partnership entity, the addendum, as written, does not preclude an interpretation of the named insured as including both the individual partners and the partnership. The addendum simply states that the five entities identified in the list of named insured is commonly owned and controlled. Since there cannot be common financial ownership and control of the individuals Harold and Warren Treegoob, there is no reason for their inclusion in the addendum.
Even if we were to accept USF&G's argument regarding the addendum to Endorsement # 4, the meaning of the phrase "Harold and Warren Treegoob T/A Treegoob's" remains ambiguous when read in conjunction with the definition of an "eligible person" contained in Endorsement # 10. Under this definition persons eligible for personal injury protection benefits include the named insured or "relatives" of the named insured. Thus, if we accept USF&G's interpretation of the named insured, we would have to read the definition of "eligible persons" contained in Endorsement # 10 as if the references to relatives were not there. However, under Pennsylvania law "the court's duty is to ascertain the intent of the parties as manifested in the language of the agreement. In discharging its duty, the court should attempt to view the policy in its entirety, and give effect, if possible, to all portions of the contract." Treasure Craft Jewelers v. Jefferson Insurance Co., 583 F.2d 650, 652 (3d Cir. 1978) [emphasis added].
Reading the policy as a whole and giving effect to the references to "relatives" of the named insured contained in Endorsement # 10 it appears that the phrase "Harold and Warren Treegoob T/A Treegoob's" was intended to designate both the individuals and the partnership as named insureds. However, granting USF&G the benefit of the doubt, the phrase is at best ambiguous and the ambiguity must be resolved in this case against USF&G, the party who wrote the policy. Therefore, the Court finds that the phrase "Harold and Warren Treegoob T/A Treegoob's" designates Warren Treegoob as a named insured under the USF&G policy and that Robert Treegoob, the minor son of the named insured, is entitled to personal injury protection benefits under Endorsement # 10, thereby making the USF&G policy the applicable security under § 204(a)(2) for the payment of basic loss benefits to Robert Treegoob.
The Court also notes that this interpretation of the policy carries out the intent of the parties as evidenced by the terms of the policy as a whole. Under the terms of the policy and the accompanying endorsements as they existed before the no-fault coverage provided by Endorsement # 10 was rolled on, Harold and Warren Treegoob and their wives appear to have had liability coverage in connection with the use of the partnership automobiles as well as other automobiles used but not owned by them, whether those automobiles were being used for the business of the partnership or the partner's personal or pleasure use. For instance, Endorsement # 7 specifically names "Harold Treegoob & Sylvia H/W, Warren Treegoob & Bonnie H/W, and Mark Treegoob" in the endorsement which extends the coverage of the basic policy to the Treegoobs as individuals while operating other non-owned automobiles and Endorsement # 9 makes it clear that the liability coverage is applicable *199 whether the automobiles of the partnership are being used for business, personal or pleasure activities by the named insured. It thus appears that Endorsement # 10, which was rolled onto the policy in 1975 in order to provide the personal injury protection required by the No-Fault Act, was intended to extend personal injury protection coverage to the same degree the policy provided liability coverage, namely, to the individual partners as well as the partnership.
Although there are no Pennsylvania decisions addressing the issue before this Court, plaintiff has referred the Court to a decision of the District Court of Appeal of Florida, Ohio Casualty Insurance Company v. Fike, Fla.App., 304 So.2d 136 (1975) which considered a similar situation. In Fike, the insurer had issued a policy which designated the named insured as "Russell C. Fike, Jr. and Robert D. Fike d/b/a Orange State Painting Company." The declaration page of the policy designated the insured as a partnership from among several different categories listed. The policy also contained a no-fault endorsement which provided personal injury protection benefits to any relative of the named insured injured in a motor vehicle or while a pedestrian. Based on these facts, the District Court of Appeal of Florida determined that Russel Fike was a named insured under the Florida no-fault policy and that his daughter, who had sustained injuries when she was struck by an automobile while a pedestrian, was entitled to personal injury protection benefits as a relative of the named insured. Id. at 137-38. The Florida Court noted in its opinion:
The fact that the defendant insurer issued an amendatory endorsement to the policy in question which provided personal injury protection to "the named insured, or any relative" seems inapposite to the insured's [sic] position that the policy in question was intended to be limited to a "partnership"; if anything, the amendatory endorsement is reflective of an intention to insure the individual as well as the partnership. Id. at 137.
Although the Florida court reached its final determination on the basis of partnership theory (which we will discuss at a later point in this memorandum), the court noted that a similar determination could be made on the basis of ambiguity.
