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Order Michigan Supreme Court Lansing, Michigan February 7, 2011 Robert P. Young, Jr., Chief Justice 141647 & (16) Michael F. Cavanagh Marilyn Kelly Stephen J. Markman Diane M. Hathaway Mary Beth Kelly PEOPLE OF THE STATE OF MICHIGAN, Brian K. Zahra, Plaintiff-Appellee, Justices v SC: 141647 COA: 297073 Wayne CC: 08-000829-01-FC 08-000830-01-FC DJUAN MAGEE, Defendant-Appellant. _________________________________________/ On order of the Court, the application for leave to appeal the July 2, 2010 order of the Court of Appeals is considered, and it is DENIED, because the defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). The motion to remand is DENIED. I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. February 7, 2011 _________________________________________ s0131 Clerk	{ "pile_set_name": "FreeLaw" }
In the United States Court of Appeals For the Seventh Circuit ____________ Nos. 04-1321 & 04-1524 SUE MERCIER, ELIZABETH J. ASH, ANGELA BELCASTER, et al., Plaintiffs-Appellees, v. FRATERNAL ORDER OF EAGLES, LA CROSSE AERIE 1254, Intervening Defendant-Appellant, and CITY OF LA CROSSE, Defendant-Appellant. ____________ Appeals from the United States District Court for the Western District of Wisconsin. No. 02 C 376—Barbara B. Crabb, Chief Judge. ____________ ARGUED SEPTEMBER 8, 2004—DECIDED JANUARY 3, 2005 ____________ Before BAUER, MANION, and KANNE, Circuit Judges. MANION, Circuit Judge. For almost forty years, a monument inscribed with the Ten Commandments (the “Monument”) 2 Nos. 04-1321 & 04-1524 has occupied a spot in Cameron Park, a public park in the City of La Crosse, Wisconsin (“La Crosse” or the “City”). Recently, certain residents of La Crosse, joined by an advo- cacy group, sued the City claiming the Monument violated the Establishment Clause of the First Amendment. In re- sponse, La Crosse sold a portion of the park and the Monu- ment to the Order of Eagles, the service organization that had originally donated the Monument to the City. The district court held that this sale violated the Establishment Clause. We reverse. I. In the fall of 1964, the local chapter (or “Aerie”) of the Fraternal Order of Eagles (the “Eagles”) requested the permission of the City to install in Cameron Park (“Cameron Park” or the “Park”) a granite monument bearing an in- scription of the Ten Commandments and adorned with cer- tain religious and other symbols associated with this country (an eagle grasping the American flag in its talons and the “all-seeing eye” most often associated with the one dollar 1 bill). The La Crosse Park Board considered the proposal at its September 8, 1964 meeting and, on October 5, 1964, gave the Eagles permission to erect the Monument in the Park. 1 The Monument at issue in this case is identical to the monu- ment considered by this court in Books v. City of Elkhart, 235 F.3d 292 (7th Cir. 2000). In fact, both monuments were part of the same program organized by the Eagles. The only difference in the monuments is the inscription providing the name of the city receiving the monument, the number of the Aerie making the presentation, and the date of the presentation. For a history of the Eagles’ monument program as well as a fuller physical de- scription of the monuments, see id. at 294-96. Nos. 04-1321 & 04-1524 3 The installation ceremony was scheduled to coincide with the Eagles’ Sixty-third Annual Convention to take place in La Crosse in June, 1965. The particular location of the Monument within the Park was left to the determination of the City’s director of parks and recreation. Cameron Park occupies one and one-half acres in down- town La Crosse. The Park is classified by the City as a “neighborhood park.” According to the City’s 1993 “Park and Recreation Plan,” “the purpose of a neighborhood park is to provide an attractive neighborhood setting and a place to be used primarily for recreation for people of all ages.” La Crosse owns more than 1,300 acres of land designated as parkland. Of that parkland, fifty-six acres are designated as neighborhood parks. The Park, rectangular in shape, is bordered on three sides by sidewalks and public streets, and on one side by private property. A map of the Park shows that it is intersected by walkways and dotted with trees. The Park is surrounded by commercial property, including a bank and a restaurant. There are no governmental buildings within sight of the Park, and it is not necessary to walk through or past the Park to enter into any governmental buildings. The parks and recreation director chose a location for the Monument very near the northeastern corner of the Park. The Monument is placed seventeen feet south from a side- walk bordering the park and sixty feet west from another 2 sidewalk bordering the park. Although there is a walkway through the Park and near the Monument, it runs behind 2 As indicated above, the Park is rectangular in shape with its long sides running east and west and its significantly shorter sides running north and south. We have included with this opin- ion a map of the Park as well as pictures of the Monument. 4 Nos. 04-1321 & 04-1524 the face of the Monument, and a visitor walking along the walkway would not see the inscription. The Monument does not occupy a particularly privileged location in the aesthetic scheme of the Park. The attention of visitors to the Park is not drawn to the Monument by it being displayed in a particularly prominent location or setting (such as, for instance, on a hill overlooking the surrounding landscape or at the center of the Park with walkways leading the visitor to the Monument). The location of the Monument near the corner of the Park was not, however, accidental. The Monument is, and has been since its construction, directly across from the Eagle’s La Crosse headquarters and the 3 Monument’s inscription faces the headquarters. In April 1965, after the approval of the Monument but before its installation, La Crosse suffered severe flooding from the Mississippi River. Several hundred high-school students from the area, and as far away as Milwaukee, vol- unteered to help with flood-fighting efforts, particularly the filling of more than 51,000 sandbags. The students’ efforts were recounted in a “special flood edition” of the local newspaper. Two months later, on June 19, 1965, the Monument was dedicated. Participants in the dedication ceremony included Alvin A. Watson, a past president of the La Crosse Aerie, a minister of the local Lutheran church, a state judge, and the president of the Park Board. In his remarks dedicating the 3 As we describe below, the attention of passers-by is directed to the Monument at night by a spotlight on the roof of the Eagles’ headquarters that illuminates the Monument. This spotlight is not, however, part of the design or layout of the Park and is provided at the sole expense of the Eagles. There is no indication in the record that La Crosse has approved (other than passively), or coordinated with the Eagles, the use of the spotlight. Nos. 04-1321 & 04-1524 5 Monument, Watson paid tribute to the youth who helped fight the flood in April. The local paper reported the next day that the Monument “was dedicated especially to those young people who helped during this spring’s flood.” For the next twenty years the Monument generated little (if any) controversy. During that time (and through today), the Eagles assumed full responsibility for the preservation and maintenance of the Monument. Members of the Eagles have planted and watered a small flower bed surrounding the Monument. Further, the Monument has been illumi- nated at night by a light attached to the roof of the Eagles’ building. The City has expended no funds in maintaining the Monument. In 1985, Phyllis Grams, a resident of La Crosse, joined by the coordinating Appellee in this case, the Freedom From Religion Foundation, Inc. (the “Foundation”), wrote a letter to the La Crosse Common Council, asking that the Monument be removed from the Park. The Council denied the request, and Grams and the Foundation filed a lawsuit in the United States District Court for the Western District of Wisconsin, contending that the location of the Monument in the Park violated the Establishment Clause of the First Amendment to the Constitution. This case was eventually dismissed in 1987 for lack of standing. Freedom From Religion Foundation, Inc. v. Zielke, 663 F. Supp. 606 (W.D. Wis. 1987), aff’d ,845 F.2d 1463 (7th Cir. 1988). More than a decade later, in June 2001, the Foundation again asked the City to remove the Monument from the Park. The City Council again refused. In September 2001, the Secretary for the La Crosse Aerie wrote to the City’s at- torney and offered to take back the Monument and display it in a location visible to the public. The City declined the offer. In March 2002, a local Episcopal church also offered to move the Monument to another location. The City again 6 Nos. 04-1321 & 04-1524 declined the offer. Finally, the Foundation also offered to move the Monument to another location. Again, the City declined the offer. In April 2002, the City Council addressed the Monument controversy and passed a resolution. The resolution noted that: 1) there was a threat of a renewed lawsuit by the Foundation, 2) the Monument was given to the City to honor the flood-fighting effort of area youth, 3) the Council believed the Monument did not violate the Constitution, 4) the Monument deserved to remain in its current location, and 5) the Council would take the neces- sary steps to keep the Monument in its current location. By June 2002, the City reached what it saw as a solution and decided to sell the Monument to the Eagles along with a twenty-foot by twenty-two-foot parcel of land under and surrounding the Monument. On June 20, 2002, the La Crosse Parks Commission recommended the sale of this parcel. On July 1, 2002, the Foundation, joined by two fictitiously named plaintiffs, filed a suit against the City challenging the display of the Monument in the Park. The district court later denied the individual plaintiffs’ motion to proceed anon- ymously. On August 7, 2002, twenty additional individuals were named as plaintiffs. Each of the individual plaintiffs asserted essentially the same facts. They are all residents of La Crosse and claim that they avoid the Park because of the presence of the Monument, or that they are emotionally disturbed or distressed when they travel to one of the commercial businesses surrounding the Park because of the presence of Monument. Ten days after the Foundation filed its suit, on July 11, 2002, the City Council adopted, by a 5-3 vote, a resolution: authorizing the sale of the parcel; directing the City Assessor to determine the fair market value of the parcel; and au- thorizing the Mayor and City Clerk to execute any necessary deeds to effectuate the sale of the parcel. The resolution also Nos. 04-1321 & 04-1524 7 noted that the Monument had been dedicated to the flood fighters. The resolution cited as authority for the sale of the parcel Wisconsin Statute § 27.08. This statute grants a city council the power, in conjunction with a city’s board of park commissioners, to sell park land when that land is no longer 4 needed for park purposes. In the resolution, the La Crosse City Council stated that the parcel at issue was no longer needed for park purposes. The sale to the Eagles took place on August 21, 2002. As indicated above, the plot of land sold to the Eagles was roughly a twenty-foot by twenty-two-foot area of the Park (440 square feet) where the Monument was located. This plot is bordered on three sides by the Park and on one side by a sidewalk. The City Assessor had previously determined that the fair market value of the parcel at issue was $2,640 or $6.00 per square foot. The Eagles paid this amount. The quitclaim deed recording the transfer provided that “appro- priate fencing, landscaping and signage shall be provided by 10/24/02 and maintained in order to commemorate the youth of the La Crosse area for their assistance and great help for the spring, 1965 flood that the City of La Crosse experienced.” 4 Wisconsin Statute § 27.08 provides in pertinent part: (2) The board of park commissioners is empowered and directed: (c) Subject to the approval of the common council to buy or lease lands in the name of the city for park, parkway, boulevard or pleasure drive purposes within or without the city and, with the approval of the common council, to sell or exchange property no longer required for its purposes. Wis. Stat. § 27.08(2)(c). 8 Nos. 04-1321 & 04-1524 In October 2002, the Eagles erected a four-foot-high steel fence around the parcel. Temporary signs were later added which read “This is the property of the La Crosse Eagles Aerie 1254.” In March 2003, these temporary signs were replaced with permanent signs on all four sides of the fence stating, This is the property of La Crosse Eagles Aerie 1254 Dedicated to the volunteers who helped save the city of La Crosse during the 1965 flood. Below this wording is a picture of volunteers filling sand- bags during the 1965 flood. One month later, the City of La Crosse erected a second fence, this one wrought-iron and, like the first fence, four feet high, almost immediately outside the fence erected by the Eagles. On the north and south sides of this fence are metal signs. On these signs in ten-inch high black letters is the statement “PRIVATE PARK.” Beneath this statement, in four-inch black letters, are the words: “THIS PROPERTY IS NOT OWNED OR MAINTAINED BY THE CITY OF LA CROSSE, NOR DOES THE CITY ENDORSE THE RELI- GIOUS EXPRESSION THEREON.” The Foundation and the individual plaintiffs (collectively, the “Appellees”) were not appeased, however. The Appellees amended their complaint after the sale of the plot, and again after the fences were constructed. The Appellees continued to assert that the presence of the Monument in the Park, despite the sale, violated the Establishment Clause. Nos. 04-1321 & 04-1524 9 The district court agreed and in July 2003, granted sum- mary judgment in favor of the Appellees. Mercier v. City of La Crosse, 276 F. Supp. 2d 961 (W.D. Wis. 2003). The district court held that the City’s display of the Monument before the sale to the Eagles violated the Establishment Clause, id. at 972-74, and that the sale of the Monument to the Eagles did not terminate the violation, id. at 974-78. The district court also held that the appropriate remedy for the violation was the return of the plot of land to the City and the removal of the Monument from the Park. Id. at 979. Shortly after formal judgment was entered in favor of the Appellees, however, the Eagles, who had not been a party to the suit, moved to intervene and, at the same time, moved the district court to alter, amend, or grant relief from, its judgment under Federal Rules of Civil Procedure 59(e) and 60(b). The district court agreed with the Eagles that it should have been a party to the suit, granted the motion to inter- vene, vacated its judgment, and permitted the Eagles to con- duct limited discovery. At the close of its discovery, the Eagles moved for sum- mary judgment. On February 3, 2004, the district court denied the Eagles’ motion and, sua sponte, granted summary judgment in favor of the Appellees. Mercier v. City of La Crosse, 305 F. Supp. 2d 999 (W.D. Wis. 2004). In granting summary judgment to the Appellees, the district court again held that the display of the Monument at the Park prior to the sale constituted a violation of the Establishment Clause. Id. at 1005-09. The district court also held that the sale of the plot was, itself, regardless of what happened to the Monu- ment after the plot was sold, an independent violation of the Establishment Clause. Id. at 1019. As in its earlier decision, the district court concluded that the only remedy available was the invalidation of the sale of the plot and the removal of the Monument from the Park. Id. at 1019-20. This appeal followed. 10 Nos. 04-1321 & 04-1524 II. On appeal, the City and the Eagles challenge the district court’s grant of summary judgment in favor of the 5 Appellees. Our review is de novo. McPherson v. City of Waukegan, 379 F.3d 430, 437 (7th Cir. 2004). A party is en- titled to summary judgment in its favor when “there is no genuine issue of material fact and that he or she is entitled to judgment as a matter of law.” Id.; Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The parties agree that there are no material facts in dispute. The only question, therefore, is whether the Appellees are entitled to judgment as a matter of law. The First Amendment to the United States Constitution provides, in pertinent part, that “Congress shall make no law respecting an establishment of religion. . . .” U.S. Const. amend. I, cl. 1. This provision, the Establishment Clause, is made applicable to the States through the Fourteenth Amendment. Everson v. Bd. of Educ. of the Township of Ewing, 330 U.S. 1, 15 (1947). In recent years, this court has considered in various con- texts whether the government’s use or display of religious imagery violates the Establishment Clause. See, e.g., Ind. Civil Liberties Union v. O’Bannon, 259 F.3d 766 (7th Cir. 2001); Books v. City of Elkhart, 235 F.3d 292 (7th Cir. 2000); Gonzales v. North Township, 4 F.3d 1412 (7th Cir. 1993); Harris v. City of Zion, Lake Cty., Ill., 927 F.2d 1401 (7th Cir. 1991); American Jewish Congress v. City of Chicago, 827 F.2d 120 (7th Cir. 1987). That is not precisely what we are asked to resolve here. We are not concerned with whether the installation and 5 Because we conclude that the district court erred in granting summary judgment to the Appellees, we need not consider the arguments concerning the district court’s remedy. Nos. 04-1321 & 04-1524 11 presence of the Monument on public land (a municipally owned park) from 1965 to 2002 violated the Establishment Clause. Although the district court reached such a conclu- sion in its order and opinion granting summary judgment in favor of the Appellees, neither the Eagles nor the City challenge that holding in this court. We need not, therefore, decide whether the display of the Ten Commandments in a neighborhood park violated 6 the Establishment Clause. We will assume, however, the district court was correct in order to reach the issue that is before this court: whether the sale by the City to the Eagles of the plot of land underneath and surrounding the Monument was an independent violation of the Establishment Clause. In support of their position that the sale of the Monument and land to the Eagles was constitutionally permissible, the Eagles and the City rely extensively on this court’s decision in Freedom From Religion Found., Inc. v. City of Marshfield, 203 F.3d 487 (7th Cir. 2000). The Appellees argue in response that Marshfield is not controlling. We turn to Marshfield itself to resolve this disagreement. 6 In Books, this court held a Ten Commandments monument displayed outside the City of Elkhart’s municipal building vio- lated the Establishment Clause. 235 F.3d at 304. Applying Books, in Indiana Civil Liberties Union v. O’Bannon, 259 F.3d 766 (7th Cir. 2001), this court held a Ten Commandments display on the grounds of the Indiana capitol complex violated the Establishment Clause. The Supreme Court recently granted certiorari in two cases to consider the constitutionality of Ten Commandments displays on public property. McCreary County, Ky. v. ACLU of Ky., 125 S.Ct. 310, 2004 WL 2059432 (Oct. 12, 2004); Van Orden v. Perry, 125 S.Ct. 346, 2004 WL 2282082 (Oct. 12, 2004). 12 Nos. 04-1321 & 04-1524 A. Marshfield In 1959, the local chapter of the Knights of Columbus, a Roman Catholic laymen’s organization, donated to the City of Marshfield, Wisconsin, a statue of Jesus Christ. Id. at 489. The city accepted the gift and placed the statue on land owned by the city. Id. The statue was (and is) fifteen feet in height and “depicts Christ, arms open in prayer, standing atop a large sphere, which in turn rests atop a base bearing the inscription in twelve-inch block letters ‘Christ Guide Us On Our Way.’ ” Id. The statue overlooks “the main thor- oughfare into Marshfield from the south, and is clearly visible to travelers from the road.” Id. A few years after the statue was installed, a member of the Knights of Columbus agreed to help Marshfield construct signs, picnic tables, and outdoor grills at the site, and the city agreed to designate the property as a city park. Id. The city also provided the site with electricity. Id. Nearly forty years after the statue was installed, the Foundation requested that the city remove the statue. Id. When the city refused, the Foundation, joined by a local resi- dent, sued the city claiming the presence of the statue in a city-owned park violated the Establishment Clause. Id. Shortly after the suit was filed, a group of Marshfield res- idents (referred to in Marshfield as the “Fund”) purchased from the city the land underneath and surrounding the statue. Id. at 489-90. The city separated out the electrical service re- quired for lighting the statue from the cost of lighting the rest of the park, and the cost of lighting the statue is paid by the Fund. The city also placed a disclaimer near the statue stating that the location of the statue did not constitute an endorsement of religion. On appeal in Marshfield, the plaintiffs argued that the sale was a sham and, as such, the sale itself “constitute[d] an en- Nos. 04-1321 & 04-1524 13 dorsement of religion by the City.” Id. at 491. The plaintiffs also argued that the sale did not end “the government endorsement of religion, because the continued presence of the statue in proximity to a public park may still reasonably be perceived as the City’s endorsement of religion.” Id. at 490. Considering whether the sale of the statue was proper, this court noted that “[a]bsent unusual circumstances, a sale of real property is an effective way for a public body to end its inappropriate endorsement of religion.” Id. at 491. We cautioned, however, that given the risk of manipulation in a “formalistic standard,” a court must “look to the substance of the transaction as well as its form to determine whether government action endorsing religion has actually ceased.” Id. This court held that the sale of the statue by the City of Marshfield was proper because the city performed the necessary formalities to transfer ownership of the parcel, sold the parcel for a fair price, and the Fund “assumed the traditional duties of ownership.” Id. at 492. This court also held, however, that despite the formal sale of the property, “the proximity of the statue to City property and the lack of visual definition between City and Fund property creates a perception of improper endorsement of religion by the City and constitutes a violation of the Establishment Clause.” Id. at 496. This court noted that the parcel of land sold by Marshfield was “not physically differentiated from the surrounding public park, and no visual boundaries currently exist that would inform the reasonable but unknowledgeable observer that the Fund property should be distinguished from the public park.” Id. at 494. This court also noted that “the statue’s positioning and orientation combine with the other physical features to convey the impression that the statue is on city park property.” Id. at 495. 14 Nos. 04-1321 & 04-1524 On remand, this court instructed the district court, to- gether with the parties, to develop some way “to differen- tiate between property owned by the Fund and property owned by the City.” Id. at 497. The remedy reached by the district court on remand is, not coincidentally, similar to the steps taken by La Crosse after its sale of the parcel at issue 7 in this case. The district court ordered the installation, on Marshfield’s property, of a four-foot-high wrought-iron fence. Freedom From Religion Found., Inc. v. City of Marshfield, No. 98-C-270-S, 2000 WL 767376, at 1 (W.D. Wis. May 9, 2000). Attached to the fence, the district court ordered the installation of two signs, each reading, Private Park This property is not owned or maintained by the City of Marshfield, nor does the City endorse the religious expressions thereon. Id. The district court ordered that “[t]he text ‘Private Park’ will be in ten (10) inch block letters while the subsequent text will be in four (4) inch block letters.” Id. Recall that the fencing and signs installed by La Crosse is identical (even to the point of having the same-size lettering) to that ordered by the district court in Marshfield. B. The Present Case As noted above, the parties (and the district court) dispute the significance of Marshfield. The Eagles and the City argue that Marshfield compels judgment in their favor. Quoting this 7 On remand, the Foundation, a plaintiff in Marshfield, proposed as a remedy a ten-foot masonry wall surrounding the statue. Freedom From Religion Found., Inc. v. City of Marshfield, No. 98-C- 270-S, 2000 WL 767376, at 1 (W.D. Wis. May 9, 2000). Nos. 04-1321 & 04-1524 15 court’s statement in Marshfield that “[a]bsent unusual circum- stances, a sale of real property is an effective way for a public body to end its inappropriate endorsement of re- ligion,” id. at 490, the Eagles and the City argue that there are no unusual circumstances to call into question the sale. Conversely, the Appellees argue that Marshfield is not controlling because that case considered only whether the city remained “excessively entangled with the private owner because a restrictive covenant required that the private owner maintain the property as a park.” Marshfield did not address, according to the Appellees (and the district court), whether the sale itself, particularly in light of competing offers to relocate the Monument to private property, dem- onstrated a preference for, and therefore an endorsement of, religion by the City. They claim this selective sale con- stituted an independent violation of the Establishment Clause. The Appellees, however, misread Marshfield. Marshfield considered not just whether the restrictive covenant was constitutional, but also whether the sale itself was a sham and constituted an endorsement of religion by the City, as well as whether the City continued to violate the Establishment Clause after selling the property to a private party. Marshfield, 203 F.3d at 490-91. Marshfield concluded that the sale was proper and not an unconstitutional en- dorsement of religion. Id. at 491. As noted above, the Appellees attempt to discount Marshfield by claiming the case concerned only whether the sale inextricably entangled the City with the private owners (and thus the statue) because a restrictive covenant required the private owner to maintain the property as a park. It is true that in Marshfield the court concluded that the restric- tive covenant did not improperly entangle the City, but this 16 Nos. 04-1321 & 04-1524 court went further, holding that the sale itself did not con- stitute an unconstitutional endorsement of religion. Id. at 491. This court also held that “our independent review of the facts here leads us to conclude that this sale validly ex- tinguished any governmental endorsement of religion.” Id. at 492. We also stated that “[a]bsent unusual circumstances, a sale of real property is an effective way for a public body to end its inappropriate endorsement of religion.” Id. at 491. Thus, although Marshfield focused on the original placement of the statue and whether the sale rectified the Establishment Clause violation, that case also made clear that the sale of the parcel was permissible under the Establishment Clause. In the present case, La Crosse executed just such a sale. On the assumption that the Monument’s placement in a public park constituted a constitutional violation, in line with Marshfield, the sale would appear to have ended La Crosse’s “endorsement” of religion. But the district court held, and the Appellees now argue, that even if that sale ended the existing violation, the reasons for the sale caused the City to commit a second violation. The City Council knew that it was faced with a lawsuit seeking the removal of the Monument on the theory that the location of the Monument violated the Establishment Clause. Although it had three separate offers (from the Eagles, a church, and the Foundation) to move the Monument to a different location, the Council instead chose to sell the Monument site to the Eagles. Although the City no longer owned the parcel, the Appellees claim that because the Council members knew that the sale would keep the Monument in its challenged location, the sale itself favored the religious purpose of the Monument, and thus that act was unconstitutional. To begin with, the Appellees have no legal precedent for this assertion. The desire to keep the Monument in place Nos. 04-1321 & 04-1524 17 cannot automatically be labeled a constitutional violation. Removal is always an option, but as Marshfield holds, it is not a necessary solution to a First Amendment challenge. The court in Marshfield approved the sale when removal was obviously an option, so the Appellees’ complaint that the City of La Crosse exercised the wrong option is contrary to the holding in Marshfield. In short, Marshfield authorized an alternative to removal— a sale that did not involve “unusual circumstances.” This does not mean, as the Appellees suggest, that if the La Crosse sale is valid, every sale of public space where a religious display is located would be permissible. The Supreme Court, and this court, have emphasized the case-by-case nature of a court’s review of an alleged Establishment Clause violation. See, e.g., Santa Fe Independent School Dist. v. Doe, 530 U.S. 290, 315 (2000) (quoting Lynch v. Donnelly, 465 U.S. 668, 694 (1984) (O’Connor, J., concurring)) (“Every gov- ernment practice must be judged in its unique circum- stances . . . .”); Books, 235 F.3d at 302.The same holds true for efforts to end a violation. Simply because we find in this case that the sale by the City of La Crosse did not violate the Establishment Clause does not mean, as Marshfield made clear, that every such sale would be permissible. Here, we are focused upon the sale of the property in response to litigation undertaken to remove a monument that has stood undisturbed on governmental property for forty years. We are not endorsing a non-remedial initiative designed to sell off patches of government land to various religious denomi- nations as a means of circumventing the Establishment Clause. We therefore reject the idea that the sale was a violation of the Establishment Clause simply because the City had other options. The sale, however, must still satisfy the requirements of Marshfield, namely, there must be no unusual circumstances 18 Nos. 04-1321 & 04-1524 surrounding the sale of the parcel of land so as to indicate an endorsement of religion. Marshfield highlighted some “of the typical sort of improprieties that might cause us to disregard a transaction.” Id. at 492. Such improprieties would include a sale that did not comply with applicable state law governing the sale of land by a municipality, id.; a sale to a straw purchaser that left the City with continuing power to exercise the duties of ownership; or a sale well below fair market value resulting in a gift to a religious organization. Id. In this case, the sale complied with Wisconsin state law and the Eagles paid the market rate, as determined by the City Assessor. The Eagles also assumed the traditional du- ties of ownership. Although the Appellees point to the fact that the land was offered solely to the Eagles, that was also true in Marshfield, where the City of Marshfield did not solicit alternative bids for the statue. Id. Moreover, to the extent any facts differ materially from the facts in Marshfield, they militate in favor of a conclusion that the sale of the parcel of land and the Monument by the City was constitutionally permissible. For example, the City had an historical reason—the 1965 flood and the youth who helped protect the city—for keeping the Monument in place. And the Eagles, whose headquarters were located directly across the street from the Monument, would continue to maintain it at no expense to the City. While the historical benefit would remain, the sale would extricate the City from any perceived endorsement of the religious wording on the Monument. These features may be unique to La Crosse, but they do not entail the “unusual circumstances” that would otherwise override the type of legitimate sale approved by Marshfield. The location of the Monument is also significant. The parcel sold by the City is not located near, or in, any gov- Nos. 04-1321 & 04-1524 19 ernmental building. Residents of La Crosse do not pass by the Monument to attend court hearings, pay fines, meet with government officials or employees, or participate in any other way in the civic affairs of La Crosse. Although Cameron Park is public property, it is a park and is not, like a courthouse, capitol building, or even the grounds of a government complex, “a setting where the presence of government is pervasive and inescapable.” American Jewish Congress v. City of Chicago, 827 F.2d 120, 126 (7th Cir. 1987). Cf. Books, 235 F.3d at 305 (“[We subject] to particularly careful scrutiny displays at the seat of government.”). La Crosse is not selling property inextricably linked with the seat of government. Obviously, a city could not sell space under the dome of its City Hall or the sidewalk in front of the courthouse steps. Such sale would be, on its face, a sham. Instead, the location in a neighborhood park nowhere near the seat of government separated the Monument from the “particularly careful scrutiny” this court required in Books. Moreover, the parcel is not particularly prominent within the layout of the Park. It is not, as men- tioned above, set at the heart of the Park or in a particularly prominent location where the sale would eviscerate the design or plan of the Park’s layout. By selling the parcel around the Monument, the City has not suddenly deprived the visitors to the Park of normal access and enjoyment. Visitors to the Park remain free to utilize the park grounds, much the same way as before the sale. Other than the twenty by twenty-two-foot-space fenced around the Monument, which has occupied the space for forty years, access to the Park is not limited by the now-private parcel. In addition, the buyer of the parcel has a long-standing and important relationship with the Monument. It was the Eagles, of course, who donated the Monument to the City in the first place and it is the Eagles who have maintained the 20 Nos. 04-1321 & 04-1524 Monument. Selling the Monument to the Eagles, rather than removing it, also makes practical sense—the Eagles head- quarters is, and has long been, directly across the street from the Monument. The members will also continue to carefully maintain the site. Finally, we cannot ignore the somewhat extensive effort made to distinguish the now-private property from the Park. As we stated above, the parcel is surrounded by two fences adorned by six signs, four of which state the parcel is owned by the Eagles and refers to the 1965 flood, and two that state the parcel is not owned by the City. These last two signs also disclaim any endorsement of the Monument by the City. Contrary to the district court’s statement that “no matter how many fences or signs that City and the [Eagles] build, it is impossible to defeat the impression that the mon- ument is still part of the City’s property,” 305 F. Supp. 2d at 1019, the impression that the Monument is no longer part of the City’s property could not be any clearer. Any reasonable person walking past the Monument (either in front or behind) will quickly recognize that the Monument, what- ever its past history, is not the property of the City of La Crosse. Therefore, this sale clearly meets the standards set out in Marshfield. Even assuming that Marshfield does not control, the sale of the Monument and the land satisfies the Lemon test. In Lemon v. Kurtzman, 403 U.S. 602 (1971), the Supreme Court adopted a three-part test for analyzing Establishment Clause cases. Although the Lemon test has been applied to constitu- tional challenges to the placement of a religious symbol on public property, it has not been applied in a challenge to a sale. Nevertheless, the Lemon standards are instructive in addressing the Appellees’ claim of an Establishment Clause violation. Under the Lemon test, a court considering whether a state action violates the Establishment Clause “must consider (1) Nos. 04-1321 & 04-1524 21 whether the government activity in question has a secular purpose, (2) whether the activity’s primary effect advances or inhibits religion, and (3) whether the government activity fosters an excessive entanglement with religion.” Books, 235 F.3d at 301 (citing Lemon, 403 U.S. at 612-13). “State action violates the Establishment Clause if it fails to satisfy any of these prongs.” Edwards v. Aguillard, 482 U.S. 578, 583 (1987). The Appellees do not argue that the sale would “foster [ ] an excessive entanglement with religion.” Books, 235 F.3d at 301. The City is, after all, divesting itself of a monument that the parties assume violated the Establishment Clause when it was on public ground. We focus our attention, therefore, on the first two prongs of the Lemon test—whether the sale had a secular purpose and whether the sale’s primary effect was to advance or inhibit religion. In determining whether a particular government action affecting a religious symbol has a secular purpose, a gov- ernment’s characterization of its purpose is entitled to defer- ence. Santa Fe Indep. Sch. Dist., 530 U.S. 290, 308. Courts, however, must ensure that the government’s characteriz- ation is sincere. Initially, it is important to emphasize that in this case we are concerned with the purpose behind the sale of the Monument and not its purpose when originally installed. That being said, the purpose for which the Monument has remained in the Park for forty years is im- portant in understanding why the City would choose to keep it where it was rather than allow it to be removed. As this court explained in Books, there was a national effort to distribute as many as 5,000 monuments of the Ten Commandments throughout the country, many of them in cooperation with the Eagles. Whatever may have been the purpose of the City in accepting the Monument in 1964, from the time of its dedication in 1965 the Monument ap- 22 Nos. 04-1321 & 04-1524 pears to have taken on a significant local meaning in the wake of the flood. This was not forgotten. In its resolution authorizing the sale, as well as the restriction in the deed recording the sale, the City reaffirmed the efforts of the youth volunteers during the 1965 flood. Unlike Books, how- ever, where on the eve of litigation the city council first indicated that the monument in that case had a secular pur- pose, see Books, 235 F.3d at 304, the volunteer effort of La Crosse youth in protecting the City during the 1965 flood was expressly stated during the 1965 dedication as a reason for the gift of the Monument to the City by the Eagles. The City also had a rather obvious secular motive for the sale—it wanted to eliminate its ownership in the Monument to preempt litigation accusing it of using the Monument to endorse a religious message by displaying it on public prop- erty. The Appellees claim that the reason is not secular because the City could have avoided the lawsuit by simply removing or allowing someone else to remove the Monument. They claim that by not removing it and by leav- ing it on what had been City property demonstrates that the City’s motive was not secular. But as we have stated above, Marshfield makes clear that in most cases, a government can remedy a potential Establishment Clause violation by sell- ing the real property where the religious monument sits. While removal was an option, so also was the sale. By selling the Monument site to end a perceived endorsement, the City exercised an option that served a secular purpose. Finally, the sale of the property did not have the “primary or principal effect of advancing a religion.” Books, 235 F.3d at 304 (emphasis added). In this prong, our focus is not on the intent of the City, but on whether a reasonable person, apprised of the circumstances surrounding the sale, would conclude that the sale amounted to an endorsement of reli- gion. Lynch, 465 U.S. at 690; Books, 235 F.3d at 304; Marshfield, Nos. 04-1321 & 04-1524 23 203 F.3d at 493. A reasonable person, considering the history of the monument recited above, would understand the City’s desire to keep the Monument in its original location. Moreover, the Eagles were the original donor, so they would be the logical purchaser. The sale allowed the Monument to remain intact across from the headquarters with easy access for continual maintenance of the parcel. Additionally, as discussed above, the location is nowhere near the seat of government, so there would be no unnatural carving out of a piece of property from what would otherwise obviously be the grounds of a city hall or courthouse. Given all these historic and secular reasons, no reasonable person would believe that this sale was to advance religion. All of this, when coupled with the authority established under Marshfield and the extensive efforts taken by the City to separate itself from any religious message the Monument might convey, would surely overcome any doubts a reasonable observer might have once he or she views the double fencing and multiple signs surrounding the Monument. In addition to meeting the legal standards of the Establishment Clause, the sale achieves a practical goal. The City is able to extricate itself completely from the implied endorsement of the purpose and content of the religious symbol, yet the Monument can remain in the location it has occupied for many years. If the local citizens at some point want the symbol moved to make way for an alternate use, the solution can be found in the political rather than the legal process. III. In the face of litigation threatening the presence of a mon- ument of the Ten Commandments in a public park, the City of La Crosse decided to sell that Monument and a small parcel of land surrounding the Monument to the group that 24 Nos. 04-1321 & 04-1524 had donated the Monument to the City forty years ago. This sale has clearly not pleased everyone, and it likely did not entirely please anyone. It was, however, constitutionally appropriate. The decision of the district court is reversed and the case is remanded so that the district court may enter an order of summary judgment in favor of the City and the Eagles. REVERSED BAUER, Circuit Judge. I respectfully dissent. If one accepts the premise that, by its present action, the authorities of the City of La Crosse has effectively disas- sociated themselves and the City from an endorsement of religion by sponsoring a monument of The Ten Commandments, the majority opinion is hard to quarrel with. But I believe that the District Court had it right; the actions of the City actually show a stubborn refusal to separate itself from the display of a purely religious monu- ment. Having created a problem by the original act of permitting a monument of The Ten Commandments to be displayed on public property with what any observer would have to conclude was an endorsement of the message of the commandments, the City elected a solution that I think borders on a fraud. I am aware of the fact, set out carefully in the majority opinion, that a disclaimer has been set next to the monu- ment which remains exactly where it was originally placed Nos. 04-1321 & 04-1524 25 on what was unquestionably public property, surrounded by public property, and for all intents and purposes is still public property. I am also aware that a transfer of a tiny share of the public domain to the Eagles was recorded and, if a passerby had the time and inclination, he or she could consult the official records of the Recorder of Deeds to verify this gesture. Moreover, as the majority opinion points out, a disclaimer sets out that the City is not endorsing anything. The disclaimer seems to me to be taken from a scene in the movie “The Wizard of Oz” in which the phony wizard, whose fraud has been exposed, directs the onlookers to “pay no attention to that man behind the curtain;” a dis- claimer that is no more or less effective than the disclaimer at the monument. It too is an obvious sham. The admonition of the Constitution that creates the separ- ation of church and state forbids any government entity from endorsing, or seeming to endorse, religion but does not at all prevent individual members who make up a gov- ernment entity from practicing or loudly announcing their deep religious convictions. They can place displays on their private property, put religious symbols on the bumper stick- ers of their cars, wear religious symbols on their clothing and even, by living up to the admonitions of the command- ments in their personal and political lives show, by their example, their deep commitment to the religion of their choice. What they cannot do is, by word or action, spend public money endorsing or seeming to endorse on behalf of the government agency they represent, an endorsement of any religion. The monument belongs on what is obviously private property or a church setting. It does not belong where it is. And, as I recall the story, when asked whether the law of God or the law of man was law to follow, the answer by the founder of Christianity was, “Render unto Caesar the things 26 Nos. 04-1321 & 04-1524 that are Caesar’s and to God the things that are God’s.” Neither God nor religion requires an endorsement from Government—nor does the law permit it. I would affirm the finding and order of the district court. Nos. 04-1321 & 04-1524 27 28 Nos. 04-1321 & 04-1524 Nos. 04-1321 & 04-1524 29 30 Nos. 04-1321 & 04-1524 Nos. 04-1321 & 04-1524 31 32 Nos. 04-1321 & 04-1524 A true Copy: Teste: _____________________________ Clerk of the United States Court of Appeals for the Seventh Circuit USCA-02-C-0072—1-3-05	{ "pile_set_name": "FreeLaw" }
604 F.3d 939 (2010) Richard COOEY, Plaintiff, Michael Beuke, Plaintiff-Intervenor-Appellant, v. Ted STRICKLAND, Governor, State of Ohio; Ernie L. Moore, Director, Ohio Department of Rehabilitation and Correction; Donald Morgan, Warden, Southern Ohio Correctional Facility, Defendants-Appellees. No. 10-3598. United States Court of Appeals, Sixth Circuit. Submitted: May 11, 2010. Decided and Filed: May 12, 2010. 941 ON BRIEF: Charles L. Wille, Thomas E. Madden, Office of the Ohio Attorney General, Columbus, Ohio, for Appellees. Before: BATCHELDER, Chief Judge; MARTIN and NORRIS, Circuit Judges. BATCHELDER, C.J., delivered the opinion of the court, in which NORRIS, J., joined. MARTIN, J. (pp. 947-49), delivered a separate dissenting opinion. OPINION ALICE M. BATCHELDER, Chief Judge. Intervenor-Plaintiff Michael Beuke, an Ohio death row inmate, appeals from the order of the United States District Court for the Southern District of Ohio, Eastern Division, denying both his motion for injunctive relief filed pursuant to 42 U.S.C. § 1983, and his oral request to stay his execution pending appeal of the decision. On appeal, Beuke also requests, in the alternative, that a single judge issue a stay enjoining his execution while he appeals the district court's decision, pursuant to Federal Rule of Appellate Procedure 8(a)(2)(A)(ii) and (a)(2)(D). For the reasons that follow, we affirm the opinion of the district court denying Beuke's motion for injunctive relief, and further deny his request for a stay enjoining his execution. I. Beuke is scheduled to be executed on May 13, 2010. The district court permitted him to intervene for a second time in the present lawsuit on March 23, 2010, and on May 6, 2010, he filed a motion for injunctive relief to enjoin the State of Ohio from utilizing its alternative execution plan ("Plan B") under its current lethal injection protocol. The district court held a hearing on May 10, 2010, during which it heard testimony from Beuke's two experts, Dr. Edward D. French and Dr. Mark J.S. Heath. Defendants called no witnesses but requested that the district court incorporate previous testimony of Dr. Mark Dershwitz, who has testified on numerous prior occasions on behalf of defendants in this lawsuit. On May 11, 2010, the district court denied Beuke's motion for injunctive relief and his motion for a stay pending appeal. Michael Beuke was convicted in October 1983 of one count of aggravated murder, two counts of attempted aggravated murder, three counts of aggravated robbery, three counts of kidnapping, and one count of carrying a concealed weapon. The aggravated murder charge also included two specifications, either of which aloneif proven beyond a reasonable doubtwould make him eligible for the death penalty: (1) committing aggravated murder as part of a course of conduct involving the purposeful attempt to kill two or more persons, and (2) committing aggravated murder in the course of an aggravated robbery. The jury found that both specifications were proven beyond a reasonable doubt. At the penalty hearing, the jury also found beyond a reasonable doubt that the aggravating factors outweighed the mitigating factors and recommended 942 the death penalty. The trial court adopted the recommendation and imposed the death penalty. Having completed and failed in his direct appeal, two petitions for post-conviction relief, and two habeas attempts, in November 2007, Beuke moved the District Court for the Southern District of Ohio to allow him to intervene in a lawsuit challenging the constitutionality of Ohio's then applicable lethal injection protocol, Cooey v. Strickland., No. 04-CV-01156, 2010 WL 1882263 (S.D.Ohio May 11, 2010). The district court granted the motion to intervene on February 15, 2008, and Beuke filed his intervenor complaint the same day. However, the district court dismissed his action on August 25, 2008, on the ground that the decision in Cooey v. Strickland, 479 F.3d 412 (6th Cir.2007), required dismissal, on statute of limitations grounds, of Beuke's 42 U.S.C. § 1983 claims. Beuke did not appeal. The remaining plaintiffs in the Cooey action continued to litigate their challenge to the lethal injection process, and in the meantime, Ohio changed its execution protocol, making changes which were designed to make the State's capital punishment protocol more humane. The new protocol, which took effect on November 30, 2009, utilizes a one-drug, IV injection ("Plan A") with a two-drug, intramuscular injection back-up procedure if the execution team fails to locate veins suitable for IV transmittal ("Plan B"). See Cooey (Biros) v. Strickland, 589 F.3d 210, 217 (6th Cir.2009). Given the change of policy, the statute of limitations to challenge the new procedure began to run anew. But it was not until March 17, 2010, that Beuke filed a motion to intervene once again in the pending lawsuit in the district court, despite knowing that his execution date of May 13, 2010 (scheduled by the State of Ohio on November 4, 2009), was drawing near. The district court granted the motion to intervene on March 23, 2010, and Beuke filed his new intervenor complaint the same day. Defendants filed a motion to dismiss the complaint on April 6, 2010. A month later, on May 3, 2010, Beuke filed a motion for leave to untimely file a response in opposition to the motion to dismiss. The district court granted the motion. On May 7, 2010, Beuke filed a motion to amend his complaint to include claims challenging the State's use of Plan B as a back-up execution plan, arguing that his anti-seizure medication would interact with and reduce the effects of the drugs utilized in Plan B. He also sought to enjoin the defendants from using Plan B to carry out his execution. The district court held a hearing on Beuke's amended complaint on May 10, 2010, at 2:00 p.m., and at the conclusion of that hearing, counsel for Beuke orally requested a stay of his execution pending appeal should his motion for injunctive relief be denied. On May 11, 2010, the district court denied the motion for injunctive relief, as well as his request for a stay pending appeal. Beuke filed a timely notice of appeal the same day. We extensively described Ohio's new execution protocol in the Biros case. But in a nutshell, Plan A, which Beuke does not challenge, involves intravenous injection of five grams of thiopental sodium. The back-up plan, Plan B, which Beuke is challenging, is used only if a prisoner's veins prove too difficult to access. Plan B involves a two-drug injection of 10 milligrams of midazolam and 40 milligrams of hydromorphone, which are administered in a single syringe intramuscularly. A medical team member, after administering the injection and waiting five minutes, will examine the inmate for signs of breathing. Then, if necessary, a second injection of the same mixture will be administered, and the inmate will be re-examined after five 943 more minutes for signs of breathing. Then only if there are continued signs of breathing will a final injection of 60 milligrams of hydromorphone be administered. See Cooey (Biros), 589 F.3d at 220. Beuke's challenge to the use of Plan B is premised on the allegation that its use will be unconstitutional as applied to him because he takes anti-seizure medication daily that will interact with the midazolam in such a way as to produce various undesirable effects. Because of a seizure disorder, Beuke takes 120 milligrams per day of the drug phenobarbital, and has been taking the drug daily for approximately five years. (R. 751-4, Amend. Compl. at ¶¶ 5, 7). Phenobarbital is a barbiturate that acts as an anticonvulsant to depress one's central nervous system. (Id. at ¶ 5). Likewise, midazolam produces depressant effects such as sedation, anti-anxiety, and unconsciousness. (Id. at ¶ 6). Because of his chronic intake of phenobarbital, there is a high likelihood, Beuke claims, that he will have an increased tolerance to the amount of midazolam given during Plan B, and because of this increased tolerance, the rate at which he descends into unconsciousness would be slowed, resulting in an increased chance of his experiencing the effects of hydromorphone. (Id. at ¶ 8). Thus, he may consciously experience the side effects of hydromorphone, which can include, inter alia, nausea, vomiting, disinhibited speech, delirium, anxiety, or disorientation. (Id.). The increased risk of this type of experience if he is subjected to Plan B, Beuke argues, violates both his right to be free from cruel and unusual punishments under the Eighth Amendment, and a claimed "liberty, life, and property" interest arising under Ohio Rev.Code § 2949.22(A) that is ultimately protected under the due process clause of the Fourteenth Amendment, that entitles him to a "quick and painless death." (Id. at ¶¶ 11, 13, 16).[1] II. In his appeal from the district court's decision denying injunctive relief, Beuke requests that we enjoin the State from utilizing Plan B to carry out his execution because seizure medications that he is taking, namely phenytoin and phenobarbital, may interact with the Plan B drugs so as to violate his constitutional rights under the Eighth and Fourteenth Amendments. In reviewing the denial of the motion for injunctive relief, we consider four factors: "(1) whether [Beuke] has demonstrated a strong likelihood of success on the merits; (2) whether he will suffer irreparable injury in the absence of equitable relief; (3) whether the stay will cause substantial harm to others; and (4) whether the public interest is best served by granting the stay." Cooey (Biros), 589 F.3d at 218 (citing Workman v. Bredesen, 486 F.3d 896, 905 (6th Cir.2007)). "These factors are not prerequisites that must be met, but are interrelated considerations that must be balanced together." Id. (quoting Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir.1991)). We review the district court's factual findings for clear error and its legal conclusions de novo. H.D. V.-Greektown, LLC v. City of Detroit, 568 F.3d 609, 618-19 (6th Cir.2009). 944 Beuke first challenges Ohio's use of Plan B as violative of his Eighth Amendment right to be free from cruel and unusual punishment. To demonstrate a likelihood of success on the merits of this claim, Beuke is required to demonstrate that in utilizing Plan B, the State of Ohio's "protocol ignores a `sure or very likely' risk of serious pain `and needless suffering' which `creates a demonstrated risk of severe pain' that is `substantial when compared to the known and available alternatives.'" Cooey (Biros), 589 F.3d at 220 (quoting Baze v. Rees, 553 U.S. 35, 50, 61, 128 S.Ct. 1520, 170 L.Ed.2d 420 (2008)). After carefully reviewing the written submissions and the oral testimony of both Dr. French and Dr. Heath, we conclude that this evidence is wholly insufficient to demonstrate that Plan B creates a "demonstrated risk of severe pain." In testifying as to the predicted effects of Plan B's dosage of midazolam on Beuke, Dr. Heath opined that there was a "very high likelihood" that "Beauke will have a reduced effect to the midazolam, or he will be resistant to the midazolam." (Tr. at 54). However, when asked to quantify these effects, Dr. Heath noted that "I can't put an exact number on it. All I can say is that, as a practitioner who sees this frequently, it would be my strong expectation that I would have to give him a lot more midazolam to achieve the same effect. How much more, I don't know." (Id.). And even while noting his belief that the effects of the midazolam would be reduced due to "cross tolerance" as a result of his seizure medications, Dr. Heath testified that the result would be merely to "prolong the dissent [sic] from consciousness into unconsciousness" (Tr. at 81) so that Beuke would experience more of the intoxicating effects of the hydromorphone, which may include "nausea and vomiting, hallucinations or delusions, [and] basically confused thinking." (Tr. at 66). But Dr. Heath expressly stated that the actual "cross tolerance" itself, or "intoxication," did not equate to pain. (Tr. at 80, 81). Neither Dr. Heath nor Dr. French could quantify the likelihood of nausea or vomiting in connection with the use of hydromorphone. (Tr. at 82). Nor could Dr. French give any definitive answer regarding how tolerant Beuke would be to midazolam. When asked whether Beuke, because of his use of anti-seizure medications, would fall outside the category of individuals who would have a typical reaction to midazolam, Dr. French said, "It is my opinion that he could, and I think it's not improbable." (Tr. at 27). Finally, Dr. French could not predict that there would be an increased probability of nausea and vomiting side effects as dosage levels of hydromorphone were increased. (Tr. at 41). As the district court noted in its order, this testimony necessitates the conclusion that "any estimation of what side effects are likely to occur and the severity of those side effects is wholly speculative." (Dist. Ct. Order at 7). This sort of speculation cannot meet the standard of a "sure or very likely risk of serious pain ... that is substantial when compared to the known and available alternatives." Cooey (Biros), 589 F.3d at 220. In any event, the only available alternative that Beuke submits is Plan A, which is the default method for execution. Similarly to the defendant in Biros, Beuke does not argue that he has difficult-to-access veins, and Plan B "comes into play only when an IV injection [under Plan A] is not possible.... That reality alone diminishes the alleged risks." Id. at 229. And Plan B's entire purpose is to minimize any difficulties encountered during the use of Plan A. See id. at 222 ("the purpose of the intramuscular injection seeks to avoid an unduly prolonged search for difficult-to-access veins and to provide a safe, non-IV lethal injection method"). There has been no showing 945 that this substitute method is more likely to result in severe pain than continuing with increasingly lengthy attempts at IV injection under Plan A. But Beuke maintains that the district court erred by focusing solely on the likelihood that he would suffer severe pain if subjected to the protocol of Plan B. Beuke argues that the district court failed to consider whether he had demonstrated that the use of Plan B creates an "objectively intolerable risk of harm" that is "substantial when compared to the known and available alternatives." Id. at 215. Beuke fares no better with this argument. The district court did not specifically explain which of the two phrases"risk of severe pain" or "objectively intolerable risk of harm"it was focusing upon in its analysis, but it is true that it appears to focus more particularly on the risk of severe pain. And this is understandable, given that at the hearing, much of the testimony was directed at the potential for Beuke to experience possible side effects from the hydromorphone, such as nausea and vomiting. Nevertheless, we will also review the evidence specifically to determine whether it compels a finding that Plan B presents an "objectively intolerable risk of harm." A threshold question, then, is what is the "harm" that is being referenced? It surely cannot be an inmate's ultimate death, as that is the intended consequence of any execution protocol. Beuke argues that the risk of harm that is objectively intolerable is the likelihood that his response to midazolam would result in a lessened sedative effect, i.e., a sedative effect less than he would experience from the same dosage of midazolam if he had not been taking his anti-seizure medication, with the concomitant result that he would experience the effects of the hydromorphone more acutely. (See Beuke's Br. at 12). However, neither of Beuke's expertsnot Dr. French, nor Dr. Heath could quantify the extent of any tolerance of the midazolam Beuke may have. All that was demonstrated was that it was likely that Beuke would have some elevated level of tolerance. Of course, as we have already pointed out, the experts testified that the increased tolerance level would not itself cause any discomfort. This lack of quantification of even the extent of Beuke's potential tolerance to the Plan B drugs, not to mention the lack of quantification of the likelihood of Beuke's experiencing any uncomfortable side effects from the hydromorphone, renders unsustainable his argument that he has demonstrated an "objectively intolerable risk of harm." Mere likelihood of an increased tolerance to the Plan B sedative, which may possibly lead in turn to Beuke's experiencing uncertain but potentially uncomfortable side effects from the hydromorphone is not a risk of harm which is either objective or intolerable. Beuke also challenges the Plan B protocol as violative of his right to a "quick and painless death" that arises under Section 2949.22(A) of the Ohio Revised Code. He argues that even though this interest arises under state law, it is nonetheless protected as a right under the due process clause of the Fourteenth Amendment. The district court did not directly address this argument; however, it is foreclosed by our decision in Biros. There, we specifically noted that Section 2949.22 "creates no cause of action to enforce any right to a quick and painless death." Cooey (Biros), 589 F.3d at 234 (citing State v. Rivera, 2009 WL 806819, at 7 (Ohio Ct.App. Mar. 30, 2009)). And we noted that we were unpersuaded by assertions that § 2949.22 creates a federal right protected by the Fourteenth Amendment. Id. We remain unpersuaded. 946 We agree with the district court that Beuke has failed to demonstrate any likelihood of success on the merits of his claim that use of the Plan B procedure would violate his Eighth Amendment rights. And we conclude that he has also failed to demonstrate any likelihood of success on the merits of his claim that the procedure would violate any right protected by the Fourteenth Amendment. Because Beuke cannot make any showing that he has any likelihood of success, we find the first factor dispositive. See Workman v. Bredesen, 486 F.3d 896, 911 (6th Cir.2007). Nonetheless, we note that Beuke has not established any of the other factors. He cannot show that he would be irreparably harmed by failure to stay the execution because he has provided no evidence that he will ever be subjected to Plan B, the only part of the Ohio execution protocol to which he objects. And both the third and the fourth factors weigh against granting the stay. The state has a "significant interest in meting out a sentence of death in a timely fashion," Nelson v. Campbell, 541 U.S. 637, 644, 124 S.Ct. 2117, 158 L.Ed.2d 924 (2004), and, as the Supreme Court has repeatedly held, a compelling interest in ensuring the finality of its judgments. See McCleskey v. Zant, 499 U.S. 467, 491, 111 S.Ct. 1454, 113 L.Ed.2d 517 (1991) ("Our federal system recognizes the independent power of a State to articulate societal norms through criminal law; but the power to a State to pass laws means little if the State cannot enforce them.") "To unsettle these expectations is to inflict a profound injury to the `powerful and legitimate interest in punishing the guilty,' an interest shared by the State and the victims of crime alike." Calderon v. Thompson, 523 U.S. 538, 556, 118 S.Ct. 1489, 140 L.Ed.2d 728 (1998) (quoting Herrera v. Collins, 506 U.S. 390, 421, 113 S.Ct. 853, 122 L.Ed.2d 203 (1993)). Importantly, these cases make this point in the context of habeas corpus review; how much more must this principle be respected when a last-minute stay of execution is sought in the context of a § 1983 action. III. "While the absence of any meaningful chance of success on the merits suffices to resolve this matter," Workman, 486 F.3d at 911, a final point should be made about the nature of Beuke's request for a stay of execution: "a stay is an equitable remedy, and equity must take into consideration the State's strong interest in proceeding with its judgment." Nelson, 541 U.S. at 649, 124 S.Ct. 2117. Even if Beuke had stated a cognizable § 1983 claim, "the mere fact that an inmate states a cognizable § 1983 claim does not warrant the entry of a stay as a matter of right." Id. In fact, "in considering the equitable remedy of staying an execution, `a district court must consider ... the extent to which the inmate has delayed unnecessarily in bringing the claim.'" Workman, 486 F.3d at 911 (quoting Nelson, 541 U.S. at 649-50, 124 S.Ct. 2117). "There is `a strong equitable presumption against the grant of a stay where a claim could have been brought at such a time as to allow consideration of the merits without requiring entry of a stay.'" Id. (quoting Nelson, 541 U.S. at 650, 124 S.Ct. 2117). While Beuke's delay may not be as egregious as that of the defendant in Workman, it nonetheless "could have been brought at such a time as to allow consideration of the merits without requiring entry of a stay." Beuke has been taking anti-seizure medication for several years. Ohio's revised method of execution that includes Plan B as a back-up was instituted in November 2009. Beuke's current execution date of May 13, 2010, was also set in November 2009. Nevertheless, he waited until March 17, 2010, to move the district court to intervene and, waited until 947 only one week prior to his execution date to amend his complaint to bring the particularized challenges to Plan B that he is currently asserting on appeal. This constitutes unnecessary delay, and Beuke has failed to overcome the "strong equitable presumption" against the grant of his stay request. Finally, "[i]n the alternative, Beuke respectfully requests that a single judge on this Court expeditiously issue a stay enjoining his execution [pending] his appeal of the District Court's decision to denying [sic] him relief[,] pursuant to Federal Rule of Appellate Procedure 8(a)(2)(A)(ii) and 8(2)(D)." This alternative relief is wholly unavailable here. The purpose of a single-judge stay is to provide potential relief when the panel to which the appeal is assigned is not available to consider the merits of the claim. In a case such as this, where the panel is not only available to consider but in fact has considered the merits of the case, Rule 8(a)(2)(D) is simply inapplicable. IV. For the foregoing reasons, we AFFIRM the judgment of the district court, and we DENY the motion for injunctive relief. BOYCE F. MARTIN, JR., Circuit Judge, dissenting. Michael Beuke seeks a stay of his execution on the basis that an anti-seizure medication that he has been taking for some time would interact negatively and painfully with one of the drugs in the Plan B intramuscular injection, should his executioners encounter difficulty administering the State of Ohio's new one-drug injection protocol. At a hearing before the district court, Beuke presented evidence that there was a concrete possibility that such a reaction could occur, but the district court found that he had failed to prove that it was "likely" to occur. I would reverse and grant the stay. * * * * * * This is another in the long line of cases that have developed in the short period since the State of Ohio drastically altered its lethal injection protocol in November 2009. Though, as far as I know, Ohio has not yet encountered problems in carrying out executions under its latest protocol, the fact remains that Ohio is blazing a very new trail. Only time will tell if the changed protocol actually addressed the problems alleged to have surrounded the prior three-drug method of execution. But that's the point. Only time will tell. Under Cooey and its progeny, inmates facing execution must show a likelihood[1] that use of this protocol will result in "`needless suffering' and a `demonstrated risk of severe pain.'" Cooey (Biros) v. Strickland, 589 F.3d 210, 222 (6th Cir.2009) (quoting Baze v. Rees, 553 U.S. 35, 50, 128 948 S.Ct. 1520, 170 L.Ed.2d 420 (2008)). An inmate could make a showing by developing a robust scientific record.[2] This is a new protocol, so it will necessarily take time to investigate how it may affect inmates in general. However, relying upon the likelihood of success requirement, we brashly rejected a request to do just this when we allowed Ohio to implement an untested protocol on Kenneth Biros just eight days after the State announced the change. Cooey (Biros) v. Strickland, 588 F.3d 921, reh'g en banc denied, 588 F.3d 924 (6th Cir.2009). We are now faced with the next question: will we allow inmates, like Beuke, with particularized conditions that may interact in unanticipated and unpredictable ways with the chemicals in the new protocol the time to develop their challenges and will we allow ourselves the time to consider them properly? But, in the Sixth Circuit, there is no timeor at least no time like the present. We do not permit time for sufficient research to produce the record needed to make an informed decision. Instead, we encourage Ohio to continue its one-a-month execution march. If the science does not yet exist when an inmate's appointed time comes, we say "alas, you have not shown a likelihood of suffering, maybe the next guy can." And then we say the same thing the next month. The upshot is that an inmate staring down the barrel of the new protocol will only be able to show a likelihood of unnecessary suffering if someone ahead of him has suffered unnecessarily. Until the unthinkable happens, we charge ahead unthinking. As the district court noted, this is the functional equivalent of human experimentation. We tell Ohio to just keep going until an experiment goes horribly awry, as it did in the case of Romell Broom. Only then will we halt our rush to a result and remember that our true business is reasoned constitutional consideration. In this case, it is clear that Beuke presents an individualized circumstance that, at the very least, creates a distinct possibility of needless suffering. If this is not the case in which we allow the inmate time to develop his claim, I would ask my fellow judges for an example of a case in which they would grant a stay. In light of the past several months, I cannot fathom what would suffice. I suspect that this request for an example will be met with deafening silence, as I am now convinced that, until we experience another failed execution, this Court will never interrupt Ohio's monthly execution schedule to allow for meaningful inquiry. If this is the case, then we should just say so and save everyone the time and expense of death penalty appeals and the bother of continuing the kabuki dance of feigning constitutional deliberation. 949 I would grant Beuke a stay, and I respectfully dissent from the majority's contrary conclusion. NOTES [1] Beuke also asserted a claim in his amended complaint that because of the drug interaction, he will not be competent to be executed when his execution is imminent, in violation of standards set out in Ford v. Wainwright, 477 U.S. 399, 106 S.Ct. 2595, 91 L.Ed.2d 335 (1986). He did not focus on such a claim in the district court hearing, and he does not raise it on appeal. It is deemed waived. [1] We invented this requirement of showing a likelihood, meaning a greater than fifty percent chance, in Workman v. Breedesen, 486 F.3d 896, 904 (6th Cir.2007), by analogizing stay requests in death penalty cases to any other request for temporary injunctive relief. This despite the fact that the Supreme Court has stated that "inmates seeking time to challenge the manner in which the State plans to execute them must satisfy all of the requirements for a stay, including a showing of a significant possibility of success on the merits." Hill v. McDonough, 547 U.S. 573, 584, 126 S.Ct. 2096, 165 L.Ed.2d 44 (2006) (emphasis added); see also Jones v. Hobbs, 604 F.3d 580, 582-83, 2010 WL 1767861, at *2-3 (8th Cir.2010) (Mellow, J., dissenting). "Likelihood of success" is a term of art used in many areas of the law, so if the Supreme Court had meant for that to be the standard, it would have said so. Instead, it set the requisite showing at a "significant possibility of success," which is necessarily a lower burden. Beuke's case highlights Workman's folly, as it demonstrates the practical impossibility of an inmate being able to show a likelihood of suffering absent a past example of suffering. [2] And by "robust scientific record," I refer to scientific testimony or evidence that would satisfy the Supreme Court's standard of a significant possibility of success on the merits, not our regional "likelihood" burden. To require a physician to quantify the likelihood of risk, the doctor would have to measure the risk in precise mathematical terms; indeed, this is exactly the basis on which the majority faults the testimony offered by Beuke at the district court. Though the physicians testified unequivocally that there was a significantly increased risk of a negative interaction in Beuke's case, they could not precisely quantify the risk. I have never met a doctor who could give me a precisely calculated risk of anything, even with a substantial body of predictive scientific knowledge, so how can we require doctors to provide it when there has been such scant time to mine the data relevant to Ohio's new protocol? For example, how can anyone quantify the "risk of nausea" in a given case? In applying the error of Workman and Biros to this case, as I concede that the majority must, they have imposed an impossible requirement.	{ "pile_set_name": "FreeLaw" }
3 So.3d 309 (2008) PHANTOM OF BREVARD, INC., Petitioner, v. BREVARD COUNTY, Florida, Respondent. Brevard County, Florida, Petitioner, v. Phantom of Brevard, Inc., Respondent. Nos. SC07-2200, SC07-2201. Supreme Court of Florida. December 23, 2008. Rehearing Denied February 17, 2009. 310 Mark D. Shuman of Gray Robinson, P.A., Melbourne, FL, for Petitioner/Respondent. Scott L. Knox, County Attorney, Viera, FL, for Respondent/Petitioner. CANADY, J. Phantom of Brevard, Inc. and Brevard County seek review of the decision of the Fifth District Court of Appeal in Phantom of Brevard, Inc. v. Brevard County, 966 So.2d 423 (Fla. 5th DCA 2007), on the ground that it expressly and directly conflicts with the decision of the Second District Court of Appeal in Phantom of Clearwater, Inc. v. Pinellas County, 894 So.2d 1011 (Fla. 2d DCA 2005). The district courts disagree about whether substantially similar county ordinance provisions related to the regulation of fireworks conflict with chapter 791, Florida Statutes. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. For the reasons stated below, we quash the Fifth District's decision in Phantom of Brevard to the extent it is inconsistent with this opinion, and we approve the Second District's decision in Phantom of Clearwater on the conflict issue. FACTUAL AND PROCEDURAL BACKGROUND Phantom of Brevard, Inc. (Phantom) sought a judgment declaring Brevard County, Florida, Ordinance No. 05-60 (December 6, 2005), as amended by Brevard County, Florida, Ordinance No. 06-18 (April 11, 2006), unconstitutional. Phantom of Brevard, 966 So.2d at 425. The circuit court entered a final summary judgment in favor of Brevard County, concluding that it was required to follow the Second District's decision in Phantom of Clearwater. The Second District in Phantom of Clearwater had upheld a similar Pinellas County fireworks ordinance with the exception of one sentence that Brevard County had since removed from its fireworks ordinance. Phantom appealed the circuit court's judgment. On appeal, the Fifth District affirmed in part and reversed in part the circuit court's judgment. Phantom of Brevard, 966 So.2d at 428. First, the Fifth District held that chapter 791, Florida Statutes (2006), does not expressly preempt the regulation of fireworks. Id. at 427. Second, the Fifth District concluded that the legislative history of chapter 791 does not support implied preemption. Id. However, the Fifth District reversed in part and remanded with instructions to sever certain provisions of the ordinance that it found in conflict with chapter 791. Id. at 428. Among the provisions that the Fifth District found to be in direct conflict is section 10, entitled "Evidence of financial responsibility," with which businesses must comply in order to receive a permit for selling fireworks and sparklers in Brevard County. See id. at 428-29. Section 10 provides: In furtherance of the provisions of sections 8 and 9, all sellers of fireworks must keep in force an insurance policy showing general, comprehensive, liability 311 and property damage insurance coverage on an occurrence basis with minimum limits in the policy of not less than $1,000,000.00 combined single limit coverage for each loss that may result from the activities of the sellers. Sellers must maintain Workers' Compensation coverage as required pursuant to F.S. Ch. 440. A failure to maintain this required coverage after the procurement of a permit shall be a violation of this ordinance and grounds for suspension of their permit from the authority and the sale of the permitted goods shall cease until such time as the required insurance is obtained. Id. at 428 (quoting Ordinance No. 05-60, § 10). The Fifth District explained its reasoning and its disagreement with the Second District as follows: Upon considering substantially similar language in the Pinellas County ordinance, the Phantom of Clearwater court determined that a county may, as part of its permitting process, demand proof of the seller's ability to respond in damages. 894 So.2d at 1023. We disagree. Brevard County's financial responsibility ordinance is in direct conflict with section 791.001, Florida Statutes, which provides that chapter 791 "shall be applied uniformly throughout the state." Because chapter 791 does not contain any financial responsibility standard or requirement, retailers and other supply-side entities are subject to potentially disparate obligations throughout the state. Although the legislature has provided counties with considerable discretion to determine the amount of a bond required of a fireworks display licensee under section 791.03, there is no reason to believe that the legislature would have countenanced a system in which a seller of fireworks or sparklers must maintain a particular amount of liability insurance simply because one of the counties in which it does business requires such coverage. Id. at 428-29. In contrast to the Fifth District, the Second District in Phantom of Clearwater, 894 So.2d at 1023, had rejected the contention that the permitting requirement of compliance with the Pinellas County fireworks ordinance's "Evidence of financial responsibility" provision conflicts with chapter 791. See id.[1] The Second District reasoned: Although the ordinance does establish a permitting process for all businesses involving fireworks and that process imposes additional requirements on businesses wanting to avail themselves of the benefits of doing business in Pinellas County, this permitting process does not directly conflict with the provisions of chapter 791. . . . A person can comply with the requirements of the ordinance without violating chapter 791, and can comply 312 with the requirements of chapter 791 without violating the ordinance. Id. Both Phantom and Brevard County sought review on the ground that the Fifth District's decision in Phantom of Brevard is in express and direct conflict with the Second District's decision in Phantom of Clearwater regarding whether these substantial similar "Evidence of financial responsibility" provisions conflict with chapter 791.[2] DISCUSSION We begin our analysis by summarizing chapter 791, Florida Statutes (2006), and Brevard County Ordinance 05-06, as amended by Brevard County Ordinance 06-18. Chapter 791, entitled "Sale of Fireworks," is a relatively short chapter. It begins with section 791.001, which provides: This chapter shall be applied uniformly throughout the state. Enforcement of this chapter shall remain with local law enforcement departments and officials charged with the enforcement of the laws of the state. Then, the chapter defines various terms, including fireworks, sparklers, manufacturer, retailer, and wholesaler. In particular, "fireworks" is defined as including "any combustible or explosive composition or substance or combination of substances or, except as hereinafter provided, any article prepared for the purpose of producing a visible or audible effect by combustion, explosion, deflagration, or detonation." 791.01(4)(a), Fla. Stat. However, the term fireworks does not include snakes, party poppers, auto burglar alarms, and other expressly delineated items. § 791.01(4)(c), Fla. Stat. To be excluded from the term "fireworks," sparklers must be tested and approved by the Division of the State Fire Marshal (Division) prior to retail sale. § 791.01(4)(b), Fla. Stat. Sparklers also must be stored in the manner described by section 791.015. And a retailer (defined by section 791.01(6) as someone engaged in selling sparklers) may not sell sparklers or other products authorized for sale by chapter 791 "unless the product was obtained from a manufacturer, distributer, or wholesaler registered with the division." § 791.02(2), Fla. Stat. Significantly, section 791.02(1) prohibits the use and sale of items that fall within the definition of fireworks. However, there are several exceptions to this general prohibition. First, there is an exception for the use and sale of fireworks for certain public displays of fireworks. See § 791.02(1), Fla. Stat.; § 791.04, Fla. Stat. The governing bodies of counties and municipalities can adopt rules for granting permits for the public displays of fireworks by fair associations, amusement parks, or other organizations. § 791.02(1), Fla. Stat. Boards of county commissioners must require bonds from licensees in an amount not less than $500. § 791.03, Fla. Stat. Further, outdoor displays are subject to the safety standards of "the National Fire Protection Association (NFPA) 1123, Code for Fireworks Display, 1995 Edition." § 791.012, Fla. Stat. But "[a]ny state, county, or municipal law, rule, or ordinance 313 may provide for more stringent regulations for the outdoor display of fireworks." Id. And the Code for Fireworks Display does not govern fireworks displays on private, residential property. Id. In addition to exempting the use and sale of fireworks for certain public displays, chapter 791 exempts the wholesale of fireworks if the sales are delivered to out-of-state entities or to other manufacturers, distributers, or wholesalers. § 791.04, Fla. Stat. Moreover, chapter 791 exempts the use of fireworks for signal purposes by railroad and transportation agencies, for quarrying purposes, for blasting or industrial purposes, for show or theatre purposes (blank cartridges), "or for signal or ceremonial purposes in athletics or sports, or for use by military organizations." Id. Chapter 791 also exempts the sale and use of fireworks for "frightening birds from agricultural works and fish hatcheries." § 791.07, Fla. Stat. This last use "shall be governed entirely by the rules prescribed by the Department of Agriculture and Consumer Services." Id. Brevard County's fireworks ordinance begins with a list of definitions, including one that specifies that "[f]ireworks, sparklers, retailer, wholesaler, distributor, and manufacturer shall have the same meaning as specified in F.S. Section 791.01, as it may, from time to time, be amended." Ordinance No. 05-60, amended by Ordinance No. 06-18, § 1(d). Additionally, the ordinance explains that it is "enacted pursuant to the Home Rule Charter of Brevard County, Florida and F.S. Chapter 791." Id. § 2. Section 5 of the fireworks ordinance requires the Brevard County Fire Chief to "develop an affidavit which all sellers of fireworks within the county shall use to determine the entitlement of any purchaser at retail or wholesale to buy fireworks." Id. § 5(b). A purchaser must provide the seller with documentary evidence that the purchaser is entitled to purchase fireworks. Id. § 5(c). The seller is required to maintain copies of the records required by the ordinance for a period of four years from the sale date. Id. § 5(j). And vendors must provide purchasers with receipts. Id. § 6. Section 7, which the Fifth District remanded with instructions for the circuit court to determine whether it should be severed, requires devices to have labels in English that describe the weight of the combustible substance, "the name of the chemical composition and a brief statement describing its action when ignited." Section 8, which the Fifth District remanded for severance, designates sparklers and fireworks to be ultrahazardous and dangerous products, "subjecting the vendors, distributors and manufacturers to strict liability for any injury sustained by a purchaser or user." Section 9(b) provides that any seller of fireworks within Brevard County must apply for and secure a permit from the Brevard County Fire Chief. Among other requirements, an applicant must demonstrate evidence of financial responsibility pursuant to section 10, which is quoted above and which the Fifth District remanded for severance. Id. § 9(e). Section 12 includes specific requirements for the issuance of permits for public displays of fireworks. For example, one must submit an application to the appropriate fire department at least thirty days prior to the event and must include a diagram of the grounds where the fireworks are to be discharged. Id. § 12(a)(1). Section 13, which the Fifth District remanded for severance, provides that the use, explosion, or storage of fireworks is prohibited in the county unless: (a) a county 314 permit for public display is obtained; (b) the use is by a railroad or transportation agency for signal purposes or the use is for quarrying, blasting, or industrial purposes; or (c) the use is for a bona fide agricultural purpose. Section 14, entitled "Penalties and enforcement," explains that law enforcement has the authority to order the cessation of the sale of fireworks if a seller is selling fireworks without the required permits until the missing permits are obtained. This section also provides for a period of suspension of a permit for repeat offenders of the ordinance or chapter 791. Finally, Brevard County's fireworks ordinance includes a severability clause. Id. § 15. Brevard County's Mandatory Insurance Provision Does Not Conflict with Chapter 791 Brevard County contends that section 10 of its fireworks ordinance, entitled "Evidence of financial responsibility," does not conflict with chapter 791. We agree. Pursuant to our Constitution, chartered counties have broad powers of self-government. See art. VIII, § 1(g), Fla. Const. Indeed, under article VIII, section 1(g) of the Florida Constitution, chartered counties have the broad authority to "enact county ordinances not inconsistent with general law." See also David G. Tucker, A Primer on Counties and Municipalities, Part I, Fla. B.J., Mar. 2007, at 49. However, there are two ways that a county ordinance can be inconsistent with state law and therefore unconstitutional. First, a county cannot legislate in a field if the subject area has been preempted to the State. See City of Hollywood v. Mulligan, 934 So.2d 1238, 1243 (Fla.2006). "Preemption essentially takes a topic or a field in which local government might otherwise establish appropriate local laws and reserves that topic for regulation exclusively by the legislature." Id. (quoting Phantom of Clearwater, 894 So.2d at 1018). Second, in a field where both the State and local government can legislate concurrently, a county cannot enact an ordinance that directly conflicts with a state statute. See Tallahassee Mem'l Reg'l Med. Ctr., Inc. v. Tallahassee Med. Ctr., Inc., 681 So.2d 826, 831 (Fla. 1st DCA 1996). Local "ordinances are inferior to laws of the state and must not conflict with any controlling provision of a statute." Thomas v. State, 614 So.2d 468, 470 (Fla. 1993); Hillsborough County v. Fla. Rest. Ass'n, 603 So.2d 587, 591 (Fla. 2d DCA 1992) ("If [a county] has enacted such an inconsistent ordinance, the ordinance must be declared null and void."); see also Rinzler v. Carson, 262 So.2d 661, 668 (Fla. 1972) ("A municipality cannot forbid what the legislature has expressly licensed, authorized or required, nor may it authorize what the legislature has expressly forbidden."). There is conflict between a local ordinance and a state statute when the local ordinance cannot coexist with the state statute. See City of Hollywood, 934 So.2d at 1246; see also State ex rel. Dade County v. Brautigam, 224 So.2d 688, 692 (Fla.1969) (explaining that "inconsistent" as used in article VIII, section 6(f) of the Florida Constitution "means contradictory in the sense of legislative provisions which cannot coexist"). Stated otherwise, "[t]he test for conflict is whether `in order to comply with one provision, a violation of the other is required.'" Browning v. Sarasota Alliance for Fair Elections, Inc., 968 So.2d 637, 649 (Fla. 2d DCA 2007) (quoting Phantom of Clearwater, 894 So.2d at 1020), review granted, No. SC07-2074 (Fla. Nov. 29, 2007). In this case, nothing in the "Evidence of financial responsibility" provision conflicts with chapter 791 because chapter 315 791 does not in any way address the subject matter addressed by the "Evidence of financial responsibility" provision, namely the requirement that sellers of fireworks obtain liability insurance. Section 791.03 only provides that a county must require at least a $500 bond from licensees. Although "licensee" is not defined in chapter 791, it appears that section 791.03 "is intended to cover the persons who receive local permits for outdoor displays." Phantom of Clearwater, 894 So.2d at 1016 n. 3. Therefore, when enacting section 10 of its fireworks ordinance, the county simply chose to legislate in an area where the Legislature chose to remain silent. Specifically, when regulating businesses that sell fireworks within its borders, Brevard County chose to require that sellers of fireworks obtain and maintain a $1,000,000 single limit liability insurance policy. While this imposes an additional requirement on businesses that sell fireworks in Brevard County beyond the requirements imposed by chapter 791, this additional requirement does not directly conflict with any requirement, prohibition, or exemption in chapter 791. Businesses that sell fireworks in Brevard County can comply with the county's additional insurance requirement without violating any provision of chapter 791. Thus, the "Evidence of financial responsibility" provision can coexist with chapter 791. There is no direct conflict. Cf. Dade County v. Acme Specialty Corp., 292 So.2d 378 (Fla. 3d DCA 1974) (holding that portion of county ordinance that banned the sales of sparklers was unconstitutional because it directly conflicted with section 791.01, Fla. Stat., which specifically approved the sale of sparkers). The Fifth District concluded that the "Evidence of financial responsibility" provision conflicts with section 791.001, which provides that chapter 791 is to be "applied uniformly throughout the state." More specifically, the Fifth District found that Brevard County's "Evidence of financial responsibility" provision will subject fireworks businesses to varying insurance coverage requirements throughout the State. However, focusing on potential differences caused by varying local requirements confuses the issue. Because chapter 791 does not include an insurance coverage standard or requirement, chapter 791 is not being applied disparately. In other words, a state statute is not being applied in a non-uniform manner when a locality enacts a regulation on a particular matter that is not addressed in the statute. The statute is being applied uniformly. It is the local ordinance that is creating any variance between counties. Brevard County's "Evidence of financial responsibility" provision could only be hindering a uniform application of chapter 791 if chapter 791 included a standard insurance standard or requirement. But, as stated earlier, chapter 791 includes no such standard or requirement. Thus, there is no conflict. CONCLUSION Because chapter 791 is silent regarding insurance requirements for businesses that sell fireworks, Brevard County's "Evidence of financial responsibility" provision does not conflict with chapter 791. Accordingly, we quash the Fifth District's decision in Phantom of Brevard to the extent it is inconsistent with this opinion, and we approve the Second District's decision in Phantom of Clearwater. It is so ordered. QUINCE, C.J., and ANSTEAD, PARIENTE, LEWIS, and POLSTON, JJ., concur. WELLS, J., recused. NOTES [1] The Pinellas County provision provides: In furtherance of the provisions of Sec 62-88, all sellers of fireworks, must keep in force an insurance policy showing general, comprehensive, liability and property damage insurance coverage on an occurrence basis with minimum limits in the policy of not less than one million dollars ($1,000,000.00) combined single limit coverage for each loss that may result from the activities of the sellers. Sellers must maintain Workers' Compensation coverage as required pursuant to Chapter 440, Florida Statutes. A failure to maintain this required coverage after the procurement of a permit shall be a violation of this Division and grounds for suspension of their permit from the Authority and the sale of the permitted goods as set forth in Sec 62-82 shall cease until such time as the required insurance is obtained. Phantom of Clearwater, 894 So.2d at 1028-29 (quoting Pinellas County, Fla., Ordinance No. 03-48 (June 24, 2003)). [2] While Phantom's jurisdictional brief argued that this Court has jurisdiction because the district courts are in conflict regarding whether the "Evidence of financial responsibility" provisions conflicts with chapter 791, Phantom's merits briefs did not specifically address this issue. And, during oral argument, Phantom conceded this conflict issue. However, we do not address Phantom's preemption arguments because the Fifth and Second Districts do not conflict on the issue of preemption. See Savona v. Prudential Ins. Co. of Am., 648 So.2d 705, 707 (Fla.1995).	{ "pile_set_name": "FreeLaw" }
860 P.2d 1393 (1993) EXCEL CORPORATION, Petitioner, v. The INDUSTRIAL CLAIM APPEALS OFFICE of the State of Colorado; Director, Department of Labor and Employment, Division of Workers' Compensation, State of Colorado; and Salvador M. Barron, Respondents. No. 93CE0001. Colorado Court of Appeals, Div. V. September 9, 1993. 1394 Blackman & Levine, Tama L. Levine, Denver, for petitioner. No appearance for respondents Indus. Claim Appeals Office and Director, Dept. of Labor and Employment. The Connell Law Firm, Curt Kriksciun, Denver, for respondent Salvador M. Barron. Opinion by Judge HUME. In this workers' compensation proceeding, we granted certiorari to address application of the "quasi-course of employment" doctrine, as recognized in Travelers Insurance Co. v. Savio, 706 P.2d 1258 (Colo.1985), to a second injury sustained by a workers' compensation claimant during a trip to obtain medical care or rehabilitation for a compensable injury. Here, the Industrial Claim Appeals Panel applied the doctrine to affirm the determination of the Administrative Law Judge that an accident in which the claimant, Salvador M. Barron, slipped and fell while leaving a physical therapy session was the natural and proximate result of his original compensable injury. The employer, Excel Corporation, seeks review, and we affirm. The claimant suffered an admitted industrial injury to his left shoulder and back in 1991 when employed as a hide puller. The employer does not dispute that claimant was receiving reasonable and necessary physical therapy to relieve the effects of a compensable injury when he fell. Nor does it suggest that he was engaged in any intentional misconduct at the time of the fall. Instead, the employer contends that the claimant failed to prove that the fall was the result of a weakened condition from a compensable injury. Thus, it argues, the slip and fall was an independent intervening accident which terminates its liability for the claimant's continuing disability and need for medical care. We are not persuaded. The "quasi-course of employment" doctrine applies to activities undertaken by the employee which follow a compensable injury. And, although they take place outside the time and space limits of normal employment and would not be considered employment activities for usual purposes, they are nevertheless related to the employment in the sense that they are necessary or reasonable activities that would not have been undertaken but for the compensable injury. 1 A. Larson, Workmen's Compensation Law, § 13.11(d)( (1992). Because an employer is required to provide medical treatment and an injured 1395 employee is required to submit to it, a trip to the doctor's office becomes an implied part of the employment contract. Consequently, when an injured employee suffers additional injuries in the course of a journey to a doctor's office occasioned by a compensable injury, the additional injuries generally are held compensable. 1 A. Larson, Workmen's Compensation Law § 13.13 (1992). We agree with the Panel that the "quasi-course of employment" doctrine applies. The dispositive fact is that the claimant was leaving authorized medical treatment, rather than whether he had a weakened condition. This conclusion is followed by a majority of jurisdictions and, in our view, is the better reasoned rule. See Kodiak Oilfield Haulers v. Adams, 777 P.2d 1145 (Alaska 1989); Preway, Inc. v. Davis, 22 Ark.App. 132, 736 S.W.2d 21 (1987); Laines v. Workmen's Compensation Appeals Board, 48 Cal.App.3d 872, 122 Cal. Rptr. 139 (1975); Little Caesar's Pizza v. Ingersoll, 572 So.2d 8 (Fla.Dist.Ct.App. 1990); Taylor v. Centex Construction Co., 191 Kan. 130, 379 P.2d 217 (1963); Case of McElroy, 397 Mass. 743, 494 N.E.2d 1 (1986); Font v. New York City Board of Education, 170 A.D.2d 928, 566 N.Y.S.2d 754 (1991); Fenton v. SAIF Corp., 87 Or. App. 78, 741 P.2d 517 (1987). But see Street v. Douglas County Road Department, 160 Ga.App. 559, 287 S.E.2d 586 (1981). Order affirmed. DAVIDSON and TAUBMAN, JJ., concur.	{ "pile_set_name": "FreeLaw" }
985 F.2d 571 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.Wilbur BLUME, Mary Blume, Plaintiffs-Appellants, Cross-Appellees,v.OHIO CASUALTY INSURANCE COMPANY; Ohio Casualty Group,Defendants-Appellees, Cross-Appellants. Nos. 91-55706, 91-55920. United States Court of Appeals, Ninth Circuit. Argued and Submitted Jan. 7, 1993.Decided Jan. 28, 1993. 1 Before CANBY and WILLIAM A. NORRIS, Circuit Judges and TANNER,* District Judge. 2 MEMORANDUM** 3 Mary Blume and her late husband Wilbur brought this action against the Ohio Casualty Insurance Company ("Ohio") for its handling of a claim they filed after a fire severely damaged their home. The jury found that Ohio breached its duty of good faith and fair dealing when it undervalued the loss and forced the Blumes to seek arbitration. The jury awarded the Blumes $63,000 in compensatory damages and $2 million in punitive damages. The district court rejected Ohio's challenge to the compensatory damage award, but granted the insurer's motion for judgment notwithstanding the verdict (JNOV) on punitive damages. Blume appeals the JNOV, and Ohio cross-appeals on the liability issue. We affirm in both appeals. Compensatory Damages 4 The Blumes argue that Ohio's selected adjuster calculated a scope of loss sufficient only to perform "cosmetic repairs" to the home rather than restore it to its condition before the fire. They contend that the adjuster, with Ohio's blessing, forced contractors to bid within the adjuster's scope of loss.1 Under California law the Blumes must offer direct evidence of Ohio's improper purpose to recover damages for bad faith. See California Shoppers, Inc. v. Royal Globe Ins. Co., 175 Cal.App.3d 1, 47-48, 221 Cal.Rptr. 171, 196-97 (1985). The record before us contains direct evidence of improper purpose. 5 Each of the three contractors that bid on repairing the Blume home bid within $500 of each other. One contractor lowered its bid after it was warned that its original bid was too high. Although Ohio insists that it told the contractors they could add to the initial scope, a reasonable jury could find by a preponderance of the evidence that Ohio handled the Blumes' claim in bad faith. California Shoppers requires only that an inference of improper purpose be rooted in some direct evidence of wrongdoing. See id. The Blumes met that standard.2 Punitive Damages 6 We review de novo a motion for JNOV. The motion is properly granted when "the evidence permits only one reasonable conclusion as to the verdict." In re Hawaii Federal Asbestos Cases, 960 F.2d 806, 816 (9th Cir.1992). All of the evidence is considered in the light most favorable to the Blumes and all reasonable inferences are drawn in their favor. See id. 7 The Blumes are entitled to punitive damages only if the evidence clearly and convincingly shows that the insurer "has been guilty of oppression, fraud, or malice." Cal.Civ.Code Section 3294(a). Oppression, fraud, or malice means more than undervaluing a claim to cut costs. Punitive damages are proper only if Ohio intended to harm the Blumes or if it acted with conscious disregard of the risk of harm, meaning that Ohio understood the consequences of its actions and deliberately chose to maintain its position. See Travelers' Ins. Co. v. Lesher, 187 Cal.App.3d 169, 200, 231 Cal.Rptr. 791, 807 (1986). 8 Although Ohio's aim to "keep costs in line" supports a finding of bad faith, there is insufficient evidence that the insurer wished to harm the Blumes or acted with conscious disregard for their welfare. Mere refusal to settle on the insured's terms is not malicious, oppressive, or fraudulent conduct. See Miller v. National American Ins. Co., 54 Cal.App.3d 331, 338, 126 Cal.Rptr. 731, 734 (1976). In addition, the Blumes have offered no evidence that Ohio's conduct towards them was part of a nationwide policy on the part of Ohio. 9 We conclude that, although the compensatory damage award is proper, the district court correctly granted JNOV for Ohio on the punitive damage issue. Our decision today is consistent with the approach of California courts in similar appeals. See, e.g., Beck v. State Farm Mut. Automobile Ins. Co., 54 Cal.App.3d 347, 355-56, 126 Cal.Rptr. 602, 607 (1976) (sustaining compensatory damage award but voiding punitive damage award because insufficient evidence existed to determine the insurer's intent). 10 AFFIRMED. * The Honorable Jack E. Tanner, Senior United States District Judge for the Western District of Washington, sitting by designation ** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3 1 Ohio does not challenge its potential liability for the acts of the adjuster 2 We decline to view this case solely as a dispute over an ambiguous policy provision. The district court relied on that view to void the punitive damage award under Safeco Ins. Co. of America v. Guyton, 692 F.2d 551, 557 (9th Cir.1982) (applying California law). Whether couched in terms of repair or replacement, however, the dispute between the Blumes and Ohio revolves around the amount of money needed to restore the home to its preexisting condition. The jury could have found that Ohio intentionally prescribed an unjustifiably low repair figure. We uphold the verdict as supported by substantial evidence. Davis v. Mason Cty., 927 F.2d 1473, 1486 (9th Cir.), cert. denied, 112 S.Ct. 275 (1991)	{ "pile_set_name": "FreeLaw" }
74 F.3d 1254 U.S.v.128,530.00 in U.S. Currency* NO. 94-4924 United States Court of Appeals,Eleventh Circuit. Jan 09, 1996 1 Appeal From: S.D.Fla., No. 92-01427-CIV-CCA 2 AFFIRMED. * Fed.R.App.P. 34(a); 11th Cir.R. 34-3	{ "pile_set_name": "FreeLaw" }