The ambiguity exists with respect to whether the "named insured" is limited to the partnership entity or whether it also includes the individuals named therein, particularly where an amendatory endorsement is made without limitation. All ambiguities and uncertainties are resolved in favor of the insured and against the insurer. Id. at 137-38, n. 2.
As we heretofore determined, the rules of construction, as defined by the Pennsylvania courts, lead this Court to the same result in this case.
Turning now to Nationwide's second argument, the Court is persuaded that its determination is also supported by the concepts relating to the law of partnership in Pennsylvania. Pennsylvania has enacted the Uniform Partnership Act, 59 Pa.Con. Stat.Ann. § 301 et seq. and "whether a partnership is to be regarded as an entity under the Act will and should be governed by the particular question to be decided by the Appellate Court of the particular state jurisdiction or of a Federal court following state substantive law under Erie R. R. v. Tompkins." Lewis, Is A Partnership Under The Uniform Partnership Act An Aggregate Or An Entity? 16 Vand.L.Rev. 377, 384 (1963).
The decisions of the Pennsylvania Supreme Court since the adoption of the Uniform Partnership Act indicate that Pennsylvania, while recognizing a partnership as an entity for some limited purposes, still adheres to the aggregate theory of partnership.
In Morrison's Estate, 343 Pa. 157, 22 A.2d 729 (1941), the Supreme Court of Pennsylvania set forth the basic law of the Commonwealth with respect to partnerships:
We deem it to be the law in Pennsylvania and the approved opinion in most other jurisdictions that a partnership is not recognized as an entity like a corporation, that it is not a legal entity having as such *200 a domicile or residence separate and distinct from that of the individuals who compose it. It is rather a relation or status between two or more persons who unite their labor or property to carry on a business for profit. This is subject to an apparent exception, for while a partnership as such is not a person, it, as a matter of fact, is treated by a legal fiction as a quasi person or entity for such purposes as keeping of partnership accounts and marshalling assets.
Id. at 162, 22 A.2d at 732. Twenty years later in Tax Review Board of Philadelphia v. D. H. Shapiro Co., 409 Pa. 253, 185 A.2d 529 (1962), the Supreme Court of Pennsylvania, after quoting its decision in Morrison at length, stated
We could multiply authorities, but we must hold that the weight of authority in this Commonwealth is to the effect that a partnership is treated as an aggregate of individuals and not as a separate entity.
Id. at 260, 185 A.2d at 533.
There is no indication in subsequent Pennsylvania case-law that the Pennsylvania Supreme Court would choose to abandon the position taken in Morrison, supra, and Tax Review Board of Philadelphia, supra. Therefore, in light of Pennsylvania's adherence to the aggregate theory of partnership, we predict that the Pennsylvania Supreme Court would hold that the designation of the named insured in this case as "Harold and Warren Treegoob T/A Treegoob's" insured Warren Treegoob in his individual capacity.
In similar situations the District Court of Appeal in Florida and the Supreme Court of Wisconsin reached the same result relying on the aggregate theory of partnership. In Fike, supra, the Florida District Court of Appeal held that
although in the commercial sense a partnership is looked upon as a "legal entity", Florida follows the common law view "that a partnership is not a legal entity apart from the members composing it," [citation omitted]. Where a policy of insurance refers to the partnership entity as the "named insured" and then proceeds to list the names of the individual partners in describing the "named insured", the policy must be read to cover "the partners as individuals as well as partners as an entity" unless a contrary intention clearly appears. [citation omitted].
304 So.2d 136 at 137 [Court's emphasis].
Likewise in McDonald v. Aetna Casualty & Surety Co., 47 Wis.2d 235, 177 N.W.2d 101 (1970), the Supreme Court of Wisconsin held that under a policy listing the named insured as
Frank Schubert Meat Market
(Willard Schubert and Frank W. Schubert d/b/a)
the individual partners, as well as the partnership, were named insureds. The Wisconsin court stated:
Under common-law doctrine, Wisconsin has held a partnership to be no more than an aggregate of individual partners. Under the Uniform Partnership Act as adopted in Wisconsin, the concepts of entity and aggregate are commingled. For some purposes, notably the conveyance of property and the holding of title to property, the partnership is considered to be a separate entity. In other situations, the aggregate concept of the partnership as "* * * an association of two or more persons to carry on as co-owners a business for profit," has been recognized by this court as continuing and controlling. While the entity aggregate concepts have and will continue to collide, here, particularly because the Aetna policy names the partnership as the insured and then goes on to list the names of the individual partners in describing the named insured, we hold that the policy must be read to cover the partners as individuals, as well as the partnership as an entity.