756 S.W.2d 207 (1988) STATE of Missouri, Respondent, v. Scott MARVEL, Appellant. No. 15533. Missouri Court of Appeals, Southern District, Division One. August 29, 1988. 208 Sharon Ayers, Asst. Public Defender, Poplar Bluff, for appellant. William L. Webster, Atty. Gen., Christopher M. Kehr, Asst. Atty. Gen., Jefferson City, for respondent. CROW, Presiding Judge. A jury found Scott Marvel ("defendant") guilty of the class C felony of tampering in 209 the first degree, § 569.080, RSMo 1986. The trial court, having found defendant to be a prior offender,[1] § 558.016.2, RSMo 1986, sentenced him to three years' imprisonment. Defendant appeals, briefing three points: (1) the trial court erred in receiving evidence that defendant appeared intoxicated when arrested, (2) the trial court erred in allowing the arresting officer to testify as to statements made by defendant to a companion at the time of arrest, and (3) the evidence was insufficient to support the verdict. We address the latter point first. In that point defendant maintains the trial court wrongly denied his motion for judgment of acquittal at the close of the State's evidence, and his subsequent motion for judgment of acquittal at the close of all the evidence. After defendant's motion for judgment of acquittal at the close of the State's evidence was denied, defendant presented evidence. By doing so defendant waived any error with respect to the denial of such motion. State v. Green, 476 S.W.2d 567, 569[2] (Mo.1972); State v. Thomas, 452 S.W.2d 160, 162[4] (Mo.1970). Consequently, the sufficiency of the evidence to support the verdict will be determined upon the basis of all the evidence. State v. Campbell, 655 S.W.2d 96, 97 (Mo.App.1983); State v. Wood, 553 S.W.2d 333, 334[3] (Mo.App.1977). On that issue we consider the evidence and all inferences reasonably to be drawn therefrom in the light most favorable to the verdict, and disregard all contrary evidence and inferences. State v. Guinan, 665 S.W.2d 325, 327 (Mo. banc 1984), cert. denied, 469 U.S. 873, 105 S.Ct. 227, 83 L.Ed.2d 156 (1984); State v. McDonald, 661 S.W.2d 497, 500[1] (Mo. banc 1983), cert. denied, 471 U.S. 1009, 105 S.Ct. 1875, 85 L.Ed.2d 168 (1985). The test is whether the evidence, so viewed, was sufficient to make a submissible case from which rational jurors could have found beyond a reasonable doubt that defendant was guilty. State v. Bonuchi, 636 S.W.2d 338, 340 (Mo. banc 1982), cert. denied, 459 U.S. 1211, 103 S.Ct. 1206, 75 L.Ed.2d 446 (1983); Jackson v. Virginia, 443 U.S. 307, 324, 99 S.Ct. 2781, 2791-92, 61 L.Ed.2d 560, 576-77 (1979). Bill Taylor, sales manager at MidWest Motors in Dexter, arrived there about 7:45 a.m., August 25, 1987, driving his red and white Ford pickup. He parked it and entered the office. Some 15 minutes later Benjamin Rushing, an employee of MidWest Motors, arrived and saw two people standing beside Taylor's pickup. Rushing entered the office and asked Taylor if the duo was with him. Taylor replied, "No," whereupon Rushing ran outside, followed by Taylor. Rushing saw the pair walking away in a ditch. He shouted at them, and they "started scuffling up the hill to get to the other side of the ditch, and they took off running." Asked what they were wearing, Rushing responded, "As I recall, one of them was wearing a gray or a blue T-shirt, and the other one was wearing yellow." At trial, Rushing identified defendant as one of the individuals. Taylor did not see the fleeing duo. He opened the door to his pickup, observing "stuff pulled out of the glove box." Additionally, said Taylor, "[M]y cassette recorder had been grabbed, and it looked like tried to jerk it out of there and broke the lid." Taylor added, "I checked right then, and I noticed my two gospel tapes were gone." An air gauge was also missing. Taylor immediately telephoned the Dexter police department. Detective Granville Gregory responded to the call, and about a half hour after the incident Gregory observed defendant and Scott Moore, a "16-year-old juvenile," on foot about three-fourths of a mile from MidWest Motors. Both were shirtless; defendant was carrying a yellow T-shirt and Moore was carrying a blue shirt. 210 Gregory, who was in his "duty car," stopped and asked defendant where he and Moore were going. At this point in Gregory's testimony the following exchange occurred, which supplies the basis for defendant's first assignment of error (to be discussed later). "Q. Go ahead, sir. A. The Defendant appeared intoxicated. Q. Why do you say that? A. He smelled of intoxicants Ms. Ayers:[2] Your Honor, I The Witness: speech slurred. Ms. Ayers: object. This is irrelevant. My client has not been charged with any crime relating to being intoxicated. The Court: Mr. Welborn.[3] Mr. Welborn: Well, Judge, he said that he appeared to be intoxicated. I was just asking him what led him to that conclusion. The Court: Well, what I intended to ask you was, what do you say as to her objection that itthat it is not relevant to this case? Mr. Welborn: Well, it certainly indicates that they they've been up, Judge, and it indicates thatpart of his condition as to what his condition was. The Court: The objection is overruled. By Mr. Welborn: Q. Go ahead.... Just tell the jury briefly what it was that led you to that conclusion? A. Okay. His speech was very slurred. He was unsteady, eyes were really bloodshot. His clothing was dirty, his jeans; his trousers were dirty on bothon both people." Gregory arrested defendant and Moore, placing defendant in the front seat of Gregory's vehicle and Moore in the back seat. Describing what occurred en route to the police station, Gregory gave the following testimony, which supplies the basis for defendant's second assignment of error (also discussed later). "Q. ... Did Mr. Marvel make any comments on the way to the police station? A. Not to me. Q. All right. To whom did he make the comments? A. He kept turning around in the seat talking to the juvenile. Q. All right. What did Ms. Ayers: Your Honor, I object. This is hearsay. Mr. Welborn: NoI'm sorry, Your Honor. The Court: The objection is overruled. By Mr. Welborn: Q. What did he tell the Defendant [sic] on the way back to the police station? A. It was basically not to give me any information, not to say anything, keep his mouth shut." Scott Moore, called as a witness by the State, testified he and defendant went to MidWest Motors on the morning of August 25, 1987, and defendant "got in this red and white truck." Shortly thereafter, said Moore, Rushing arrived and, upon seeing him, defendant and Moore ran through a "gully," eventually encountering Detective Gregory. Moore recalled he (Moore) was wearing a dark shirt. Asked what color shirt defendant was wearing, Moore answered, "Yellow, or some color." The amended information averred defendant committed the tampering offense in that he knowingly and without the consent of the owner defaced a motor-propelled vehicle, i.e., Taylor's pickup. Defendant, insisting the evidence was insufficient to support the conviction, asserts that the fact an accused may have been present at the scene of a crime or may have possessed the opportunity to commit it is not circumstantial evidence sufficient to justify conviction. While we do not dispute that declaration as an abstract statement of law, it does not aid defendant here. 211 Taylor's testimony established that the damage to the cassette recorder in his pickup occurred during the 15-minute interval between his arrival at MidWest Motors and his inspection of the vehicle immediately after Rushing reported the presence of the two strangers. Rushing identified defendant at trial as one of the two, and Moore's testimony placed defendant inside Taylor's pickup shortly before Moore and defendant fled in the ditch. Rushing's testimony about the color of the shirts worn by the suspects matched Detective Gregory's testimony regarding the shirts Moore and defendant were carrying when he confronted them a half hour later, three-fourths of a mile from MidWest Motors. In State v. Clemmons, 579 S.W.2d 682 (Mo.App.1979), the accused was convicted of tampering with a motor vehicle, § 560.175.1, RSMo 1969. He argued on appeal that the evidence was insufficient to support the conviction. The vehicle owner testified he had washed it and cleaned its windows the day of the crime. He put a book inside the vehicle about 10:30 p.m., and saw nothing amiss. Twenty minutes later he returned to the vehicle and saw the vent window on the driver's side pointed outward. Some books and a transistor radio were missing. Fingerprints outside and inside the vent window were identified as those of the accused. The appellate court held the evidence sufficient to support a finding that the tampering had been done during the 20 minutes between the placement of the book in the vehicle and the discovery of the damage and theft. Id. at 684-85[5]. The court further held that the accused's fingerprints outside and inside the vehicle were sufficient to support a finding that he was the culprit. Id. The evidence in the instant case is obviously stronger than Clemmons, in that here there was eyewitness testimony by Moore that defendant was inside Taylor's pickup during the 15-minute period when the damage was done. Furthermore, defendant and Moore fled when they were observed by Rushing. An accused's flight from a crime scene is admissible to show a consciousness of guilt contrary to any theory of innocence. State v. Rodden, 728 S.W.2d 212, 219[2] (Mo. banc 1987). Additionally, as explained more fully later in our discussion of defendant's second point, his admonition to Moore to keep his mouth shut and to give Gregory no information was admissible as a statement by defendant against his interest, from which the jury could infer a consciousness of guilt. We therefore find the evidence sufficient to support the verdict. Defendant's third point is denied. We next consider defendant's second assignment of error, which complains about the receipt in evidence of Detective Gregory's testimony that defendant told Moore to keep his mouth shut during the journey to the police station.[4] Defendant proclaims such testimony was inadmissible hearsay and, if tendered as a declaration against penal interest, was inadmissible in a criminal case. Defendant cites two cases in support of the point: State v. Tyler, 676 S.W.2d 922 (Mo.App.1984), and State v. Ivicsics, 604 S.W.2d 773 (Mo.App.1980). Neither is applicable, as each concerned the testimony of a witness regarding an out-of-court statement made by a third party, not by the accused. Tyler, 676 S.W.2d at 924-26; Ivicsics, 604 S.W.2d at 779-80. An out-of-court statement by an accused is admissible as an exception to the rule against hearsay if it constitutes an admission against interest. State v. Patterson, 516 S.W.2d 571, 573[1] (Mo.App. 1974). Any statement evincing a consciousness of guilt on the part of an accused is an admission against interest. Id. at 573[3]. Consistent with those rules it has been held that testimony by a witness that an 212 accused, after his arrest, told the witness "not to tell anything," and that "nobody better testify against [the accused], he would throw five gallons of gasoline on them and touch a match to it," was admissible as statements and admissions by the accused against his interest. State v. Koch, 322 Mo. 106, 16 S.W.2d 205, 210 (1929). In State v. Massey, 542 S.W.2d 88 (Mo. App.1976), the accused argued on appeal that it was error to allow the victim to testify that the accused had attempted to bribe the victim not to testify. Rejecting the point, the appellate court held that evidence showing an accused's attempted fabrication or procurement of false evidence, attempted destruction of evidence, or attempted subornation may be received as evidence of guilt of the main facts charged. Id. at 90[6]. In State v. Chunn, 701 S.W.2d 578, 582 (Mo.App.1985), a witness testified that after the accused's arrest, the accused told the witness, "You snitch, you better not show up in court." The appellate court stated that evidence of threats by an accused toward a witness against him may be adduced in order to establish his guilt on the original charge; such evidence is admissible as showing a consciousness of guilt. Id. at 585[5]. Koch, Massey and Chunn demonstrate that defendant's command to Moore to keep his mouth shut and to give Gregory no information was admissible in evidence as an admission by defendant against his interest, as it manifested a consciousness of guilt. Defendant's second point is meritless. We turn now to defendant's first point, the only one not yet addressed. In it, defendant declares that reversible error occurred when the trial court allowed Detective Gregory to testify, over defendant's objection, that defendant was intoxicated when arrested. Defendant argues such testimony "had no connection with the offense at trial and tended to show the jury the existence of an extraneous offense." Defendant relies primarily on State v. Himmelmann, 399 S.W.2d 58 (Mo.1966). There, the accused was convicted of assaulting a police officer with intent to do great bodily harm. The assault took place at, in, and alongside the officer's car which was parked several feet from the accused's vehicle. No part of the offense arose or occurred at or in the accused's vehicle, and there was no evidence of, or reference to, liquor, drinking, or intoxication as a circumstance of the assault. Over the accused's objection the trial court received in evidence a photograph of the interior of the accused's vehicle showing a less-than-full bottle of brandy lying on the passenger seat. The Supreme Court of Missouri held the photograph was not relevant, as it did not tend to prove or disprove any issue in the case. Id. at 62. Finding the receipt of the photograph prejudicially erroneous under the circumstances, the Supreme Court reversed the conviction and remanded the cause for a new trial. Id. In the instant case we do not see how evidence that defendant appeared intoxicated at the time of arrest tended to prove or disprove any issue in the case. Himmelmann, therefore, appears to support defendant's first point. There are, however, circumstances in the instant case that did not exist in Himmelmann. Defendant, testifying in his own defense, recounted that he and Moore were walking past MidWest Motors at the time in question and he (defendant) stopped to tie his shoe. Then, said defendant, he looked up and saw Moore getting in a truck, whereupon he (defendant) began walking toward a ditch. On cross-examination defendant conceded that when he saw Rushing, he (defendant) "took off" without telling Rushing "what was going on." Defendant also acknowledged he did not call the police, but explained he had no money to do so. Then, this: "Q. You were stopped ... by Officer Gregory there in Dexter; weren't you? A. Yes. Q. You didn't tell Officer Gregory at that time what was going on; did you? A. No, sir, because he slapped me three or four times in the process. So, 213 therefore, I felt like I shouldn't tell him nothing. Q. ... And you, as a matter of fact, told Mr. Moore to keep quiet; didn't you? A. No, sir. Q. You didn't tell him to keep his mouth shut, huh? A. No. Q. Okay. And you're telling us that this was all Mr. Moore's doings, right? A. I'm saying he did get in the truck, and when I seen what was happening, I walked away not wanting to have anything to do with it." After defendant's testimony, the prosecutor called Detective Gregory in rebuttal. Gregory denied slapping defendant. Then, this: "Q. ... What were you doing when you were driving down there in that police car to the police station? A. I was trying to restrain him. As I said before, he was intoxicated, and he was getting belligerent. Q. What was he doing? A. He was making moves toward me. He was turning around in the seat. He was cursing. He was telling the juvenile in the back seat, of course, to not tell me anything and to keep his mouth shut." As the above excerpt demonstrates, no objection was registered by defendant to this segment of Gregory's testimony. If evidence is improperly admitted, but other evidence before the court establishes essentially the same facts, there is no prejudice and no reversible error. State v. Zagorski, 632 S.W.2d 475, 478 n. 2 (Mo. banc 1982); State v. Garrette, 699 S.W.2d 468, 503[47] (Mo.App.1985). It follows that even if the trial court erred in overruling defendant's objection to Detective Gregory's initial testimony regarding defendant's apparent intoxication at the time of arrest, there was no prejudiceand hence no reversible erroras the same evidence came in later without objection. Furthermore, conceding for the purpose of defendant's first point that Detective Gregory's testimony regarding defendant's apparent intoxication was irrelevant to any issue when initially presented, it is manifest that such evidence subsequently became relevant when defendant, in his own testimony, accused Gregory of slapping him. Gregory, rebutting defendant's accusation, explained he (Gregory) found it necessary to restrain defendant because defendant was intoxicated and belligerent. It has been held that a criminal conviction will not be reversed for error in receiving testimony that became admissible at a subsequent stage of the trial. Cabanas v. State, 698 S.W.2d 405, 406-07[3] (Tex.App. 13 Dist.1985). In State v. Alderette, 86 N.M. 600, 526 P.2d 194 (Ct.App.1974), cert. denied, 86 N.M. 593, 526 P.2d 187 (1974), the appellate court held that if evidence of the homicide victim's character was improperly admitted in the prosecution's case-in-chief, the error was in anticipating evidence which the defense, in opening statement, had declared would be introduced, and when the defense proceeded to do so, any error in admission of character evidence in the case-in-chief was harmless. 526 P.2d at 198[4]. In Bradburn v. State, 256 Ind. 453, 269 N.E.2d 539 (1971), the accused complained on appeal that when certain exhibits were received in evidence they had not been connected with him, nor had there been any showing that a crime had been committed. The appellate court held that inasmuch as the evidence was rendered relevant by later testimony, any error which may have occurred at the time the evidence was received was thereby cured and rendered harmless. Id. at 542[4]. Applying those principles here, we hold that even if Gregory's initial testimony regarding defendant's apparent intoxication was irrelevant, any error in receiving it was cured and rendered harmless when such testimony later became relevant by reason of defendant's testimony that Gregory slapped him. In so deciding, we emphasize that defendant's testimony about the slapping was not presented to rebut Gregory's testimony that defendant appeared intoxicated at the time of arrest. Defendant's narrative about the slapping was introduced for the purpose of explaining why defendantwho, earlier in his testimony, *214 had said it was Moore who entered the pickupdid not report Moore's action to Gregory at the time of arrest. Defendant's testimony about the slapping was not, therefore, compelled by the improper admission of Gregory's initial testimony regarding intoxication. Defendant's first point is denied, and the judgment is affirmed. HOLSTEIN, C.J., and GREENE, J., concur. NOTES [1] The copy of the judgment in the legal file, Rule 30.04(a), Missouri Rules of Criminal Procedure (19th ed. 1988), recites that the trial court found beyond a reasonable doubt that defendant was a persistent offender, § 558.016.3, RSMo 1986. However, the trial court's verbal findings in the transcript and the trial court's written findings on the docket sheet show that defendant was determined to be a prior offender. As defendant raises no issue about the discrepancy, we leave the matter as we find it. [2] Assistant Public Defender Sharon Ayers, who represented defendant at trial. [3] Prosecuting Attorney Briney Welborn of Stoddard County. [4] In the excerpt from Detective Gregory's testimony regarding the incident, the phraseology of the final question implies it was Moore who told defendant to keep his mouth shut and to give Gregory no information. Later in the trial, however, Gregory testified about the incident in rebuttal, and it is clear from that testimony (quoted infra in our discussion of defendant's first point) that it was defendant who was admonishing Moore to keep his mouth shut and to give Gregory no information.	{ "pile_set_name": "FreeLaw" }
189 N.J. Super. 42 (1983) 458 A.2d 924 KENNETH A. CARTER, PLAINTIFF, v. TIMOTHY J. SANDBERG AND MRS. TIMOTHY J. SANDBERG, HIS WIFE, DEFENDANTS. Superior Court of New Jersey, District Court Burlington County. February 22, 1983. 43 John B. Mathews for plaintiff (Mathews, Sitzler, Weishoff & Sitzler, attorneys). Robert G. Holston for defendants (Holston, Holston and MacDonald, attorneys). GOTTLIEB, J.J.D.R.C. (temporarily assigned). In Sommer v. Kridel, 74 N.J. 446, 449 (1977), the Supreme Court held that a landlord has an obligation to make a reasonable effort to mitigate damages where a tenant wrongfully vacates a residence. The present case questions whether that doctrine is applicable to a suit in this State for damages arising 44 out of a tenancy in another state where the law of that jurisdiction does not require any effort toward mitigation of damages. Plaintiff, a resident of California, owns a single-family home in San Antonio, Texas. Acting through a Texas realtor, plaintiff entered into a one-year lease, beginning on July 30, 1981, with defendant Timothy J. Sandberg. The monthly rental was $475 and a security deposit of $300 was given. Defendants occupied the home until mid-October 1981, when they left to move to New Jersey because of a newly available job opportunity. Defendants advised plaintiff about two or three weeks before they left that they were moving out. At the same time defendants contacted the realtor, asking that a substitute tenant be found and offering to pay for any fees earned by the realtor in obtaining another tenant. The realtor brought a prospective replacement tenant to the home while defendants were still in residence. The prospective tenant appeared anxious to succeed to defendants' occupancy and requested that defendants accommodate him by leaving a few days earlier than originally planned. Defendants agreed and subsequently did so. The prospective tenant was then put in communication with plaintiff by the realtor. For reasons not indicated during the trial, the prospective tenant did not in fact replace defendants in occupying the home. Although plaintiff instructed the agent to try to get a replacement tenant, one was not obtained until March 1, 1982. Plaintiff seeks to recover damages consisting of unpaid rental for November and December 1981 and January and February 1982, totalling $1,900, late charges of $190 (10% of the rental), $20 for cleaning the home after defendants left and $237.50 for the realtor's commission in getting a new tenant. Defendants have counterclaimed for a return of the $300 security deposit. As indicated in Sommer v. Kridel, supra at 457, a landlord must demonstrate "reasonable diligence in attempting to re-let the premises" as an affirmative element of a cause of 45 action for unpaid rental. While each case must be judged on its own facts, the Supreme Court stressed that "the trial court shall consider, among other factors, whether the landlord, either personally or through an agency, offered or showed the apartment to any prospective tenants, or advertised it in local newspapers." Id. at 458-459. Plaintiff testified only that he directed the realtor to attempt to obtain a substitute tenant. There is no evidence showing what efforts, if any, were taken by the realtor that the court might decide that they were reasonable under the circumstances. There is not even an explanation why the available and anxious prospective tenant was not substituted for defendants. In conclusion, plaintiff has not affirmatively demonstrated a reasonable effort to mitigate damages. This court, however, has been presented with the applicable law of Texas and takes judicial notice of it. Evid.R. 9(2). Texas law does not require any effort to mitigate damages. There a landlord has no duty to try to re-let where a tenant abandons leased premises. Stubbs v. Stuart, 469 S.W.2d 311 (Tex.Civ.App. 1971). Is Texas law to apply in the courts of this State in this situation or would public policy preclude such an event? Absent public policy considerations, it is clear that Texas law must apply. Basic contract law dictates that "[t]he measure of damages for a breach of contract is determined by the law of the place of performance." Kentucky Dept. of Mental Health v. Mullins, 56 N.J. Super. 449, 463 (App.Div. 1959), aff'd 31 N.J. 598 (1960). It is not only the site of the residence which determines the applicable law, but it is the place where the lease was negotiated and performed. Further examination of the specific rights embodied in a lease only strengthen a decision favoring the applicability of Texas law. Generally, leases create two kinds of rights: rights in property (in rem) and rights in a person (in personam). The former are concerned with an interest in real estate and characterize the interests of two or more competing parties in real 46 property. The laws of the site of the property determine the nature of those rights. Segal v. Greater Valley Terminal Corp., 83 N.J. Super. 120, 124-5 (App.Div. 1964). Personal rights, however, are indicative of more than the legal interest in property and are exemplified by the covenants in a lease. These would include agreements restricting use, covenants concerning habitability and agreements for the payment of rent. In re Barnett, 12 F.2d 73, 76-77 (2 Cir.1926), cert. den. sub nom. United Cigar Stores Co. v. Rayher, 273 U.S. 699, 47 S.Ct. 94, 71 L.Ed. 846 (1926). They are normally governed by the law of the state possessing the most substantial contacts with the transaction. HIMC Investment Co. v. Siciliano, 103 N.J. Super. 27, 34 (Law Div. 1968); Royal Store Fixture Co. v. N.J. Butter Co., 114 N.J. Super. 263, 267 (App.Div. 1971); Restatement, Conflict of Laws 2d, § 188 at 575 (1971); Mallory Assoc., Inc. v. Barving Realty Co., Inc., 300 N.Y. 297, 90 N.E.2d 468, 471 (Ct.App. 1949), reh. den. 300 N.Y. 680, 91 N.E.2d 331 (Ct.App. 1950). Texas law applies since it is both the site of the property and it is the place where the lease was negotiated and to be performed. The analysis, however, cannot end here. Courts will not enforce a claim profoundly contradicting the public policy of their forum. Stone v. William Steinen Mfg. Co., 7 N.J. Super. 321, 332 (Cty.Ct. 1949), aff'd per curiam 6 N.J. Super. 178 (App. Div. 1950). That is not to say that any difference between the laws of this State and of a foreign jurisdiction are offensive to the public policy of New Jersey. Zotta v. Otis Elevator Co., 64 N.J. Super. 344, 349 (App.Div. 1960). "Rather, `public policy' in conflicts of law doctrine has been said to be `some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.'" Breslin v. Liberty Mutual Ins. Co., 134 N.J. Super. 357, 365-6 (App.Div. 1975), aff'd 69 N.J. 435 (1976), quoting from Judge Cardozo's opinion in Loucks v. Standard Oil Co., 224 N.Y. 99, 120 N.E. 198, 202 (Ct.App. 1918). Is there a public policy which will preclude the application of Texas law in this situation? 47 The Supreme Court in Sommer v. Kridel, supra, held (74 N.J. at 456), that a landlord must make reasonable efforts to mitigate damages "as a matter of basic fairness," and because of "more modern notions of fairness and equity." The motivation behind its holding is inescapable. Such forceful language as "basic fairness" and "equity" indicates a strong public policy. The concept of mitigation is axiomatic when judging acceptable conduct towards a wrongly vacating tenant. While the courts of this State are normally open to the enforcement of foreign rights, they cannot patronize a claim which is so clearly antithetical to our own strong policy. Restatement, Conflict of Laws 2d, § 90 at 267 (1971). Accordingly, since plaintiff has failed to prove a reasonable effort to mitigate damage, it cannot prevail and the complaint is dismissed. There remains the counterclaim for failure of plaintiff to return the $300 security deposit. In order to prove this cause of action, a former tenant must show three facts: the existence and subsequent termination of a landlord-tenant relationship, the receipt of a security deposit by the landlord and the failure of the landlord to return those deposit monies together with interest. Each of these elements has been proven in this case. As a result, the former landlord has the obligation to justify the failure to return the deposit monies and interest. Watson v. United Real Estate, Inc., 131 N.J. Super. 579, 582 (Cty.D.Ct. 1974). As indicated earlier, plaintiff did obtain a new tenant during the term of defendants' lease, starting in March 1982. Plaintiff had to pay $237.50 one-half of a month's rent to a realtor for the service of locating a new tenant. In addition, it did cost plaintiff $20 to clean the home to make it presentable to a new tenant. Both expenses are appropriately chargeable against the deposit. That leaves a balance of $42.50 for which no justification to retain has been proven by plaintiff. The law of Texas concerning the award of a security deposit has not been submitted to this court for the purposes of taking judicial notice. In such a situation, Evid.R. 9(3) requires this 48 court to apply the law of New Jersey. See, also, Zotta v. Otis Elevator Co., supra 64 N.J. Super. at 349 ("The lex fori controls matters of remedy. ..." Emphasis in original). N.J.S.A. 46:8-21.1 requires the award of a double recovery of the monies a landlord is not justified in retaining. In addition to $42.50 the amount of the security deposit wrongfully withheld the court will add interest for the three-month period of actual occupancy in the amount of 85¢. Doubled, this amounts to $86.70. Ordinarily, the court would also award attorney's fees to a successful claimant under N.J.S.A. 46:8-21.1. However, no request for this has been made nor have any proofs by way of affidavit of services been submitted. R. 4:42-9(b). None will be allowed. The court enters judgment on the counterclaim in favor of defendant for $86.70 together with interest from November 1, 1981, plus court costs.	{ "pile_set_name": "FreeLaw" }
457 F.2d 512 Sandersv.Henderson 72-1056 UNITED STATES COURT OF APPEALS Fifth Circuit Mar. 29, 1972 1 N.D.Ga. 2 --------------- Summary Calendar cases; Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Co. of	{ "pile_set_name": "FreeLaw" }
276 S.W.3d 916 (2009) STATE of Missouri, Plaintiff-Respondent, v. Charles G. HAWTHORNE, Defendant-Appellant. No. SD 29036. Missouri Court of Appeals, Southern District, Division Two. February 19, 2009. David B. Smith, Asst. Public Defender, Springfield, for Appellant. Darrell L. Moore, Pros. Atty., Joseph E. Knipp, Asst. Pros. Atty., Springfield, for Respondent. JOHN E. PARRISH, Judge. Charles G. Hawthorne undertakes to appeal this court-tried criminal case. The appeal must be dismissed. Rule 30.04 prescribes what is required in the record on appeal that must be filed in the appeal of a criminal case. The record on appeal is divided into two components, the legal file and the transcript. Rule 30.04(a). "The legal file component of the record on appeal must include a copy of the judgment and sentence. Rule 30.04(a). Rule 29.07(c) requires that a judgment of conviction `set forth the plea, the verdict or findings, and the adjudication and sentence.'" State v. Nenninger, 50 S.W.3d 368, 369 (Mo.App.2001). See also City of Neosho v. Doyle, 52 S.W.3d 651 (Mo.App.2001); State v. Miner, 606 S.W.2d 448 (Mo.App.1980). The record on appeal in this case does not include a final judgment. The appeal is dismissed. LYNCH, C.J., and RAHMEYER, J., concur.	{ "pile_set_name": "FreeLaw" }
In the United States Court of Appeals For the Seventh Circuit ____________________ No. 19‐1916 ARWA CHIROPRACTIC, P.C., individually and as representative of the certified class, Plaintiff‐Appellant, v. MED‐CARE DIABETIC & MEDICAL SUPPLIES, INC., et al., Defendants‐Appellees. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:14‐cv‐05602 — John Z. Lee, Judge. ____________________ ARGUED DECEMBER 6, 2019 — DECIDED JUNE 5, 2020 ____________________ Before ROVNER, BRENNAN, and ST. EVE, Circuit Judges. BRENNAN, Circuit Judge. A medical supply company sent faxes to thousands of medical providers to solicit prescrip‐ tions to sell medical equipment to the providers’ patients. One provider received numerous faxes and filed this class action challenging the faxing practices under the Telephone Con‐ sumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq. 2 No. 19‐1916 As the case worked its way through the district court, the supply company failed to appear and had default judgment entered against it as to liability but not damages. Later the supplier’s chief executive oﬃcer was granted summary judg‐ ment. Concerned with an inconsistency, the district court va‐ cated the default judgment against the supply company and entered judgment for both the executive and the company. The medical provider appeals that decision. We aﬃrm the judgment for the executive. But because the good cause standard was not applied in vacating the default judgment against the company, and inconsistent judgments between the individual and corporate defendants do not pre‐ sent a problem, we reverse and remand for further proceed‐ ings on the claim against the company. I. Factual and Procedural Background Plaintiff Arwa Chiropractic, P.C. is an Illinois medical pro‐ vider. On six occasions Arwa received nearly identical faxes containing a prescription request form for a nebulizer (which turns liquid medicine into a mist) from defendant Med‐Care Diabetic & Medical Supplies, Inc. Med‐Care used a third party, WestFax, to send the faxes in bulk. Med‐Care provided WestFax with blank templates for the prescription request forms, along with spreadsheets of contact information to fill in the forms. WestFax then sent Med‐Care’s faxes to thou‐ sands of medical providers. Those Arwa received were part of a broadcast of 46,051 faxes in which each differed only by the patient and doctor information. Med‐Care’s chief executive officer, Dr. Steven Silverman, explained “Med‐Care’s business model as a mail‐order medi‐ cal equipment company involved reaching out to physicians No. 19‐1916 3 to request prescriptions after first being contacted by patients needing medical products.” Silverman asserted he had no personal control over the faxing operations of Med‐Care. He claimed the “day to day operations of the business were del‐ egated to others” while he “focused more on big picture busi‐ ness development and the overall health of the business.” Silverman did not send any faxes on behalf of Med‐Care. He did not oversee, supervise, or participate in sending faxes, and he did not design or draft any of the prescription request forms. He did not execute Med‐Care’s contract with WestFax, and he was not involved with uploading order requests to WestFax. Others signed the contract with WestFax, oversaw Med‐Care’s operations, and uploaded the faxes to WestFax. Arwa sued Med‐Care and Silverman on behalf of a puta‐ tive class of fax recipients, claiming defendants’ faxing prac‐ tices violated the TCPA. Arwa moved to certify the class, which the district court granted. Defense counsel then moved to withdraw as the attorney for Med‐Care but continued to represent Silverman. Counsel also informed the court that Med‐Care had commenced a proceeding in Florida court as‐ signing its assets for the benefit of creditors, see generally FLA. STAT. ch. 727, a state proceeding similar to bankruptcy. The district court granted counsel’s motion to withdraw from representing Med‐Care and ordered it to have an attor‐ ney appear if it wished to continue to defend this case. When none did, Arwa moved for default against Med‐Care under Federal Rule of Civil Procedure 55(a), which was granted. Later Arwa moved for default judgment against Med‐Care. See FED. R. CIV. P. 55(b). The district court granted that motion and entered default judgment for Arwa against Med‐Care as to liability, but the court deferred the question of damages. 4 No. 19‐1916 Moving to the next defendant, Arwa sought partial sum‐ mary judgment against Dr. Silverman on its TCPA claim, and Silverman moved for summary judgment on all claims. After reviewing the parties’ briefing and the law, the district court concluded that Med‐Care’s faxes were not advertisements, and it denied Arwa’s motion for summary judgment. Arwa argued Silverman directly participated in or authorized the faxes and should also be liable, but the only evidence Arwa cited to support this theory was that Silverman “knew” or “was aware” that Med‐Care’s procedures included sending faxed prescription requests to physicians. So the court granted Silverman’s motion for summary judgment because even if the faxes were advertisements, he could not be person‐ ally liable unless he was a “sender” under the TCPA or had “direct personal participation in or personally authorized” the faxes. Arwa then renewed its motion for default judgment against Med‐Care and submitted its damages calculation. Sil‐ verman, who despite receiving summary judgment in his fa‐ vor had remained active in the case. He opposed Arwa’s re‐ quest and argued the default judgment against Med‐Care was logically inconsistent with the court’s ruling that the Med‐ Care faxes were not advertisements. At an April 11, 2019 hearing, after Arwa and Silverman supplemented their arguments, the district court considered this question of inconsistent judgments. Arwa had sought to hold Med‐Care and Silverman liable based on the same con‐ duct: the sending of unsolicited fax advertisements. The court concluded that defendants sued jointly should not be sub‐ jected to inconsistent judgments. Given the court had found that faxes were not advertisements, it reasoned that Arwa was No. 19‐1916 5 not entitled to a default judgment on liability against Med‐ Care. So the court denied Arwa’s renewed motion for default judgment, vacated the default judgment on liability against Med‐Care, and entered judgment for both Silverman and Med‐Care. Arwa appeals those rulings, arguing Med‐Care’s prescrip‐ tion request forms are advertisements under the TCPA, a genuine issue of material fact exists as to Silverman’s personal liability, and summary judgment for Silverman does not pre‐ clude a default judgment against Med‐Care. Silverman disa‐ grees with each of these arguments. He believes the district court was correct to vacate the previous default judgment as to liability against Med‐Care and to enter judgment for Med‐ Care. Med‐Care has not participated in this appeal.1 II. Discussion Two standards of review apply to the parties’ arguments on appeal. The first, as to Silverman, is the familiar de novo review of a grant of summary judgment, which is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). We view the record and draw all reasonable inferences in the light most favorable to the nonmoving party. See, e.g., Driveline Sys., LLC v. Arctic Cat, Inc., 936 F.3d 576, 579 (7th Cir. 2019). We may aﬃrm summary judgment on any ground supported in the record, provided the parties 1Med‐Care’s last appearance in this litigation was in November 2017 when its counsel (who also represents Silverman) was allowed to with‐ draw. 6 No. 19‐1916 adequately addressed the issue in the district court and the non‐moving party had an opportunity to contest it. Id. The second is for abuse of discretion on the entry or vaca‐ tion of a default judgment as to Med‐Care, and the denial of a renewed motion for default judgment by Arwa. See Relational, LLC v. Hodges, 627 F.3d 668, 671 (7th Cir. 2010); Pretzel & Stouﬀer v. Imperial Adjusters, 28 F.3d 42, 44–45 (7th Cir. 1994). A. Silverman’s Liability We first consider whether the district court erred in grant‐ ing summary judgment to Silverman on Arwa’s claims. Per‐ sonal liability under the TCPA is analyzed by examining whether the individual was a “sender” under the TCPA, or whether the person had direct, personal participation in or personally authorized the conduct found to have violated the statute. Physicians Healthsource, Inc. v. A‐S Medication Sols. LLC, 324 F. Supp. 3d 973, 983 (N.D. Ill. 2018), aﬀ’d 950 F.3d 959 (7th Cir. 2020) (citing Texas v. Am. Blastfax, Inc., 164 F. Supp. 2d 892, 898 (W.D. Tex. 2001)). “In addition to the person who physically sends the fax, federal regulations bring within the definition of ‘sender’ the person or entity on whose behalf a facsimile unsolicited advertisement is sent or whose goods or services are advertised or promoted in the unsolicited adver‐ tisement.” Heather McCombs, DPM, LLC v. Cayan LLC, 2017 WL 1022013, at *5 (N.D. Ill. Mar. 16, 2017) (citing 47 C.F.R. § 64.1200(f)(10)). Silverman did not fit within the definition of sender be‐ cause he did not send any of the faxes, the faxes were sent on behalf of Med‐Care and not Silverman personally, and if the faxes were advertisements, they advertised Med‐Care’s prod‐ ucts, not Silverman’s. No. 19‐1916 7 Even though Silverman was not a “sender,” some courts have found a corporate officer “personally liable under the TCPA if he had direct, personal participation in or personally authorized the conduct found to have violated the statute, and was not merely tangentially involved.” Physicians Healthsource, Inc., 324 F. Supp. 3d at 983 (noting regulatory definition of “sender”); see also City Select Auto Sales Inc. v. David Randall Assoc., Inc., 885 F.3d 154, 162 (3d Cir. 2018) (as‐ suming personal‐participation liability is available under TCPA, direct, personal participation of corporate officer is re‐ quired). Our court has not decided whether personal‐participation liability is available under the TCPA. The district court in Physicians Healthsource noted that the “direct, personal partic‐ ipation” standard “has been adopted across the country, in‐ cluding by other judges in this district,” and rejected the requirement that officer liability requires only knowledge of the wrongful conduct or willful violation. 324 F. Supp. 3d at 983. This court affirmed, 950 F.3d 959 (7th Cir. 2020), includ‐ ing, on that case’s facts, the personal liability of the chief ex‐ ecutive officer. The personal‐participation standard has been criticized as resting on the challenged assumption that traditional forms of common‐law personal liability remain available under fed‐ eral statutes by default. City Select, 885 F.3d at 160–61 (citing Boim v. Holy Land Found. for Relief & Dev., 549 F.3d 685, 689 (7th Cir. 2008) (en banc)). But we need not decide whether personal‐participation liability is present here. The only claim Arwa oﬀers in support of Silverman’s liability was that he “knew” or “was aware” that Med‐Care’s procedures included sending the faxes. Mere knowledge is insuﬃcient. See 8 No. 19‐1916 Physicians Healthsource, 324 F. Supp. 3d at 983 (citing Am. Blastfax, 164 F. Supp. 2d at 898). Even assuming personal‐par‐ ticipation liability is the standard, direct participation or au‐ thorization would be required, and that is absent here. So we conclude that the district court did not err in granting sum‐ mary judgment in Silverman’s favor. B. Default and Default Judgment as to Liability against Med‐Care Before considering whether the vacation of default judg‐ ment was proper, as background we examine the district court’s entry of default under Rule 55(a) and subsequent en‐ try of default judgment as to liability against Med‐Care under Rule 55(b). “When a party against whom a judgment for af‐ firmative relief is sought has failed to plead or otherwise de‐ fend, and that failure is shown by aﬃdavit or otherwise, the clerk must enter the party’s default.” FED. R. CIV. P. 55(a). Rule 55(b)(2) provides that the court may enter judgment on a de‐ fault. When counsel for Med‐Care withdrew, the district court instructed that an attorney must appear for the company if it wished to defend this lawsuit. When after two months none appeared, the court granted Arwa’s request for an entry of de‐ fault. After two more months Med‐Care still failed to appear, so the court granted Arwa’s motion for default judgment as to liability. When a court enters a default judgment as to liability, it must accept as true all factual allegations in the complaint, ex‐ cept those regarding the amount of damages. FED. R. CIV. P. 8(b)(6); see, e.g., Quincy Bioscience, LLC v. Ellishbooks, 957 F.3d 725, 725 (7th Cir. 2020) (affirming entry of default judgment). No. 19‐1916 9 That occurred here. Arwa’s requests for default and default judgment contained all the information necessary for the dis‐ trict court to issue its rulings. Med‐Care did not appear after November 2017 and failed to explain its absence. Indeed, Med‐Care has not appeared on appeal and no defense to the contrary has been offered for us to hold otherwise. These rul‐ ings by the district court were within its discretion, which it properly exercised. C. Vacation of the Default Judgment on Liability for Med‐Care Arwa has challenged the district court’s decision to vacate the default judgment on liability against Med‐Care and to deny Arwa’s request for default judgment as to damages. “The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b).” FED R. CIV. P. 55(c). Relief from a final judgment is available because of mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, the judgment is void or has been satisfied, or any other reason that justifies relief. FED. R. CIV. P. 60(b)(1)–(6); see Chrysler Credit Corp. v. Macino, 710 F.2d 363, 367 (7th Cir. 1983) (aﬃrming grant of default judgment). The Rule 60(b) standard is “applied more stringently” than the Rule 55(c) good cause standard. Chrysler, 710 F.2d at 368. Upon initial review, the district court’s grant of Arwa’s motion for “default judgment,” which was as to liability but not damages, suggests that Rule 60(b) should apply. The court’s order used the term “judgment,” and the court and counsel referred to the ruling in that manner. But the district court did not enter a final judgment until over one year later, after it had ruled on the parties’ motions 10 No. 19‐1916 for summary judgment and vacated the entry of default judg‐ ment as to liability.2 The more stringent Rule 60(b) standard is not applied unless a final judgment was entered. FED. R. CIV. P. 60(b) (noting ground for relief from “final” judgments); see also Kapco Mfg. v. C&O Enters., 773 F.2d 151, 153 (7th Cir. 1985) (quoting Rule 60(b) that it “applies only to a final judg‐ ment, order, or proceeding” (internal quotation marks omit‐ ted)); Dassault Systemes, SA v. Childress, 663 F.3d 832, 840 (6th Cir. 2011) (noting “the well‐established rule that Rule 60(b) applies only to final, appealable judgments”). So the “default judgment” against Med‐Care is better characterized as an en‐ try of default, for which the Rule 55(c) good cause standard applies. See, e.g., O.J. Distrib. v. Hornell Brewing Co., 340 F.3d 345, 353 (6th Cir. 2003) (noting the stricter Rule 60(b) standard applies once the default has ripened into a judgment, mean‐ ing the court has entered a judgment and determined damages); Chrysler Credit Corp., 710 F.2d at 367 (noting the dif‐ ferent standards between Rule 55(c) and Rule 60(b)). The scope of our review here is limited. Staﬀord v. Mesnik, 63 F.3d 1445, 1450 (7th Cir. 1995). We may consider only whether the court’s decision was an abuse of discretion, and “we cannot reach the merits of the underlying judgment.” Staﬀord, 63 F.3d at 1450 (quoting Lee v. Village of River Forest, 936 F.2d 976, 979 (7th Cir. 1991)); see also Wehrs v. Wells, 688 F.3d 886, 890 (7th Cir. 2012) (reviewing the district court’s de‐ nial of a motion to vacate default judgment only for an abuse 2The district court entered default judgment as to liability in March 2018, and then vacated the default judgment as to liability and entered judgment for Med‐Care in April 2019. No. 19‐1916 11 of discretion); Merrill Lynch Mortg. Corp. v. Narayan, 908 F.2d 246, 250 (7th Cir. 1990) (reviewing entry of default, entry of default judgment, and motions to vacate those rulings under an abuse of discretion standard). “To succeed in the vacation of a default order under Rule 55(c), the defendant must show ‘(1) good cause for [its] de‐ fault; (2) quick action to correct it; and (3) a meritorious de‐ fense to the plaintiﬀ’s complaint.’” O’Brien v. R.J. O’Brien & Assoc., Inc., 998 F.2d 1394, 1401 (7th Cir. 1993) (quoting United States v. DiMucci, 879 F.2d 1488, 1495 (7th Cir. 1989)). “The same requirements, although more strictly applied, must be met to set aside a default judgment under Rule 60(b).” Id. None of the factors above have been shown. Indeed, Med‐ Care has not appeared or put forth a defense since the class‐ certification stage. Med‐Care never moved to set aside the default judgment; the district court did that sua sponte. Cf. Van Cannon v. United States, 890 F.3d 656, 661 (7th Cir. 2018) (noting that Rule 60’s revised text of “[o]n motion and just terms” may foreclose the district court’s ability to vacate a de‐ fault judgment sua sponte but leaving the question for an‐ other day). Relief from default judgment will be granted only where actions leading to default were not willful, careless, or negligent, also referred to as “excusable neglect.” Johnson v. Gudmundsson, 35 F.3d 1104, 1117 (7th Cir. 1994). Although we consider this case under the more lenient Rule 55 standard, the defendant must still show good cause under either stand‐ ard. O’Brien, 998 F.2d at 1402 (aﬃrming denial of motions to vacate default and default judgment when defendant failed to demonstrate good cause). Here, there is no evidence of excus‐ able neglect or good cause for Med‐Care’s default. Med‐Care failed to appear after November 2017, has not appeared on 12 No. 19‐1916 appeal, and oﬀers no explanation for its default. See id. (find‐ ing no good cause for default where defendant had been served over 17 months before entry of default, failed to ap‐ pear, and oﬀered no explanation for its default). The good cause requirement has not been met, even under the more le‐ nient Rule 55 standard, when Med‐Care has failed to appear or oﬀer any explanation for its default. We conclude that the district court abused its discretion in vacating its default judgment as to liability for Arwa and against Med‐Care. It did not analyze the circumstances under the good cause standard of Rule 55(c). A court abuses its dis‐ cretion when it fails to consider a motion under the proper legal standard. See, e.g., Smego v. Payne, 854 F.3d 387, 391 (7th Cir. 2017) (noting “[a]buse of discretion means a serious error of judgment, such as … use of an incorrect legal standard”); Jones v. Ill. Cent. R. Co., 617 F.3d 843, 850 (6th Cir. 2010) (re‐ viewing denial of Rule 60(b) motion for abuse of discretion for committing “a clear error of judgment, such as applying the incorrect legal standard”). The district court violated this re‐ quirement when it issued its April 11, 2019 rulings without considering the applicable Rule 55(c) standard. It follows that the district court also abused its discretion by not reaching Arwa’s motion for default judgment as to damages. When Arwa presented this motion, it sought a final judgment as to Med‐Care, including a damages amount. Be‐ cause the district court did not apply the appropriate stand‐ ard, Arwa’s motion for default judgment as to damages did not receive proper consideration and is subject to the district court’s resolution on remand. No. 19‐1916 13 D. The Inconsistency Analysis On appeal the parties take opposite positions on the dis‐ trict court’s conclusion that Med‐Care’s prescription request forms are not advertisements for purposes of the TCPA. Arwa argues the faxes are advertisements, and Silverman asserts they are not. This question is the primary topic of the briefing on appeal, and federal courts have reached diﬀerent conclu‐ sions on this question based on the facts before them. We need not reach this issue, though. Whether or not the faxes were advertisements under the TCPA, the question before us is whether the district court abused its discretion in finding in‐ consistent the summary judgment for Silverman and default judgment on liability against Med‐Care. When the district court decided the parties’ cross‐motions for summary judgment, it granted summary judgment to Silverman and ruled that Med‐Care’s prescription request forms were not advertisements for purposes of the TCPA. To the district court, this created an inconsistency that required reconciliation. This issue was briefed and addressed in the April 11, 2019 hearing. At that hearing, the district court reasoned “that when a claim is based on joint or vicarious conduct, no matter how the plaintiﬀ characterizes the suit against defendants, the con‐ cern reflected in [Frow v. De La Vega, 82 U.S. 552 (1872)] about inconsistent judgments is present and must be considered.” But the district court’s reliance on Frow was misplaced. In that case a plaintiﬀ alleged several defendants conspired to de‐ fraud him out of title to land in Texas. 82 U.S. at 552–53. One of the alleged co‐conspirators defaulted, resulting in an entry of a “final decree absolute against him, adjudging the title of the land to be [plaintiﬀ’s].” Id. at 553. The remaining 14 No. 19‐1916 defendants prevailed at trial, resulting in dismissal of the plaintiﬀ’s complaint. Id. Frow appealed, focusing on the di‐ rectly inconsistent judgments. Id. at 552–53. The Court held that a “final decree on the merits cannot be made separately against one of several defendants upon a joint charge against all, where the case is still pending as to the others.” Id. at 554. So Frow stands for the proposition that when several defend‐ ants are sued jointly and one of them defaults, a default judg‐ ment should not be entered until the matter has been resolved for all defendants. See In re Uranium Antitrust Litig., 617 F.2d 1248, 1256–57 (7th Cir. 1980).3 This court limited the broad rule of Frow in In re Uranium Antitrust Litigation, which distinguished between defendants sued jointly, and defendants sued jointly and severally. 617 F.2d at 1257; see also Douglas v. Metro Rental Servs., Inc., 827 F.2d 252, 255 (7th Cir. 1987) (noting In re Uranium Antitrust Litigation limited Frow to cases where all the defendants were claimed to be jointly, not severally, liable). Defendants sued jointly should not be subjected to inconsistent judgments. Nevertheless, “when diﬀerent results as to the diﬀerent par‐ ties are not logically inconsistent or contradictory, the ra‐ tionale for the Frow rule is lacking.” In re Uranium Antitrust Litig., 617 F.2d at 1257–58. One example of when diﬀerent re‐ sults as to diﬀerent parties is not logically inconsistent is when defendants are sued jointly and severally. Id. A second exam‐ ple is when the facts and theories of the case do not require 3 To deal with this problem, nearly a century later Federal Rule of Civil Procedure 54(b) was amended to permit entry of judgment in multiple party litigation to avoid the hardship resulting from delay in waiting until completion of the entire case. See FED. R. CIV. P. 54(b) advisory committee’s note to 1961 amendment. No. 19‐1916 15 uniformity of liability as to diﬀerent defendants. See Douglas, 827 F.2d at 255 (finding diﬀerent judgments against corpora‐ tion and its agent were not logically inconsistent). In those ex‐ amples, the court has discretion to decide whether to enter judgment against fewer than all the defendants under Rule 54(b). This is not a case of joint liability requiring uniformity of judgment among all defendants. Plaintiﬀs have alleged joint and several liability, not merely joint liability. So an entry of default judgment against one defendant but not another is not precluded. See In re Uranium Antitrust Litig., 617 F.2d at 1262. This is also not a case of vicarious liability. Arwa did not seek to hold Med‐Care vicariously liable for Silverman’s violation of the TCPA, or vice versa. Rather, Arwa argued Med‐Care and Silverman were both directly and independently liable for TCPA violations. Although the elements for TCPA liability for Med‐Care and Silverman may overlap, the theories of liability for each defendant do not require uniformity of judgments. Med‐Care may be liable as a “sender” under 47 C.F.R. § 64.1200(f)(10) as an entity on whose behalf a facsimile unsolicited advertise‐ ment was sent or whose goods or services are advertised. Silverman’s liability also turns on whether he was a “sender” under the TCPA, but Arwa must show diﬀerent proof for Silverman to be liable than Med‐Care. And Silverman may show he is not liable because he was not a “sender” under the TCPA, but the court may still hold Med‐Care liable as a “sender.” So judgment against Med‐Care would not neces‐ sarily be inconsistent with a judgment for Silverman. Med‐Care “by defaulting, admitted its guilt.” Douglas, 827 F.2d at 255. Med‐Care “cannot now take advantage of the 16 No. 19‐1916 judgment in favor of” Silverman when “exoneration of one defendant of charges of [a TCPA violation] does not compel the finding that no [TCPA violation] occurred.” Id. Because judgments against these two defendants would not neces‐ sarily be inconsistent, the concerns described in Frow are not present here. The district court also mistakenly believed that Arwa sought to “essentially” hold Silverman vicariously liable as an oﬃcer of Med‐Care, which would require uniformity in judg‐ ments. No record evidence suggests Arwa wanted to hold Silverman liable based on vicarious liability. Arwa alleged joint and several liability, which is critically diﬀerent from vi‐ carious liability when considering the issues the Supreme Court described in Frow. We do not fault the district court for this slip, as this case is procedurally complex. Nevertheless, we cannot uphold a judgment in Med‐Care’s favor when the good cause factors under Rule 55 were not analyzed, and joint and several liabil‐ ity was conflated with vicarious liability. We cannot find any evidence of good cause when Med‐Care has not appeared in this case past the class certification stage and has not put on a defense as to whether the faxes are advertisements. And the district court’s ruling that the faxes were not advertisements was not necessary for its holding that Silverman was not lia‐ ble. It also gives us pause that while Silverman has put on this defense for Med‐Care, there are serious questions as to his standing to do so.4 Silverman argues that the default judg‐ ment for Med‐Care implicates him because he weighed in on 4 Silverman recognizes this weakness. Appellee’s Br. p. 40 n.10. No. 19‐1916 17 Arwa’s motion for default judgment as to damages against Med‐Care, and Arwa has said it will pursue him personally in the assignment for benefit of creditors case in Florida. But “[s]tanding to defend on appeal in the place of an orig‐ inal defendant, no less than standing to sue, demands that the litigant possess a direct stake in the outcome.” Arizonans for Official English v. Arizona, 520 U.S. 43, 64 (1997) (quoting Diamond v. Charles, 476 U.S. 54, 62 (1986)) (internal quotation marks omitted). Silverman’s stake has been resolved and can‐ not be conditioned on relief an opponent seeks from him in another forum. Even more so, Silverman specifically opposed Arwa’s request for declaratory judgment against Med‐Care. That differs materially from requesting that the district court enter judgment in favor of Med‐Care, which is what the dis‐ trict court did here. “Even if the entry of the default judgment resulted in a judgment inconsistent with the judgment on the merits for [Silverman], the issue is not properly before us,” as we do not review the merits of the underlying judgment as to Med‐Care or whether the faxes are advertisements. Angelo Iafrate Constr., LLC v. Potashnick Constr., Inc., 370 F.3d 715, 722 (8th Cir. 2004) (citing Pfanenstiel Architects, Inc. v. Chouteau Petrol. Co., 978 F.2d 430, 433 (8th Cir. 1992)). Because the district court va‐ cated the entry of default judgment as to liability and denied Arwa’s motion for renewed default judgment without analyz‐ ing the good cause factors of Rule 55(c), and did so based on a misplaced concern of inconsistent judgments, we conclude that the district court abused its discretion in its April 11, 2019 ruling vacating the default judgment as to liability against Med‐Care and entering judgment for Med‐Care. 18 No. 19‐1916 III. Conclusion Arwa has not provided suﬃcient evidence to establish Dr. Silverman’s personal liability under the TCPA, so we AFFIRM the district court’s grant of summary judgment to him. But the district court failed to apply the correct good cause factors in analyzing the default judgment on liability as to Med‐Care, and that judgment is not inconsistent with sum‐ mary judgment for Silverman. So we REVERSE the district court’s vacation of the default judgment on liability against Med‐Care and the denial of Arwa’s renewed motion for de‐ fault judgment, and REMAND this case to the district court for further proceedings consistent with this opinion.	{ "pile_set_name": "FreeLaw" }
Filed 4/13/15 P. v. Victoriano CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION ONE THE PEOPLE, Plaintiff and Respondent, A143396 v. CARLOS AVALOS VICTORIANO, (Marin County Super. Ct. No. SC187975) Defendant and Appellant. In this appeal, counsel for appellant Victoriano indicates he has reviewed the record in the matter and has decided to file a brief pursuant to People v. Wende (1979) 25 Cal.3d 436. He has advised appellant of this conclusion and indicated to Victoriano that he may decide to submit to this court a written statement of legal issues appellant believes are available here. Thirty days have passed and we have received no supplemental statement from appellant. We therefore have conducted an independent review of the record in this case. We find the appeal appropriate under California Rule of Court, rule 8.304, subdivision (b). We affirm the judgment. STATEMENT OF THE CASE The District Attorney of Marin County filed a complaint on February 24, 2014, charging appellant with one count of second degree robbery, a violation of Penal Code1 section 211, and one count of assault with a deadly weapon, a violation of section 245, 1 Unless otherwise stated, all statutory references are to the California Penal Code. subdivision (a)(1). The alleged deadly weapon was a knife. Each count had an allegation of great bodily injury pursuant to section 12022.7, subdivision (a), and each offense was alleged as a strike based on section 1170.12, subdivisions (a), (b), and (c). Each was alleged as a serious and violent felony pursuant to sections 667.5, subdivision (c)(9) and 1192.7, subdivision (c). On June 4, 2014, appellant eventually entered a guilty plea to count two, a violation of section 245, subdivision (a)(1) and all but one of the enhancements. The prosecution dismissed count one and the great bodily injury allegation. On October 17, 2014, appellant was sentenced to the aggravated term of four years in state prison. Appellant’s appeal contains no certificate of probable cause. STATEMENT OF FACTS2 On February 6, 2014, the police were advised of a stabbing located on Woodland Avenue in San Rafael. The victim was attempting to unlock his front door when appellant approached and demanded his cell phone. When the victim told appellant he had no such item, Victoriano proceeded to stab him two times. Appellant then knocked the victim to the ground and took his wallet, containing $60. When the victim yelled for assistance, appellant tried to stab him two more times. During this confrontation, the victim detected the odor of alcohol on the person of Victoriano. After the police arrived, they took the victim to the hospital for medical treatment. On February 22, 2014, the victim saw appellant walking on Woodland Avenue and he alerted the police. Victoriano was then arrested and he confessed to the incident on February 6, 2014. He affirmed he wanted to steal a cell phone. Appellant conceded that he was drinking that day and becomes aggressive when he is in this condition. 2 The statement of facts is drawn from the Marin County Probation Department report. 2 ANALYSIS In this case, we find the appellant was properly advised of his rights during the change of plea. There is no certificate of probable cause attached to this appeal, and no meritorious issues emerge from a review of the record. The appellant was properly represented by appointed counsel in the proceedings below. We therefore affirm the judgment. 3 _________________________ Dondero, J. We concur: _________________________ Margulies, Acting P.J. _________________________ Banke, J. 4 A143396 5	{ "pile_set_name": "FreeLaw" }
685 F.2d 1387 29 Fair Empl.Prac.Cas. 1750,30 Empl. Prac. Dec. P 33,179Stonev.Xerox Corporation 81-7863 UNITED STATES COURT OF APPEALS Eleventh Circuit 8/18/82 1 N.D.Ga. AFFIRMED Fed.R.App.P. 34(a); 11th Cir. R. 23	{ "pile_set_name": "FreeLaw" }
NO. 07-08-0461-CR IN THE COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS AT AMARILLO PANEL B SEPTEMBER 14, 2009 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â ______________________________ ROBERT LEE CASTELLON, APPELLANT V. THE STATE OF TEXAS, APPELLEE _________________________________ FROM THE 251ST DISTRICT COURT OF POTTER COUNTY; NO. 57,953-C; HONORABLE ANA ESTEVEZ, JUDGE _______________________________ Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ. OPINION Â Â Â Â Â Â Â Â Â Â Appellant, Robert Lee Castellon, was convicted of aggravated assault with a deadly weapon. Appellant was sentenced to serve 20 years confinement in the Institutional Division of the Texas Department of Criminal Justice (ID-TDCJ). By a single issue, appellant contends that the trial court committed reversible error when it did not sua sponte instruct the jury on the lesser-included charge of deadly conduct. Disagreeing with appellantâs contention, we affirm. Factual and Procedural Background Â Â Â Â Â Â Â Â Â Â Appellant does not contest the sufficiency of the evidence, therefore, we will only address so much of the factual background as is necessary for our opinion. Appellant and Mellissa Loya, one of the daughters of the complaining witness, Leobardo Loya, were living together with their child. Their relationship had been somewhat tumultuous. On the evening in question, Mellissa had spoken on the telephone with appellant and, during the conversation, appellant advised Mellissa that she should go to her parentâs home. Mellissa proceeded to her parentâs home, and appellant arrived in his SUV. Mellissa and appellant began to have an argument when Leobardo, who had been observing from the sidewalk, started toward the SUV. Appellant got in his truck and started leaving and, when he got approximately a half a block down the street, turned around and came back toward Leobardoâs home jumping the curb in his SUV and driving toward Mellissa and Leobardo. The SUV ran into some large flower pots immediately in front of Leobardo and stopped. Appellant backed out rapidly and drove off, apparently going around the block. He reappeared and drove onto the lawn a second time. Again, appellant drove his vehicle toward Mellissa and Leobardo, this time stopping when his windshield struck a branch on a tree in the yard. Â Â Â Â Â Â Â Â Â Â As a result of this activity, appellant was indicted for aggravated assault with a deadly weapon. The vehicle was the alleged deadly weapon. At the conclusion of the evidence at trial, the trial court prepared a charge to the jury on the law. The charge included a charge on the indicted offense of aggravated assault with a deadly weapon and simple assault. At the conference with the attorneys, appellantâs trial counsel made no objection to the proposed charge nor did trial counsel request a charge on the lesser-included offense of deadly conduct. The jury subsequently found appellant guilty of aggravated assault with a deadly weapon and assessed his punishment at confinement in the ID-TDCJ for 20 years. Appellant now complains of the failure of the trial court to include, sua sponte, a charge on deadly conduct. We will affirm. Analysis Â Â Â Â Â Â Â Â Â Â Appellantâs entire analysis is based upon the assumption that the trial court has a sua sponte duty to charge the jury on a lesser-included offense, even though there was neither objection to the charge nor request for such charge. Appellant asserts that the trial courtâs duty arises under the general requirements of article 36.14 of the Texas Code of Criminal Procedure. According to appellant, even though no objection was lodged at trial, the action of the trial court in not granting the lesser-included charge sua sponte is reviewed by an appellate court under an egregious harm standard as set forth in Ngo v. State. See Ngo v. State, 175 S.W.3d 738, 743-44 (Tex.Crim.App. 2005). The Ngo opinion cites to Almanza v. State, which is the seminal opinion on charge error. See Almanza v. State, 686 S.W.2d 157, 171 (Tex.Crim.App. 1985). Almanza determined that if a defendant failed to object to the trial courtâs omission or erroneous description of âthe law applicable to the caseâ in the courtâs charge, that failure could result in reversible error if the error caused egregious harm to the defendant. Â Â Â Â Â Â Â Â Â Â However, as the Texas Court of Criminal Appeals noted in Delgado v. State, Almanza did not address the question of who is responsible for deciding what is âthe law applicable to the case.â Delgado v. State, 235 S.W.3d 244, 249 (Tex.Crim.App. 2007). Delgado answers the question by stating that, obviously, it is the trial judge who is responsible for the accuracy of the charge and accompanying instructions and, further, the trial judge has an absolute sua sponte duty to prepare a charge that accurately sets out law applicable to specific offense charged. Id. The courtâs choice of words âspecific offense chargedâ was not simply fortuitous, as was demonstrated when discussing other matters contained in the charge. The requirement for deciding what is the law applicable to the case, however, does not translate to a like duty to sua sponte instruct a jury on all potential defensive issues, lesser-included offenses, or evidentiary issues. Id. The court explained that those types of enumerated issues often depend upon trial strategy and tactics. Id. (citing Posey v. State, 966 S.W.2d 57, 63 (Tex.Crim.App. 1998)). These issues are better left to the attorney and the client and are not, therefore, the âlaw applicable to the case,â as that phrase has been used. Id. at 250-51 (citing 43 George E. Dix & Robert O. Dawson, Criminal Practice and Procedure Â§ 36.50 at 201 (Supp. 2006)). Thus, in order to preserve this type of issue for appeal, an objection to the charge or a request for a charge must be made. Id. The failure to object to charge omissions of this type results in the error being waived. Darnes v. State, 118 S.W.3d 916, 921 (Tex.App.âAmarillo 2003, pet. refâd). Â Â Â Â Â Â Â Â Â Â In the case before the court, the alleged charge error required an objection to the failure to include the lesser-included charge or a requested lesser-included charge. Neither were presented by trial counsel. The alleged error was not preserved for appeal. Id. Accordingly, appellantâs issue is overruled. Conclusion Â Â Â Â Â Â Â Â Â Â Having overruled appellantâs single issue, we affirm the trial courtâs judgment. Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Mackey K. Hancock Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Justice Publish. iv.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} p.MsoHeader, li.MsoHeader, div.MsoHeader {mso-style-noshow:yes; mso-style-priority:99; mso-style-link:"Header Char"; margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; mso-pagination:widow-orphan; tab-stops:center 3.25in right 6.5in; font-size:11.0pt; font-family:"Arial","sans-serif"; mso-fareast-font-family:Arial; mso-bidi-language:EN-US;} p.MsoFooter, li.MsoFooter, div.MsoFooter {mso-style-priority:99; mso-style-link:"Footer Char"; margin-top:0in; margin-right:0in; margin-bottom:10.0pt; margin-left:0in; line-height:115%; mso-pagination:widow-orphan; tab-stops:center 3.25in right 6.5in; font-size:11.0pt; font-family:"Arial","sans-serif"; mso-fareast-font-family:Arial; mso-bidi-language:EN-US;} span.HeaderChar {mso-style-name:"Header Char"; mso-style-noshow:yes; mso-style-priority:99; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:Header; font-family:"Arial","sans-serif"; mso-ascii-font-family:Arial; mso-fareast-font-family:Arial; mso-hansi-font-family:Arial; mso-bidi-font-family:Arial; mso-bidi-language:EN-US;} span.FooterChar {mso-style-name:"Footer Char"; mso-style-priority:99; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:Footer; font-family:"Arial","sans-serif"; mso-ascii-font-family:Arial; mso-fareast-font-family:Arial; mso-hansi-font-family:Arial; mso-bidi-font-family:Arial; mso-bidi-language:EN-US;} span.SpellE {mso-style-name:""; mso-spl-e:yes;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:Calibri; mso-fareast-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} .MsoPapDefault {mso-style-type:export-only; margin-bottom:10.0pt; line-height:115%;} /* Page Definitions */ @page {mso-footnote-separator:url("07-10-0107.cv%20order$no%20judgment$_files/header.htm") fs; mso-footnote-continuation-separator:url("07-10-0107.cv%20order$no%20judgment$_files/header.htm") fcs; mso-endnote-separator:url("07-10-0107.cv%20order$no%20judgment$_files/header.htm") es; mso-endnote-continuation-separator:url("07-10-0107.cv%20order$no%20judgment$_files/header.htm") ecs;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-title-page:yes; mso-footer:url("07-10-0107.cv%20order$no%20judgment$_files/header.htm") f1; mso-paper-source:0;} div.Section1 {page:Section1;} --> NO. 07-10-0107-CV Â IN THE COURT OF APPEALS Â FOR THE SEVENTH DISTRICT OF TEXAS Â AT AMARILLO Â PANEL B Â JUNE 23, 2010 Â Â JIM JONES TRIGG, JR., Attorney in Fact For MARY JANE TRIGG, Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Appellant v. Â PATTI T. MOORE,Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Appellee _____________________________ Â FROM THE 423RD DISTRICT COURT OF BASTROP COUNTY; Â NO. 423,500; HONORABLE CHRISTOPHER DARROW DUGGAN, PRESIDING Â Â Order Â Â Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ. Â Pending before the court is Pattie T. MooreÂs motion to dismiss the appeal of Jim Jones Trigg, Jr., as attorney in fact for Mary Jane Trigg.Â We deny it. Â Â Â Â Â Â Â Â Â Â Â Moore requests dismissal because Trigg moved to non-suit his original petition against Moore, sought to withdraw the non-suit, and filed a second action allegedly involving the same claims and parties.Â However, she fails to cite us to any authority, much less authority holding that an appeal can be dismissed simply because it emanates from a non-suit of a claim that has been re-filed.Â Nor do we find any want of jurisdiction for the notice of appeal was perfected within 30 days of the date the trial court signed its order of dismissal.Â In re Bennett, 960 S.W.2d 35, 38 (Tex. 1997) (stating that the appellate timetable begins once the formal order of dismissal is signed). Â Â Â Â Â Â Â Â Â Â Â Finally, it seems as though the eventual issue before us will entail the ability of the trial court to dismiss a proceeding per a motion to non-suit after the movant withdraws his motion.Â By seeking dismissal of this appeal, Moore effectively is asking us to address that matter without the benefit of briefing by either party.Â We opt not to accept her invitation to circumvent the rules of appellate procedure, especially Rule 38 (the rule applicable to briefing). Â Â Â Â Â Â Â Â Â Â Â The motion to dismiss this appeal is denied.Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Per Curiam	{ "pile_set_name": "FreeLaw" }
T.C. Memo. 2014-189 UNITED STATES TAX COURT WILLIAM CAVALLARO, DONOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent PATRICIA CAVALLARO, DONOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 3300-11, 3354-11. Filed September 17, 2014. In 1979 Ps started Knight Tool Co. (“Knight”), a contract manufacturing company that made tools and machine parts. In 1982 P-H and Ps’ eldest son developed an automated liquid-dispensing machine they called CAM/ALOT. In 1987 Ps’ three sons incorporated Camelot Systems, Inc. (“Camelot”), a business dedicated to the selling of the CAM/ALOT machines made by Knight. The two companies operated out of the same building, shared payroll and accounting services, and collaborated in further development of the CAM/ALOT product line. Knight funded the operations of both companies and paid the salaries and overhead costs for both. In 1994 Ps sought estate planning advice. The professionals they consulted advised Ps that the value of the CAM/ALOT technology resided in Camelot (the sons’ company) and not in Knight (the parents’ company) and that they should adjust their estate -2- [2] planning accordingly. Ps and their sons merged Knight and Camelot in 1995, and Camelot was the surviving entity. Valuing the two companies in accordance with the advice their professionals had given, Ps accepted a disproportionately low number of shares in the new company and their sons received a disproportionately high number of shares. After examining the merger, R issued notices of deficiency to Ps determining for each a gift tax liability and an I.R.C. sec. 6651 failure-to-file addition to tax (as well as an I.R.C. sec. 6663 fraud penalty that R eventually conceded). Ps timely petitioned this Court for redetermination. Respondent later conceded the fraud penalties and asserted, in the alternative, accuracy-related penalties under I.R.C. sec. 6662(a). Held: The Camelot shares that Ps received in the merger in exchange for their shares of Knight were not full and adequate consideration; therefore, in 1995 Ps made a $29.6 million gift to their sons. Held, further, because they followed professional advice, Ps had reasonable cause for failing to timely file gift tax returns and are not liable for the I.R.C. sec. 6651 additions to tax, and Ps likewise had reasonable cause for their underpayments of gift tax and are not liable for I.R.C. sec. 6662 accuracy-related penalties. Andrew Good, Phillip Cormier, and Edward DeFranceschi, for petitioners. Carina J. Campobasso and Derek W. Kelley, for respondent. -3- [3] CONTENTS FINDINGS OF FACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Petitioners’ backgrounds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Formation of Knight Tool Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Development of the liquid-dispensing machine. . . . . . . . . . . . . . . . . . . . . . . 9 Incorporation of Camelot Systems, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Continuation of CAM/ALOT production. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Relationship between Knight and Camelot. . . . . . . . . . . . . . . . . . . . . . . . . 16 Allocation of income and expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Ownership of CAM/ALOT technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 The accountants’ early consideration of merger.. . . . . . . . . . . . . . . . . . . . . 25 Different advice from the lawyers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Falling into line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Later consideration of merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Merger on December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Sale to Cookson America, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The IRS’s examination and notices of deficiency. . . . . . . . . . . . . . . . . . . . 35 Petitioners’ experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 The Commissioner’s expert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Petitioners’ critiques of the Commissioner’s expert.. . . . . . . . . . . . . . . . . . 43 OPINION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 I. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 II. Burden of proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 A. “New matter”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 1. New matter relating to liability for tax . . . . . . . . . . . . . . . . . . 47 2. New matter relating to liability for penalty . . . . . . . . . . . . . . .49 B. “[E]xcessive and arbitrary”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 -4- [4] III. Gift tax liability.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 A. General gift tax principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 B. Lack of arm’s-length character. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 C. Company valuations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 IV. Failure-to-file additions to tax under section 6651(a)(1) and accuracy-related penalties under section 6662. . . . . . . . . . . . . . . . . . . . . . . 61 A. Applicability of failure-to-file additions to tax. . . . . . . . . . . . . . . . . 62 B. Applicability of accuracy-related penalties. . . . . . . . . . . . . . . . . . . . 62 C. Reasonable cause defenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 1. Reasonable cause for failure to file. . . . . . . . . . . . . . . . . . . . . 64 2. Reasonable cause for the underpayment. . . . . . . . . . . . . . . . . 65 3. The Cavallaros’ reliance on professional advice. . . . . . . . . . . 66 MEMORANDUM FINDINGS OF FACT AND OPINION GUSTAFSON, Judge: By statutory notices of deficiency dated November 18, 2010, the Internal Revenue Service (“IRS”) determined for each of petitioners William and Patricia Cavallaro a deficiency in the Federal gift tax for the year 1995, plus an addition to tax under section 6651(a) for failure to file a gift tax return and a fraud penalty under section 6663.1 As an alternative to the fraud 1 Unless otherwise indicated, all section references are to the Internal Revenue Code (26 U.S.C., “the Code”) in effect for the year at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Some of the amounts stated in this opinion have been rounded. These consolidated cases (continued...) -5- [5] penalties, respondent, the Commissioner of the IRS, asserted in his answers accuracy-related penalties under section 6662. The Commissioner conceded the fraud penalty after trial, and the issues remaining for decision are: (1) whether the 19% interest Mr. and Mrs. Cavallaro received in Camelot Systems, Inc., in 1995 in exchange for their shares of Knight Tool Co., Inc., in a tax-free merger was full and adequate consideration (we find that it was not), and, if not, how much excess value was conferred on their sons through the merger as a taxable gift (we find that there was a gift in the total amount of $29.6 million); (2) whether Mr. and Mrs. Cavallaro are liable for additions to tax under section 6651(a)(1) for failure to file gift tax returns for 1995, or whether instead the failure to file was due to “reasonable cause” (we find that petitioners had reasonable cause for that failure); and (3) whether there are underpayments of gift tax attributable to a gift tax valuation understatement for purposes of the accuracy-related penalty imposed by section 6662, and, if so, whether any portions of the underpayments were 1 (...continued) involve separate liabilities for each petitioner, but the issues are the same in each case. We therefore decide them in tandem, and each petitioner will owe his or her share of the gift tax liability in proportion to his or her ownership in Knight Tool Co., Inc.,--i.e., 49% for Mr. Cavallaro and 51% for Mrs. Cavallaro. -6- [6] attributable to “reasonable cause” under section 6664(c) (we find a gross gift tax valuation understatement for which there was reasonable cause). For the reasons explained hereafter, we will sustain the determinations of liability for gift tax (though in amounts less than the IRS determined in the notices of deficiency); and because we find reasonable cause and good faith on the part of the Cavallaros, we will not sustain the IRS’s determinations as to the accuracy-related penalties and the failure-to-file additions to tax. FINDINGS OF FACT At the time they filed their petitions, the Cavallaros resided in New Hampshire. Petitioners’ backgrounds Mr. Cavallaro’s background and occupation was that of a toolmaker. He finished school through eighth grade, attended ninth grade in which he had some difficulty, and transferred to the Haverhill Trade School Machine Shop program, from which he graduated in 1957. He is able to read, but he does so with difficulty; at trial he benefited from having documents read aloud to him. Mr. Cavallaro never attended college or obtained a post-high-school degree. During trade school Mr. Cavallaro began working part time as a janitor at Northeastern Tool Co. After graduating, he continued working there as an -7- [7] apprentice, and he worked his way up to production manager. Other than his own businesses discussed hereafter, Mr. Cavallaro never worked at any other business. Mrs. Cavallaro graduated from Haverhill High School in 1958. She attended a year of secretarial courses at college but did not obtain a post-high- school degree. She did clerical work for Bell Labs in North Andover for about a year. The Cavallaros were married in 1960, and at that time Mrs. Cavallaro stopped working outside her home. Formation of Knight Tool Co. In 1976 Mr. and Mrs. Cavallaro met around their kitchen table with their sons, Ken (then age 15), Paul (13), and James (12), and informed their sons that they had decided to go into business for themselves. In that year Mr. Cavallaro left Northeastern Tool Co., and he and Mrs. Cavallaro started Knight Tool Co., which they co-owned. In 1979 they incorporated Knight Tool Co., Inc. (“Knight”). Mr. Cavallaro owned 49% of Knight’s stock, and Mrs. Cavallaro owned 51%. In 1993, Knight elected S corporation status. Knight was a machine shop, and its early years were dedicated to manufacturing tools and parts that were used by other companies in the assembly of their own products. Knight was thus a contract manufacturer, and its principal -8- [8] customers were defense, aerospace, and industrial companies. Knight’s work included typical contract jobs in which the customer provided plans and specifications, as well as “design and build” work. Mr. Cavallaro’s principal work was making and selling the products of the tool business. He led the manufacturing operations at Knight, including entering the competitive bidding process for various jobs, supervising employees during all phases of production, and working with a team of engineers to design particular machines. Mrs. Cavallaro learned how to handle the paperwork, the money, and the phones. She paid the bills and prepared original-entry journals of their receipts and expenses, and she handed those over to an accountant who prepared their financial statements and tax returns. Though she had no formal training as an accountant or bookkeeper, she contributed her services in that role for many years. The Cavallaros’ three sons also worked in the family business--part time when they were in school, and eventually full time. Ken Cavallaro graduated from college in 1983 with a degree in marketing and management and then began working at Knight full time. Paul Cavallaro graduated from college in 1985 with a degree in finance, worked for a bank for about three years, and returned to Knight in 1988. James Cavallaro graduated from high school in 1982 and then began working full time at Knight as an apprentice machinist. -9- [9] Development of the liquid-dispensing machine The nature of Knight’s work was to build a single custom tool at the request of a customer. That is, Knight was not a manufacturing operation with an assembly line. After about five years in operation, Knight began to feel the financial pressures associated with the cyclical nature of customer-dependent contract manufacturing and job shop work. Mr. and Mrs. Cavallaro sought outside funding from various sources, and they began looking for ways to break out of the contract manufacturing mold. Mr. Cavallaro envisioned Knight developing its own product that could be sold regularly. By this time Ken Cavallaro was working full time for Knight in a sales and marketing role. On one occasion when Mr. Cavallaro and Ken visited a potential customer, they observed an opportunity. They saw an operation for the production of computer circuit boards, in which workers engaged in a messy and unreliable process of manually squirting liquid adhesive from tubes shaped like ketchup bottles in order to attach parts to the boards. The Cavallaros thought that a computerized machine could be devised to do this process neatly and repetitively, and that Knight might be able to mass-produce such a machine. In 1982 Knight engineers and employees collaborated with Mr. Cavallaro and Ken Cavallaro to create the first liquid-dispensing machine prototypes for use - 10 - [10] in through-hole mounting schemes. Knight began selling the machine under the name “CAM/ALOT”, invoking the acronym for “computer assisted machine” and reflecting the hope that it would be used “a lot”. Knight invested substantial time and attention into the machine--so much so that this activity was undertaken at the expense of Knight’s traditional business. In its early versions, the machine had a relatively unstable cantilevered arm for dispensing the glue; it could move only along the X and Y axes; it used a stepper motor incapable of making a perfectly smooth arc; and it employed legacy Apple computer technology and software that was not easy to program. In 1986 Knight hired Salesmark, a sales and marketing consulting company, to advise it how best to market and sell the CAM/ALOT machines. The Salesmark report confirmed the weaknesses present in the CAM/ALOT liquid-dispensing machine technology; however, its conclusion was that “Knight Tool Company appears to have what every job shop firm covets--a viable product!” Though Knight was able to sell some of the early CAM/ALOT models, profit from sales was not outpacing the cost of production, and the machine’s recognizable flaws needed correction before the idea would be a sustainable revenue-producing product for Knight. Because Knight had spent a significant sum on the development of the CAM/ALOT product, the company needed either a vital - 11 - [11] infusion of capital or a change in corporate structure (which would facilitate the purchase of an equity interest by a third-party investor) to maintain ongoing operations. In January 1987 Knight sought advice on how best to solve its working capital problems. Knight hired a consulting firm “to explore the advisability of splitting off the CAM/ALOT Liquid Dispensing Systems from Knight Tool Company, Inc. to form a separate affiliated corporation”. The firm reviewed Knight’s financial statements and spoke with Knight principals (including Mr. Cavallaro) and concluded that the proposed two-company structure would be at risk for potential conflicts due to shifting economic benefits between them (as when a customer who was initially interested in the CAM/ALOT machine would want to “trade up” to a more specialized Knight machine). The firm was also concerned not only that removing the CAM/ALOT line of revenue would cause Knight to operate at a loss, but also that there would not be enough revenue from CAM/ALOT products to sustain a fledgling, stand-alone enterprise. Knight was thus advised not to start a new affiliated company that would be solely the sales arm of Knight, but rather to increase its operating margins by adjusting various expenses and thus increasing net income. Knight’s working capital situation did - 12 - [12] not improve, however, and from June 30 to December 30, 1987, Knight’s bank debts increased from $58,000 to $352,000.2 Knight’s thin capitalization was especially troublesome to Mrs. Cavallaro, who finally insisted that Knight revert to its original tool-making business. Mr. Cavallaro acknowledged that his real strength lay in the traditional business of tool-making, and he told Mrs. Cavallaro that it was time for Knight to call it quits on CAM/ALOT. The CAM/ALOT production equipment and remaining inventory were put into a single room. However, as we will show, manufacturing of the CAM/ALOT dispensing machines soon resumed, and little changed at Knight. Incorporation of Camelot Systems, Inc. Ken Cavallaro was not willing to give up on CAM/ALOT. He continued to believe they could develop a successful liquid-dispensing machine and find a market for it. He approached his parents and asked if he and his brothers could do so. The Cavallaros assented. However, no document was ever prepared conferring on the sons or their planned new company any rights--much less exclusive rights--to produce or sell the liquid-dispensing machine. To organize a 2 The consulting firm found that in 1987 Knight had substantial equity positions in both its real estate and manufacturing plant and equipment but that it was operating at a break-even position on a cashflow basis. - 13 - [13] new corporation, Mr. and Mrs. Cavallaro referred their sons to Fred Cirome, the attorney they had used for their own legal needs. After Mr. Cirome had prepared the documents for incorporating Camelot Systems, Inc. (“Camelot”), all five of the Cavallaros went to his office, and the Cavallaro sons signed the articles of incorporation. At its incorporation Camelot had a total of 150 shares issued, and each son owned 50 shares. When Camelot was incorporated on November 30, 1987, Ken was 26 years old, Paul was 24, and James was 23. At a meeting in Mr. Cirome’s office, Mr. Cirome started to hand the new Camelot corporate minute book to Mr. Cavallaro; but Mr. Cavallaro deflected the suggestion that Camelot was his corporation and immediately handed the minute book instead to Ken Cavallaro, saying, “‘Take it; it’s yours.’” (As we explain below, an estate planning lawyer later construed this event to constitute a transfer of CAM/ALOT technology, but this construction is not corroborated by the record or any other testimony.) The three sons jointly contributed a modest total of $1,000 to start the corporation--i.e., $333.33 each--and that was the total capital investment they made in the company during its entire existence. Consequently, they did not believe that success would come from their capital investment alone. Rather, they - 14 - [14] expected to develop value by their opportunity to develop Knight’s CAM/ALOT line of business, by Knight’s continued support of the product, by creating a niche market for the liquid-dispensing product, and by the investment of their time. Each of the sons and their parents understood that Ken Cavallaro would be the driving force behind the CAM/ALOT product, as the one with the most relevant expertise and the one who would expend the most labor on the project. (Initially Paul Cavallaro was not working for either Knight or Camelot, but at the bank.) However, the Cavallaro sons subjectively valued equally the potential contributions of each other. They did not make any attempt to determine a market value of each brother’s expected contribution but rather expected that, by virtue of their equivalent stock ownership in Camelot, each brother would profit equally from any success of the venture. Continuation of CAM/ALOT production After the incorporation of Camelot, Ken Cavallaro--working on the Knight payroll--began exploring ways to improve the CAM/ALOT dispensing product. He attended industry trade shows and talked with Knight customers who had purchased the machines. Ken Cavallaro then worked with Knight engineers, and they made changes to the design of the CAM/ALOT machines in an effort to eliminate the problems of which customers had complained. - 15 - [15] The improved models of the CAM/ALOT dispensing machines incorporated a gantry mechanism rather than a cantilever, the use of servo motors rather than stepper motors, and the use of DOS-based computer programming. These additions gave the machine the ability to move along the Z axis and to dispense liquids in an arc, and they facilitated programming. Later models incorporated prefabricated components bought directly from third parties, and the machines became an amalgamation of third-party products and Knight- manufactured pieces, all undergoing final assembly at Knight’s shop. Various sizes of CAM/ALOT dispensing machines were developed to accommodate different customers’ assembly line needs; and as the technology improved, the machines’ dispensing speed and precision increased. Ken Cavallaro remained focused on traveling to sales expos and meeting with customers; he was committed to fine-tuning the product and attempting to forecast industry needs and trends. His efforts were timely, and they coincided with a relative boom in the liquid-dispensing industry as surface-mount technology largely replaced through- hole technology in circuit board and electronics manufacturing. However, Ken Cavallaro was not an engineer, inventor, or machinist. Though Ken Cavallaro certainly knew his way around a machine shop, it was other Knight personnel--both Mr. Cavallaro and those under his direction--who - 16 - [16] continued to make the CAM/ALOT dispensing machines and to effect the ideas and meet the needs that Ken Cavallaro brought in from the field. Relationship between Knight and Camelot Knight manufactured the CAM/ALOT machines and Camelot sold and distributed them to third parties. Although it is Mr. and Mrs. Cavallaro’s position that Camelot should be seen as the manufacturer of the machines and Knight as its contractor, the contemporaneous documents (including the companies’ own financial statements3 and filed tax returns4 until 1994) overwhelmingly 3 For example, the combined financial statement for Knight and Camelot, for the year ending December 31, 1991 (prepared on March 11, 1992), states: Organization - Knight Tool Company, Inc. was incorporated in 1976. Its principal business activity is the manufacturing of machine parts and tools according to industry and government specifications and is the sole provider of machines sold by Camelot Systems, Inc. Camelot Systems, Inc. was incorporated in 1987. Its principal business activity is the selling of computerized liquid dispensing machines. [Emphasis added.] As we note later, when the IRS requested the financial statements in 1998, Knight’s accountant Kevin McGillivray doctored the narrative to state instead that Knight was “the sole provider of machines owned by Camelot” (emphasis added), in order to be consistent with the Cavallaros’ position that pre-merger Camelot was not a mere sales agent but rather had owned the technology and was the manufacturer of the machines (with Knight as its contractor). 4 On Knight’s original Forms 1120, “U.S. Corporation Income Tax Return”, (continued...) - 17 - [17] characterize Knight as the manufacturer of the machines and Camelot merely as the seller. As late as 1995 an agreement was reached with Cognex Corp. (“Cognex”) for the purchase of hundreds of “vision systems” to be used in CAM/ALOT machine production, and the agreement was drawn up between Cognex and Knight (not Camelot), consistent with the reality that Knight manufactured the CAM/ALOT liquid-dispensing machines on its own account and used Camelot as its sales agent. Camelot received a purchase order from a customer and then submitted an order (either oral or written) to Knight for the requested model of CAM/ALOT machine, including any customer-requested specifications or modifications. Knight’s personnel, facilities, and manufacturing equipment created the CAM/ALOT machines. Camelot then paid for each machine a price that included 4 (...continued) for the years ending June 30, 1990, through December 31, 1993 (Knight elected to change its fiscal yearend in 1993), Knight reported its business activity as “Manufacturing” of “Tools” and selected business code no. 3540 (which signifies the “Manufacturing” of “Metalworking machinery”). On Camelot’s original Forms 1120 for the tax years 1988 through 1992, Camelot reported its business activity as “Sales” of “Machinery & Equip”, and selected the business code no. 5008 (which signifies the “Wholesale Trade” of “Machinery, equipment, and supplies”). For tax year 1993, when Camelot claimed S corporation status and filed its return on Form 1120S, “U.S. Income Tax Return for an S Corporation” (a form that required a business code but not a verbal statement of business activity), Camelot continued to use the same business code, 5008, that it had used in prior years. - 18 - [18] Knight’s direct costs plus an “overhead burden rate”. (Mr. and Mrs. Cavallaro claim that this rate was set so that Camelot would purchase the CAM/ALOT technology incrementally over time, but the evidence does not support this claim.) Some of Camelot’s purchase orders were for batches of machines, as to which Ken Cavallaro expected eventual but not-yet-received orders from customers. Knight did not bill Camelot until the machines were completed and ready for delivery, and Camelot did not pay for the machines until the ultimate customer had paid Camelot. Thus, Knight was at risk for non-payment, and Camelot was effectively immune from such risk. As reflected by the documentary evidence, Camelot had no employees from 1987 to 1995. All the persons who worked on CAM/ALOT machines after Camelot’s incorporation--including Ken Cavallaro--were on the Knight payroll and received all their wages from Knight.5 In addition to a shared payroll system, Camelot’s and Knight’s financial affairs overlapped in other ways. In 1989 Camelot and Knight entered into a joint 5 For example, for 1992 and 1993 Knight reported spending $457,072 and $748,864 for salaries and wages as a part of its selling and administration expenses, whereas for the same years Camelot reported spending only $61,032 and $86,205 for salaries and wages, all of which was for its international affiliate, Camelot S.A. - 19 - [19] financing agreement for an $850,000 line of credit and a $150,000 term loan, for which Knight and Camelot executed cross-corporate guaranties of their respective obligations; but the risk was allocated not to Camelot (or the Cavallaro sons) but to Knight (and Mr. and Mrs. Cavallaro): The agreement was collateralized by all of Knight’s business assets and an agreement by Mr. and Mrs. Cavallaro not to sell or encumber the 216 River Street property, Knight’s place of business. Mr. and Mrs. Cavallaro also executed personal unlimited guaranties of Knight’s and Camelot’s financial obligations.6 In 1992 the parties executed two subsequent financing agreements with the same lender and identical guaranties as for the 1989 loan. Camelot did not have its own bank accounts or books of account. Rather, intercompany accounts were created on Knight’s books so that Camelot could be billed for certain expenses, and this accounting device was used to charge Camelot for overhead expenses. With minor exceptions,7 Camelot’s bills were paid using Knight’s funds. 6 Before and after the incorporation of Camelot in 1987, Mr. and Mrs. Cavallaro mortgaged their house to support Knight’s operations. 7 Mr. McGillivray explained that Camelot did make some direct payments for its own expenses, such as for those costs associated with trade shows, advertising, marketing, the west coast and foreign offices, and warranty costs. - 20 - [20] Allocation of income and expenses Apart from those minor exceptions, the record does not reflect a consistent or systematic approach to the overall allocations of income and expenses between the two companies, and Knight received less income than it should have as the manufacturer of the machines, while Camelot received more than it should have as the mere seller.8 Knight provided the equipment and personnel for making the machines, paid the bills, and bore the risk; but profits were disproportionately allocated to Camelot. We attribute this disproportion not to the objective values of the companies but either to the deliberate benevolence of Mr. and Mrs. Cavallaro toward their sons or else to a non-arm’s-length carelessness born of the family relationships of the parties. Camelot and Knight’s outside accountant, Mr. McGillivray, testified at trial that sums of money were allocated between the companies as needed to cover expenses incurred by one or the other. However, Mr. McGillivray’s credibility at trial was damaged when he confessed to having given false testimony to the Court 8 Although 90% of Knight’s business was for CAM/ALOT machines, Knight did not enjoy a profit margin similar to Camelot’s on the sales of the dispensing machines. As illustrated by one seven-month representative snapshot, from October 1991 to April 1992, Camelot reported an average gross profit percentage of 24%, whereas Knight’s average gross profit was a mere 6%. - 21 - [21] during his first day of testimony,9 and we therefore discredit his explanation of the financial allocations between the companies. Mr. McGillivray prepared a spreadsheet comparing the balance sheets of the two companies and (at a point before the current controversy arose) handwrote a note in the margin (presumably to management) that he would “‘run the numbers to shift more of [the] burden to [Camelot].’” Until at least as late as 1994, no allocation of expense to Camelot was made for Knight workers who built the CAM/ALOT liquid-dispensing machines. Rather, their time was accounted for as Knight time, and Camelot paid for it indirectly only as it paid for a machine to which Knight’s employee expense had been allocated as a cost of sales. This was deemed the “overhead burden rate”. The fact that Knight was the manufacturer of the CAM/ALOT machines (rather than Camelot’s contractor) and Camelot was its sales agent (rather than the manufacturer) is itself evidence tending to show that Knight, not Camelot, owned the technology, the subject to which we now explicitly turn. 9 Mr. McGillivray admitted that he had lied when he initially testified that he did not know who altered the companies’ previously prepared financial statements, tending to make Camelot look like the “owner” and not just the “seller” of the CAM/ALOT technology. In fact, it was Mr. McGillivray himself who altered the original statements, many years after he had first created them. - 22 - [22] Ownership of CAM/ALOT technology It is undisputed that Knight originally owned the CAM/ALOT technology. We find that Knight never transferred it to Camelot and that Knight, not Camelot, owned the incremental improvements in that technology over the succeeding years. The record contains no document of any sort memorializing any transfer of CAM/ALOT technology from Knight to Camelot,10 and no document granted Camelot any rights (exclusive or otherwise) to any CAM/ALOT technology. No document restricted Knight from licensing any aspect of the technology to another manufacturer or user, nor from using any CAM/ALOT-related technology on machines it might sell itself on its own account. On the contrary, with two exceptions, the documents in the record all tend to show affirmatively that Knight continued to own the technology and intangibles associated with the CAM/ALOT machines. The two exceptions are: (1) mechanical drawings of assorted parts for machines produced for various customers, which state that Camelot owns the drawings--the earliest of which is dated November 3, 1992; and (2) copyright notices on the software, which state that the copyright holder is Camelot. The software copyright notices appeared on the computer screens used with 10 We discuss below a belated and fictitious 1995 “confirmatory” agreement. - 23 - [23] CAM/ALOT machines and were visible to a user upon startup of the machine. Any probative value of the drawings and copyright notices is outweighed by the other evidence of Knight’s ownership: The few public registrations of intellectual property were all owned by Knight: The CAM/ALOT trademark was registered to Knight on August 27, 1985, and it remained registered to Knight until December 31, 1995, when Knight assigned it to Camelot in connection with the merger on that date. As for patent registrations, the dispensing machine as a whole had never been patented (and was presumably not patentable as such). Rather, as of 1987, the CAM/ALOT technology subsisted in Knight’s know-how, trade secrets, assembled work force, and other similar intangible assets. Various improvements or features of the machine might have been patentable; and before the 1995 merger of Knight and Camelot Mr. Cavallaro filed four patent applications related to pumps he had designed. In his patent applications he identified not Camelot but Knight as his assignee.11 11 The evidence does not show that these particular pumps turned out to have great value or utility in the CAM/ALOT process, but we consider them significant, since we think that, between parties dealing at arm’s length, the supposed acquirer of the CAM/ALOT technology would have assured ownership of all the related patents. Knight owned a few patents; Camelot owned none. - 24 - [24] In 1992--before the current controversy arose--Knight and Camelot had an occasion to determine who was the owner of the technology, and they determined it was Knight, not Camelot. The companies engaged the accounting firm of Ernst & Young (“E&Y”) for advice on various tax issues, including the availability of research and development (“R&D”) tax credits pursuant to section 41. E&Y accountants studied Camelot’s and Knight’s financial statements and past expenditures and determined that a portion of the work that had been done in prior years by Knight’s engineers could be characterized as R&D costs eligible for the tax credit. When that study was concluded, the accountants prepared and signed amended tax returns for Knight for the years 1990 to 1993, claiming the R&D credits for Knight.12 Only after the involvement of Mr. and Mrs. Cavallaro’s estate-planning attorneys in 1994 and 1995 (discussed below) did the accountants prepare another set of amended returns for both Camelot and Knight, this time 12 Petitioners have challenged the significance of Knight’s claiming the R&D credit by arguing that Knight might have been entitled to claim the credit even if Camelot was the owner of the technology. This argument can be assumed valid, but it misses the point: There is no suggestion that, at the relevant time, Knight entertained this late-arising thought that a non-owner could claim the credit. Rather, when the idea first arose that Camelot might be treated as the owner of the technology, Knight’s personnel immediately saw a dissonance between that idea and Knight’s original claim of the credits; hence, they filed amended returns to try to fix the problem and accommodate the new idea. See infra note 15. - 25 - [25] disclaiming the R&D credits previously taken by Knight and claiming the R&D credits for Camelot. The accountants’ early consideration of merger Mr. and Mrs. Cavallaro had prepared wills in the past, but as the combined fortunes of Knight and Camelot improved, they believed that their estate plan should be reviewed. At their request, E&Y accountants began to consider the Cavallaros’ estate plan. They observed that the elder Cavallaros’ generation possessed value that would eventually be passed down to the three sons (generating estate tax liability), and they considered various strategies to minimize the estate tax, including a “Grantor Retained Annuity Trust”, or “GRAT”. The E&Y professionals concluded that merging the two companies was a necessary first step to transfer some of Knight’s value to the sons through Camelot (and therefore achieve the Cavallaros’ estate planning objectives) and to eventually sell the combined entities. Different advice from the lawyers Unbeknownst to their E&Y accountants, the Cavallaros had also retained attorneys at the Boston law firm of Hale & Dorr to give them estate planning advice. Mr. and Mrs. Cavallaro had seen a brochure from that firm that included the name of a long-time acquaintance of Mrs. Cavallaro--Louis Hamel--and they - 26 - [26] contacted him. At a meeting in October 1994, Mr. Hamel reviewed the Cavallaros’ estates and businesses, and observed the same issue that the accountants had seen--i.e., that passing to the next generation the value held in the parents’ generation (i.e., in Knight) would result in estate tax liability for the estates of Mr. and Mrs. Cavallaro. Accordingly, Mr. Hamel determined that the Cavallaros should claim instead that the value of the CAM/ALOT technology inhered in Camelot, and was thus already owned by the three sons. He based this determination on his conclusion that a one-time transfer of some of the CAM/ALOT technology had occurred in 1987 (when Camelot was created) and that there had also been ongoing transfers from time to time since then. This conclusion was based not on documentation of transfers (there was none) but on a supposed significance that Mr. Hamel contrived from the November 1987 incident in which Mr. Cavallaro had handed the Camelot minute book to Ken Cavallaro at the meeting in Mr. Cirome’s office. Mr. Hamel testified at trial that he construed this as a ceremonial or symbolic act for the transfer of the CAM/ALOT technology13--a construction that the evidence does not support. 