177 N.W.2d at 103. Thus, the Court's determination that under the facts of this case the designation of the named insured as "Harold and Warren Treegoob T/A Treegoob's" insured Warren Treegoob in his individual capacity is also supported by the aggregate concept of a partnership.
*201 Even assuming that the named insured of the USF&G policy was limited to the partnership entity, the Court is persuaded that USF&G is likewise responsible for the payment of personal injury benefits in this case on the basis of the "reasonable expectations rule." The simplest statement of the rule is that "insurance contracts should provide that coverage which one would reasonably expect upon a reading of the policy." Brokers Title Co. v. St. Paul Fire and Marine Insurance Company, 466 F.Supp. 1174 (E.D.Pa.1979) reversed, 610 F.2d 1174 (3d Cir. 1979) (reversed on the ground that the insured was a sophisticated buyer).
To the extent this rule can be said to be applied by Pennsylvania courts it is applied in situations where an insurer denies coverage on the basis of an exception or an exclusion in a policy. Brokers Title Co. v. St. Paul Fire and Marine Insurance Company, 466 F.Supp. at 1179; see Daburlos v. Commercial Insurance Co., 521 F.2d 18 (3d Cir. 1975); Hionis v. Northern Mutual Insurance Company, 230 Pa.Super. 511, 327 A.2d 363 (1974). In these situations, even where the terms of the exception or exclusion are unambiguous, Pennsylvania law places the burden on the insurer of showing that the exception or exclusion applies and that it was so explained to the insured. Daburlos v. Commercial Insurance Co., 521 F.2d at 24; Weissman v. Prashker, 405 Pa. 226, 233, 175 A.2d 63 (1961); Hionis v. Northern Mutual Insurance Company, 230 Pa.Super. at 517, 327 A.2d at 365. The rule only applies where the insurer is in a superior bargaining position to the insured. Brokers Title Co. v. St. Paul Fire & Marine Insurance Company, 610 F.2d 1174, 1177-79 (3d Cir. 1979).
In Hionis v. Northern Mutual Insurance Company, supra, the Superior Court of Pennsylvania explained the policy considerations underlying the rule:
Insurance contracts have been viewed under the law as contracts of "adhesion", where the insurer prepares the policy for a purchaser having no bargaining power. Where a dispute arises, such contracts are construed strictly against the insurer. East Coast Equipment v. Maryland Casualty Company, 38 D. & C.2d 499, 207 Pa. Super. 383, 218 A.2d 91 (1966). In East Coast, we affirmed the decision of a court en banc on the basis of the lower court opinion which provided in part: "The policy behind this rule [construction against the insurer] is sound; the insurer wrote the policy and the individual purchaser is concerned primarily with monetary benefits. Concern with definitional clauses and exclusions is minimal; therefore, if they do become material, they should be strictly construed against the insurer." 38 D. & C.2d at 511, 218 A.2d at 98. When a defense is based on an exception or exclusion in a policy, our Supreme Court has held that such a defense is an affirmative one, and the burden is upon the defendant to establish it. Weissman v. Prashker, 405 Pa. 226, 233, 175 A.2d 63 (1961). Even where a policy is written in unambiguous terms, the burden of establishing the applicability of an exclusion or limitation involves proof that the insured was aware of the exclusion or limitation and that the effect thereof was explained to him. See e.g., Frisch v. State Farm Fire and Casualty Co., 218 Pa.Super. 211, 275 A.2d 849 (1971); Purdy v. Commercial Union Insurance Co. of New York, 50 D. & C.2d 230, 235 (1970).
230 Pa.Super. at 516-17, 327 A.2d at 365.
The Superior Court expressed these same considerations in Klischer v. Nationwide Life Insurance, 281 Pa.Super. 292, 422 A.2d 175, 178 (1980), where the court stated:
We adhere to our view expressed in Hionis. The major premise upon which Hionis rests is the vast inequality of bargaining power between the insurer and the typical purchaser of insurance. As a direct result of that disparity, the insurer may dictate the terms and conditions of the policy. Whether the policy is clear and precise or whether it is oblique and ambiguous, the disparity between the parties remains the same. Moreover, the insured's primary interest, which is obtaining the maximum coverage for his insurance dollar, is no less valid when the *202 policy is unambiguous than it is when the policy is obscure. The policies served by Hionis are particularly pertinent when, as here, the insured buys insurance expecting to be covered for certain risks.
Although we recognize that there may be some question as to whether this case technically involves a defense based on an exception or exclusion in the policy, the Court finds that the facts of this case together with the intent of the parties as expressed by the terms of the policy require the application of the above discussed rule in the instant case.