13 At trial Mr. Hamel explained that the events of the November 1987 meeting “reminded me of the ancient way of transferring land. You own the land, hand some twigs to the buyer or donoree and say, ‘Take it; it’s yours.’” - 27 - [27] Given the lack of documentation for the transfer, Mr. Hamel suggested in 1994 that the Cavallaros should prepare affidavits and a “confirmatory” bill of sale attesting to a 1987 transfer, so that when they died and their estate matters were being addressed (by the IRS in particular), there would be evidence that not their company, Knight, but rather Camelot (and through it their sons) had owned the valuable technology underlying the CAM/ALOT machine. An associate of Mr. Hamel interviewed Mr. Cavallaro and Ken Cavallaro; and as to the ownership of the technology, Mr. Cavallaro said nothing to support a 1987 transfer. On the contrary, when Mr. Cavallaro was asked whether there were “ever any agreements either written or oral transferring the technology that Knight Tool developed” he said that he “[n]ever gave it any thought”. At trial, Mrs. Cavallaro confirmed Mr. Cavallaro’s recitation of the facts. She was asked: “[H]ow did the transfer of the technology from Knight to Camelot occur? Was there a document signed between you and your husband as the owners of Knight transferring the technology [in 1987]?” In response, Mrs. Cavallaro stated: “Why would there be a document? Nobody told us there should be a document.” Nonetheless, Hale & Dorr prepared affidavits and a - 28 - [28] “Confirmatory Bill of Sale” that asserted a 1987 technology transfer from Knight to Camelot.14 Falling into line Before the affidavits and confirmatory bill of sale were executed by Mr. Cavallaro and Ken Cavallaro on May 23, 1995, David Frac (then chief financial officer of both Camelot and Knight) transmitted them to E&Y for review. Then Mr. Hamel began a correspondence campaign to convince the E&Y accountants, as well as Mr. McGillivray, to adopt his view of the CAM/ALOT technology ownership, as outlined in the affidavits. In one letter to E&Y describing the transfer of CAM/ALOT technology, Mr. Hamel highlights his estate planning concerns: From an estate planning perspective, the present two- corporation arrangement is advantageous. I see no advantage to merging them, and I think we both agree that a merger of any kind would leave us with the problem of getting the product of the merger out of the estates of the older generation * . 14 Ken Cavallaro’s affidavit, as prepared by Hale & Dorr, reads: “Knight Tool transferred the original dispensing product to Camelot when the latter was formed in 1987 and Knight Tool received no compensation for this transfer, which was a gift by the shareholders of Knight Tool to the shareholders of Camelot.” - 29 - [29] In turn, Mr. McGillivray wrote a letter to Hale & Dorr, asserting various errors he saw present in the affidavits. Responding to Mr. McGillivray’s letter, Mr. Hamel wrote: With regard to the ownership of the “technology,” I am going to be guided by the history which comes out of [the] interviews with the key players. In any history there are a few events which do not fit the picture which the historian sees as “what happened.” History does not formulate itself, the historian has to give it form without being discouraged by having to squeeze a few embarrassing facts into the suitcase by force. Of course, the “embarrassing facts” were those facts that showed that Knight owned the technology and always had, and Mr. Hamel advocated “squeez[ing those facts] * * * into the suitcase by force”--i.e., disregarding or suppressing those facts in order to take the more advantageous position. The accountants initially objected to Mr. Hamel’s proposal that the CAM/ALOT technology had been transferred in 1987. They explained that Mr. Hamel’s idea was at odds with all the evidence and that it was at odds with Knight’s recent amended returns claiming R&D credits for the engineering work on the CAM/ALOT machine.15 15 Eric Wolf, E&Y partner, wrote in his letter to Mr. Hamel: We understand the affidavits and the fax [sic] that they present. There are other documents in the public domain that may not (continued...) - 30 - [30] As a result of Mr. Hamel’s correspondence campaign, however, the previously separate tracks of advice--one from the accountants at E&Y and Mr. McGillivray, and the other from the attorneys at Hale & Dorr--now came together for the first time. The contradiction was evident to all the professionals: The accountants had assumed no 1987 transfer (and thus believed there was a need for a means to transmit value to the next generation), but the attorneys postulated a 1987 transfer (and subsequent transfers) pursuant to which that value had already been placed in the hands of the next generation. The attorneys eventually prevailed, however, and the accountants acquiesced. Eventually all of the advisers lined up behind Mr. Hamel’s suggestion that a 1987 transfer be memorialized in the affidavits and the confirmatory bill of sale. They provided a draft of the documents, which Mrs. Cavallaro read aloud to Mr. Cavallaro. After they reported a few typographical errors, the attorneys prepared final versions, which Mr. Cavallaro and Ken Cavallaro executed on May 23, 1995. 15 (...continued) necessarily reflect the facts as stated in the affidavits. Specifically, there have been tax returns filed for 1993 which do not coincide with the ownership of technology issue relative to the way in which R&D credits have been claimed, and there may be certain financial statements which have been issued which also do not appropriately reflect that which is stated in the affidavits. We should discuss whether or not any steps should be taken to address these inconsistencies. - 31 - [31] Mr. and Mrs. Cavallaro had been oblivious to the disagreement between the accountants and the lawyers about the transfer of CAM/ALOT technology. All they knew was that their acquaintance and lawyer, Mr. Hamel, advised them that Mr. Cavallaro’s act of passing the corporate minute book to Ken Cavallaro in November 1987 warranted their asserting that a technology transfer had occurred. Mr. Cavallaro followed Mr. Hamel’s advice and signed the affidavit and confirmatory bill of sale. Later consideration of merger In the early 1990s Ken Cavallaro and Camelot began distributing the CAM/ALOT machines internationally and established a customer base in Europe. In order to keep pace with changing European Union manufacturing regulations, however, Camelot had to become CE certified16--an expensive and time-consuming process--and it did so. Unbeknownst to them at the time, in order for Camelot and the CAM/ALOT products to be in compliance with CE marking, Camelot had to certify that all the liquid-dispensing machine components complied with European Union manufacturing Directives. This meant that the 16 Since 1993, products sold in the European Economic Area must display a symbol called the “CE Marking”. CE stands for the French phrase “Conformité Européenne”, which means “European Conformity”. This symbol is affixed to a product as testimony that it meets all relevant Directives, i.e., regulations. - 32 - [32] manufacturer of CAM/ALOT products, Knight, also had to achieve the CE marking; but Mr. Cavallaro made it clear to Ken Cavallaro that he was unwilling to spend the time and money necessary for Knight to do so. Camelot wanted to continue expanding its presence in the European liquid- dispensing machine market, and the two companies began discussing the possibility of a merger, which the Cavallaros stated would circumvent the need for Knight to undergo CE certification independently. That is, they believed that a merged company would inherit Camelot’s CE marking without further certification. Merger on December 31, 1995 After all the discussion of estate planning issues and of continued CAM/ALOT production for distribution in Europe, in late 1995 Camelot and Knight decided to begin preparations for a merger of the two companies. Accordingly, the Cavallaros engaged E&Y to determine the respective values of the two companies. Timothy Maio of E&Y, using a market-based approach, identified company comparables for Knight and the newly formed merged entity. He explained that he found no suitable comparables for the pre-merger Camelot, and so he did not value it as a stand-alone company. He valued the proposed - 33 - [33] combined entity as being worth between $70 and $75 million, with Knight’s portion of that value being between $13 and $15 million. On December 31, 1995, Knight and Camelot merged in a tax-free merger with Camelot as the surviving corporation. The stock of the merged company was distributed as follows: Mrs. Cavallaro received 20 shares, Mr. Cavallaro received 18 shares, and 54 shares each were distributed to Ken, Paul and James Cavallaro.17 Mr. and Mrs. Cavallaro explained that they distributed the shares according to the relative value of each company, as determined by Mr. Maio (that is, 19% of the combined entity to the former shareholders of Knight--Mr. and Mrs. Cavallaro; and 81% of the combined entity to the founding shareholders of Camelot--Ken, Paul, and James Cavallaro). However, in determining these relative values, 17 The Commissioner seems to argue that, because Ken Cavallaro’s contribution to the ongoing success of Camelot was more significant than those of his brothers, he should have received more shares in the final sale of the Camelot entity--an argument that may conflate an ownership interest in a company with compensation for services rendered for that company. From Camelot’s incorporation, Ken Cavallaro’s ownership interest in Camelot was the same as his brothers’--that is, each brother owned 50 shares. For Ken Cavallaro’s substantial ongoing services for the company he received a commensurate annual salary (larger than those of his brothers). However, while the brothers’ capital contributions to Camelot were trivial (totaling $1,000), their ownership of equal shares assured that they would benefit equally from Knight’s beneficial treatment of Camelot, and this fact made the merger of the two companies a useful means for Mr. and Mrs. Cavallaro to confer their wealth to the next generation with an equal share going to each son. - 34 - [34] Mr. Maio had assumed--contrary to fact--that pre-merger Camelot had owned the CAM/ALOT technology. It had not. Consequently, Mr. Maio overstated the relative value of Camelot and understated the relative value of Knight. We find that as a result, by means of this distorted allocation of the stock, Mr. and Mrs. Cavallaro conveyed disproportionate value to their sons in amounts totaling $29.6 million.18 Sale to Cookson America, Inc. On July 1, 1996, Cookson America, Inc. (“Cookson Group”) purchased Camelot (i.e., the merged companies). The sale price was $57 million in cash with a contingent additional amount--i.e., up to $43 million in potential deferred 18 The determination of the total amount of those gifts should be made by determining the value of the post-merger company and the extent to which that value is allocable to the two pre-merger companies and then comparing that allocation of value to the allocation of the post-merger stock. For the first step of that process, petitioners contend that the post-merger value is $72.8 million and the Commissioner contends it is $64.5 million. Somewhat surprisingly, we determine that we do not need to make a specific finding of the value of the merged company nor even of the relative values of Knight and Camelot. Rather, as we explain below, the persistent assumption by the Cavallaros and their experts that Camelot and not Knight owned the technology makes their valuation invalid and causes them to fail to carry their burden of proof, leaving us to accept the amount of gift that the Commissioner determined, reduced to the extent of his partial concession. - 35 - [35] payments based on future profits.19 After the July 1996 sale no further payments were made from Cookson Group to the Camelot shareholders. On the basis of stock ownership, Mr. and Mrs. Cavallaro received a total of $10,830,000 (i.e., 19% of $57 million) while Ken, Paul, and James each received $15,390,000 (i.e., 27% of $57 million). The IRS’s examination and notices of deficiency In January 1998 the IRS opened an examination of Knight’s and Camelot’s 1994 and 1995 income tax returns. During the income tax examination the IRS learned that there might be a possible gift tax issue in connection with the 1995 19 Neither petitioners nor the Commissioner look to the post-merger July 1996 sale price ($57 million plus possible contingent payments of up to $43 million) as the measure of the merged company’s value at the time of the merger in December 1995. However, the Cavallaros argue in the alternative, that, if we determine that gift tax is due, the best evidence of the value of the merged company as of the valuation date is $57 million, the amount paid by Cookson Group six months after the merger (and the amount assumed in the notice of deficiency). The Commissioner counters that, if we were to value the merged company according to the purchase price set forth in the contract with Cookson Group, we would have to include at least some discounted portion of the $43 million contingent payment as well. The Commissioner’s point is well taken; and since all the experts agree that the value is greater than $57 million, we do not adopt that figure. Moreover, since neither party has provided us with a means for projecting what portion of the contingent payments could have been expected (though none were eventually paid) and should be included, and neither has explained how we could take into account a post-valuation-date event, when we generally do not do so, see Estate of Gilford v. Commissioner, 88 T.C. 38, 52 (1987), we lack the predicate for using the July 1996 sale price for this December 1995 valuation. - 36 - [36] merger of the two companies and thus also opened a gift tax examination in February 1998. The IRS issued third-party summonses to E&Y seeking documents that the accounting firm created or received in the fall of 1994 and in 1995 while working on estate tax and corporate merger issues with Mr. Hamel. Petitioners filed petitions to quash these summonses and fought this issue to the Court of Appeals for the First Circuit, which ultimately affirmed the District Court’s order denying petitioners’ motion to quash and enforcing the summonses. See Cavallaro v. United States, 284 F.3d 236 (1st Cir. 2002), aff’g 153 F. Supp. 2d 52 (D. Mass. 2001). On July 7, 2005, Mr. and Mrs. Cavallaro each filed a Form 709, “United States Gift (and Generation Skipping Transfer) Tax Return”, for the 1995 tax year, reporting no taxable gifts and no gift tax liability. On November 18, 2010, the IRS issued statutory notices of deficiency to Mr. Cavallaro and Mrs. Cavallaro for the tax year 1995, determining (without having obtained an appraisal) that pre-merger Camelot had zero value and that each of the parents had made a taxable gift of $23,085,000 to their sons when Knight merged with Camelot, resulting in a gift tax liability of $12,889,550 for - 37 - [37] each petitioner.20 In addition, the notices of deficiency determined additions to tax pursuant to section 6651(a)(1) for failure to file timely gift tax returns, as well as section 6663(a) penalties for fraud. In his answers the Commissioner asserted, for the first time, alternative section 6662 accuracy-related penalties. Petitioners’ experts Mr. and Mrs. Cavallaro offered into evidence two expert reports with different but reconcilable valuations of the merged company. The first was the report completed by Mr. Maio in January 1996--contemporaneously with the merger--which had concluded that the merged company was worth between $70 and $75 million and that only $13 to $15 million of that value was attributable to Knight. The Cavallaros offered the January 1996 report as evidence of the fact that they had obtained a contemporaneous valuation. The Cavallaros’ second expert report was composed in preparation for trial by John Murphy of Atlantic Management Co., who used a market-based approach similar to that used by Mr. Maio. Accordingly, Mr. Murphy’s report also 20 The Commissioner initially determined the same gift amounts for both petitioners, despite the fact that Mrs. Cavallaro owned 51% of Knight before the merger and Mr. Cavallaro owned 49%. The Commissioner later reduced the determined deficiency amounts and gift tax liabilities and reflected the actual division of ownership, claiming that Mr. Cavallaro made gifts totaling $14,538,300 and Mrs. Cavallaro made gifts totaling $15,131,700. - 38 - [38] identified company comparables for Knight21 and the newly formed merged company. (Mr. Murphy explained in his report that he did not find suitable comparables for Camelot and so he, too, did not value it as a stand-alone company. Rather, he reckoned (reasonably, we find) that the value of post-merger Camelot minus the value of pre-merger Knight equals the value of pre-merger Camelot and allows a comparison of the relative values of the two pre-merger companies.) Mr. Murphy’s report differed from Mr. Maio’s in only one respect, which modestly increased Knight’s relative value: he added a royalty adjustment which allocated 2% of Camelot’s income to Knight for the use of the CAM/ALOT trademark and the limited use of Mr. Cavallaro’s patented pump technology in a few of the CAM/ALOT models. Notwithstanding the fact that he made the 2% adjustment, he stated: Atlantic Management does not agree that a transfer pricing adjustment is necessary or that royalty payments are warranted in light of the respective roles of the two companies, the pricing structure between the two pre-merger entities, and payments made 21 Mr. Murphy chose “companies that are similar in nature to Knight”, but Mr. Murphy considered Knight’s nature to be not that of a manufacturer of the CAM/ALOT machines and the owner of the technology but rather, in effect, to be that of a machine shop to which Camelot “outsourced the assembly of the product line”. In addition, Mr. Murphy’s chosen comparables were intended to be similar to Knight in (among other things) “net profit”; but as we have shown, Knight’s profits had been understated for years. Thus, Mr. Murphy’s comparables were not in fact similar to Knight. - 39 - [39] directly to William Cavallaro by Camelot for his technological contributions. Mr. Murphy valued the combined entity at $72,800,000 (i.e., within the range of Mr. Maio’s $70 to $75 million), of which he concluded that 18.8%--i.e., $13,700,000--was Knight’s portion. In discerning the relative values of Knight and Camelot, both of petitioners’ experts assumed (contrary to our findings) that Camelot owned the CAM/ALOT technology and that Knight was a contractor for Camelot. As Mr. Murphy explained his assumptions-- the liquid dispensing machines basically became * * * Ken and Camelot’s product [in 1987]. And so from that point, it was our understanding that as ideas flourished, as concepts were nurtured through Camelot, they would be brought to Knight, Knight in the capacity of a contract manufacturer. Neither Mr. Maio nor Mr. Murphy opined about the values of the companies if one assumes that Knight was not a mere contract manufacturer but instead owned the technology and manufactured the machines, with Camelot as its sales agent. The Commissioner’s expert In preparation for trial, the Commissioner retained Marc Bello of Edelstein & Co. to determine the 1995 fair market values of Knight and Camelot. Mr. Bello assumed (as we have found) that Knight owned the CAM/ALOT - 40 - [40] dispensing-machine technology. Mr. Bello valued the combined entities at approximately $64.5 million (i.e., a lower aggregate value than Mr. Maio and Mr. Murphy determined), and Mr. Bello determined that 65% of that value--i.e., $41.9 million--was Knight’s portion. To make this valuation, Mr. Bello used not the comparable sales approach that petitioners’ experts had used but rather a discounted cashflow method.22 We summarize here Mr. Bello’s methods and conclusion, though, as we will explain, we decide in favor of the Commissioner but do not base the outcome of these cases on his expert’s opinion. Mr. Bello started with the companies’ 1995 annualized pre-tax earnings (operating profits) and adjusted for cashflow items, such as working capital, capital expenditures, and depreciation, in order to determine the adjusted net income amounts. Then, using Robert Morris 22 The discounted cashflow method is an income-based valuation method which analyzes future cashflow projections of a given company and discounts them (typically using a discount rate such as the weighted average cost of capital) to present values as of the valuation date. The discount rate is calculated by projecting economic income for a fixed number of years (usually between 3 and 10 years), and then assuming a terminal value at the end of that period. In theory, the amount a willing buyer would pay for the valued entity is equal to the present value of the projected economic income, plus the discounted terminal value. See, e.g., Estate of Jung v. Commissioner, 101 T.C. 412, 424 n.6 (1993). - 41 - [41] Associates (“RMA”) industry data23 as well as data from the Almanac of Business and Financial Ratios as benchmarks, he made normalizing adjustments to the ongoing after-tax cashflows of both companies to better reflect his belief that a significant amount of revenue had been improperly allocated to Camelot, given Knight’s ownership of the technology.24 On its income tax returns, Camelot had self-reported its business activity as “Sales” and had used the code 5008 (“Machinery, Equipment, and Supplies” in the “Wholesale Trade” category).25 However, when Mr. Bello was evaluating Camelot’s performance against industry norms to determine whether any of Camelot’s numbers could have been artificially inflated, Mr. Bello chose to use data corresponding to the Standard Industrial Classification (“SIC”) code 5084 (“Wholesaling Industries”). The RMA Annual Statement Studies describe the companies in SIC 5084 as follows: “‘INDUSTRIAL MACHINERY AND 23 RMA is a professional association that, through the inputs from its members, serves the financial services industry by providing resources and information on risk. In 2000 Robert Morris Associates changed its name to the Risk Management Association. 24 Mr. Bello determined that in 1995 Knight’s net income after tax, net of debt, should have been $3,657,974 and Camelot’s should have been $1,959,206. 25 The 1993 instructions to Form 1120 advised that the reporting codes, “[t]hough similar in format and structure to the Standard Industrial Classification (SIC) codes, * * * should not be used as SIC codes.” - 42 - [42] EQUIPMENT. Distribution of industrial machinery, equipment, and supplies. This industry does not include office, restaurant, or hotel fixtures, or air conditioning and refrigeration equipment. (SIC No. 5084).’” Camelot’s unadjusted annualized 1995 profit percentage before taxes was 15.1%. The RMA combined industry data (sorted by sales) for profit percentage before taxes for 1995 for SIC code 5084 was 4.1%. Mr. Bello used this 4.1% as a starting point and then accounted for Camelot’s success by putting it in the top 90% of the RMA data distributors by applying a 3.65% premium.26 He then determined that Camelot’s adjusted net income before tax should have been $3,186,608, i.e., only 7.5% of Camelot’s 1995 annualized adjusted revenue of $42,488,102. Mr. Bello then redistributed the remaining profit to Knight, resulting in a profit split between the two companies of 36.03% of the combined value to Camelot, and 63.97% to Knight. (The unadjusted values had allocated 72.56% to Camelot and 27.44% to Knight.) After making this normalizing adjustment to the net cashflows, Mr. Bello calculated the projected cashflows for the four years following the merger (1996 - 99), assumed a terminal value, and applied the discount rate. 26 Mr. Bello stated he made the adjustment to “reflect the [Camelot] strategy of premium pricing and higher profitability as of the valuation date”; however, he did not explain how he came up with the number 3.65. - 43 - [43] Petitioners’ critiques of the Commissioner’s expert In addition to disagreeing with Mr. Bello’s (correct) assumption that Knight owned the CAM/ALOT technology and was itself the manufacturer, Mr. and Mrs. Cavallaro advance two main arguments against Mr. Bello’s valuation methodology. First, they contend that Mr. Bello improperly used RMA data in his analysis, particularly when he selected SIC industry codes for analyzing the financial statements of Knight and Camelot; and they claim his normalizing adjustments to each company’s revenue streams were thus improper. (They do not suggest the proper SIC codes that Mr. Bello should have used in his report.) Second, Mr. and Mrs. Cavallaro assert that Mr. Bello’s valuation report was not independent because it was improperly influenced by respondent’s counsel. The Cavallaros allege that before Mr. Bello conducted his analysis, respondent’s counsel informed Mr. Bello (1) that the 1995 affidavits were false and Knight, not Camelot, owned the CAM/ALOT technology,27 (2) that he should not interview executives at either company,28 and (3) that he should rely only on company 27 Since we find that Knight, not Camelot, owned the technology in 1995, we do not consider Mr. Bello’s opinion to be undermined by his so assuming. 28 The Cavallaros argue: “Mr. Bello stated in his report that had he conducted a site visit or interviews, ‘the results of [his] analysis might have been different.’” At trial, Mr. Bello countered that conducting a site visit for a company (continued...) - 44 - [44] financial documents prepared before 1994 in his valuation.29 The Commissioner points to Mr. Bello’s testimony that he nonetheless performed an independent analysis and that, if a contrary finding regarding the technology had been warranted, he would have stated it in his report. The Commissioner also points to Mr. Bello’s conclusions as an indicator of his independence; Mr. Bello valued the combined entity at $64,500,000, which is far less than the values found by both Mr. Maio (valuing the combined entity at $70-$75 million) and Mr. Murphy ($72.8 million). 28 (...continued) that had been sold to a third party 16 years earlier would seem to add negligible value. Mr. Bello testified that, “considering that there were representations from the owners and a lot of company background information, * * under my professional standards there was enough information to gain an understanding of the companies that I didn’t foresee it to go back and interview the owners of the business.” 29 Mr. Bello seems not to have followed this instruction. In his report he cites company documents, financial and otherwise, prepared after 1994. - 45 - [45] OPINION I. Introduction We must determine the extent to which Mr. and Mrs. Cavallaro made gifts to their sons by merging the parents’ company (Knight) with the sons’ company (Camelot) and allowing the sons an 81% interest in the merged entity. The parties agree that this issue calls for a determination of the fair market value of the merged entity and of the relative fair market values of Knight and Camelot on the eve of that merger. In his notices of deficiency, the Commissioner determined identical taxable gifts made by Mr. and Mrs. Cavallaro each in the amount of $23,085,000, for a total gift of $46,170,000, but the Commissioner’s position has evolved during the course of this litigation, and he has conceded that the value of the gifts is less than determined in the notices of deficiency. For ease of comparison, the positions of the notices of deficiency, the Cavallaros’ expert (Mr. Murphy), and the Commissioner’s expert (Mr. Bello) are summarized here: - 46 - [46] Competing values (rounded, in millions) and allocations Notices of Cavallaros’ Commissioner’s deficiency expert expert Total value of $57.0 $72.8 $64.5 merged company Knight Value: Percent 100 18.8 65 Dollar $57.0 $13.7 $41.9 Camelot value: Percent -0- 81.2 35 Dollar -0- $59.1 $22.6 81% of total value $46.1 $59.0 $52.2 Gift amount $46.1 <$0.1> $29.6 II. Burden of proof In general, the IRS’s notice of deficiency is presumed correct, “and the petitioner has the burden of proving it to be wrong”. Welch v. Helvering, 290 U.S. 111, 115 (1933); see also Rule 142(a). The Commissioner has conceded that the taxable gifts totaled not $46.1 million (as in the notices of deficiency) but instead $29.6 million (as yielded by Mr. Bello’s analysis). Where the Commissioner has made a partial concession of the determination in the notice of deficiency, the petitioner has the burden to prove that remaining determination wrong. See Silverman v. Commissioner, 538 F.2d 927, 930 (2d Cir. 1976) - 47 - [47] (holding that the burden of proof does not shift where the Commissioner’s change of position operates in favor of the taxpayer), aff’g T.C. Memo. 1974-285; cf. Rule 142 (shifting the burden “in respect of * * increases in deficiency”). However, the Cavallaros argue that, for two reasons,30 the burden of proof shifted to the Commissioner. Because the burden of proof is important to the outcome in these cases, we address those two arguments: A. “New matter” 1. New matter relating to liability for tax Rule 142(a)(1) provides: “ The burden of proof shall be upon the petitioner, * * * except that, in respect of any new matter, * * * it shall be upon the respondent.” Petitioners point out that the notices of deficiency presume that Camelot was a shell company with zero value, whereas at trial the Commissioner 30 Before trial the Cavallaros had argued that the burden of proof shifted pursuant to section 7491(a)(1), which provides that the burden of proof will shift to the Commissioner on a factual issue “[i]f * * * a taxpayer introduces credible evidence with respect to any factual issue relevant to ascertaining the liability of the taxpayer”. However, section 7491(a)(1) is applicable to cases arising in connection with examinations commenced after July 22, 1998, Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, sec. 3001(c)(1), 112 Stat. at 727, whereas it was before that date--i.e., on February 10, 1998--that the IRS commenced the examination at issue here by sending petitioners a Substitute Form 4564, “Information Document Request”, requesting information regarding the values of Knight and Camelot in 1995 and 1996. Therefore, section 7491(a)(1) is not applicable, and it appears the Cavallaros have abandoned this contention. - 48 - [48] acknowledged that Camelot accounted for 35% of the value of the merged entity. Petitioners argue that the Commissioner’s litigating position is a new theory which constitutes “new matter” as to which the Commissioner has the burden of proof. However, the Court of Appeals for the First Circuit (to which an appeal would presumably be made in these cases) has articulated the meaning of “new matter” in the opinion that petitioners cite and rely on, Estate of Abraham v. Commissioner, 408 F.3d 26, 35-36 (1st Cir. 2005), aff’g T.C. Memo. 2004-39: [W]here the Notice of Deficiency fails to adequately “describe the basis on which the Commissioner relies to support a deficiency determination” and the Commissioner seeks to establish the deficiency on a basis not described in the Notice, the burden shifts to the Commissioner on that new basis. Shea v. Comm’r of Internal Revenue, 112 T.C. 183, 197, 1999 WL 177471 (1999); see T.C.R. 142(a)(1). “A new theory that is presented to sustain a deficiency is treated as a new matter when it either alters the original deficiency or requires the presentation of different evidence.” Wayne Bolt & Nut Co. v. Comm’r, 93 T.C. 500, 507, 1989 WL 124141 (1989). But if the theory “merely clarifies or develops the original determination[, it] is not a new matter in respect of which [the Commissioner] bears the burden of proof.” Id. The Estate’s main argument is that the Notice was “latently ambiguous, overly broad and confusing” and failed to specify all the elements of the Commissioner’s argument * * Acceptance of the Estate’s arguments would amount to a requirement that the Notice of Deficiency be as detailed as trial briefs. There is no such requirement. The standard of specificity for notices of deficiency is much lower. “In fact, if a deficiency notice is broadly worded and the Commissioner later advances a theory not - 49 - [49] inconsistent with that language, the theory does not constitute new matter, and the burden of proof remains with the taxpayer.” Abatti v. Comm’r, 644 F.2d 1385, 1390 (9th Cir.1981); see also Shea, 112 T.C. at 191. * * The IRS’s notice of deficiency states: “It is determined that under IRC Section 2511 donor’s merger of Knight Tool Co. into Camelot Systems, Inc. in return for 19% of the stock in Camelot Systems, Inc. resulted in a gift of $23,085,000.00 to the other shareholders of Camelot Systems, Inc.”31 The Commissioner’s position at trial was “not inconsistent with that language”. The Commissioner has never abandoned that theory nor contended otherwise. His partial concessions as to Camelot’s non-zero value did not require a new theory or change the issues for trial. The Commissioner’s trial position was therefore not “new matter”. 2. New matter relating to liability for penalty The Commissioner acknowledges that, unlike the additions to tax for failure to file timely under section 6651(a)(1),32 the section 6662(a) accuracy-related 31 The language quoted above from the notice of deficiency issued to Mrs. Cavallaro does not appear in the notice of deficiency issued to Mr. Cavallaro; but the Commissioner explains: “It appears that this Explanation of Adjustments sheet was inadvertently omitted from the statutory notice of deficiency issued to petitioner William Cavallaro. However, this inadvertent omission clearly did not prejudice Mr. Cavallaro, as shown by his petition, which is virtually identical to the petition filed by Mrs. Cavallaro.” 32 The section 6651(a)(1) additions to tax arose in connection with an (continued...) - 50 - [50] penalties were not determined in the notice of deficiency, that they therefore do constitute “new matter”, and that he has the burden of proof33 as to the applicability of these penalties. However, the Commissioner contends that-- petitioners nevertheless bear the burden of showing reasonable cause to escape the application of these penalties. * * The statutory notices of deficiency issued to petitioners included the civil fraud penalty under I.R.C. § 6663 [which was conceded after trial] and consequently raised the issue of reasonable cause. Therefore, the defense of reasonable cause under I.R.C. § 6664 (c) is not a new matter in the case and petitioners bear the burden of proof in showing reasonable cause under I.R.C. § 6664(c). We have previously held that, when a penalty is asserted as “new matter”, the Commissioner has the burden to prove that the taxpayer’s failure “was not due to reasonable cause or was due to willful neglect”, Arnold v. Commissioner, T.C. Memo. 2003-259, slip op. at 10-11 (citing cases); see also Schmidt v. 32 (...continued) examination that began before July 22, 1998 (so that the Commissioner does not have the burden of production; see supra note 30) and was determined in the notice of deficiency (so that it is not new matter). Consequently, the Cavallaros have the burden of proof as to the additions to tax. As we explain below, they succeed in a defense of reasonable cause. 33 Where section 7491(c) applies, the Commissioner bears the burden of production and must produce sufficient evidence that the imposition of the penalty is appropriate in a given case; but that provision is not applicable here because these cases arose in connection with an examination that began before July 22, 1998. Ochsner v. Commissioner, T.C. Memo. 2010-122, slip op. at 18 n.11; see supra note 30. - 51 - [51] Commissioner, T.C. Memo. 2014-159, at 57-58; and the Commissioner points us to no authority supporting his contention that a taxpayer’s “reasonable cause” defense against one penalty is necessarily implicated in the IRS’s assertion of an alternative penalty, so that the taxpayer therefore has the burden to prove reasonable cause as an equivalent defense to the alternative penalty. Moreover, we are able to resolve the reasonable defense issue (in the Cavallaros’ favor) however the burden is allocated, so we need not address further the issue of burden of proof on reasonable cause. See Martin Ice Cream Co. v. Commissioner, 110 T.C. 189, 210 n.16 (1998) (“we decide the issue on a preponderance of the evidence; therefore, the allocation of the burden of proof does not determine the outcome”). B. “[E]xcessive and arbitrary” As a second basis for shifting the burden of proof, petitioners assert: Alternatively, the controlling law also states that, where the assessment is shown to be excessive, naked, arbitrary or without any foundation, the burden shifts to the Respondent. * * The gift amount allegations and gift tax deficiencies asserted in the now-abandoned Notices of Deficiency were not based on any appraisal, and were excessive and arbitrary. As we have already shown, the notices of deficiency were not “abandoned”. It is evidently true that the Commissioner did not obtain an appraisal before issuing the - 52 - [52] notices, but this did not render the notices “arbitrary”. Rather, the Commissioner had discovered that, in merging the companies and granting stock to their sons, petitioners had followed advice to contrive technology transfers that had never occurred and to “squeeze a few embarrassing facts into the suitcase by force”. This was a sufficient basis for issuing the notices, and to require more would violate the general rule that we do not “look behind” the notice of deficiency. Graham v. Commissioner, 82 T.C. 299, 308 (1984), aff’d, 770 F.2d 381 (3d Cir. 1985). III. Gift tax liability A. General gift tax principles Section 2501(a) imposes a tax on the transfer of property by gift. The donor is primarily responsible for paying the gift tax. Sec. 2502(c); see also 26 C.F.R. sec. 25.2502-2, Gift Tax Regs. The gift tax is imposed upon the donor’s act of making the transfer, rather than upon receipt by the donee, and it is measured by the value of the property passing from the donor, rather than the value of enrichment resulting to the donee. 26 C.F.R. sec. 25.2511-2(a). Donative intent on the part of the donor is not an essential element for gift tax purposes; the application of gift tax is based on the objective facts and circumstances of the - 53 - [53] transfer rather than the subjective motives of the donor. 26 C.F.R. sec. 25.2511-1(g)(1), Gift Tax Regs. Section 2512(b) provides: “Where property is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift”. Such taxable transfers include not only those transfers for which no valuable consideration is received, as in the case of a typical gift, but “embrace as well sales, exchanges, and other dispositions of property for a consideration to the extent that the value of the property transferred by the donor exceeds the value in money or money’s worth of the consideration given therefor.” 26 C.F.R. sec. 25.2512-8, Gift Tax Regs. Where, as here, the transaction was made between family members, the transaction is “subject to special scrutiny, and the presumption is that a transfer between family members is a gift.” Harwood v. Commissioner, 82 T.C. 239, 258 (1984) (citing Estate of Reynolds v. Commissioner, 55 T.C. 172, 201 (1970)), aff’d without published opinion, 786 F.2d 1174 (9th Cir. 1986). The parties dispute whether the merger transaction was made in the “ordinary course of business”, that is, “a transaction which is bona fide, at arm’s - 54 - [54] length,[34] and free from any donative intent”, which is “considered as made for an adequate and full consideration in money or money’s worth.” 26 C.F.R. sec. 25.2512-8. B. Lack of arm’s-length character We find that the 1995 merger transaction was notably lacking in arm’s- length character. If Camelot had offered itself to the market for acquisition claiming ownership of the CAM/ALOT technology, it is inconceivable that a hypothetical acquirer would do anything other than demand to see documentation of Camelot’s ownership interest--documentation that we have found does not exist. An unrelated hypothetical acquirer would never have been be satisfied with Camelot’s mere assertions of ownership, or its statements that an oral agreement effecting the transfer occurred at some point after Camelot’s incorporation. Instead, upon realizing no such documentation was available, an unrelated party either would have offered to purchase Camelot at a much lower price or (more likely) would have walked away from the deal altogether. 34 See Estate of Bongard v. Commissioner, 124 T.C. 95, 122-123 (2005) (“An arm’s-length transaction has been defined as ‘A transaction between two unrelated and unaffiliated parties’, or alternatively, a transaction ‘between two parties, however closely related they may be, conducted as if the parties were strangers, so that no conflict of interest arises.’ Black’s Law Dictionary 1535 (8th ed. 2004)”). - 55 - [55] Likewise, if Knight were dealing with an unrelated party which sold machines that had been manufactured at Knight’s risk by Knight employees on Knight premises using technology developed by Knight personnel, where Knight had owned the only public registrations of intellectual property and had claimed ownership of the technology in prior tax filings, it defies belief to suggest that Knight would have simply disclaimed the technology and allowed the unrelated party to take it. If an unrelated party had purchased Camelot before the merger and had then sued Knight to confirm its supposed acquisition of the CAM/ALOT technology, without doubt that suit would fail. Camelot did not even own the CAM/ALOT trademark registration. But these cases, unlike those hypothetical scenarios, involve parents who were benevolent to their sons and involve sons who could therefore proceed without the caution that normally attends arm’s-length commercial dealings between unrelated parties. The Cavallaros manifestly gave no thought in 1987 to the question of which entity would own what intangibles. They gave no thought thereafter to who was paying for the further development of the technology. When the question of technology ownership came up in the context of claims for R&D credits, the professionals comfortably assumed--without challenge--that of course Knight owned the technology. And when the question finally arose - 56 - [56] explicitly, it arose in an estate-planning context, when the question was “How can we best convey wealth to our sons?” and donative intent was front and center. In that context, the “confirmatory” bill of sale confirmed a fiction. There is no evidence of any arm’s-length negotiations occurring between the representatives or executives of the two companies. Instead (and despite a wholesale lack of evidence as to Camelot’s ownership of the technology), Knight agreed to take a less than 20% interest in the merged company, effectively valuing Camelot at four times the value of Knight. As we stated in Dauth v. Commissioner, 42 B.T.A. 1181, 1189 (1940): Where the facts show that the parties to a sale demonstrate such a lack of interest as to the price at which one sells to another that the buyer purportedly gives a sum greatly in excess of the worth of the property, such facts indicate that what was done was not a real business transaction and “was not intended to have the usual results and significance of a bona fide business deal.” Pierre S. du Pont [v. Commissioner], * * [37 B.T.A. 1198] p. 1242 [(1938)]. * * * Accordingly, we find that the merger transaction between Knight and Camelot was not engaged in at arm’s length and was not in the ordinary course of business. C. Company valuations Valuation is ultimately a question of fact. Estate of Newhouse v. Commissioner, 94 T.C. 193, 217 (1990). The value of the gift depends on the fair market value of the property, which is “the price at which such property would - 57 - [57] change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts.” 26 C.F.R. sec. 25.2512-1. When an interest in a business is being valued for the determination of a gift of transferred property (pursuant to section 2512), 26 C.F.R. section 25.2512-3(a), Gift Tax Regs., provides: Care should be taken to arrive at an accurate valuation of any interest in a business which the donor transfers without an adequate and full consideration in money or money’s worth. The fair market value of any interest in a business, whether a partnership or a proprietorship, is the net amount which a willing purchaser, whether an individual or a corporation, would pay for the interest to a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts. The net value is determined on the basis of all relevant factors including-- (1) A fair appraisal as of the date of the gift of all the assets of the business, tangible and intangible, including good will; (2) The demonstrated earning capacity of the business; and (3) The other factors set forth in paragraph (f) of § 25.2512-2 relating to the valuation of corporate stock, to the extent applicable.[35] 35 Generally, the value of stock in a company is the “fair market value per share * * on the date of the gift.” 26 C.F.R. sec. 25.2512-2(a), Gift Tax Regs. However, where actual selling prices are unavailable, then, in the case of shares of stock, the factors to be considered are “the company’s net worth, prospective earning power and dividend-paying capacity, and other relevant factors.” Id. para. (f)(2). “Other relevant factors” include-- the goodwill of the business; the economic outlook in the particular (continued...) - 58 - [58] To assist the Court in properly valuing Knight and Camelot, both parties retained experts in business valuation to determine the respective values of the closely held S corporations in these cases. The Court evaluates expert opinions in the light of each expert’s demonstrated qualifications and all other evidence in the record. Parker v. Commissioner, 86 T.C. 547, 561 (1986). The appraiser must use common sense and informed judgment to analyze all the facts and circumstances of each case, maintaining “a reasonable attitude in recognition of the fact that valuation is not an exact science.” Rev. Rul. 59-60, sec. 3.01, 1959-1 C.B. 237, 238. We are not bound by an expert’s opinions and may accept or reject an expert opinion in full or in part in the exercise of sound judgment. Helvering v. Nat’l Grocery Co., 304 U.S. 282, 295 (1938); Parker v. Commissioner, 86 T.C. at 561-562. 35 (...continued) industry; the company’s position in the industry and its management; the degree of control of the business represented by the block of stock to be valued; and the values of securities of corporations engaged in the same or similar lines of business which are listed on a stock exchange. However, the weight to be accorded such comparisons or any other evidentiary factors considered in the determination of a value depends upon the facts of each case. * * Id. para. (f) (flush language). - 59 - [59] Both of Mr. and Mrs. Cavallaros’ experts (i.e., Mr. Maio hired in 1995 in anticipation of the merger and Mr. Murphy hired to testify at trial) valued the companies using market-based approaches. They compared Knight and post- merger Camelot to public companies that are arguably similar, if one assumes that Camelot owned the technology (and had been entitled to the income that had been allocated to it). But that assumption is contrary to fact. Mr. and Mrs. Cavallaro did not meet their burden to prove that Camelot actually owned the technology, yet they proposed no alternative valuation on the (accurate) assumption that it was Knight, instead, that owned the technology and had been entitled to most of the income that the CAM/ALOT product line had generated. Because we find incorrect the Cavallaros’ fundamental premise, on which their valuations are based (that is, we find that Knight owned the CAM/ALOT technology), Mr. Maio’s and Mr. Murphy’s market-based comparison valuations must be disregarded entirely-- leaving petitioners with no evidence on this critical issue as to which they have the burden of proof. The Commissioner’s expert concluded that the total value of the combined entities at the date of the merger was $64.5 million, that 65% of that was attributable to Knight, and that 35% of the total was what Camelot’s shareholders should have received in the merger. Mr. and Mrs. Cavallaro’s experts posited a - 60 - [60] higher value of the combined entities, $72.8 million, though asserting that no gift was made because the portion received by the Cavallaros accurately reflected the value of Knight relative to Camelot at that time. In putting forth Mr. Bello’s conclusions of value, the Commissioner has thus conceded that the value of the combined entities is not greater than $64.5 million, and that the value of the gift made in the merger transaction is not greater than $29.6 million. Although petitioners make several serious criticisms of his method, their own higher valuation of $72.8 million moots those criticisms insofar as the value of the entire merged entity is at issue. Petitioners’ criticisms might have greater significance on the next sub-issue--i.e., determining what portion of that value is properly attributable to each of the two companies--but we need not resolve those criticisms or attempt to correct the Commissioner’s figures. It is the Cavallaros who have the burden of proof to show the proper amount of their tax liability, and neither of the expert valuations they provided comports with our fundamental finding that Knight owned the valuable CAM/ALOT technology before its merger with Camelot. We are thus left with the Commissioner’s concession, effectively unrebutted by the party with the burden of proof. The Cavallaros risked their cases on the proposition that Camelot had owned the CAM/ALOT technology (and on a - 61 - [61] valuation that assumed that proposition), but they failed to prove that proposition (and the evidence showed it to be false). That being so, “[i]t would serve no useful purpose to review our agreement or disagreement with each and every aspect of the experts’ opinions.” CTUW Georgia Ketteman Hollingsworth v. Commissioner, 86 T.C. 91, 98 (1986). We conclude that Mr. and Mrs. Cavallaro made gifts totaling $29.6 million on December 31, 1995.36 IV. Failure-to-file additions to tax under section 6651(a)(1) and accuracy-related penalties under section 6662 In the notices of deficiency for 1995, the IRS determined that Mr. and Mrs. Cavallaro are both liable for the addition to tax imposed by section 6651(a)(1) for failure to timely file gift tax returns. In his answers, the Commissioner asserted the section 6662 accuracy-related penalties (in the alternative to the fraud penalties that the Commissioner no longer asserts). We 36 Since we base this conclusion on petitioners’ failure of proof, it is all but immaterial that the Commissioner’s expert reached this $29.6 million gift number by an arguably flawed analysis under which the total value of the merged entity was $64.5 million, Knight’s value was $41.9 million (i.e., 65% of the total), and Camelot’s value was $22.6 million (i.e., 35% of the total). Given petitioners’ failure of proof and our consequent finding of a $29.6 million gift, if we assume instead the total value that petitioners’ expert determined--$72.8 million--then arithmetic shows us that Knight’s value must have been $43.4 million (i.e., 59.6% of the total) and Camelot’s value must have been $29.4 million (i.e., 40.4% of the total). We do not choose between these two possibilities. - 62 - [62] hold that the Commissioner has shown that the additions and the penalties are applicable, but we sustain the Cavallaros’ defenses of “reasonable cause”. A. Applicability of failure-to-file additions to tax Section 6651(a)(1) authorizes the imposition of an addition to tax for failure to file a timely return (unless the taxpayer proves that such failure is due to reasonable cause and is not due to willful neglect, as discussed below). We have found that Mr. and Mrs. Cavallaro did make gifts totaling $29.6 million, and it is undisputed that Mr. and Mrs. Cavallaro did not file Forms 709 for the 1995 gifts until July 7, 2005, approximately nine years late. Therefore, as a threshold matter, the addition to tax imposed by section 6651(a)(1) is applicable in each case here (subject to the defense described below). B. Applicability of accuracy-related penalties Section 6662 imposes an “accuracy-related penalty” of 20% of the portion of the underpayment of tax where the taxpayer’s return reflects either a “substantial estate or gift tax valuation understatement” or a “gross valuation misstatement”. Section 6662(a), (b)(5), (h).37 Pursuant to section 6662(g)(1), 37 The accuracy-related penalty is also imposed where the tax underpayment is attributable to the taxpayer’s negligence or disregard of rules or regulations, and the Commissioner here alleges such negligence. However, we need not reach the issue of negligence, since the mathematical bases for a “substantial estate or gift (continued...) - 63 - [63] there is a substantial estate or gift tax valuation understatement where the value of property reported on an estate or gift tax return is 50% or less of its correct value and the underpayment exceeds $5,000. Where such property is reported at a value less than 25% of its correct value, there is a “gross valuation misstatement” and the penalty imposed under section 6662 is increased from 20% to 40% of the tax imposed. Sec. 6662(h). Because we have found that Mr. and Mrs. Cavallaro made gifts totaling $29.6 million but (as they admit) reported gifts of zero on their gift tax returns, the gross valuation misstatement penalty imposed by section 6662(h) is applicable here (subject to the defense discussed below). C. Reasonable cause defenses Both the section 6651(a)(1) addition to tax and the section 6662(a) accuracy-related penalty are subject to a “reasonable cause” defense. The defenses arise from distinct statutory sources, but where a taxpayer asserts reasonable cause as a defense from liability for both because he relied on the advice of a competent adviser, the two overlap significantly. We therefore discuss them in tandem below. 37 (...continued) tax valuation understatement” or a “gross valuation misstatement” are met here. - 64 - [64] 1. Reasonable cause for failure to file The failure-to-file addition to tax is applied “unless it is shown that such failure is due to reasonable cause and not due to willful neglect”. Sec. 6651(a)(1). 26 C.F.R. section 301.6651-1(c), Proced. & Admin. Regs., provides: “If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to a reasonable cause.” “Whether the elements that constitute ‘reasonable cause’ are present in a given situation is a question of fact”, based on the circumstances of the individual case. United States v. Boyle, 469 U.S. 241, 249 n.8 (1985). “[W]illful neglect” is defined as “a conscious, intentional failure or reckless indifference”. Id. at 245. Circumstances that constitute reasonable cause include good faith reliance on a mistaken legal opinion of a competent tax adviser that no liability was due and it was unnecessary to file a return may also constitute reasonable cause. Id. at 250-251; McMahan v. Commissioner, 114 F.3d 366, 369 (2d Cir. 1997) (“reliance on a mistaken legal opinion of a competent tax adviser--a lawyer or accountant-- that it was unnecessary to file a return constitutes reasonable cause”), aff’g T.C. Memo. 1995-547. As the Supreme Court articulated in Boyle, 469 U.S. at 251: - 65 - [65] When an accountant or attorney advises a taxpayer on a matter of tax law, such as whether a liability exists, it is reasonable for the taxpayer to rely on that advice. Most taxpayers are not competent to discern error in the substantive advice of an accountant or attorney. To require the taxpayer to challenge the attorney, to seek a “second opinion,” or to try to monitor counsel on the provisions of the Code himself would nullify the very purpose of seeking the advice of a presumed expert in the first place. * * “Ordinary business care and prudence” do not demand such actions. 2. Reasonable cause for the underpayment Similarly, under section 6664(c)(1), a taxpayer who is otherwise liable for the accuracy-related penalty may avoid the liability if he can show, first, “that there was a reasonable cause” for the underpayment and, second, that he “acted in good faith with respect to” the underpayment, then no accuracy-related penalty “shall be imposed”. Whether the taxpayer acted with reasonable cause and in good faith depends on the pertinent facts and circumstances, including his efforts to assess his proper tax liability, his knowledge and experience, and the extent to which he relied on the advice of a tax professional. 26 C.F.R. sec. 1.6664-4(b)(1), Income Tax Regs. “Reliance on * * * professional advice or other facts, however, constitutes reasonable cause and good faith if, under all the circumstances, such reliance was reasonable and the taxpayer acted in good faith.” Id. The Court’s caselaw sets forth the following three requirements in order for a taxpayer to use reliance on a tax professional to avoid liability for a - 66 - [66] section 6662(a) penalty: “(1) The adviser was a competent professional who had sufficient expertise to justify reliance, (2) the taxpayer provided necessary and accurate information to the adviser, and (3) the taxpayer actually relied in good faith on the adviser’s judgment.” Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43, 99 (2000), aff’d, 299 F.3d 221 (3d Cir. 2002). 3. The Cavallaros’ reliance on professional advice Mr. and Mrs. Cavallaro made the requisite showing of reasonable cause. They had little to no advanced education, including no formal accounting, legal, or business education. Mr. and Mrs. Cavallaro hired advisers who were competent professionals with sufficient expertise to justify reliance. They engaged professionals from a well-known accounting firm and a well-known law firm to structure the tax-free merger of their S corporation, Knight Tool, with their sons’ S corporation, Camelot Systems. As discussed above, the professionals initially had differing opinions regarding the ownership of the CAM/ALOT technology, and the issue was explicitly considered by those professionals. The team of advisers eventually structured the merger transaction according to the idea proposed by the Cavallaros’ attorney Mr. Hamel at Hale & Dorr--that is, that on the date of the merger, the CAM/ALOT technology belonged to Camelot and not to Knight (and therefore that no gift occurred) because of a prior transfer. They - 67 - [67] obtained the valuation report by Mr. Maio based on this assumption and allocated the post-merger stock accordingly. Mr. Hamel was the author of this fiction of a 1987 transfer, which he concocted from facts recounted to him by the Cavallaros about the 1987 meeting. Using those facts, Mr. Hamel advised the Cavallaros that they had transferred the CAM/ALOT technology in 1987 and that Knight therefore did not still own it in 1995. Thus, on the basis of professional advice from someone they perceived to be competent and reliable--a friend from many years prior who had become a partner at a well-known and successful law firm--the Cavallaros believed that their company no longer owned the technology in 1995. Since they believed that Camelot owned it instead, they reasonably and in good faith thought that the post- merger division of stock that was based on Mr. Maio’s valuation was reasonable. Mr. and Mrs. Cavallaro also assert that they provided necessary and accurate information to their advisers. The Commissioner disputes this assertion, arguing that Mr. and Mrs. Cavallaro do not have the defense of reasonable cause for failing to file gift tax returns because Mr. and Mrs. Cavallaro “provided [their attorney] with incorrect information and worked with him in developing the [false] ‘picture’ depicted in the affidavits.” As we stated above, however, it was Mr. Hamel’s idea to create the affidavits when he realized that, if the value of the - 68 - [68] CAM/ALOT liquid-dispensing machine technology remained in Knight, the corporation wholly owned by Mr. and Mrs. Cavallaro, then their eventual estate tax liability would be greater. Mr. Hamel sought to establish a basis for arguing that the valuable CAM/ALOT technology was already owned by the younger generation (i.e., in their Camelot corporation), yet he was faced with the problem that there was no documented transfer of the technology--in 1987, when Camelot was incorporated, or later. Mr. Cavallaro could hardly be said to have contributed to creating a false picture of that alleged transfer when he stated in the interview preceding the affidavit’s creation that he had not even given the transfer of technology a thought. It was Mr. Hamel who concocted the idea that the technology transfer happened when Mr. Cirome handed the newly formed Camelot minute book to Ken Cavallaro. Mr. and Mrs. Cavallaro were later convinced by Mr. Hamel to adopt the idea but cannot be fairly accused of providing false information. There is also no evidence in the record that Mr. and Mrs. Cavallaro provided any false or incomplete information to Mr. Maio when he was hired to perform an independent valuation of the two companies before their merger. At trial, Mr. Maio explained that he followed his normal practice in gathering information from which to value a company: he conducted on-site visits of the - 69 - [69] two companies, he reviewed relevant company materials, and he interviewed key principals of both. He explained that he also used the relevant financial information of Camelot and Knight, as provided to him by the companies’ accountants. And not only did Mr. Maio state that he was given complete access to the necessary records of both companies, but he also testified that at the time he did his initial valuation he did not see either the affidavits prepared by Mr. Cavallaro and Ken Cavallaro or the “Confirmatory Bill of Sale”. We find that Mr. and Mrs. Cavallaro have established that they provided necessary and accurate information to their advisers. Finally, Mr. and Mrs. Cavallaro persuasively testified that they actually relied in good faith on the advisers’ judgment when they structured the merger of Knight and Camelot and when they received inadequate compensation (in the form of shares of the new, merged entity) for their shares of Knight. Neither of the Cavallaros received advanced formal education, and neither was familiar with sophisticated legal matters; and though both had participated in the process of forming a company, neither had previously been a part of a corporate merger. Exercising their best judgment, they sought out professionals with the relevant experience in structuring this type of transaction, and then they acted according to the professionals’ recommendations. The value in dispute inhered in invisible, - 70 - [70] intangible assets, consisting of intellectual property that was mostly not even susceptible of public registration. When their lawyer advised them that it had been transferred, they were hardly in a position to contradict him. In ways that sometimes surprise laymen, the law sometimes deems transfers to have taken place; in fact, the very gifts that we find here are indirect, deemed transfers. If the lawyers and accountants said that a transfer had taken place when Camelot was created in 1987, then from the Cavallaros’ point of view, why not? The fault in the positions the Cavallaros took was attributable not to them but to the professionals who advised them. (Since those professionals are not parties here and have not had a full opportunity to explain or defend themselves, we refrain from further comment on them.) The value of the consideration that Mr. and Mrs. Cavallaro received in the merged Camelot and Knight entity was based on the valuation figures arrived at by Mr. Maio of E&Y; and at the time, none of their advisers questioned the numbers or suggested to the Cavallaros that there might be gift tax implications. We find that Mr. and Mrs. Cavallaro did in fact rely on the judgment and advice of their professional advisers that the technology at issue had already been owned by their sons’ company since 1987 (and thus was not being transferred in 1995). The Cavallaros therefore had reasonable cause not to file gift tax returns in connection - 71 - [71] with the 1995 merger and, when they later did file returns, had reasonable cause to report that their gift tax liability was zero. Because both Mr. and Mrs. Cavallaro disclosed all the relevant facts regarding Knight and Camelot to their experienced accounts and estate-planning attorneys and followed their advice in good faith, both Mr. and Mrs. Cavallaro have a successful defense of reasonable cause to the section 6651(a)(1) addition to tax and the section 6662 accuracy-related penalty. So that the gift tax liabilities can be computed, Decisions will be entered under Rule 155.	{ "pile_set_name": "FreeLaw" }
132 F.3d 1311 97 Cal. Daily Op. Serv. 13, 97 Daily JournalD.A.R. 27Douglas Arnold GIBSON, by his Guardian ad litem DouglasArnold GIBSON, Individually and on Behalf of IndividualsSimilarly Situated and the General Public; Diane MarieGibson, by her Guardian ad litem Douglas Arnold Gibson,Individually and on Behalf of Individuals Similarly Situatedand the General Public; Dustin Gibson, by his Guardian adlitem Douglas Arnold Gibson, Individually and on Behalf ofIndividuals Similarly Situated and the General Public;Daniel Gibson, by his Guardian ad litem Douglas ArnoldGibson, Individually and on Behalf of Individuals SimilarlySituated and the General Public; James Dittmar,Individually and on Behalf of Individuals Similarly Situatedand the General Public, Plaintiffs-Appellees,v.COUNTY OF RIVERSIDE; Larry Parrish, Individually and in hisOfficial Capacity as Chief Administrative Officer; ThomasIngram, Individually and in his Official Capacity asDirector of Building and Safety; Scott Barber, Individuallyand in his Capacity as Supervising Code Enforcement Officer;Joseph Tronti, Individually and in his Capacity as SeniorCode Enforcement Officer, Defendants-Appellants. No. 96-56369. United States Court of Appeals,Ninth Circuit. Argued and Submitted Nov. 4, 1997.Decided Dec. 31, 1997. Brian J. Wright, Greines, Martin, Stein & Richland, Beverly Hills, CA, for defendants-appellants. James D. Smith (argued), Law Office of James D. Smith, Berkeley, CA, and Elizabeth Brancart (on the briefs), Brancart & Brancart, Pescadero, CA, for plaintiffs-appellees. Appeal from the United States District Court for the Central District of California; Robert J. Timlin, District Judge, Presiding. D.C. No. CV-94-00028-RT-Mcx. Before: FLOYD R. GIBSON,* KOZINSKI, and TROTT, Circuit Judges. TROTT, Circuit Judge: OVERVIEW 1 This appeal arises from an action brought by a family with minor children challenging Riverside County, California's senior citizen zoning ordinances. The district court granted (1) plaintiff's motion for partial summary judgment, and (2) declaratory and injunctive relief permanently enjoining the County from enforcing its age-based zoning laws. In so doing, the district court concluded that California Government Code § 65008(a)(1), 1994 legislation that broadly outlawed certain forms of discrimination in connection with the use and enjoyment of real property, expressly prohibited any zoning based upon age. Cal. Gov.Code § 65008(a)(1) (West 1994). 2 On July 25, 1996, three days after the district court's ruling, however, the California Legislature amended § 65008 specifically to exempt Riverside County (County) from the statutory prohibition. The Legislature's action was apparently taken in response to the district court's ruling. In a subsequent hearing prompted by the new legislation, the district court ruled that the 1996 amendment (Amendment) was invalid as an "act in excess of the Legislature's powers." Thus, the district court denied (1) a motion to vacate its previous orders, (2) a motion to alter and amend, (3) a motion for relief from judgment, and (4) a motion for judgment as a matter of law-all filed by the County. The court also denied a motion to reconsider the permanent injunction. 3 Although we concur in the initial judgment of the district court regarding the effect as of 1994 of § 65008(a) on the Riverside senior citizen zoning ordinances, we respectfully reject the district court's conclusion that the later Amendment is invalid. The second ruling constitutes an unwarranted intrusion into the powers and prerogatives of the State Legislature and State government. We vacate the court's injunction and remand so the district court can redetermine the outcome of plaintiff's motion for declaratory relief in light of the valid 1996 amendment and other pertinent laws. The court will now need to address other questions of state and federal law left untouched by its previous rulings. STANDARD OF REVIEW 4 The district court's construction of California Government Code § 65008 is a purely legal issue reviewed de novo. Premier Communications Network, Inc. v. Fuentes, 880 F.2d 1096, 1102 (9th Cir.1989) (legal issues reviewed de novo); Mastro v. Witt, 39 F.3d 238, 241 (9th Cir.1994) (issues of state law reviewed de novo). DISCUSSION 5 From 1978 through 1993, the County of Riverside enacted a series of zoning ordinances that limited certain residential areas in the County to senior citizens only. See Riverside County, Cal., Ordinance 348, § 18.7 (April 13, 1993). These ordinances remain on the books and have never been repealed. In 1991, Plaintiff Gibson and his family, including his two minor children, moved into an inherited home located in a seniors only zone. The County served Plaintiff with several notices of zoning violations. In 1994, Plaintiff sued the County alleging the zoning ordinance violated, inter alia, various provisions of California law. 6 California Government Code Section 65008(a)(1) enacted in 1994 reads in pertinent part:Any action pursuant to this title by any ... county ... in this state is null and void if it denies to any individual or group of individuals the enjoyment of residence, landownership, tenancy, or other land use in this state because of any of the following reasons: The race, sex, color, ethnicity, national origin, ancestry, lawful occupation, or age of the individual or groups of individuals. 7 Cal. Gov.Code § 65008(a)(1) (emphasis added). The district court properly held that the plain language of § 65008(a) rendered the County's age-based zoning restrictions "null and void." Section 65008(a) is clear on its face and requires no assistance from any other source in interpreting its meaning. The County's argument that the section does not mean what it says is unpersuasive. The 1996 Legislature's statement about the meaning of § 65008(a), passed two years prior, is similarly unpersuasive. 8 As noted, the California legislature amended § 65008(a) in 1996 by passing § 65008(e). The Amendment was passed in reaction to the district court's ruling. The Amendment expressly exempts Riverside County from the prohibition against age-based discrimination in zoning, and it endorses of the County's ordinances. It reads: 9 nothing in this section or this title shall be construed to prohibit ... [t]he County of Riverside from enacting and enforcing zoning to provide housing for older persons, in accordance with state or federal law if that zoning was enacted prior to January 1, 1995. 10 Cal. Gov.Code § 65008(e)(1). 11 The district court concluded, solely on the basis of state law, that the Amendment was invalid, reasoning that it (1) represented a retroactive change in the law, and (2) exceeded the legislature's state constitutional powers. We respectfully disagree. 12 First, the Amendment is valid on its face. It is a proper legislative response to a ruling of a court on an issue involving the meaning and effect of state statutory law with which the Legislature formally disagreed. As such, the Amendment does not constitute an impermissible or excessive exercise of legislative authority. To the contrary, the Amendment serves a permissible legislative purpose: it lifts a prohibition previously imposed-possibly unintentionally-by the legislature that enacted it and revalidates the County's zoning ordinances enacted prior to January 1, 1995. "Null and void" as used in § 65008(a)(1) only means having no effect: it does not mean "repealed." The district court's attempt to decide whether the Amendment "clarified" the law on one hand, or "retroactively altered" it on the other, led the court astray. The 1994 change in the law may very well give certain residents a nonconforming use claim against future zoning enforcement, but it does not serve as a predicate to render the County's laws now invalid. 13 Moreover, and contrary to the district court's conclusion, the Amendment does not itself "zone or reimpose zoning" in violation of California's Constitution, which confers zoning authority on local, not State, government. Cal. Const. art. XI, § 7 (1970). The Amendment served only to allow the County to enforce its current zoning regulations insofar as those regulations are consistent with state and federal law. No principle of law required the County formally to reenact its zoning laws to bring them back to life when the ban was lifted. Making such zoning again possible does not mean the legislature is itself doing the zoning. Although the amendment may not be able to be applied retroactively, it can surely operate prospectively. 14 On remand, the district court must determine the effect of the change in the law which exempts Riverside County from the former blanket prohibition of discrimination in zoning. The court must determine whether the prospective application of the Amendment affects the outcome of this dispute and the nature of the relief to be awarded, if any. The court must also determine whether Plaintiff escapes application of the Amendment by having filed suit before its enactment. 15 Finally, the remaining legal questions not answered by the district court must also now be answered on remand. The court in fashioning relief failed adequately to acknowledge other California statutes that implicitly allow senior-only zoning. See, e.g., California Fair Employment and Housing Act, Cal. Gov.Code § 12920-12955.9 (West 1994); California Government Code § 65852.1 (West Supp.1997); Health and Safety Code § 18300(g)(1) (West Supp.1997); the 1996 amendment to the Unruh Civil Rights Act, Cal. Civ.Code §§ 51-51.12 (West Supp.1997). Both state and federal law permit senior-only housing under certain conditions. See, e.g., Fair Housing Act, 42 U.S.C. §§ 3601-3631 (1994). In fact, and as the district court itself acknowledged, senior citizen housing developments under the right conditions serve a valid social and legislative purpose. The sweeping injunction is inconsistent with this allowance. Thus, because the injunction as drafted is plainly invalid, we vacate it in its entirety. 16 REVERSED and REMANDED. * The Honorable Floyd R. Gibson, Senior Circuit Judge for the Eighth Circuit, sitting by designation	{ "pile_set_name": "FreeLaw" }
810 F.2d 1326 22 Fed. R. Evid. Serv. 894 UNITED STATES of America, Plaintiff-Appellee,v.Melchor DE LOS SANTOS, Defendant-Appellant. Nos. 86-2085, 86-2296. United States Court of Appeals,Fifth Circuit. Feb. 13, 1987. Michael E. Tigar, Austin, Tex., for defendant-appellant. Wayne F. Speck, Asst. U.S. Atty., Helen M. Eversberg, U.S. Atty., Michael R. Hardy, Asst. U.S. Atty., San Antonio, Tex., for plaintiff-appellee. Appeals from the United States District Court for the Western District of Texas. Before THORNBERRY, DAVIS and HILL, Circuit Judges. ROBERT MADDEN HILL, Circuit Judge: 1 Melchor De Los Santos was arrested on October 29, 1985, for possession with intent to distribute heroin in violation of 21 U.S.C. Sec. 841(a)(1). Following the district court's denial of both a motion to suppress the seized heroin and a motion to reveal the identity of a confidential informant, De Los Santos entered a conditional plea of guilty pursuant to Fed.R.Crim.P. 11(a)(2). In accordance with this conditional plea, De Los Santos now appeals the denial of his suppression and disclosure motions. Finding that the district court committed no error, we affirm. I. 2 On October 28, 1985, in the late afternoon Drug Enforcement Administration (DEA) Special Agent Albert Castro received information from a confidential informant that De Los Santos would be in the area of Malone and South Flores Streets in San Antonio, Texas, the following morning to pick up heroin that was to be stored somewhere in that area that evening. Apparently, at some point on October 28 Castro had also undertaken surveillance of De Los Santos, who was driving what was testified to as a red automobile, and followed him to a number of areas in San Antonio, including that of Malone and South Flores Streets.1 It is not clear from the record, however, whether Castro was following De Los Santos prior to receiving the information from the informant or after and in response to receiving it. 3 On the evening of October 28 Castro made arrangements to have a surveillance team assembled the next morning in the Malone-South Flores area. The next morning the agents observed De Los Santos drive in the same vehicle to the rear of a residence located at 302 West Malone Street, where he remained for two to four minutes. When De Los Santos left, several police officers and DEA agents followed him while Castro and several other DEA agents, with the consent of the occupants, searched the residence on Malone Street. However, no drugs were found. Castro subsequently gave the order to San Antonio Police Department detective Jerry Rangel to stop De Los Santos. 4 Once De Los Santos was pulled over, Rangel told him to place his hands on the steering wheel and then removed him from the automobile and frisked him. After moving De Los Santos to the rear of the automobile, Rangel went to the driver's side where he saw a brown paper sack protruding from underneath the front seat. Rangel removed the sack and, upon examining its contents, determined that it contained 15 packets of a substance that resembled heroin. De Los Santos was arrested; subsequently the substance in the packets was positively tested as heroin.2 5 After an indictment was returned charging De Los Santos with intent to distribute heroin in violation of 21 U.S.C. Sec. 841(a), De Los Santos made a motion to suppress the evidence obtained from the search of his automobile and a motion requesting disclosure of the identity of the informant on whose tip the authorities based their stop and search. In the event that the government were to claim the privilege of nondisclosure as to the informant, De Los Santos also requested an in camera hearing in his memorandum in support of the motion for disclosure. At a minimum, he argued that his counsel should be present at the in camera hearing to determine whether the informant's identity should be revealed. 6 At a hearing on both motions before the district court, both Castro and Rangel testified as to the facts leading up to the arrest of De Los Santos. Castro also testified as to the reliability of the informant and as to the criminal record of De Los Santos. Regarding the informant, he stated that he had known the informer for ten or eleven years; that the informer had provided reliable information in the past that had led to the seizure of drugs; and that the informer was continuing to work on cases for the DEA.3 With respect to De Los Santos' criminal record, there was evidence that he had been convicted for committing violent crimes and for the distribution of heroin. 7 Following Rangel's and De Los Santos' testimony and an argument by De Los Santos that he should be able to discover the identity of the informant, the government requested that the court hear additional information regarding the informant in camera. Counsel for De Los Santos did not request at this time that he be allowed to attend the in camera proceeding. The court granted the government's request. At the in camera hearing the judge, Castro, and the prosecutor were the only ones present. At this hearing the court was offered additional facts surrounding the informant's tip. This information could not be testified to in open court because it clearly would have revealed the identity of the informant. The court did consider whether the identity of the informant would be helpful to De Los Santos' defense, and whether it should therefore be released. 8 After sealing the in camera testimony, the court made findings of fact and conclusions of law. In addition to the facts stated above, the court found that the information supplied by the informant was reliable and had been provided by one whose reliability and veracity was established. The court also found that the totality of the circumstances gave rise to a reasonable suspicion to support the stop of De Los Santos' automobile. The court based its finding of reasonable suspicion on the knowledge of Castro, which had been transmitted to the arresting officers. Subsequent to the stop, the court found that Rangel made a proper arrest. Regarding the informant, the court found that there were compelling reasons for keeping the informant's identity confidential; that the informant was a knowledgeable person aware of each of the circumstances that were communicated to Castro; that there was no other disclosure of the informant's identity; that neither the informant's identity nor the informant's testimony would be helpful to De Los Santos' defense; and that there had been no showing by De Los Santos that the information of the informant could be material or helpful to his case. 9 The court subsequently supplemented its findings of fact and conclusions of law. The additional findings of fact and conclusions of law clarified its position regarding probable cause:4 10 The Court finds that upon searching Defendant's vehicle pursuant to the stop occasioned by probable cause to believe that the Defendant possessed controlled substances, the arresting officers discovered a paper sack that was of a size and shape that indicated that it might contain the contraband sought. The Court concludes that the arresting officers had probable cause to believe pursuant to the standards set forth in Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983), that the paper sack might contain the contraband sought, and therefore, the police were justified in searching the container and discovering the contraband therein. 11 Thereafter De Los Santos was rearraigned and he entered a conditional guilty plea under Fed.R.Crim.P. 11(a)(2). He was assessed a 17 year sentence of imprisonment. He now appeals the denial of his two motions. Basically, he argues that the district court erred in excluding him from the in camera proceeding, that the government did not have probable cause to arrest him, and that even with probable cause the search was unconstitutional. We address each of these contentions in turn. II. 12 De Los Santos' first argument attacks the propriety of the in camera proceeding. He asserts that excluding him from the in camera hearing violated his sixth amendment right to be present and "to be confronted with the witnesses against him." De Los Santos also argues that his sixth amendment right to a public trial was violated by his exclusion. This right to a public trial, he contends, serves the same purpose as his right to be present at the trial to confront his accusers. Thus, De Los Santos uses the analysis of the right to a public trial, expressed in cases such as Waller v. Georgia, 467 U.S. 39, 104 S.Ct. 2210, 81 L.Ed.2d 31 (1984), to support his contention that both the sixth amendment right to a public trial and his right to be present and confront his accuser were violated. 13 The government responds that at a hearing on a motion to suppress evidence a defendant does not have the right to hear details of the information given by a confidential informant to the arresting officers when those details would disclose the identity of the informant. The government argues that the informant's privilege articulated in Roviaro v. United States, 353 U.S. 53, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957), allows the government to withhold the identity of the informant and any information that would lead to the informant's identity. 14 The fundamental issue, therefore, is whether it is necessary to compel disclosure of the informant's identity to De Los Santos or to require that he be allowed to be present at the in camera hearing to vindicate his sixth amendment rights of confrontation and of a public trial or whether we should deny disclosure because of an overriding interest of confidentiality compelled by the governmental privilege. To resolve this issue, we must examine the extent of the privilege of nondisclosure and the nature of De Los Santos' sixth amendment rights. A. 15 In Roviaro, the Supreme Court examined the government's privilege to refrain from disclosing the identity of an informant. The Court found that the purpose of this privilege is to promote effective law enforcement; citizens are encouraged by their guaranteed anonymity to communicate information concerning the commission of crimes to law enforcement officials. Roviaro, 353 U.S. at 59, 77 S.Ct. at 627. However, fairness to the defendant restricts the scope of the privilege. Thus, the privilege is not applicable to any communications if the information will not reveal the informer's identity, if the identity of the informant is already known, or if the informant or the identity is relevant and helpful to the defense of the accused. Id. at 60-61, 77 S.Ct. at 627-28. Because of the competing interests, the Court held that there should be a 16 balancing [of] the public interest in protecting the flow of information against the individual's right to prepare his defense. Whether a proper balance renders nondisclosure erroneous must depend on the particular circumstances of each case, taking into consideration the crime charged, the possible defenses, the possible significance of the informer's testimony, and other relevant factors. 17 Id. at 62, 77 S.Ct. at 628-29. 18 This circuit, in numerous cases applying Roviaro, has established a three-part test to determine whether disclosure is mandated. See United States v. Diaz, 655 F.2d 580, 586 n. 4, 587-89 (5th Cir.1981), cert. denied, 455 U.S. 910, 102 S.Ct. 1257, 71 L.Ed.2d 448 (1982). First, we evaluate the level of the informant's involvement in the alleged criminal activity. Id. at 588; United States v. Ayala, 643 F.2d 244, 246 (5th Cir.1981); United States v. Gonzales, 606 F.2d 70, 75 (5th Cir.1979). The more active the participation, the more likely disclosure will be required. Ayala, 643 F.2d at 246. On the other hand, if the informant's participation is minimal, it favors nondisclosure. Gonzales, 606 F.2d at 75. Finally, if "the evidence shows that an informer is a mere tipster, no disclosure of his identity is required." United States v. Freund, 525 F.2d 873, 876-77 (5th Cir.), cert. denied, 426 U.S. 923, 96 S.Ct. 2631, 49 L.Ed.2d 377 (1976). The second factor considers the helpfulness of disclosure to any asserted defense. Ayala, 643 F.2d at 247. The defendant is required to make a sufficient showing that the testimony would significantly aid the defendant in establishing an asserted defense. Diaz, 655 F.2d at 588. "[M]ere conjecture or supposition about the possible relevancy of the informant's testimony is insufficient to warrant disclosure." Gonzales, 606 F.2d at 75. The third consideration is the government's interest in nondisclosure. Diaz, 655 F.2d at 588-89. The government's interest relates to both the safety of the informant and the informant's future usefulness to the authorities as a continuing confidential source. See Ayala, 643 F.2d at 247 (citing United States v. Toombs, 497 F.2d 88 (5th Cir.1974)). 19 When there are conflicting interests and when necessary to properly balance these three interests, we have held that the court may conduct an in camera hearing. Freund, 525 F.2d at 877. This "limited disclosure of identity and information to the trial judge recognizes the government's interest in maintaining anonymity while at the same time insuring the appellant's interest in developing the testimony of every witness who possesses facts which could control his claim of an illegal search and seizure." Id. 20 With this background, we now must consider whether the Roviaro balancing test required the district court to disclose the identity of the informant or the information supplied by the informer.5 The standard of review of a district court's decision to grant or to deny disclosure of an informant is whether the court abused its discretion. See United States v. Gray, 626 F.2d 494, 500 (5th Cir.1980), cert. denied, 449 U.S. 1091, 101 S.Ct. 887, 66 L.Ed.2d 820 (1981); United States v. Alexander, 559 F.2d 1339, 1344 (5th Cir.1977), cert. denied, 434 U.S. 1078, 98 S.Ct. 1271, 55 L.Ed.2d 785 (1978). To properly balance the interests in this case, it was necessary to know the substance of the information possessed by the informant. The in camera proceeding was the appropriate method of examining the information and balancing the interests. In reviewing the testimony of this in camera proceeding, as well as other relevant evidence, we do not believe the district court abused its discretion in deciding that the informant's identity should not be disclosed. 21 Admittedly, the level of involvement of the informant is not insubstantial. The connection between Castro and De Los Santos existed only because of the informant. Castro was told that De Los Santos would be in a certain area at a certain time to pick up drugs. Without the information, Castro would not have been waiting for De Los Santos. There is also other involvement of the informer that was revealed at the in camera proceeding that supports disclosure, but to reveal it would most likely disclose the identity of the informant. On the whole, though, this factor favors disclosure of the informant. 22 The next factor is whether De Los Santos has made a sufficient showing that the informer's information would significantly aid him in establishing an asserted defense. In his request for disclosure, De Los Santos asserted no defense to the charge of possession with intent to distribute heroin, but only stated: "Defendant is entitled to disclosure ..., where it is relevant and helpful to his defense." Mere supposition about the possible relevancy of the informant's testimony is insufficient to warrant disclosure; rather, "[t]he defendant must show that the informant's testimony would significantly aid in establishing an asserted defense." United States v. Kerris, 748 F.2d 610 at 614 (5th Cir.1984) (citing Diaz, 655 F.2d at 588). De Los Santos has made no such showing. Therefore, this factor does not support disclosure. Compare Ayala, 643 F.2d at 247 (the defendant's contention "that the testimony of the informer, who allegedly had a closer view of the jogger [who sold the drugs] than the agent, would be directly relevant to proving he was not the jogger and would cast doubt on the agent's identification;" this contention was a sufficiently specific demonstration of the relevancy and potential helpfulness of the informer's testimony to warrant disclosure) with Gonzales, 606 F.2d at 75 ("the mere allegation of entrapment is not sufficient in and of itself to force disclosure"). 23 Finally, we must examine the government's interest in nondisclosure. The district court considered this factor to be important. We agree that it is. There was evidence that De Los Santos had been violent before, and there were indications that he could be violent again. Therefore, the safety of the informant is potentially at risk. The court also heard testimony regarding the future usefulness of the informant, discovering that he was involved in several ongoing criminal investigations that would be jeopardized by disclosure. We agree that the governmental interest weighs strongly against disclosure. 24 In sum, the interests balance toward nondisclosure. Although the participation of the informant supports disclosure, De Los Santos did not show that the informant's testimony would significantly aid in establishing an asserted defense, which cuts against disclosure, and the government's interest clearly supports nondisclosure. In a situation such as this where the relative interests balance toward nondisclosure, and where the district court held an in camera hearing at which evidence was presented that enabled the court to reach its decision, we do not believe the court abused its discretion in withholding the identity of the informant. B. 25 Having determined that the court properly withheld the identity of the informant, we must now examine De Los Santos' claims that his sixth amendment right to a public trial and his right to confront his accuser were violated. De Los Santos argues that being excluded from the hearing violated these sixth amendment rights.6 26 The sixth amendment provides the accused with the right to a public trial. See, e.g., Waller, 467 U.S. at 43, 104 S.Ct. at 2214, 81 L.Ed.2d at 36; Rovinsky v. McKaskle, 722 F.2d 197, 199 (5th Cir.1984). The public trial guarantee helps fulfill the central aim of the criminal proceeding: to ensure that the accused is tried fairly. Waller, 467 U.S. at 46, 104 S.Ct. at 2215, 81 L.Ed.2d at 38. This explicit sixth amendment right to a public proceeding invokes the same considerations raised implicitly in the first amendment right of the press and public to attend an accused's trial. Id. at 46, 104 S.Ct. at 2215, 81 L.Ed.2d at 38. Because of this similarity, the Supreme Court found that under the sixth amendment any closure of a public trial over the objections of the defendant must meet the tests set out under the first amendment analysis in Press-Enterprise Co. v. Superior Court of California, 464 U.S. 501, 104 S.Ct. 819, 78 L.Ed.2d 629 (1984). See Waller, 467 U.S. at 47, 104 S.Ct. at 2216, 81 L.Ed.2d at 39. Moreover, the Court found that the aims and interests involved in a suppression hearing were just as pressing as those in the actual trial because such hearings often were the only trial, with defendants thereafter pleading guilty pursuant to a plea bargain. Id. at 46-47, 104 S.Ct. at 2215-16, 81 L.Ed.2d at 38-39. Therefore, whether the suppression hearing would be public or not was also subject to the Press-Enterprise standard. Id. at 47, 104 S.Ct. at 2216, 81 L.Ed.2d at 39. The Court restated the standard in Waller: 27 Under Press-Enterprise, the party seeking to close the hearing must advance an overriding interest that is likely to be prejudiced, the closure must be no broader than necessary to protect that interest, the trial court must consider reasonable alternatives to closing the proceeding, and it must make findings adequate to support the closure. 28 Id. Thus, in narrow circumstances when an overriding interest is present, the hearing can be closed to the public. 29 The sixth amendment also provides an accused with the right to confront his accuser. The Confrontation Clause of the sixth amendment provides that "[i]n all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him...." One of the most basic rights guaranteed by the Confrontation Clause is the right to be present in the courtroom at every stage of the trial to confront one's accusers, Illinois v. Allen, 397 U.S. 337, 338, 90 S.Ct. 1057, 1058, 25 L.Ed.2d 353, 356 (1970), but this is not an absolute right. See, e.g. id. (if a defendant is disruptive the court can exclude him). However, this "important constitutional right of a criminally accused to be present at his trial cannot cursorily ... be deemed by the trial court to have been waived...." United States v. Beltran-Nunez, 716 F.2d 287, 291 (5th Cir.1983). 30 Under the sixth amendment, then, the closure of a suppression hearing must meet the four requirements of Press-Enterprise. See Waller, 467 U.S. at 47, 104 S.Ct. at 2216. We find that the closure in the instant case does so. First, the government advanced an overriding interest that would be prejudiced: the safety of an informant and the potential apprehension of several suspected narcotic dealers. Second, the closure was no broader than necessary to protect that interest. The in camera testimony consisted of a small portion of the total testimony and only considered information relevant to the informer. Also, the officers were available for cross-examination during the open suppression hearing; De Los Santos was not completely precluded from being present while they testified. Moreover, the limited in camera proceeding is a reasonable alternative that has been expressly adopted as acceptable by this circuit for use during a suppression hearing when the identity of an informant is at issue. See, e.g., Freund, supra. Finally, the court made adequate findings to support the closure. Thus, we conclude that the in camera proceeding utilized at this hearing was a proper exception to De Los Santos' sixth amendment right to a public trial. 31 De Los Santos' sixth amendment confrontation argument raises two issues. First, whether he was denied his sixth amendment right to confront his accuser because he was not provided with the identity of the informant or the information supplied by the informant. Second, whether De Los Santos' confrontation rights were violated because of his absence from a portion of the suppression hearing. 32 Regarding the identity of the informant, both the Supreme Court and this circuit have held that the government's privilege of nondisclosure overrides any sixth amendment right to the identity of an informant for purposes of confrontation. In McCray v. Illinois, 386 U.S. 300, 87 S.Ct. 1056, 18 L.Ed.2d (1967), the Court was asked to hold that the Due Process Clause of the fourteenth amendment and the sixth amendment right of confrontation "compels Illinois to abolish the informer's privilege ..., and to require disclosure of the informer's identity in every such preliminary hearing where it appears that the officers made the arrest or search in reliance upon facts supplied by an informer they had reason to trust." Id. at 312, 87 S.Ct. at 1063, 18 L.Ed.2d 62. In response, the Court stated: "we find no support for the petitioner's position in either of those constitutional provisions." Id. at 313, 87 S.Ct. at 1063. In considering the sixth amendment issue, the Court reasoned: 33 The petitioner does not explain precisely how he thinks his Sixth Amendment right to confrontation and cross-examination was violated by Illinois' recognition of the informer's privilege in this case. If the claim is that the State violated the Sixth Amendment by not producing the informer to testify against the petitioner, then we need no more than repeat the Court's answer to that claim a few weeks ago in Cooper v. California [386 U.S. 58, 87 S.Ct. 788, 17 L.Ed.2d 730 (1967) ]: "Petitioner also presents the contention here that he was unconstitutionally deprived of the right to confront a witness against him, because the State did not produce the informant to testify against him. This contention we consider absolutely devoid of merit." 386 U.S. p. 58, at 62, note 2, 17 L.Ed.2d 730, 734, 87 S.Ct. 788 [791 note 2.] 34 On the other hand, the claim may be that the petitioner was deprived of his Sixth Amendment right to cross-examine the arresting officers themselves, because their refusal to reveal the informer's identity was upheld. But it would follow from this argument that no witness on cross-examination could ever constitutionally assert a testimonial privilege, including the privilege against compulsory self-incrimination guaranteed by the Constitution itself. We have never given the Sixth Amendment such a construction, and we decline to do so now. 35 Id. at 313-14, 87 S.Ct. at 1064. We find this decision to be controlling and hold that De Los Santos was not denied his sixth amendment right to confront his accuser when the government did not release the identity of the informant, or the information supplied by the informant. See also United States v. Valenzuela-Bernal, 458 U.S. 858, 870, 102 S.Ct. 3440, 3448, 73 L.Ed.2d 1193, 1204 (1982) ("While Roviaro was not decided on the basis of constitutional claims, its subsequent affirmation in McCray v. Illinois, 386 U.S. 300, 87 S.Ct. 1056, 18 L.Ed.2d 62 (1967), where both due process and confrontation claims were considered by the Court, suggests that Roviaro would not have been decided differently if those claims had actually been called to the Court's attention."). 36 This circuit has also held that the defendant's sixth amendment right to assistance of counsel and to confront witnesses against him is not violated by an in camera proceeding used to determine whether the disclosure of an informant's identity would benefit the defense and therefore should be revealed. See United States v. Doe, 525 F.2d 878, 880 (5th Cir.), cert. denied, 425 U.S. 976, 96 S.Ct. 2179, 48 L.Ed.2d 801 (1976). See also Gray, 626 F.2d at 499-500 (holding that the sixth amendment right to confrontation does not prevent a judge from refusing to allow disclosure of a witness' address or place of employment when the value of the evidence is outweighed by the safety of the witness). The Ninth Circuit has apparently adopted this position. See United States v. Anderson, 509 F.2d 724, 728-30 (9th Cir.) (the defendant argued his sixth amendment right of confrontation and his fifth amendment right to due process of law were violated by an in camera hearing to determine whether to disclose the identity of the informant; the court disagreed), cert. denied, 420 U.S. 910, 95 S.Ct. 831, 42 L.Ed.2d 840 (1975). Thus, we are constrained by precedent to hold that De Los Santos' sixth amendment right to confront his accusers was not violated by not being present at the in camera hearing. 37 De Los Santos also contends that because he was not present during all portions of the suppression hearing, his sixth amendment right of confrontation was violated. On the facts of this case, we do not agree. First, De Los Santos was presented with a full opportunity to confront his accuser during the suppression hearing. De Los Santos was given the opportunity to cross examine Castro on the reliability and trustworthiness of the informant. Also of some importance was the limited nature of the closure and the fact that it was a pretrial hearing and not a trial on the merits. Moreover, it was impossible to hear all the probable cause testimony in open court without jeopardizing the identity of the informant. Finally, the nature of the testimony elicited at the closed portion of the hearing was very unfavorable to De Los Santos. All of these factors, under the circumstances of this case, convince us that De Los Santos' sixth amendment confrontation right was not violated. 38 We hold, therefore, that the in camera hearing does not violate De Los Santos' sixth amendment rights to a public trial and to confront his accusers. III. 39 De Los Santos' next arguments are that his arrest and the search and seizure were violations of his fourth amendment rights. He first contends that the government did not have probable cause to arrest him. He then argues that even if probable cause existed for the arrest, the warrantless searches of the automobile and the bag were unconstitutional. We disagree. A. 40 It is well established that warrantless searches and seizures are unreasonable under the fourth amendment. United States v. Shaw, 701 F.2d 367, 376 (5th Cir.1983), cert. denied, 465 U.S. 1067, 104 S.Ct. 1419, 79 L.Ed.2d 744 (1984). There are, however, exceptions to this principle. Id. Thus, "[t]he Fourth Amendment does not require a warrant for an arrest made on probable cause." United States v. Fortna, 796 F.2d 724, 739 (5th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 437, 93 L.Ed.2d 386 (1986). Probable cause "exists when the facts and circumstances within the knowledge of the arresting officer are sufficient to cause a person of reasonable caution to believe that an offense has been or is being committed." United States v. Antone, 753 F.2d 1301, 1304 (5th Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 64, 88 L.Ed.2d 52 (1985). The arresting officer does not have to have personal knowledge of all the facts constituting probable cause; it can rest upon the collective knowledge of the police when there is communication between them. United States v. Webster, 750 F.2d 307, 323 (5th Cir.1984), cert. denied, 471 U.S. 1106, 105 S.Ct. 2340, 85 L.Ed.2d 855 (1985). The arrest, therefore, proper even though the arresting officer, Rangel, received the information from another officer, Castro. 41 Since probable cause is based upon an informant's tip, Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983), provides the applicable standard of review. Under Gates we must examine the "totality of the circumstances" to determine whether the informant's tip provided probable cause to arrest De Los Santos. Id. at 238, 103 S.Ct. at 2332. This inquiry involves "a practical, common-sense decision whether, given all the circumstances ..., including the 'veracity' and 'basis of knowledge' of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place." Id. at 238, 103 S.Ct. at 2332. 42 We believe that the officers had probable cause to believe that contraband would be found, and therefore they properly stopped and arrested De Los Santos. First, Castro knew that De Los Santos had dealt in heroin on previous occasions. He then received a tip from an informant who Castro knew and who had provided reliable information in the past. The informant told Castro that De Los Santos would travel to a certain area to store drugs and would pick them up the next day at a certain time. As predicted by the informant, the next morning De Los Santos arrived in the neighborhood in the same vehicle he had been in before. The agents observed him go to a residence and stay there for only two to four minutes. This surveillance, therefore, corroborated information provided by the informant. 43 Moreover, Castro testified in camera as to other information that the informant supplied. This information also is supportive of probable cause. As in McCray: 44 the officer[s] in this case described with specificity "what the informer actually said, and why the officer thought the information was credible." ... The testimony of each of the officers informed the court of the "underlying circumstances from which the informant concluded that the narcotics were where he claimed they were, and some of the underlying circumstances from which the officer concluded that the informant ... was 'credible' or his information 'reliable.' " 45 McCray, 386 U.S. at 304, 87 S.Ct. at 1059 (citations omitted). Thus, under the totality of the circumstances test, "[t]here can be no doubt upon the basis of the circumstances related by [Castro], that there was probable cause to sustain the arrest...." Id. B. 46 De Los Santos also questions the propriety of the search of the automobile. He argues that the warrantless automobile search was unreasonable and did not comport with the fourth amendment. We also disagree with this contention. We have previously stated: 47 A warrantless search of an automobile stopped by police officers who have probable cause to believe that an automobile contains contraband is permissible under the fourth amendment. Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925). This principle was reaffirmed and clarified in the Supreme Court's decision in United States v. Ross, 456 U.S. 798, 102 S.Ct. 2157, 72 L.Ed.2d 572 (1982), holding that police officers who have legitimately stopped an automobile and who have probable cause to believe that contraband is concealed somewhere within it may conduct a warrantless search of the automobile that is as thorough as a magistrate could authorize by warrant. Based on these cases, it follows that if the police officers, through their collective knowledge, had probable cause to believe that contraband was contained in Mendoza's automobile, their warrantless search of that automobile and the seizure of the thirty pounds of cocaine found therein, was lawful. 48 United States v. Mendoza, 722 F.2d 96, 100 (5th Cir.1983) (footnote omitted). Based on our previous discussion of the facts that support probable cause to arrest, we conclude that probable cause also existed to search the vehicle. 49 De Los Santos argues, though, that the agents could have obtained a search warrant because the informant provided the information the evening prior to the arrest. Moreover, he asserts that there were no exigent circumstances that would allow the warrantless search. Again, we do not find these arguments persuasive. 50 First, the failure to obtain a warrant does not taint the validity of the search; it is just one factor to consider. United States v. Thompson, 700 F.2d 944, 950 (5th Cir.1983). Also, the agents could not be certain that the tip was accurate until De Los Santos actually arrived at the suggested site. Probable cause did not arise until the morning of October 29th when the officers observed De Los Santos return to the neighborhood. At that point the information was corroborated. As we have previously observed, "[s]ince the officers were [in the area] attempting to corroborate the informant's tip to justify obtaining a search warrant, they cannot be faulted for failing to have one in their possession at that time." United States v. Reyes, 792 F.2d 536, 540 (5th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 191, 93 L.Ed.2d 124 (1986). 51 Related to De Los Santos' assertion that the officers should have obtained a warrant is his claim that exigent circumstances were not present. De Los Santos argues that they were manufactured to allow a warrantless automobile search. The agents, he contends, manufactured the exigency by allowing him to drive away. This contention has no merit. When De Los Santos first arrived in the neighborhood that morning, his destination was unknown. The information was only that he was going to go to "a house" to pick up heroin. The agents had to follow him to determine where he was going. Once De Los Santos arrived at 302 West Malone Street, he only stayed for two to four minutes. The agents then searched the house, and, after finding no drugs, reasonably believed that, as the informant had stated, De Los Santos had picked up the drugs. Immediately thereafter the order was given to stop him. This is not an example of "manufactured exigency." See United States v. Mitchell, 538 F.2d 1230, 1233 (5th Cir.1976) (en banc) (rejecting the argument that the automobile exception to the warrant requirement was deliberately planned). 52 De Los Santos' last attempt at reversal is his argument that the warrantless search of the paper bag was unreasonable. United States v. Ross, 456 U.S. 798, 102 S.Ct. 2157, 72 L.Ed.2d 572 (1982), belies this contention. In Ross the Court considered whether police officers who had legitimately stopped an automobile and who had probable cause to believe contraband was concealed somewhere in it, could search the compartments and containers within the vehicle whose contents were not in plain view. The Court held: "If probable cause justifies the search of a lawfully stopped vehicle, it justifies the search of every part of the vehicle and its contents that may conceal the object of the search." Id. at 825. The search of the paper bag was reasonable and did not offend the fourth amendment constitutional rights of De Los Santos. IV. 53 For the foregoing reasons, we reject De Los Santos' arguments that he was deprived of his constitutional rights and that the district court erred in the denial of motions to suppress the evidence and to disclose the identity of the informant. 54 The judgment of conviction is AFFIRMED. 1 Castro testified that prior to the informant's tip De Los Santos had been suspected of being involved in the distribution of heroin. This information came from several sources, including the San Antonio Police Department 2 These 15 packets were found to contain approximately 15 ounces of heroin 3 De Los Santos' attorney did not cross-examine Castro on the issue of the informant's reliability and trustworthiness 4 Regarding the finding of probable cause, the district court stated in its order that "[f]ollowing the dictates of Illinois v. Gates, supra, the Court considered all the information presented to it, including the in camera portions, in arriving at its determination that there was sufficient probable cause to arrest Defendant/Appellant." (emphasis in original) 5 We note that De Los Santos does not directly argue for disclosure of the informant's information, but rather argues that he has the right to confront his accuser. However, this desire to confront the informant, or, as in this case, the information supplied by the informer, necessarily implicates the issue of whether the identity of the informant should be disclosed. Therefore, the Roviaro issue is an initial concern that must be addressed 6 Since De Los Santos never requested during the suppression hearing to be present at the in camera proceeding, one consideration is whether he waived this issue. While we believe that De Los Santos should have requested to be present, such an omission in light of his request to be present at the hearing contained in his memorandum in support of his motion for disclosure of the identity of the informant and the fact that the waiver of a constitutional right is not lightly inferred, see Rovinsky v. McKaskle, 722 F.2d 197, 199-200 (5th Cir.1984), allows us to review this issue	{ "pile_set_name": "FreeLaw" }
NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed. R. App. P. 32.1 United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 Submitted October 24, 2012* Decided January 31, 2013 Before FRANK H. EASTERBROOK, Chief Judge RICHARD D. CUDAHY, Circuit Judge DIANE S. SYKES, Circuit Judge No. 12‐1795 Appeal from the United States District Court for the Southern District of Indiana, JERMAINE UPSHAW, Terre Haute Division. Petitioner–Appellant, No. 2:11‐cv‐276‐WTL‐DKL v. William T. Lawrence, RICHARD BROWN, Judge. Respondent–Appellee. O R D E R Jermaine Upshaw, an Indiana prisoner, was attacked by a fellow inmate in a dayroom of their prison. One of the guards trying to separate the inmates was spit on; she accused Upshaw of spitting on her, but he said it was the other inmate who did so. Upshaw received a conduct report for the incident, charging him with assault. Before the hearing on the charge, he requested the video from the dayroom security system and also asked the Conduct Adjustment Board to review that video. Upshaw claimed that the video would * After examining the briefs and the record, we have concluded that oral argument is unnecessary. Thus, the appeal is submitted on the briefs and the record. See FED. R. APP. P. 34(a)(2)(C). No. 12‐1795 Page 2 reveal that during the fight in the dayroom, the other inmate, Derek Brown, had spit at him from across the room and hit the guard instead, while she stood between him and the dayroom television. At Upshaw’s disciplinary hearing, the Board denied his request to see the video, citing security as its justification. A member of the Board viewed the video, however, and provided the following summary of the evidence: “Video does show Sgt. Poole [the victim guard] standing on your left side by the dayroom TV. I can not tell if offender Brown’s actions were due to his back was toward the camera. The video does show offender Brown being placed into restraints by the microwave table.” The Board found Upshaw guilty based on reports from the dayroom guards and the written statements of Upshaw and Brown, the other inmate. Brown acknowledged walking into the dayroom and hitting Upshaw from behind but did not say whether or not he spit at him. The Board revoked 180 days of Upshaw’s earned credit time and adjusted his credit‐earning class accordingly. Upshaw submitted an administrative appeal to the warden challenging only the Board’s handling of the video evidence. The Board had not looked at the video from “[all] the angles,” Upshaw contended, and he questioned why the Board member who reviewed the video had looked at the images from a camera facing him and not from a second camera mounted above him that faced Brown. The warden denied this appeal. Upshaw’s appeal to the final reviewing authority also was rejected. Upshaw then filed a petition for a writ of habeas corpus under 28 U.S.C. § 2254. He claimed that the Board had impeded his right to present evidence by not watching the video from “all angles” or letting him watch the video himself. He also contended that the Board had lacked sufficient evidence to find him guilty. The district court denied Upshaw’s petition, explaining that the video had been taken from a “fixed angle” and showed only the other inmate’s back, and thus was unhelpful to Upshaw. The court also found that the minimum requirement of “some evidence” of guilt was met in Upshaw’s case by the guards’ reports and the video, which the hearing officer had viewed and summarized. On appeal Upshaw presses his claim that the Board’s refusal to let him see the video infringed his right to present evidence. He also asserts that the Board failed to establish a valid security justification for denying him access to the video, but this latter contention was not presented to the district court and thus is waived. See Johnson v. Hulett, 574 F.3d 428, 432 (7th Cir. 2009); Pole v. Randolph, 570 F.3d 922, 939–40 (7th Cir. 2009). Upshaw has abandoned his claim about the sufficiency of the evidence. No. 12‐1795 Page 3 Before a disciplinary board revokes an inmate’s earned credit time or lowers his credit‐earning class, the inmate must receive due process, which includes advance written notice of the charge, an opportunity to present testimony and other evidence at a hearing before an impartial decision‐maker, and a written explanation for the decision that is supported by “some evidence.” Wolff v. McDonnell, 418 U.S. 539, 564–66 (1974); Piggie v. Cotton, 344 F.3d 674, 677 (7th Cir. 2003); Pannell v. McBride, 306 F.3d 499, 502 (7th Cir. 2002). Prison administrators must disclose material, exculpatory evidence—including surveillance videos—to ensure that the accused inmate can present his best defense and that the decision‐maker considers all relevant evidence. Jones v. Cross, 637 F.3d 841, 847 (7th Cir. 2011); Scruggs v. Jordan, 485 F.3d 934, 939 (7th Cir. 2007); Piggie, 344 F.3d at 678. Disclosure may be limited, however, if prison administrators establish a bona fide security justification for refusing the inmate access to the evidence—for instance, the inmate might learn the location or capabilities of the camera, jeopardizing prison safety. See Jones, 637 F.3d at 848–49; Piggie, 344 F.3d at 679. Based on this exception to disclosure, Upshaw is not entitled to relief under § 2254. A member of the Board viewed the video and provided Upshaw a written summary of what it showed, but the Board concluded that security considerations justified refusing Upshaw personal access to the video. It is too late now, as we have noted, for Upshaw to raise a challenge to the validity of the security justification. The Board’s refusal to disclose this evidence, even if it conceivably was exculpatory, did not violate Upshaw’s right to due process. See Jones, 637 F.3d at 848–49; Piggie, 344 F.3d at 679. AFFIRMED.	{ "pile_set_name": "FreeLaw" }
535 F.Supp.2d 880 (2008) KANTNER INGREDIENTS, INC., Plaintiff, v. ALL AMERICAN DAIRY PRODUCTS, INC., Defendant. No. 3:07 CV 2822. United States District Court, N.D. Ohio, Western Division. February 28, 2008. 881 R.C. Wiesenmayer, Wiesenmayer Law Offices, Wapakoneta, OH, Cynthia M. Morrison, James L. Rogers, Eastman & Smith, Toledo, OH, for Plaintiff. James IL O'Doherty, Stephen A. Rothschild, Shurnaker, Loop & Kendrick, Toledo; OH, Jonathan A. Cass, Cohen, Seglias, Pallas, Greenhall & Furman, Philadelphia, PA, for Defendant. MEMORANDUM OPINION KATZ, District Judge. This matter is before the Court on Defendant's motion to dismiss or stay proceedings pursuant to principals of abstention set out in Colorado River Water Conservation Dist. v. United States, 424 U.S.' 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) ("Colorado River abstention"). (Doc. 12.) I. Background This matter stems from several contract disputes between Plaintiff Kantner Ingredients, Inc. ("Kantner") and Defendant All American Dairy Products, Inc. ("AADPI"). These disputes resulted in two lawsuits. First, AADPI sued Kantner and one of its vice presidents, Pamela Jeffery ("Jeffery"), in Pennsylvania state court ("the AADPI action"). Doc. 12-2. Second, Kantner filed the instant action against AADPI in Ohio state court, which was subsequently removed by AADPI to this Court ("the Kantner action"). Doc. 12-4, Doc. 1. AADPI has moved this Court to stay or dismiss the Kantner action on the basis that the claims, in the Kantner action should rightly be litigated as part of the AADPI action in Pennsylvania state court. Doc. 12 at 3-4. Kantner is a blender of dairy products. AADPI formulates and supplies dairy products to its customers. Id. In 2005, AADPI entered into an agreement with Kantner whereby Kantner would supply dairy products to certain AADPI customers. In conjunction with this agreement, the two parties entered into a "Mutual Confidential Information Agreement" ("the Confidentiality Agreement"). See Doe. 12-3. The Confidentiality Agreement, was intended to protect confidential and proprietary 882 information that would be exchanged between Kantner and AADPI as a part of their business relationship. The relationship between AADPI and Kantner was such that AADPI's customers would place an order with, and pay, AADPI. AADPI in turn forwarded the Order and payment to Kantner. Kantner would then supply the product for the third party customers. However, AADPI alleges that, beginning in or about June 2007, Kantner withheld shipments from AADPI customers, made false statements to AADPI customers about the quality of product being supplied, and wrongfully began trying to supply customers while cutting AADPI out of the equation. AADPI filed the AADPI action in Pennsylvania state court on July 16, 2007. See Doc. 12-2. The AADPI action alleges tortuous interference with business relationships between AADPI and three of its customers-Ken's Foods, Inc. ("Ken's"), Stauffer Biscuit Co. ("Stauffer"), and Ronald A. Chisholm International ("Chisholm"). Doc. 12-2 at 14-15, 80-88. It also alleges that Kantner refused to provide Ken's with one of its product orders ("the June 26th order"). Id. Additionally, the AADPI action claims commercial disparagement for alleged false statements made to AADPI customers, id. at 89-95; breach of the Confidentiality Agreement, id. at 96-107; violation of the Pennsylvania Uniform Trade Secrets Act, id. at 108-120; and unfair competition, id. at 121-123. In addition to these deteriorations to AADPI and Kantner's relationship, Kantner claims that in May 2007, AADPI stopped paying certain balances owed to Kantner. Doc. 19 at 3. Kantner filed the Kantner action on August 20, 2007, alleging that AADPI owes a total of $209,502.62 in unpaid invoices and freight costs. Doc. 12-4. The disputed invoices are as follows: a May 31, 2007 order totaling $59,994.00 ("the May 31st order"), id. at 2; a June 5, 2007 order totaling $67,624.38 ("the June 5th order"), id. at 3; a June 4, 2007 order totaling $184.00 ("the June 4th order"), id. at 4; a June 12, 2007 order totaling $14,673.00 ("the June 12th order"), id. at 5; and a June 14, 2007 order totaling $64,037.25 ("the June 14th order"), id. at 6. Additionally, Kantner claims that AADPI has not paid $2,989.99 in freight costs. Id. at 7. The June 5th and June 14th orders were placed by AADPI pursuant to orders from Ken's. See Doc. 12 at 7; Doc. 12-4. None of the other orders in the Kantner action involve the three AADPI customers in the AADPI action (Ken's, Stauffer, or Chisholm). On October 18, 2007, AADPI filed the instant motion to dismiss or stay the Kantner action pursuant to Colorado River abstention, asserting that the claims in the Kantner action are rightly litigated as part of the AADPI action in Pennsylvania state court. For the reasons stated herein, AADPI's motion is denied. II. Standard of review No complaint shall be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 2 L.Ed.2d 80, (1957); see also Pfennig v. Household Credit Servs., 295 F.3d 522, 525-26 (6th Cir.2002) (citing Bibbo v. Dean Witter Reynolds, Inc., 151 F.3d 559, 561 (6th Cir.1998)). When deciding a motion brought pursuant to Fed.R.Civ.P. 12(b)(6), the inquiry is essentially limited to the content of the complaint, although matters of public record, orders, items appearing in the record, and attached exhibits also may, be taken into account. Yanacos v. Lake County, 953 F.Supp. 187, 191 (N.D.Ohio 1996). The Court's task is to determine not whether the complaining party will prevail on its claims, but whether it is entitled to offer evidence in support of those claims. Scheuer v. Rhodes, 416 U.S. 883 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The Court must accept all the allegations stated in the complaint as true, Hishon v. King & Spalding, 467 U.S. 69; 73, 81, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984), while viewing the complaint in the light most favorable to the plaintiff. Scheuer, 416 U.S. at 236, 94 S.Ct. 1683. A court, however, is "not bound to accept as, true a legal conclusion couched as a factual allegation." Papasan v. Attain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). III. Colorado River abstention As explained by the Sixth Circuit in Romine v. Compuserve Corp., 160 F.3d 337 (6th Cir.1998), despite the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them," considerations of judicial economy and federal-state comity may justify abstention in situations involving the contemporaneous exercise of jurisdiction by state and. federal courts. . . . [T]he principles underlying this doctrine "rest on considerations of `wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" Romine, 160 F.3d at 339. Thus, Colorado River abstention instructs that "a federal court may dismiss or stay a parallel [state] action in order to avoid duplicative, piecemeal litigation." See Bowshier v. Daimlierchrysler Motors Co., 2004 WL 5347435, at 1, 2004 U.S. Dist. LEXIS 30552, at 3 (S.D.Ohio 2004) (citing Colorado River, supra). Even so, "the `clearest of justifications' must be present for a federal court to stay a proceeding pending the completion of the state action." Madoffe v. Safelite Solutions, LLC, 2007 WL 496665, at 1-2, 2007 U.S. Dist. LEXIS 9584, at 4-5 (S.D.Ohio 2007) (citing Colorado River, 424 U.S. at 819, 96 S.Ct. 1236; Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (refining the Colorado River abstention doctrine)). Colorado River abstention requires a two-part analysis. First, a district court must "determine that the concurrent state and federal actions are actually parallel." Romine, 160 F.3d at 339 (citing Crawley v. Hamilton County Comm'rs, 744 F.2d 28 (6th Cir.1984)). Second, if the actions are found to be parallel, a court Must apply the eight Colorado River factors to determine whether abstention is appropriate under the facts of the case. See id. at 340. The eight factors are: (1) whether the state court has assumed jurisdiction over any res or property; (2) whether the federal forum is less convenient to the parties; (3) avoidance of piecemeal litigation; (4) the order in which the jurisdiction was obtained; (5) whether the source of governing law is state or federal; (6) the adequacy "f the state court action to protect the federal plaintiffs rights; (7) the relative progress of the state and federal proceedings; and (8) the presence or absence of concurrent jurisdiction. Finch v. Thomas Asphalt Paving Co., 252 F.Supp.2d 459, 462 (N.D.Ohio 2002) (citing PaineWebber, Inc. v. Cohen, 276 F.3d 197, 207 (6th Cir.2001)). If abstention is appropriate under the eight Colorado River factors, a district court may grant a motion to dismiss or stay the action. IV. Discussion A. Waiver of Right to Request Dismissal or Stay In response to AADPI's motion, Kantner argues as a threshold matter that AADPI "waived its right to request a dismissal or stay on the basis of the abstention 884 doctrine when it made the decision to voluntarily remove this case to federal court." (Doc. 19 at 5). "Removal is a form of voluntary invocation of a federal court's jurisdiction. . . ." Kenny A. v. Perdue, 218 F.R.D. 277, 285 (N.D.Ga.2003) (citing Lapides v. Bd. of Regents, 535 U.S. 613, 620, 122 S.Ct. 1640, 152 L.Ed.2d 806 (2002)). As such, Kantner argues that AADPI cannot remove the Kantner action from an Ohio state court where abstention could not be argued, voluntarily invoke this Court's jurisdiction through that removal, and then ask this Court to abstain. To support its assertion of a waiver, Kantner cites Kenny A. v. Perdue, which held that [i]t would be fundamentally unfair to permit State Defendants to argue that this Court must abstain from hearing the case after they voluntarily brought the case before this Court. . . . The Court concludes that State Defendants have waived their right to seek abstention, and that even absent waiver, abstention would not be appropriate. Kenny A., 218 F.R.D. at 285 (emphasis added). The court in Kenny A. based its reasoning on the Supreme Court's decision in Lapides v. Bd. of Regents, which held that "a state waives its Eleventh Amendment immunity when it removes a case from state court to federal court." Kenny A., 218 F.R.D. at 285 (emphasis added) (citing Lapides, supra). The analyses of Kenny A. and Lapides are not applicable here. First, Kenny A. dealt with the Younger abstention doctrine. See Kenny A., 218 F.R.D. at 285. (citing Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)). Younger abstention is not at issue in this case. See id. ("Younger abstention is a doctrine of federal-state comity that limits the extent to which state defendants may be sued in federal court.") (emphasis added) (citing Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 431, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982)). Second, both Kenny A. and Lapides dealt exclusively with a state's waiver of certain rights after voluntarily invoking a federal court's jurisdiction. See Lapides, 535 U.S. at 618-19, 122 S.Ct. 1640 ("the question before us now is whether a State waives [Eleventh Amendment] immunity when it removes a case from state court to federal court."); Kenny A, 218 F.R.D. at 285 (examining whether a state's removal to federal court constitutes a waiver of its right to assert Younger abstention). The case before this Court deals with litigation between two private parties. In Dantz v. American Apple Group LLC, the Sixth Circuit distinguished a Middle District of Florida case that applied the Lapides rationale to private litigants, stating: "[w]e refuse to extend Lapides beyond the [Eleventh Amendment] sovereign immunity context." 123 Fed.Appx. 702, 707 (6th Cir.2005) (citing Obermaier v. Kenneth Copeland Evangelistic Ass'n, Inc., 208 F.Supp.2d 1288, 1290 (M.D.Fla.2002)). Furthermore, the Sixth Circuit in Dantz expressly declined to cite Kenny A. as a basis for extending Lapide's waiver rule to private litigants. See id. at 706-07 n. 3. Specifically, the Dantz court noted that while Kenny A. did extend Lapide's rule outside the Eleventh Amendment, it still "dealt with issues of federalism closely related to the Eleventh Amendment." Id. at 707 n. 3 (citing Kenny A., supra). No such issues exist in the Kantner action, and this Court will not extend Lapide's or Kenny A.'s state litigant waiver rules to private parties.[1] Accordingly, AADPI did not 885 waive its right to seek dismissal or stay when it removed this case to federal saint: B. Whether the AADPI and Kantner Actions are Parallel The first step in the Colorado River abstention analysis is determining whether the federal and state cases are "parallel." "`Exact parallelism' is not required; It is enough if the two proceedings are substantially similar." Ramine, 160 F.3d at 340. In making this determination, courts may confider, inter alia, the parties, the causes of action, the relief sought, and the material facts of each case. See id. at 339-40. As noted earlier, none of the product orders at issue in the Kantner action are at issue in the AADPI action. The Kantner action deals with the May 31 st, June 5th, June 4th, June 12th, and June 14th orders, Doc. 12-4, while the AADPI action deals exclusively with the June 26th order, as well as with tort claims and claims for breach of the Confidentiality Agreement. Doc. 12-4; Doc. 12-2 at 14-21. Moreover, Ken's is the only third party customer that is common to both actions: Ken's is the customer that made the June 5th and June 14th orders at issue in the Kantner action, see Doc. 12 at 7; Doc. 12-4, 12-3, 12-6, and Ken's is the customer that made the June 26th order at issue in the AADPI action. Doc. 12-2 at 14. The other three orders in the Kantner action do not involve any of the third party customers at issue in the AADPI action (Ken's, Stauffer, or Chisholm). Thus, there are multiple transactions and multiple third party customers that are unique to each lawsuit. Notwithstanding these differences, AADPI maintains that the parties and material facts of both actions are "substantially similar," and are therefore parallel for purposes of a Colorado River analysis. First, AADPI correctly points, out that the named parties in each action are substantially similar: Kantner against AADPI in the Kantner action; AADPI against Kantner and Kantner Vice President Jeffery in the AADPI action. Doc. 12 at 11-12. However, the apparent congruence of the named parties is negated because the third party customers involved in the two actions are significantly different. Moreover, the difference in these parties cannot be remedied by AADPI's argument that the majority of damages claimed in the Kantner action in terms of dollar amount result from orders by a third party common to both actions (Ken's). See Doc. 12 at 7, 12. Under these facts, the fact that the dollar value of two orders in the Kantner action happens to be greater than the dollar value of the other three orders does not change the fact that all five orders in the Kantner action are substantively different from the June 26th order at issue in the AADPI action. AADPI further argues that the two actions are parallel because AADPI asserted the affirmative contract defense of set-off. Doc. 12 at 12; Doc. 20 at 2-3, 4-7. Specifically, AADPI contends that if it is able to set-off the damages it may owe in the Kantner action with the damages it may win in the AADPI action, the two actions must be parallel. Id. Kantner counters by arguing that AADPI is not able to assert a 2003 WL 22990082, at 6-7, 2003 U.S. Dist. LEXIS 22824, at 25 (S.D.N.Y. Dec. 18, 2003). (Doc. 19 at 5 n. 2). However, neither of these decisions are applicable to deciding waiver in the Kantner action. Doll dealt with the Buford abstention doctrine, which directs federal courts to abstain "from deciding matters that might interfere with a state's traditional regulation, of the insurance industry." Dolt, 2006 U.S. Dist LEXIS 87668, at 2. Burford abstention is not at issue in this case. Buric dealt with Younger abstention. See Buric, 2003 WL 22990082, at 6-7, 20433 U.S. Dist. LEXIS 22824, at 25. As explained above, Younger abstention is not at lime in this case. 886 set-off defense because the contracts at issue are separate and distinct. Doc. 19 at 7-9. However, a determination of whether AADPI is entitled to assert a set-off defense is not necessary for purposes of deciding this motion. AADPI has not offered any cases suggesting that the ability of a party to set-off damages from one action with damages from another action makes the two parallel for purposes of the first step of a Colorado River analysis. Thus, in light of many differences between the two cases, this Court cannot consider them to be parallel, and the Colorado River analysis need not go further. V. Conclusion For the reasons stated herein, AADPI's motion to dismiss or stay the Kantner action is hereby denied. (Doc. 12.) IT IS SO ORDERED. NOTES [1] In support of its argument that AADPI waived its right to request a stay or dismissal, Kantner also cites Doll v. New Holstein Sch. Dist., 2006 U.S. Dist. LEXIS 87668, at. 2 (E.D.Wis. Nov. 30, 2006) and Buric v. Kelly,	{ "pile_set_name": "FreeLaw" }
262 Wis.2d 506 (2003) 2003 WI 72 664 N.W.2d 97 STATE of Wisconsin, Plaintiff-Respondent, v. John NORMAN, Defendant-Appellant-Petitioner. No. 01-3303-CR. Supreme Court of Wisconsin. Oral argument April 10, 2003. Decided July 1, 2003. 512 For the defendant-appellant-petitioner there were briefs by Angela Kachelski and The Shellow Group, Milwaukee, and oral argument by Angela Kachelski. For the plaintiff-respondent the cause was argued by Edwin J. Hughes, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general. ¶ 1. SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE. This is a review of an unpublished decision of the court of appeals, affirming the judgment of conviction entered by the Circuit Court for Oneida County, Douglas T. Fox, Judge.[1] The defendant, John K. Norman, was charged with six counts of falsifying corporate 513 documents, in violation of Wis. Stat. § 943.39(1) (1999-2000),[2] and four counts of theft, in violation of Wis. Stat. § 943.20(1)(a) and (b). The charges stemmed from allegations that the defendant falsified retail purchase agreements and established a commission-splitting scheme while working as an employee of Shoeder's Marine and Sports Center. Following a jury trial, the defendant was convicted of six counts of falsifying documents and two counts of theft. ¶ 2. The defendant appealed his convictions, arguing for relief on four separate grounds. These same grounds from the defendant's argument in this court. ¶ 3. First, the defendant claims that the circuit court erred when it admitted the preliminary hearing testimony of a witness who was not present at trial, in violation of his constitutional right to confrontation. The defendant asserts that preliminary hearing testimony may never be admitted at a criminal trial on the ground that Wisconsin case law allows a circuit court to prohibit cross-examination of a witness about credibility. ¶ 4. The court of appeals held that that admission of the unavailable witness's preliminary hearing testimony did not violate the defendant's constitutional right to confrontation. We agree with the court of appeals. The witness's memory, credibility, or bias was not at issue at trial. Consequently, the inability of the defendant to cross-examine the witness at the preliminary hearing with questions that went to memory, credibility, or bias did not present an unusual circumstance that undermined the reliability of the witness's testimony in the present case. 514 ¶ 5. Second, the defendant claims that the circuit court erred when it excluded the hearsay testimony of a witness that the defendant sought to introduce as a prior inconsistent statement for purposes of impeachment. The court of appeals held that the error in excluding the prior inconsistent statements introduced by the defendant was harmless because defense counsel was able to effectively communicate the relevant information to the jury by other means. We agree with the court of appeals and conclude that it is beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained. ¶ 6. Third, the defendant asserts that his right to a unanimous jury verdict was violated by the jury instruction that did not require that all members of the jury agree that the documents were falsified with the same criminal intent. Whether a jury instruction violates a defendant's right to a unanimous verdict involves a multi-step analysis. We conclude that the defendant has failed to develop his assertion and is not entitled to the court's consideration of this issue. We therefore hold that the circuit court did not err in instructing the jury. ¶ 7. Fourth, the defendant argues that the evidence presented at trial was insufficient to convict him beyond a reasonable doubt. On review of the evidence, we agree with the court of appeals that the defendant did not meet his burden of proving that the evidence, viewed most favorably to the State and the conviction, is so insufficient in probative value and force that it can be said as a matter of law that no trier of fact, acting reasonably, could have found guilt beyond a reasonable doubt. 515 I ¶ 8. The facts are as follows. The defendant began as a salesperson at Shoeder's Marine and Sports Center (Shoeder's Marine) in 1995. He was promoted twice, eventually becoming the general manager. In that position and in his prior positions with Shoeder's Marine, the defendant worked principally on commission. He also received monetary bonuses and perks, including the use of snowmobiles and boats. In 1999, the defendant was making plans to open his own snowmobile and marina business, and sales personnel and mechanics of Shoeder's Marine agreed to work for him when he opened his business. Shoeder's Marine would be affected by this competition. ¶ 9. In October 1999, Keith Shoeder, the owner of Shoeder's Marine, reported to the police that the defendant had altered sales documents to suggest that customers had purchased more products than they actually did. The defendant was arrested and a search warrant was executed for his home. The search turned up a snowmobile and a boat that Shoeder's Marine records indicated had been sold to customers of the dealership. ¶ 10. The defendant was charged with fraud for falsifying purchase agreements and with theft of Shoeder's Marine property. The fraud charges and one of the theft charges stemmed from several incidents of falsifying retail purchase agreements. The general fact pattern, however, was the same in each instance. A customer would purchase equipment from Shoeder's Marine, or trade in old equipment for new equipment, and receive a purchase agreement that accurately reflected the purchase or swap. ¶ 11. The purchase agreement for the same transaction on file with Shoeder's Marine, however, would 516 show the purchase of additional equipment or would fail to show that an item was traded in by the customer. The defendant would then take the additional equipment or trade-in for himself. Because Shoeder's Marine bookkeepers rely on the purchase agreements to keep track of the business's sales and inventory, altering the documents allowed the additional equipment to be removed from inventory lists. ¶ 12. The final theft charge was based upon an alleged commission-splitting scheme between the defendant and Dan Krehmeyer, a Shoeder's Marine salesperson. The defendant, as general manager, received a commission on all purchases whether he was the salesperson or not. The defendant apparently took advantage of this general commission by establishing a scheme in which he would let Krehmeyer sign the purchase agreement for some of the sales the defendant made, allowing the defendant to obtain his general manager commission, and then Krehmeyer would split his fifteen percent sales commission with the defendant as well. ¶ 13. At trial, the defendant testified that he took several products from Shoeder's Marine and falsified the purchase agreements to cover those items. The defendant, however, claimed that Keith Shoeder knew of his actions and gave him permission to take the products as job perks.[3] According to the defendant, changing the purchase agreement was a method of accounting for the inventory, not fraud. The defendant 517 denied that the commission-splitting scheme existed. Keith Shoeder disputed the defendant's account of the transactions. ¶ 14. The jury convicted the defendant on all six counts of falsifying documents and on two of the four counts of theft. He was acquitted of one count of felony theft and one count of misdemeanor theft. ¶ 15. Additional facts necessary for the resolution of each particular legal issue are included in the discussion of the legal issue. II ¶ 16. The first issue raised by the defendant is that the circuit court erred when it admitted into evidence the preliminary hearing testimony of a witness, Barbara Park, who was not present at trial. The defendant claims that the admission of this testimony violated his right to confrontation as guaranteed by the Sixth Amendment to the United States Constitution and Article I, Section 7 of the Wisconsin Constitution.[4] ¶ 17. At the preliminary hearing, Park testified that in 1998 she purchased a new Glastar motorboat 518 from Shoeder's Marine.[5] Then, in 1999, according to Park's testimony, she exchanged her used boat for a new Tracker Topper rowboat. Park made an even trade, paying only $11 for a license, which she paid in cash at the time of the exchange. Park further testified that she obtained a receipt which reflected her trade-in. She denied seeing or receiving a receipt or purchase agreement dated June 16, 1999, indicating a total purchase price for the rowboat as $1,004.81.[6] Finally, Park testified that she never dealt with the defendant, only a salesperson named "Dan." ¶ 18. The defendant asked only three questions of Park on cross-examination at the preliminary hearing. The first question confirmed that Park dealt with Dan Krehmeyer both times she was at Shoeder's Marine. The other two questions probed whether the Glastar boat had a leaking problem before it was traded in.[7] 519 ¶ 19. The defendant objects to the admission of Park's preliminary hearing testimony at trial on two grounds. [1] ¶ 20. First, the defendant's brief asserts, in passing and without explanation, that admitting Park's preliminary hearing testimony was error because Park was not "unavailable." ¶ 21. The State's motion to allow the reading of Park's preliminary hearing testimony was supported by an affidavit from the district attorney that Park suffered from a strangulated hernia and that her doctor advised her not to drive from her home in Indiana to Rhinelander. Park also declined an offer from the State to fly her to Rhinelander. ¶ 22. Wisconsin Stat. § 908.045(1) states that the former testimony of an unavailable witness is not excluded by the hearsay rule.[8] Section 908.04(1)(d) 520 defines unavailability of a witness as including situations in which a declarant "is unable to be present or to testify at the hearing because of . . . then existing physical . . . illness or infirmity." The defendant offers nothing in support of his bald assertion that "Ms. Park was not unavailable." The circuit court found that Park was unavailable for the trial. On the basis of the defendant's lack of any argument on the issue, the circuit court's finding of unavailability must stand. ¶ 23. Second, according to the defendant, the prohibition on questions designed to challenge the credibility of a witness at a preliminary hearing makes the admission of preliminary hearing testimony at all criminal trials, including at the trial in the present case, a violation of an accused's federal and state constitutional rights to confrontation and cross-examination.[9] [2-4] ¶ 24. Ordinarily, the admissibility of former testimony into evidence is a discretionary decision of the circuit court, and it will not be overturned unless the circuit court erroneously exercised its discretion.[10] Nevertheless, the question of whether the admission of evidence violates an accused's right to confrontation is a question of constitutional fact.[11] When determining a question of constitutional fact, we adopt the circuit court's findings of historical fact unless they are clearly 521 erroneous, but we independently apply the appropriate constitutional standard to those facts.[12] ¶ 25. In State v. Bauer, 109 Wis. 2d 204, 325 N.W.2d 857 (1982), this court articulated a multi-step test for determining when hearsay evidence is admissible in a criminal trial without violating an accused's right to confrontation. The threshold question, the Bauer court ruled, is whether the evidence fits within a recognized hearsay exception.[13] ¶ 26. The defendant in the present case does not dispute that Park's preliminary hearing testimony fits within a recognized hearsay exception, Wis. Stat. § 908.045(1), if Park is unavailable under the statute. ¶ 27. The next step in the Bauer multi-step test is to determine whether an accused's right to confrontation has been violated by the admission of hearsay evidence under a recognized hearsay exception. To make this determination, a circuit court must decide whether two criteria are satisfied. [5] ¶ 28. First, in many circumstances, the witness must be unavailable.[14] The mere absence of a witness does not render the witness unavailable at trial for 522 constitutional purposes.[15] Rather, the burden is on the prosecution to demonstrate that the witness is absent despite the prosecution's "good-faith effort" to obtain the witness's presence at trial.[16] The circuit court concluded that Park was "unavailable." Again, the defendant makes no argument in this court to contradict the circuit court and offers no reason to support a holding that the State did not make a good-faith effort to obtain Park's presence at trial. [6] ¶ 29. The second criterion established by the Bauer decision is that the evidence must bear some "indicia of reliability."[17] If the evidence fits within a "firmly rooted hearsay exception," a court may infer that the evidence bears the requisite indicia of reliability so long as no "unusual circumstance" exists that would warrant exclusion of the evidence.[18] ¶ 30. The preliminary hearing testimony of an unavailable witness is well recognized as a "firmly rooted hearsay exception."[19] Thus, the reliability of the hearsay evidence may be inferred in the instant case.[20] 523 ¶ 31. The defendant makes two arguments to support his position that the admission of Park's preliminary hearing testimony violates his constitutional rights to confrontation. [7] ¶ 32. The defendant's first argument asserts that the very brief cross-examination at the preliminary hearing in the instant case, entailing only three questions, constitutes an "unusual circumstance" that undermines the inference of reliability attributable to Park's preliminary hearing testimony. [8] ¶ 33. However, the mere number of questions on cross-examination, standing alone, cannot be the determinative test of whether an "unusual circumstance" exists to render the preliminary hearing testimony inadmissible at trial. The defendant does not assert his cross-examination was limited in any way by the circuit court or the State except that he could not challenge the credibility of the witness. This limitation on cross-examination leads to the defendant's other argument.[21] ¶ 34. The defendant's second argument broadly asserts that the limitations on preliminary hearing cross-examination barring questions that go to the credibility of the witness inherently render the admission of preliminary hearing testimony at criminal trials 524 a violation of the constitutional rights to confrontation. According to the defendant, the rights to confrontation include the right to challenge credibility. [10] ¶ 35. We reject the defendant's argument that preliminary hearing testimony may never be admitted at a criminal trial just because Wisconsin case law prohibits cross-examination of a witness about credibility. The defendant asserts that admission of preliminary hearing testimony necessarily violates the constitutional rights to confrontation. That precise argument was made in Bauer and was rejected. The Bauer decision followed the lead of the Seventh Circuit in United States ex rel. Haywood v. Wolff, 658 F.2d 455 (7th Cir. 1981), cert. denied, 454 U.S. 1088 (1981), and concluded that the fact that cross-examination during a preliminary hearing is limited does not necessarily render the testimony inadmissible.[22] Indeed, cases throughout the country[23] and in Wisconsin have upheld the admissibility of preliminary hearing testimony for an unavailable witness in the absence of unusual circumstances.[24] [11-13] ¶ 36. We agree with the defendant that the right to confrontation in the Sixth Amendment envisions the personal examination of a witness by the defendant. The purpose of confrontation and cross-examination is 525 to test both the witness's memory and credibility in the presence of the fact finder.[25] "These means of testing accuracy are so important that the absence of proper confrontation at trial calls into question the ultimate integrity of the fact-finding process."[26] However, this fundamental right to confrontation must, at times, be dispensed with in order to accommodate competing interests such as effective law enforcement and precise workable rules of evidence in criminal proceedings.[27] Accordingly, both the U.S. Supreme Court and this court have held that when a witness is unavailable for trial, hearsay evidence may be admitted when there has been "substantial compliance with the purposes behind the confrontation requirement. Those purposes are satisfied when the trier of fact has a reasonable basis for evaluating the truthfulness of the prior statement."[28] ¶ 37. In the present case, there has been substantial compliance with the purpose behind the confrontation requirement. The defendant has made no argument, and we can come up with none, to suggest that Park's memory or credibility is at issue in the present case or that cross-examination of Park at trial, had Park been present, would have included any questions pertaining to her memory, credibility, or bias against the defendant. ¶ 38. The facts underlying Park's testimony are not in dispute. The defendant does not dispute that Park traded in her Glastar boat for a rowboat. Neither 526 does the defendant dispute that Park dealt with Krehmeyer when trading in her boat and did not ever deal with him. More importantly, the defendant admitted at trial that he falsified Park's purchase agreement and that he paid the false amount listed on the agreement.[29] Finally, the defendant has offered no evidence, and has not even hinted at the possibility, that Park could be challenged on the basis of bias, credibility, or memory. ¶ 39. The only disputed issue at trial that involved Park's testimony in any way was whether Keith Shoeder knew that the defendant had falsified the purchase agreement with Park and whether Keith Shoeder gave the defendant permission to take the exchanged Glastar boat home. Park's testimony shed no light on either of these issues. Therefore, the defendant's inability to cross-examine Park with questions that go to memory, credibility, or bias does not present an unusual circumstance that would undermine the reliability of Park's testimony in the present case. ¶ 40. Wisconsin case law leaves open the possibility that the inability of a defendant to cross-examine a witness at a preliminary hearing on questions of memory, credibility, or bias could, under certain circumstances, constitute an unusual circumstance that would render admission of the preliminary hearing testimony 527 a violation of the defendant's right to confrontation.[30] The case at hand, however, does not present such circumstances. ¶ 41. Accordingly, we conclude that there was no error, either evidentiary or constitutional, in admitting Park's preliminary hearing testimony at the defendant's trial. III ¶ 42. Second, the defendant argues that the circuit court erred when it excluded the prior inconsistent statement of a witness, Dan Krehmeyer. The defendant was attempting to use the prior inconsistent statement to impeach Krehmeyer. ¶ 43. Krehmeyer was the State's principal witness on the theft charges stemming from the alleged commission-splitting scheme. According to the State, the commission-splitting scheme began in 1999 and involved Krehmeyer's writing nine monthly checks to the defendant, totaling over $1,000, and representing the defendant's share of the commissions Krehmeyer received. ¶ 44. On cross-examination at trial, Krehmeyer testified that he had never given checks or money to the 528 defendant for help in closing sales at Shoeder's Marine prior to the alleged agreement to split commissions. He also testified that he did not recall ever doing so. ¶ 45. The State then called Detective Ron Lueneburg of the Rhinelander Police Department, who testified about the search warrant executed at the defendant's house. During cross-examination, the defendant asked Detective Lueneburg about statements Krehmeyer made to him during the police investigation. The question was based on a police report Detective Lueneburg had prepared that indicated Krehmeyer had written three checks to the defendant in 1997 and stated they were legitimate payments for the defendant's assistance in closing some sales. The State objected to the question on hearsay grounds, and the circuit court sustained the objection. [14] ¶ 46. We agree with the court of appeals and both parties that the circuit court erred in refusing to allow the question. Krehmeyer's statement to the detective was admissible as a prior inconsistent statement under Wis. Stat. § 908.01(4)(a).[31] [15, 16] ¶ 47. The question then is whether the error is prejudicial so that a new trial on the theft charge is warranted. The test for harmless error was set forth by the U.S. Supreme Court in Chapman v. California, 386 U.S. 18, 24 (1967), reh'g denied, 386 U.S. 987 (1967), which stated that "before a federal constitutional error 529 can be held harmless, the court must be able to declare a belief that it was harmless beyond a reasonable doubt." An error is harmless if the beneficiary of the error proves "beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained."[32] This court applies the Chapman test for constitutional and non-constitutional errors in interpreting Wis. Stat. § 805.18, the harmless error statute.[33] ¶ 48. The court has explained that in applying the Chapman harmless error test, the reviewing court should consider a variety of factors, including but not limited to the frequency of the error, the nature of the State's case, the nature of the defense, the importance of the erroneously included or excluded evidence to the prosecution's or defense's case, the presence or absence of evidence corroborating or contradicting the erroneously included or excluded evidence, whether erroneously admitted evidence merely duplicates untainted evidence, and the overall strength of the prosecution's case.[34] ¶ 49. The defendant argues that the circuit court's erroneous preclusion of the statements was not 530 harmless, because the evidence would have cast doubt on whether the alleged 1999 agreement between the defendant and Krehmeyer to split commissions and defraud Shoeder's Marine actually existed. ¶ 50. We disagree with the defendant that the error was prejudicial. The record shows that even though the defense could not elicit Krehmeyer's inconsistent statement through Detective Lueneburg's testimony, the same evidence was effectively communicated to the jury by other means. ¶ 51. Krehmeyer initially testified that he had not written checks to the defendant before 1999 and did not remember telling the police that some checks written to the defendant prior to 1999 were for legitimate purposes. After the circuit court sustained the hearsay objection regarding the questioning of Detective Lueneburg, the defense called Krehmeyer to testify again and attempted to use the Detective's police report to refresh Krehmeyer's memory. During this second round of questions, Krehmeyer stated that his recollection was not refreshed by the document but admitted that if the pre-1999 checks existed then he did write them and that they would have been for legitimate purposes, as he had no reason to write the checks otherwise. ¶ 52. Krehmeyer's prior inconsistent statement was again presented to the jury when the defense summarized Krehmeyer's testimony, during closing arguments, as "I don't remember telling Mr. Lueneburg that I had these checks that I paid him and there was legitimate things back in `97." 531 ¶ 53. Because the jury learned about Krehmeyer's prior inconsistent statement, we conclude that it is clear "beyond a reasonable doubt that the error complained of did not contribute to the verdict obtained."[35] IV ¶ 54. The defendant's third argument is that the jury instruction for the charge of feloniously falsifying corporate documents violated his right to a unanimous jury in the present case. ¶ 55. Wisconsin Stat. § 943.39(1) makes it a crime for an employee of a corporation to falsify a record, account, or other document belonging to that corporation "with intent to injure or defraud."[36] The statute reads, in pertinent part: 943.39 Fraudulent writings. Whoever, with intent to injure or defraud, does any of the following is guilty of a Class D felony: (1) Being a director, officer, manager, agent or employee of any corporation or limited liability company falsifies any record, account or other document belonging to that corporation or limited liability company by alteration, false entry or omission, or makes, circulates or publishes any written statement regarding the corporation or limited liability company which he or she knows is false. . . .[37] 532 ¶ 56. The circuit court, following the pattern jury instructions, instructed the jury on both types of intent as follows: The third element [of the crime of falsifying corporate documents] requires that the defendant acted with intent to injure or defraud. Intent to injure means that the defendant intended to cause harm of any kind. Intent to defraud means that the defendant intended to obtain property that he was not entitled to receive.[38] ¶ 57. The defendant argues that the circuit court erred when it gave this instruction because it did not require that all members of the jury agree that the documents were falsified with the same criminal intent. According to the defendant, the choice of finding him guilty of falsifying documents with the intent to defraud or the intent to injure relieved the jury of its duty to reach a unanimous verdict and therefore violated the defendant's constitutional right. [17] ¶ 58. The Wisconsin Constitution guarantees accuseds a right to a trial by jury.[39] That guarantee includes the right to a unanimous verdict with respect 533 to the ultimate issue of guilt or innocence.[40] "The principal justification for the unanimity requirement is that it ensures that each juror is convinced beyond a reasonable doubt that the prosecution has proved each essential element of the offense."[41] [18] ¶ 59. The proper analysis for determining whether a defendant's right to a unanimous verdict has been violated by a jury instruction involves multiple steps. First, a court must look to the statute defining the crime and ask a threshold question: Does the statute create multiple offenses or a single offense with multiple modes of commission?[42] To resolve this question, a court is to examine four different factors: the language of the statute, the legislative history and context of the statute, the nature of the proscribed conduct, and the appropriateness of multiple punishments for the conduct.[43] The point is to determine the legislative intent in drafting the statute.[44] 534 [19] ¶ 60. When a court determines that the legislature intended to enact a statute creating multiple offenses, it is clear that juror unanimity as to each offense is required to convict an accused of each offense.[45] On the other hand, when a court determines that the legislature intended to enact a statute creating one crime with alternate modes of commission, the court must make a second inquiry to determine whether an instruction allowing a conviction based upon a finding as to either mode, in the alternative, violates an accused's constitutional right to unanimity.[46] ¶ 61. This court has employed two different tests when addressing the constitutionality of a conviction based upon a jury instruction concerning a statute that creates a single offense with alternate modes of commission. For many years we relied upon the Fifth Circuit's "conceptually distinct" test set forth in United States v. Gipson, 553 F.2d 453 (5th Cir. 1977).[47] Under the conceptually distinct test, unanimity as to the multiple modes of commission is not required unless the alternate modes are conceptually distinct.[48] ¶ 62. Then, in Derango, 236 Wis. 2d 721, we explained that the United States Supreme Court had rejected the Gipson test in Schad v. Arizona, 501 U.S. 624 (1991) and replaced it with a new test that focuses on an evaluation of the fundamental fairness and 535 rationality of the legislature's choice to provide for a single offense with alternate modes of commission.[49] In Derango and cases subsequent, this court has employed the fundamental fairness and rationality test.[50] ¶ 63. In the present case, the defendant presents no argument that Wis. Stat. § 943.39(1) creates two distinct offenses. Moreover, the defendant presents no argument that § 943.39(1) defines one crime with multiple modes of commission that are either conceptually distinct or represent a fundamentally unfair or irrational legislative choice.[51] Rather, the defendant asserts in 536 conclusory fashion that giving the jury a choice automatically violates his right to a unanimous jury.