Prior to the passage of the Act, the policy issued by USF&G to "Harold and Warren Treegoob T/A Treegoob's" provided comprehensive general automobile liability insurance. Even assuming that the named insured of the policy was the partnership entity "Treegoob's", the actual coverage provided by the policy extended beyond the partnership entity by virtue of endorsements added to the policy.
Endorsement # 7 entitled "Use of Other Automobiles Coverage-Broad Form" extended the bodily injury and property damage coverage afforded by the policy with respect to the automobiles named in the policy to any other automobiles used or operated by the insured, subject to certain limitations. The endorsements specifically names as insureds for this coverage "Harold Treegoob & Sylvia H/W, Warren Treegoob & Bonnie H/W, Mark Treegoob."
Endorsement # 9 to the policy entitled "Application of Insurance to Owner of Hired Automobile" modified the Comprehensive Automobile Liability Insurance to cover
as an Insured the owner, any lessee (of whom the Named Insured is a sub-lessee) and any agent or employee of such owner or lessee, but only while such automobile is used in the business of the Named Insured as stated in the declarations, or by or on behalf of the Named Insured for personal or pleasure purposes. (emphasis in the original).
The apparent purpose, intent and effect of these endorsements in conjunction with the basic policy was to provide Harold Treegoob, Warren Treegoob and their families complete and comprehensive automobile liability coverage for their business, personal and pleasure activities. Having taken the steps necessary to procure comprehensive automobile liability coverage for himself and his family it was only reasonable for Warren Treegoob to assume that the scope of the personal injury protection coverage rolled onto the policy pursuant to the No-Fault Act would be commensurate with the scope of his pre-existing coverage and the coverage required under the No-Fault Act.
The policy considerations which underlie Pennsylvania's rule requiring an insurer who defends on the basis of an exception or exclusion in the policy to prove that the exception or exclusion was explained to the insured require application of the rule in this case. There is no question that there was a disparity in bargaining power between the parties to the USF&G policy. USF&G wrote the policy and rolled Endorsement # 10 onto the policy. USF&G now asserts that the no-fault coverage provided by Endorsement # 10 was limited to the partnership entity and that Warren Treegoob should have requested an additional endorsement if he wished to extend the no-fault coverage to himself and the individual members of his family as insureds. There is no reason provided by the uncontested facts to expect Warren Treegoob to be aware of the limited scope of the no-fault coverage being claimed by USF&G. As heretofore stated, the policy as it existed before Endorsement # 10 was rolled on evidenced an intent on the part of the parties to provide comprehensive automobile insurance coverage for Warren Treegoob and his family and created the reasonable expectation that the additional no-fault coverage rolled onto the policy would be commensurate with the pre-existing coverage to the extent that the members of the family would be covered.
In light of these considerations, we find that USF&G has the burden of showing that the limited nature of the no-fault protection coverage and the necessity of adding *203 another endorsement to the policy in order to expand that coverage to coincide with the scope of the pre-existing coverages was explained to the Treegoobs.
Nationwide has submitted with its motion the affidavit of Warren Treegoob which states that USF&G never explained the limited scope of the personal injury protection which it rolled onto the policy to Warren Treegoob. Since USF&G has not filed a responsive affidavit, the Court accepts the facts set forth in Warren Treegoob's affidavit as true and finds that the limited scope of Endorsement # 10 and the necessity of an additional endorsement were never explained to Warren Treegoob. We shall therefore construe the policy in accordance with the reasonable expectations and intent of the parties as expressed in the policy and conclude that the no-fault coverage provided by Endorsement # 10 extended to the members of the Warren Treegoob family.
In conclusion, the Court predicts that the Supreme Court of Pennsylvania, if presented with the issue now before the Court, would, on the basis of one or more of the reasons set forth above, hold that the USF&G policy provided no-fault benefits to Robert Treegoob and that the USF&G policy is the applicable security for the payment of basic loss benefits to Robert Treegoob under § 204(a) of the No Fault Act and that Nationwide is entitled to recover from USF&G those benefits which Nationwide paid to Robert Treegoob which benefits should have been paid by USF&G, pursuant to § 204(a). Accordingly, this Court will enter summary judgment in the amount of $175,531.66 in favor of Nationwide Mutual Insurance Company and against United States Fidelity and Guaranty Company.
NOTES
[1] Section 103 of the No-Fault Act, in pertinent part, defines an insured as
(b) a spouse or other relative of a named insured, a minor in the custody of a named insured, and a minor in the custody of a relative of a named insured if,
(i) not identified by name as an insured in any other contract of basic restoration insurance complying with this act; and
(ii) in residence in the same household with a named insured.
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