[52] [20-22] ¶ 64. An accused's right to a unanimous verdict is not violated every time a judge instructs a jury on a statute that presents multiple modes of commission and does not select one among the many modes of commission. An argument that an instruction leads to a constitutionally infirm verdict must address the legislature's intent in enacting the statute and, where multiple modes of commission are found, whether the choice provided is constitutionally unacceptable. Here, the defendant has made no such arguments. We agree with the State that the defendant is not entitled to the court's consideration of this issue because he has failed to develop his assertion. We therefore conclude that the circuit court did not err in instructing the jury. V ¶ 65. Finally, the defendant argues that the evidence was not sufficient for a jury to conclude, beyond 537 a reasonable doubt, that he was guilty of the crimes of which he was convicted. Specifically, the defendant asserts that the evidence does not support a finding that he had the requisite intent under Wis. Stat. § 943.39(1). According to the defendant, Keith Shoeder, the owner of the business, consented to the defendant's falsifying the purchase agreements and taking equipment home. In addition, the defendant asserts that if he had wanted to defraud the business, he would not have added items to receipts that would later be reviewed. [23] ¶ 66. A defendant challenging the sufficiency of the evidence used to convict him bears a heavy burden. A criminal conviction will not be reversed unless the evidence, viewed most favorably to the State and the conviction, is so insufficient in probative value and force that it can be said as a matter of law that no trier of fact, acting reasonably, could have found guilt beyond a reasonable doubt.[53] [24] ¶ 67. The defendant does not meet his heavy burden. There is ample evidence to support a finding of guilt beyond a reasonable doubt in the case at hand. First, while it is true, as the defendant asserts, that the defendant testified that Shoeder knew of and approved of the defendant's actions, Shoeder himself testified to the contrary. Second, Shoeder testified that had the defendant not falsified the documents, it would have been much easier to discover his actions. *538 ¶ 68. The jury is the ultimate arbiter of a witness's credibility.[54] Nothing about either Shoeder's or the defendant's testimony or other evidence is so insufficient in probative value and force that it can be said as a matter of law that no trier of fact, acting reasonably, could have found the defendant guilty beyond a reasonable doubt. VI ¶ 69. For the foregoing reasons, the decision of the court of appeals upholding the judgment of convictions against the defendant is affirmed. By the Court.The decision of the court of appeals is affirmed. NOTES [1] State v. Norman, No. 01-3303-CR, unpublished slip op. (Wis. Ct. App. Aug. 20, 2002). [2] All subsequent references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise indicated. [3] Keith Shoeder denies ever giving the defendant permission to take the products or having any knowledge of falsified documents until he discovered the inaccurate purchase agreements in 1999. [4] The Sixth Amendment to the United States Constitution, made applicable to the states through the Fourteenth Amendment, provides: "In all criminal prosecutions, the accused shall enjoy the right . . . to be confronted with the witnesses against him." Article I, Section 7 of the Wisconsin Constitution reads as follows: SECTION 7. In all criminal prosecutions the accused shall enjoy the right to be heard by himself and counsel; to demand the nature and cause of the accusation against him; to meet the witnesses face to face; to have compulsory process to compel the attendance of witnesses in his behalf; and in prosecutions by indictment, or information, to a speedy public trial by an impartial jury of the county or district wherein the offense shall have been committed; which county or district shall have been previously ascertained by law. [5] Park identified the purchase agreement at the preliminary hearing. [6] The June 16, 1999, purchase agreement on file with Shoeder's Marine did not indicate that Park traded in a motorboat. Instead, the purchase agreement stated that Park purchased the rowboat in cash for $1,004.81. The defendant apparently kept the Glastar boat for himself and paid the $1,004.81 to Shoeder's Marine, an amount nearly half the value of the boat. [7] The preliminary hearing testimony transcript of the cross-examination of Park reads as follows: Q: Now, the person that you dealt with on both those occasions was the person you have described as Dan [Krehmeyer]; is that correct? A: Correct. Q: And did the first boat, the Glastar thatwhen you traded it in did you have some leaking problems with that? A. No, sir. I never had the boat in the water. Q: You don't know if there was any leaking problems or not? A: No, sir. [8] Wisconsin Stat. § 908.045(1) reads as follows: 908.045. Hearsay exceptions; declarant unavailable. The following are not excluded by the hearsay rule if the declarant is unavailable as a witness: (1) Former testimony. Testimony given as a witness at another hearing of the same or a different proceeding, or in deposition taken in compliance with law in the course of another proceeding, at the instance of or against a party with an opportunity to develop the testimony by direct, cross-, or redirect examination, with motive and interest similar to those of the party against whom now offered. [9] State v. Dunn, 121 Wis. 2d 389, 397, 359 N.W.2d 151 (1984) (at a preliminary hearing a judge ascertains plausibility of a witness's story, and whether, if believed, it would support a bindover; the preliminary hearing judge cannot delve into the credibility of a witness). [10] State v. Tomlinson, 2002 WI 91,¶ 39, 254 Wis. 2d 502, 648 N.W.2d 367. [11] Id. [12] Tomlinson, 254 Wis. 2d 502, ¶ 39. See also State v. Williams, 2002 WI 58, ¶ 7, 253 Wis. 2d 99, 644 N.W.2d 919 (citing State v. Ballos, 230 Wis. 2d 495, 504, 602 N.W.2d 117 (Ct. App. 1999)). [13] State v. Bauer, 109 Wis. 2d 204, 210, 325 N.W.2d 857 (1982). For another application of the Bauer test, see State v. Stuart, 2003 WI 73, 262 Wis. 2d 620, 664 N.W.2d 82. [14] Tomlinson, 254 Wis. 2d 502, ¶ 46 n.7; Bauer, 109 Wis. 2d at 210-13. The unavailability analysis at this step is derived from the Sixth Amendment to the United States Constitution, not a statute. See Ohio v. Roberts, 448 U.S. 56, 74 (1980). [15] Roberts, 448 U.S. at 74. [16] Barber v. Page, 390 U.S. 719, 724-25 (1968); see also La Barge v. State, 74 Wis. 2d 327, 336-39, 246 N.W.2d 794 (1976). [17] See Bauer, 109 Wis. 2d at 215-16. [18] Id. at 215. [19] Bauer, 109 Wis. 2d at 216 (quoting Roberts, 448 U.S. at 66). [20] Testimony at a preliminary hearing provides additional indicia of reliability as well. The defendant was present and represented by counsel; the defendant had an opportunity to cross-examine the witness; the witness was under oath subject to the penalties of perjury; and the proceedings were recorded. See Tomlinson, 254 Wis. 2d 502,¶91 50-51; Bauer, 109 Wis. 2d at 219; Nabbefeld v. State, 83 Wis.2d 515, 266 N.W.2d 292 (1978). [21] See State v. Myren, 133 Wis. 2d 430, 439-40, 395 N.W.2d 818 (Ct. App. 1986) (rejecting the argument that virtually no cross-examination is per se an unusual circumstance warranting exclusion of the preliminary hearing testimony). [22] Bauer, 109 Wis. 2d at 218. [23] See Francis M. Dougherty, Annotation, Admissibility or Use in Criminal Trial of Testimony Given at Preliminary Proceeding By Witness Not Available at Trial, 38 A.L.R. 4th 378 (1985 & Supp. 2002). [24] See, e.g., State v. Bintz, 2002 WI App 204, ¶ 17, 257 Wis. 2d 177, 650 N.W.2d 913; State v. Whiting, 136 Wis. 2d 400, 416-17, 402 N.W.2d 723 (Ct. App. 1987); State v. Myren, 133 Wis. 2d at 437-40. [25] See Ohio v. Roberts, 448 U.S. 56, 63-64 (1980) (quoting Mattox v. United States, 156 U.S. 237, 242-43 (1895)). [26] Roberts, 448 U.S. at 64 (internal citations omitted). [27] Id. [28] Bauer, 109 Wis. 2d at 214 (citations omitted); see also Roberts, 448 U.S. at 64-65. [29] In addition, the Glastar boat that Park traded in was found at the defendant's home. [30] See, e.g., Bauer, 109 Wis. 2d at 221-22 ("Notwithstanding the fact that cross-examination during the preliminary examination is limited in form, if in substance the questioning deals with the witness's credibility, the purposes behind the confrontation right may be satisfied. . . . [D]efense counsel adequately cross-examined [the witness] `on the very issues that are relevant at the time the witness is unavailable, including credibility.'"); Nabbefeld, 83 Wis. 2d at 526-27 ("Where unusual circumstances are apparent, the court may have reason to inquire into whether a meaningful confrontation was indeed afforded a defendant."). [31] Wisconsin Stat. § 908.01(4)(a) states that: "A statement is not hearsay if . . . the declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement, and the statement is . . . [i]nconsistent with the declarant's testimony." [32] Chapman v. California, 386 U.S. 18, 24 (1967) (quoted with approval in Neder v. United States, 527 U.S. 1, 15 (1999)). [33] This court continues to follow the Chapman test and rejects the notion that Neder v. United States, 527 U.S. 1 (1999), abandoned the Chapman harmless error test. See State v. Vanmanivong, 2003 WI 41,¶41 n.10, 261 Wis. 2d 202, 661 N.W.2d 76; State v. Carlson, 2003 WI 40, ¶¶ 85-86, 261 Wis. 2d 97, 661 N.W.2d 51 (Sykes, J., dissenting); State v. Harvey, 2002 WI 93, 254 Wis. 2d 442, ¶ 48 n.14, 647 N.W.2d 189. [34] See, e.g., State v. Billings, 110 Wis. 2d 661, 668-70, 329 N.W.2d 192 (1983); State v. Drusch, 139 Wis. 2d 312, 324 n.1, 407 N.W.2d 328 (Ct. App. 1987). [35] Chapman, 386 U.S. at 24. [36] Wis. Stat. § 943.39(1) (emphasis added). [37] Id. (emphasis added). The statute was amended, effective February 1, 2003, to make a person convicted under this statute guilty of a Class H felony rather than a Class D felony. [38] Wis JICriminal § 1485 (Fraudulent Writings: Falsifying a Corporate Record § 943.39(1)) (2001) (emphasis added). The jury instruction provides, in relevant part: 3. The defendant acted with intent to (injure)(defraud). ["Intent to injure" means that the defendant intended to cause harm of any kind.] ["Intent to defraud" means that the defendant intended to obtain property that (he)(she) was not entitled to receive.] [39] Article I, Section 5 of the Wisconsin Constitution provides as follows: SECTION 5. The right of trial by jury shall remain inviolate, and shall extend to all cases at law without regard to the amount in controversy; but a jury trial may be waived by the parties in all cases in the manner prescribed by law. Provided, however, that the legislature may, from time to time, by statute provide that a valid verdict, in civil cases, may be based on the votes of a specified number of the jury, not less than five-sixths thereof. [40] State v. Johnson, 2001 WI 52, ¶ 11, 243 Wis. 2d 365, 627 N.W.2d 455. [41] State v. Lomagro, 113 Wis. 2d 582, 591, 335 N.W.2d 583 (1983). [42] Manson v. State, 101 Wis. 2d 413, 422, 304 N.W.2d 729 (1981) (cited with approval in State v. Derango, 2000 WI 89, ¶ 14, 236 Wis. 2d 721, 613 N.W.2d 833). [43] Id. (cited with approval in State v. Derango, 236 Wis. 2d 721, ¶ 15). [44] Id. (cited with approval in State v. Derango, 236 Wis. 2d 721, ¶ 15). [45] Id. at 419. [46] Id. [47] See Derango, 236 Wis. 2d 721, ¶ 22 (listing Wisconsin cases relying upon United States v. Gipson, 553 F.2d 453 (5th Cir. 1977)). [48] Derango, 236 Wis. 2d 721, ¶ 22. [49] Schad v. Arizona, 501 U.S. 624, 635 (1991). [50] See, e.g., Johnson, 243 Wis. 2d 365, ¶ 17 (applying the test in Schad to address a juror unanimity challenge). [51] The court of appeals is wrong to assert that the Committee Comments to the jury instructions in this case provide persuasive authority on the constitutionality of instructing the jury on alternative modes of commission. State v. Norman, No. 01-3303-CR, unpublished slip op. ¶ 15 (Wis. Ct. App. Aug. 20, 2002). The Wisconsin Criminal Jury Instruction Committee comment on this portion of the instruction explains, "[T]he Committee concluded that it would be permissible to instruct on both types of intent and that jury agreement on the intent involved would not be required. The Wisconsin Supreme Court has reached that conclusion with offenses under § 948.07, Child enticement. State v. Derango, 2000 WI 89, 236 Wis. 2d 721, 613 N.W.2d 833." As previously stated, the first step in assessing whether a jury instruction violates a defendant's right to a unanimous verdict is to discern the legislative intent in adopting the statute on which the jury is being instructed. Consequently, the fact that this court held that it was permissible to instruct a jury on two alternative modes of commission under Wis. Stat. § 948.07 does not necessarily mean that the same is true under Wis. Stat. § 943.39(1), a completely unrelated statute. Moreover, an instruction must be examined for fairness and rationality. This court has not determined whether an instruction may be fair and rational in one fact situation but may not be fair and rational in a different fact situation. See Manson, 101 Wis. 2d at 438 (Abrahamson, J., concurring) ("Conceptual groupings, dependent upon the facts in evidence."). [52] The defendant cites to a single case, State v. Seymour, 183 Wis. 2d 683, 515 N.W.2d 874 (1994), to support his argument. Seymour, however, is in apposite. It held that Wis. Stat. § 943.20(1)(b) should be read to include distinct offenses of theft by an employee based upon the court's assessment of the legislative intent in enacting § 943.20. The same legislative intent cannot automatically be attributed to Wis. Stat. § 943.39(1), a statute addressing a different offense. [53] State v. Schwebke, 2002 WI 55, ¶ 40, 253 Wis. 2d 1, 644 N.W.2d 666. [54] State v. Webster, 196 Wis. 2d 308, 320, 538 N.W.2d 810 (Ct. App. 1995).	{ "pile_set_name": "FreeLaw" }
No. 96-2988 STANLEY WAYNE BREWER, * * Plaintiff-Appellant, * Appeal from the United States * District Court for the v. * District of South Dakota. * UNITED STATES OF AMERICA, * [NOT TO BE PUBLISHED] * Defendant-Appellee. * Submitted: June 13, 1997 Filed: August 15, 1997 Before LOKEN, REAVLEY* and JOHN R. GIBSON, Circuit Judges. PER CURIAM. Stanley Brewer was convicted of the rape of Jessica Tobacco. He brought this action under 28 U.S.C. § 2255, seeking a new trial on grounds of ineffective assistance of counsel. The district court1 denied the motion for new trial. We affirm. On appeal we review the question of ineffective assistance of counsel de novo and review the district court’s findings of * The HONORABLE THOMAS M. REAVLEY, United States Circuit Judge for the United States Court of Appeals, Fifth Circuit, sitting by designation. 1 The Honorable Richard H. Battey, Chief Judge, United States District Court for the District of South Dakota. underlying predicate facts under the clearly erroneous standard. Reed v. United States, 106 F.3d 231, 236 (8th Cir. 1997). To establish ineffective assistance, the convicted defendant must show that counsel’s performance was deficient and that the deficient performance prejudiced the defense. Strickland v. Washington, 466 U.S. 668, 687 (1984). As to the prejudice requirement, the defendant must show a reasonable probability that but for his counsel’s errors, the result of the proceeding would have been different. Id. at 694. “Judicial scrutiny of counsel’s performance must be highly deferential and the court must indulge a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance.” Reed, 106 F.3d at 236. Particularly where counsel’s trial strategy is in issue, “[w]e presume attorneys provide effective assistance, and will not second-guess strategic decisions or exploit the benefits of hindsight.” Payne v. United States, 78 F.3d 343, 345 (8th Cir. 1996). Brewer argues that his counsel was ineffective because he failed to move to suppress Brewer’s statement after arrest that “that f---ing bitch Jessie must have said I tried something.” We agree with the district court that, even if Brewer’s warrantless arrest was illegal, his statement was voluntary and not prompted by coercion or interrogation after the arrest. The statement therefore was not tainted by the alleged illegal arrest and was admissible. United States v. Houle, 620 F.2d 164, 165-66 (8th Cir. 1980). Brewer complains that his counsel failed to submit proposed voir dire questions on the issues of racial prejudice, sexual assault and alcohol. On appeal, he does not specify what questions -2- should have been asked of the potential jurors. In any event, we agree with the district court that the trial court asked sufficient questions on these issues to apprise the attorneys of possible juror prejudices. Defense counsel’s failure to propose additional questions fell within the broad range of reasonable professional assistance. Brewer next argues that his counsel was ineffective in cross- examining Tobacco and Gary Pourier. We have carefully reviewed the evidence and argument on this issue, and agree with the district court that Brewer’s counsel offered reasonably effective assistance. As to Tobacco, counsel cross-examined her at some length regarding inconsistencies between her trial testimony and prior statements. The extent to which an alleged rape victim should be subjected to cross-examination is inherently a matter of strategy, as a withering and relentless cross-examination can easily backfire. And as we have explained, “[i]n hindsight, there are few, if any, cross-examinations that could not be improved upon. If that were the standard of constitutional effectiveness, few would be the counsel whose performance would past muster.” Willis v. United States, 87 F.3d 1004, 1006 (8th Cir. 1996). Further, questioning Tobacco as to whether she was a virgin or had had sex prior to the incident would have been improper under Fed. R. Evid. 412. Brewer argues that his counsel was ineffective because he did not interview and call potential defense witnesses. Brewer does not establish ineffective assistance on this ground. By way of example, from our review of the record, the lay witness who was not called and appears to have had the most to offer is Margarette Vitalis, Brewer’s girlfriend. She offered an affidavit and testimony at the evidentiary hearing on the motion for new trial -3- that (1) Tobacco’s mother called her on the night of the incident and claimed that Brewer and Pourier had raped Tobacco, (2) the mother stated that on the night in question Tobacco had been “after” Brewer and had been “all over” Brewer, and (3) the next morning, Vitalis and Pourier visited Brewer in jail, where Brewer denied raping Tobacco, Pourier responded that “I know you didn’t,” and Pourier said “I really f----ed up this time.” Brewer’s trial counsel testified at the new trial hearing that prior to trial he had spoken to Vitalis, who denied any knowledge of the relevant facts. She told him “I don’t know anything about it.” Counsel further testified: And then after the jury got the case [Vitalis] came up to me in the courtroom while we -- just after the jury got the case after argument, and said that “[Tobacco’s mother] called me that morning and said [Brewer and Pourier] had raped [Tobacco].” And I said, “Why didn’t you tell me this before?” And she said that she was related to the Tobaccos by marriage and she didn’t want to get involved. And I said, “Well, it’s too late now.” The district court credited this testimony, concluding that “trial counsel had no way of knowing that she could provide any relevant evidence.” The district court also credited the counsel’s testimony that “he told Brewer to bring in witnesses that he thought would have relevant information. Brewer did not do this.” These findings are not clearly erroneous. Further, testimony by Vitalis as to what Tobacco’s mother had told her would have been inadmissible hearsay, and in any event testimony from the defendant’s girlfriend would have been inherently suspect. Brewer complains that his counsel should have called an expert to counter the testimony of Dr. Mulder, who examined Tobacco after the incident. At the motion for new trial, Brewer called an expert who testified that vaginal tenderness was not inconsistent with -4- consensual sex. Mulder testified at the trial that consensual sex would unlikely cause the vaginal tenderness he observed. However, he also testified that he observed no vaginal bleeding, scratches or injuries. On cross-examination, he stated that he had conducted only about ten post-rape examinations and that he “couldn’t really speak to” whether vaginal tenderness sometimes occurs with consensual sex. His testimony therefore was not unequivocal. Further, as Brewer’s trial counsel explained at the motion for new trial, vaginal tenderness was consistent with the defense theory that Tobacco became angry with Brewer only after Pourier forced himself on Tobacco and attempted to have sex with her. In these circumstances, we agree with the district court that failure to hire an expert was not unreasonable. Brewer complains that his counsel did not adequately prepare him to testify in his defense. Brewer’s counsel met with him several times before the trial. Brewer’s testimony at trial was relatively brief but set out his defense that the sex with Tobacco was consensual and that Tobacco only became angry when Pourier also attempted to have sex with her. On appeal Brewer argues that his counsel should have elicited more details about Tobacco’s behavior towards him on the evening in question prior to the sexual encounter. Brewer testified that prior to the encounter he and Tobacco sat next to each other in a car, drank, and conversed, and that he put his arm around her without objection. He fails to demonstrate that his counsel’s examination fell below the standard of reasonable professional assistance. Brewer complains that his counsel failed to object to questions directed (1) to Tobacco’s aunt about what Tobacco told her, (2) to Pourier about whether he raped Tobacco, and (3) to Pourier about what Tobacco told him. The same judge who tried the case concluded, in denying the § 2255 motion, that the statements -5- made to the aunt were admissible as excited utterances, and the questions posed to Pourier about whether he raped Tobacco were not leading. The questions of Pourier as to what Tobacco told him came from the court itself. Brewer cannot show that an objection would have led to the exclusion of any of this evidence, and cannot therefore meet the prejudice requirement for establishing ineffective assistance of counsel. Brewer lastly argues that his counsel was ineffective in failing to object to improper closing argument by the prosecutor and move for a mistrial. He contends that the prosecutor improperly urged the jury to serve as the conscience of the community. The prosecutor stated in her closing argument: This case is about holding the defendant accountable for his actions. You are the conscience of the community. It’s a big job, but you are the people who say this is not to be tolerated. You had sex with Jessica against her will without her consent and you are guilty of forcibly raping her. I ask you to be the conscience of the community and to return a just verdict in this case. The one that justice requires is guilty. Brewer relies on United States v. Johnson, 968 F.2d 768 (8th Cir. 1992), where we reversed a conviction in a drug case on grounds of improper jury argument by the prosecutor. The prosecutor in Johnson argued: [The defense attorney] says your decision to uphold the law is very important to his client. Your decision to uphold the law is very important to society. You’re the people that stand as a bulwark against the continuation of what Mr. Johnson is doing on the street, putting this poison on the street. Id. at 769. We recognized that “[u]nless calculated to inflame, an appeal to the jury to act as the conscience of the community is not -6- impermissible.” Id. at 770 (quoting United States v. Lewis, 547 F.2d 1030, 1037 (8th Cir. 1976)). However, we found the statement “urging the jury to act as ‘a bulwark against . . . putting this poison on the streets’” impermissible because it urged the jury “to encumber certain defendants with responsibility for the larger societal problem in addition to their own misdeeds” and to “assist in the solution of some pressing social problem.” Johnson, 968 F.2d at 771 (quoting United States v. Monaghan, 741 F.2d 1434, 1441 (D.C. Cir. 1984)). Johnson does not compel a new trial in this case. First, we do not read the statement made by the prosecutor in our case as urging the jury to assist in solving some general social problem. Although we do not condone references to the conscience of the community by the prosecutor, here she made the comment in the context of an argument directed solely at the defendant, urging the jury to “say this is not to be tolerated. You had sex with Jessica against her will without her consent and you are guilty of forcibly raping her.” Second, Johnson was a direct appeal. We stated that the standard of review was whether the error was harmless beyond a reasonable doubt. Johnson, 968 F.2d at 772. On habeas review, however, we apply the Strickland test to counsel’s failure to object to alleged improper argument, as we recently did in Seehan v. State of Iowa, 72 F.3d 607 (8th Cir. 1995) (en banc), cert. denied, 116 S. Ct. 1578 (1996). Under the first prong of Strickland, we emphasized in Seehan the strong presumption that the challenged conduct of counsel might be considered sound trial strategy. Id. at 611. In the pending case Brewer’s counsel testified that he did not object to the closing argument because such objections irritate the jury. We have recognized that the -7- “decision to object during prosecutor’s summation must take into account the possibility that the court will overrule it and the objection will either antagonize the jury or underscore the prosecutor’s words in their minds.” Bussard v. Lockhart, 32 F.3d 322, 324 (8th Cir. 1994). We agree with the district court’s conclusion that the failure to object here fell within the wide range of professionally competent assistance. Moreover, Brewer does not meet the second requirement under Strickland of showing that the error if any in failing to object to the prosecutor’s comment was “so serious as to deprive the defendant of a fair trial, a trial whose result is reliable.” Strickland, 466 U.S. at 687. As to the other allegedly improper comments made in closing argument, we agree that they are not grounds for a new trial for essentially the same reasons noted by the district court. Affirmed. A true copy. Attest: CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT. -8-	{ "pile_set_name": "FreeLaw" }
UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 00-1798 FRANCINE COLE, Plaintiff - Appellant, versus RICHLAND MEMORIAL HOSPITAL; MICHAEL D. WADE, Individually; PAT WELLS, Individually; K. OUIDETTE GASQUE-CARTER, Individually; ELAINE ROBB, R.N., Individually; A. S. DUNBAR, Individually, Defendants - Appellees. Appeal from the United States District Court for the District of South Carolina, at Columbia. Joseph F. Anderson, Jr., Chief Dis- trict Judge. (CA-99-412-1-17BC) Submitted: February 28, 2001 Decided: March 19, 2001 Before WIDENER, MICHAEL, and TRAXLER, Circuit Judges. Affirmed by unpublished per curiam opinion. Francine Cole, Appellant Pro Se. Charles Elford Carpenter, Jr., Georgia Anna Mitchell, S. Elizabeth Brosnan, William Curry McDow, RICHARDSON, PLOWDEN, CARPENTER & ROBINSON, Columbia, South Caro- lina; James E. Parham, Jr., Irmo, South Carolina; Andrew Frederick Lindemann, DAVIDSON, MORRISON & LINDEMANN, P.A., Columbia, South Carolina, for Appellees. Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c). PER CURIAM: Francine Cole appeals the district court’s orders dismissing her 42 U.S.C.A. § 1983 (West Supp. 2000) complaint. We have re- viewed the record and the district court’s opinions and find no reversible error. Accordingly, we affirm on the reasoning of the district court. Cole v. Richland Mem’l Hosp., No. CA-99-412-1-17BC (D.S.C. March 23 & May 4 & 22, 2000). In light of this disposi- tion, we deny Cole’s motion to ensure corrected record on appeal and/or supplement the district court’s transcript. We dispense with oral argument because the facts and legal contentions are ade- quately presented in the materials before the court and argument would not aid the decisional process. AFFIRMED 2	{ "pile_set_name": "FreeLaw" }
[Cite as Stephen Dev. Co. vs. DTB Land Dev., LLC, 2012-Ohio-1493.] COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT STEPHEN DEVELOPMENT COMPANY JUDGES: Hon. Sheila G. Farmer, P.J. Plaintiff-Appellant Hon. John W. Wise, J. Hon. Julie A. Edwards, J. -vs- DTB LAND DEVELOPMENT, LLC Case No. 2011CA00153 Defendant-Appellee OPINION CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Case No. 2010CV00740 JUDGMENT: Affirmed DATE OF JUDGMENT: March 26, 2012 APPEARANCES: For Plaintiff-Appellant For Defendant-Appellee JOHN A. MURPHY, JR. OWEN J. RARRIC KRISTEN S. MOORE 4775 Munson Street, NW Millennium Centre, Suite 300 P.O. Box 36963 Stark County, Case No. 2011CA00153 2 200 Market Avenue North Canton, OH 44735 P.O. Box 24213 Canton, OH 44701 Farmer, J. {¶1} On September 17, 2008, appellee, DTB Land Development, LLC, entered into a purchase agreement to purchase a commercial real estate building named the Renaissance Centre, from appellant, Stephen Development Company. The agreement listed the "amount to be financed" was "to be determined." {¶2} In December of 2008, appellee terminated its agreement with appellant. {¶3} On February 22, 2010, appellant filed a complaint against appellee for breach of contract. Appellee filed a counterclaim for return of its $25,000.00 deposit. Both parties filed motions for summary judgment. By judgment entry filed June 13, 2011, the trial court concluded the agreement was not enforceable, finding the agreement's failure to include an essential term "manifested a lack of intention by the parties and a failure of a meeting of the minds." The trial court denied appellant's motion and granted appellee's motion, awarding appellee $25,000.00 plus interest and costs. {¶4} Appellant filed an appeal and this matter is now before this court for consideration. Assignments of error are as follows: I {¶5} "THE TRIAL COURT ERRED, AS A MATTER OF LAW, IN DETERMINING THAT THE PURCHASE AGREEMENT WAS NOT A LEGALLY ENFORCEABLE CONTRACT." II Stark County, Case No. 2011CA00153 3 {¶6} "THE TRIAL COURT ERRED, AS A MATTER OF LAW, IN DETERMINING THAT APPELLEE WAS EXCUSED FROM PERFORMANCE UNDER THE PURCHASE AGREEMENT DUE TO THE FINANCING PROVISION WHEN THAT PROVISION GAVE ONLY STEPHEN DEVELOPMENT THE RIGHT TO VOID THE PURCHASE AGREEMENT." III {¶7} "THE TRIAL COURT ERRED IN DENYING STEPHEN DEVELOPMENT'S MOTION FOR SUMMARY JUDGMENT WHEN THE UNDISPUTED FACTS DEMONSTRATE THAT APPELLEE WAS ABLE TO ARRANGE FINANCING." IV {¶8} "IN THE ALTERNATIVE, THE TRIAL COURT ERRED IN GRANTING APPELLEE'S MOTION FOR SUMMARY JUDGMENT WHEN GENUINE ISSUES OF MATERIAL FACT REMAIN." {¶9} Appellant's four assignments of error challenge the trial court's granting of summary judgment to appellee. {¶10} Summary Judgment motions are to be resolved in light of the dictates of Civ.R. 56. Said rule was reaffirmed by the Supreme Court of Ohio in State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d 447, 448, 1996-Ohio-211: {¶11} "Civ.R. 56(C) provides that before summary judgment may be granted, it must be determined that (1) no genuine issue as to any material fact remains to be litigated, (2) the moving party is entitled to judgment as a matter of law, and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the nonmoving party, that conclusion is Stark County, Case No. 2011CA00153 4 adverse to the party against whom the motion for summary judgment is made. State ex. rel. Parsons v. Fleming (1994), 68 Ohio St.3d 509, 511, 628 N.E.2d 1377, 1379, citing Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O3d 466, 472, 364 N.E.2d 267, 274." {¶12} As an appellate court reviewing summary judgment motions, we must stand in the shoes of the trial court and review summary judgments on the same standard and evidence as the trial court. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35. {¶13} The trial court based its decision on two points. First, the purchase agreement was not enforceable as a matter of law because the agreement failed to include a specific amount to be financed. The trial court found such a failure demonstrated a lack of intention by the parties resulting in a failure of a meeting of the minds. The trial court concluded the "amount to be financed" was an essential term of the agreement. {¶14} The second issue involved the financing contingency in the agreement. The trial court concluded the lack of specificity as to the financing granted appellee "the right to determine what financing was appropriate and to ultimately decide that the proposed financing was unacceptable." See, Judgment Entry filed June 13, 2011. I {¶15} Appellant claims the trial court erred as a matter of law in determining the purchase agreement was not enforceable. Specifically, appellant claims the trial court failed to analyze the parties' intent or reasonableness in filling in the missing terms (amount of financing). We disagree. Stark County, Case No. 2011CA00153 5 {¶16} Appellant argues the purchase agreement was legally enforceable and binding upon the parties. In support, appellant cites this court's opinion in Miller v. Murday (1989), Licking App. No. CA-3398, wherein this court noted: {¶17} "Generally, a liberal construction should be put upon written instruments so as to uphold them, if possible, and carry into effect the intention of the parties. Courts are required, by applying known rules of law, to enforce valid and reasonable contracts of parties, with the view of carrying out their clear intent, rather than, by resorting to technical construction, to render such contracts void. A contract should be given that construction that will uphold it and preserve to the parties thereto their rights, if the same can be done without doing violence to the language of the contract. Whenever the language of a contract will permit, it should be so construed as to support rather than to destroy legal obligation or as it is sometimes stated, 'ut res magis valeat quam pereat.' Wherever possible, such a construction will be given as to render the contract legal and effective rather than one which renders it void." {¶18} It is appellant's position that the absence of the "amount to be financed" was not an essential term of the contract: {¶19} "As a general rule, parties cannot enter into an enforceable contract unless they come to a meeting of the minds on the essential terms of the contract. Alligood v. Proctor & Gamble Co. (1991), 72 Ohio App.3d 309. The essential terms of a contract have been identified as 'the identity of the parties to be bound, the subject matter of the contract, consideration, a quantity term and a price term.' Id." Fairfax Homes, Inc. v. Blue Belle, Inc., Licking App. No. 2007CA00077, 2008-Ohio-2400, ¶19. Stark County, Case No. 2011CA00153 6 {¶20} Appellee argues the specific omission of the "amount to be financed" with the language "to be determined" establishes there was not a meeting of the minds. In support, appellee cites the case of Anchor v. Jones (1992), Lorain App. No. 91CA005109, wherein our brethren from the Ninth District stated the following: {¶21} "An agreement is enforceable if it encompasses the essential elements of the bargain and if it provides a basis for determining the existence of a breach and for giving an appropriate remedy. Mr. Mark Corp. v. Rush, Inc. (1983), 11 Ohio App.3d 167. A court will give an effect to a contract's words; it will not delete words or use words not used. Cleveland Elec. Illuminating Co. v. Cleveland, 37 Ohio St.3d 50, paragraph three of the syllabus, rehearing denied (1988), 38 Ohio St.3d 704. The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intent is not intended to be understood as an offer or acceptance. Mr. Mark Corp., supra at 169, citing Restatement of the Law 2d, Contracts (1981) 92, Section 33(3). Based upon these principles, the court could properly hold that there was not a meeting of the minds on the amount to be financed, an essential term of the agreement." {¶22} This conclusion bears upon the facts in this case. The specific negotiated language of the agreement sub judice states the "amount to be financed" is "to be determined" and lists the following contingences at ¶6: {¶23} "(a) ENVIRONMENTAL INSPECTION: Owner agrees to permit the Purchaser, the Purchaser's lender and the qualified professional environmental consultant of either of them to enter the Premises to conduct, at the expense of the Purchaser, an environmental site assessment. This Assessment report must be Stark County, Case No. 2011CA00153 7 completed within 30 days of the execution of this Agreement. Purchaser agrees if such assessment is obtained and the consultant recommends further inspection to determine the extent of suspected contamination or recommends remedial action, the Purchaser, at Purchaser's option, may notify the Owner in writing, with a copy of the report attached, within five (5) business days after receipt by Purchaser of a copy of the environmental site assessment report, that the Contract is null and void. Does Apply [Marked & Initialed] Does Not Apply ___________ {¶24} "(b) FINANCING CONTINGENCY: Purchaser agrees to use his best efforts to obtain above loan, including complying with lender's requests. Purchaser will make loan application within 21 days after date of receipt by Purchaser of fully executed copy of this Agreement, and Purchaser shall obtain a written loan commitment within 60 days after date of such receipt. If Purchaser has failed either to make loan application or obtain a written loan commitment within the time periods set forth above, this agreement, at Seller's written election, shall be deemed null and void and all monies in trust shall be returned to Purchaser without further liability by, between and among Seller, Purchaser and REALTOR. If financing cannot be arranged, all monies shall be returned to Purchaser." See, Commercial/Industrial Real Estate Purchase Agreement, attached to Ross Deposition as Defendant's Exhibit Ross I. {¶25} Appellant's manager, William Ross, stated the financing was to be a conventional commercial lending arrangement of 70 or 80%, but it was not included in the terms of the agreement. Ross depo. at 108-109. Mr. Ross further acknowledged the October 27, 2008 communication between James Powers, the loan officer for Stark County, Case No. 2011CA00153 8 Huntington Bank, and Thomas Lazarides, appellant's real estate agent, did not include the amount of financing offered by Huntington Bank to appellee. Id. at 111; Exhibit L. {¶26} The undisputed fact was that appellant received financing, but found the financing unacceptable, thereby resulting in a termination of the agreement by appellee in December of 2008, some three months after the signing of the agreement. {¶27} The specific terms of the financing contingency paragraph in the agreement refers to "best efforts" to obtain financing. We conclude from this language and the inclusion of financing as a contingency that as in Anchor, supra, financing was an essential element of the contract and the trial court did not err in finding the contract was not enforceable. {¶28} Assignment of Error I is denied. II, III {¶29} Appellant claims the trial court erred in finding appellee was excused from performance due to the financing issue. We disagree. {¶30} Appellant argues the agreement gave the seller the sole right to terminate the contract as cited in ¶6, supra. However, the specific caveats to the financing contingency are the purchaser's "best efforts" and purchaser to make a loan application and receive a written loan commitment within certain time periods as set forth in the agreement, notwithstanding the fact that ¶6 provides that the seller may declare the agreement null and void because of a failure to obtain financing and shall return all monies to purchaser. {¶31} Theodore Sanders, one of appellee's owners, testified prior to the agreement, an on-going discussion was held with Huntington Bank relative to the Stark County, Case No. 2011CA00153 9 purchase of the Renaissance Centre and financing. Sanders depo. at 141-143. The first negotiation was for 100% financing by Huntington which was not formalized. Id. at 150. This 100% negotiation continued throughout the dealings with the bank. Id. at 156. Also involved was the need to increase by one million dollars a line of credit to one of appellee's businesses, Atlantic Financial Company, which the bank rejected. Id. at 154, 164. Eventually, the Atlantic line of credit went to Wells Fargo. Id. at 178. From the beginning, appellee wanted 100% financing. Id. at 174. Financing was available for a one year note which would require refinancing in one year. Id. at 177. Huntington refused 100% financing and offered 80/20%. without funds for improvements. Id. at 182, 188-191. Appellee did not have the money for the 20%. Id. at 192-193, 195. Mr. Sanders signed the agreement with the intention of securing 100% financing as 80/20% was not possible. Id. at 195. {¶32} It is clear that ¶6 gives both appellant and appellee the right to terminate the agreement. The evidence is also clear that appellee was wedded to 100% financing, there was a downturn in the climate of appellee's businesses (automobile sales), and Huntington denied increasing the line of credit for Atlantic, one of appellee's businesses and a would-be renter in the Renaissance Centre. {¶33} All these factors lead to financing for appellee being unavailable. One might argue that appellant's position is that once any financing is available, regardless of its costs, appellee was bound to fulfill the agreement. Without the inclusion of an "amount to be financed" in the purchase agreement, this argument is without merit. {¶34} Assignments of Error II and III are denied. Stark County, Case No. 2011CA00153 10 IV {¶35} Appellant claims genuine issues of material fact exist regarding the fulfillment of ¶6 and therefore summary judgment was not appropriate. We disagree. {¶36} Appellant argues there are questions of fact as to whether appellee made a loan application within twenty-one days or received a written commitment within sixty- days, whether appellee made "best efforts," and whether Huntington's terms were such that appellee had financing. {¶37} Because the financing terms of the agreement were left open to the discretion of appellee, appellant was bound by appellee's decision to reject the Huntington financing. As demonstrated by Mr. Sander's deposition testimony at 173, Atlantic's line of credit and the real estate purchase were intertwined. The rejection of one part, Atlantic's line of credit increase, and the switch to Wells Fargo created a financial climate that appellee found to be unacceptable. {¶38} Although one could interpret the independent facts differently, the conclusion does not change. As Mr. Sander's stated in his deposition, appellee required a 100% financing deal only. {¶39} Upon review, we find the trial court did not err in granting summary judgment to appellee. {¶40} Assignment of Error IV is denied. Stark County, Case No. 2011CA00153 11 {¶41} The judgment of the Court of Common Pleas of Stark County, Ohio is hereby affirmed. By Farmer, P.J. Wise, J. concur and Edwards, J. concurs separately. _s/Sheila G. Farmer______________ _s/ John W. Wise_________________ _______________________________ JUDGES SGF/sg 201 Stark County, Case No. 2011CA00153 12 EDWARDS, J., CONCURRING OPINION {¶42} I concur with the majority except regarding the analysis of the second, third and fourth assignments of error. {¶43} I do not find as the majority does, that it is clear that either the buyer or seller have the right to terminate the agreement. If I were to find that this is an enforceable contract, despite the missing financial terms, I would interpret the financing contingency to require the buyer to use his best efforts to obtain the loan, and, if reasonable financing cannot be arranged, all monies shall be returned to purchaser. {¶44} Appellant, in its brief, indicates that if this is the conclusion reached by the court, then a jury should decide whether the buyer used his best efforts to obtain a reasonable financing deal. While I agree that that would generally be a jury decision, the information presented to the trial court so clearly points to the conclusion that reasonable financing was not available that I find no error in the granting of the summary judgment on this ground. _______________________________________ Judge Julie A. Edwards JAE/rmn [Cite as Stephen Dev. Co. vs. DTB Land Dev., LLC, 2012-Ohio-1493.] IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT STEPHEN DEVELOPMENT COMPANY : : Plaintiff-Appellant : : -vs- : JUDGMENT ENTRY : DTB LAND DEVELOPMENT, LLC : : Defendant-Appellee : CASE NO. 2011CA00153 For the reasons stated in our accompanying Memorandum-Opinion, the judgment of the Court of Common Pleas of Stark County, Ohio is affirmed. Costs to appellant. _s/Sheila G. Farmer______________ _s/ John W. Wise_________________ s/ Julie A. Edwards________________ JUDGES	{ "pile_set_name": "FreeLaw" }
UNITED STATES OF AMERICA MERIT SYSTEMS PROTECTION BOARD BRIAN BONETTO, DOCKET NUMBER Appellant, DE-0752-13-0228-I-2 v. DEPARTMENT OF JUSTICE, DATE: February 6, 2015 Agency. THIS FINAL ORDER IS NO NPRECEDENTIAL 1 Joy Bertrand, Esquire, Scottsdale, Arizona, for the appellant. Steven R. Simon, Esquire, Phoenix, Arizona, for the agency. BEFORE Susan Tsui Grundmann, Chairman Anne M. Wagner, Vice Chairman Mark A. Robbins, Member FINAL ORDER ¶1 The appellant has filed a petition for review of the initial decision, which affirmed his indefinite suspension based on the agency’s belief that he had committed a crime after he was indicted in federal district court. Generally, we grant petitions such as this one only when: the initial decision contains erroneous 1 A nonprecedential order is one that the Board has determined does not add sign ificantly to the body of MSPB case law. Parties may cite nonprecedential orders, but such orders have no precedential value; the Board and administrative judges are not required to follow or distinguish them in any future decisions. In contrast, a precedential decision issued as an Opinion and Order has been identified by the Board as significantly contributing to the Board’s case law. See 5 C.F.R. § 1201.117(c). 2 findings of material fact; the initial decision is based on an erroneous interpretation of statute or regulation or the erroneous application of the law to the facts of the case; the judge’s rulings during either the course of the appeal or the initial decision were not consistent with required procedures or involved an abuse of discretion, and the resulting error affected the outcome of the case; or new and material evidence or legal argument is available that, despite the petitioner’s due diligence, was not available when the record closed. See Title 5 of the Code of Federal Regulations, section 1201.115 (5 C.F.R. § 1201.115). After fully considering the filings in this appeal, and based on the following points and authorities, we conclude that the petitioner has not established any basis under section 1201.115 for granting the petition for review. Therefore, we DENY the petition for review and AFFIRM the initial decision, which is now the Board’s final decision. 5 C.F.R. § 1201.113(b). DISCUSSION OF ARGUMENTS ON REVIEW ¶2 The appellant is a GL-09 Sports Specialist at a federal correctional facility. MSPB Docket No. DE-0752-13-0228-I-1 (I-1), Initial Appeal File (IAF), Tab 8 at 9. On January 15, 2013, a federal grand jury indicted him for obstruction of justice under 18 U.S.C. § 1519 for knowingly making a false record entry regarding the use of force during an incident that occurred while he was on duty. I-1, IAF, Tab 9 at 6-8. On January 18, 2013, the agency proposed to indefinitely suspend the appellant because, based on the indictment, the proposing official had reason to believe that the appellant had committed a crime. 2 I-1, IAF, Tab 8 at 2 The notice specified that the proposal was being issued under the authority of 5 C.F.R. § 752.404(d), which provides for a shortened notice period where the agency has “reasonable cause to believe that the employee has committed a crime for which a sentence of imprisonment may be imposed.” I-1, IAF, Tab 8 at 25; see 5 C.F.R. § 752.404(d). Although the agency originally allowed the appellant 7 days to tender to a response, I-1, IAF, Tab 8 at 26, it subsequently granted him an extension to respond on or before February 22, 2013, id. at 20. The appellant submitted a written response on February 15, 2013. I d. at 14-19. 3 25-27. On February 22, 2013, the agency imposed the indefinite suspension, which the appellant timely appealed to the Board. Id. at 10-12; I-1, IAF, Tab 1. 3 On January 8, 2014, the criminal charges were dismissed without prejudice, and the agency returned the appellant to work on January 10, 2014. I-2, IAF, Tab 14 at 5-7. ¶3 After holding a hearing, the administrative judge affirmed the indefinite suspension, finding that the suspension was valid and that the appellant had failed to prove that his due process rights were violated. I-2, IAF, Tab 31, Initial Decision (ID). The appellant has filed a petition for review, and the agency has responded in opposition. I-2, Petition for Review (PFR) File, Tabs 3, 7. ¶4 To sustain an indefinite suspension, the agency must show: (1) there is reasonable cause to believe that the employee committed a crime for which a term of imprisonment may be imposed; (2) the suspension has an ascertainable end, i.e., a determinable condition subsequent that will bring the suspension to a conclusion; (3) the suspension bears a nexus to the efficiency of the service; and (4) the penalty is reasonable. Albo v. U.S. Postal Service, 104 M.S.P.R. 166, ¶¶ 6-7 (2006). The administrative judge found that all of the above criteria were met in this case. ID at 4-9. ¶5 The appellant does not dispute, and we see no reason to disturb, the administrative judge’s findings that the agency had reasonable cause to believe that the appellant had committed a crime for which a term of imprisonment may be imposed and that there is a nexus between the criminal charge and the efficiency of the service. See PFR File, Tab 3. Rather, the appellant challenges the administrative judge’s findings that the indefinite suspension had an ascertainable end and was reasonable. Id. at 9-11. He further argues that, even if 3 Due to the ongoing criminal proceedings, the admin istrative judge dism issed the appeal without prejudice to refile, I-1, IAF, Tab 14, Initial Decision, and refiled the appeal sua sponte 6 months later, MSPB Docket No. DE-0752-13-0228-I-2 (I-2), IAF, Tab 1. 4 the agency initially had an adequate basis to suspend him, it was obligated to reinstate him prior to the conclusion of the criminal proceedings when it became aware that the prosecution’s case lacked merit. Id. at 10-11. Lastly, the appellant argues that the administrative judge erroneously determined that he had failed to prove that his due process rights were violated. Id. at 11-18. The administrative judge properly determined that the indefinite suspension had an ascertainable end. ¶6 To be valid, an indefinite suspension must have an ascertainable end. Harding v. Department of Veterans Affairs, 115 M.S.P.R. 284, 290, ¶ 15 (2010) aff’d, 451 F. App’x 947 (Fed. Cir. 2011). The appellant argues that the suspension could have continued in perpetuity because the decision letter and proposal notice provided that the suspension would remain in place until resolution of the criminal case and/or until there was sufficient evidence to either return him to duty or to support an administrative action against him. See PFR File, Tab 3 at 11; I-1, IAF, Tab 8 at 11, 27. It is well settled, however, that an agency may continue an indefinite suspension after resolution of criminal charges in an employee’s favor where the agency provides advance notice of possible administrative action in the suspension proposal or decision notice and takes action within a reasonable time of the conclusion of the criminal proceedings. Camaj v. Department of Homeland Security, 119 M.S.P.R. 95, ¶ 11 (2012). Nevertheless, an agency must provide reinstatement to the date of the resolution of criminal charges in an appellant’s favor if it fails to implement an adverse action within a reasonable time. Id. In the instant case, the agency provided the appellant notice that the indefinite suspension could extend beyond the resolution of the criminal charges and ultimately reinstated him within 2 days of the dismissal of the criminal charges. See I-2, IAF, Tab 14 at 5-7. Accordingly, the indefinite suspension had an ascertainable end and the agency properly reinstated the appellant within a reasonable time after resolution of the criminal case. 5 The administrative judge properly determined that an indefinite suspension was reasonable under the circumstances. ¶7 The Board will review an agency-imposed penalty only to determine if the agency considered all the relevant factors and exercised management discretion within tolerable limits of reasonableness. Douglas v. Veterans Administration, 5 M.S.P.R. 280, 306 (1981). Relevant factors include the nature and seriousness of the offense, the employee’s past disciplinary record, the supervisor’s confidence in the employee’s ability to perform his assigned duties, the consistency of the penalty with the agency’s table of penalties, the consistency of the penalty with those imposed on other employees for the same or similar offenses, and the adequacy of alternative sanctions. Lewis v. Department of Veterans Affairs, 113 M.S.P.R. 657, ¶ 5 (2010); Douglas, 5 M.S.P.R. at 305-06. Not all of the factors will be pertinent in every instance, and so the relevant factors must be balanced in each case to arrive at the appropriate penalty. Lewis, 113 M.S.P.R. 657, ¶ 5; Douglas, 5 M.S.P.R. at 306. The Board will modify a penalty only when it finds that the agency failed to weigh the relevant factors or that it clearly exceeded the bounds of reasonableness in determining the penalty. Douglas, 5 M.S.P.R. at 306 ¶8 The appellant argues that the administrative judge erred in finding that the indefinite suspension was reasonable because the deciding official “affirmatively refused” to consider any of the Douglas factors and relied exclusively on the agency “practice” of “summarily suspending all employees[] who are indicted.” PFR File, Tab 3 at 7, 9-10. Although the term “Douglas factors” does not appear in the decision letter, it is clear that the deciding official considered several relevant Douglas factors, including the nature and seriousness of the offense and its relation to the appellant’s duties. I-1, IAF, Tab 8 at 11; see ID at 8. In the decision letter, the deciding official explained that, as a federal law enforcement officer, the allegations set forth in the indictment undermined the appellant’s responsibilities as a correctional worker, which included supervising and caring 6 for the inmates, enforcing rules and regulations, and serving as a role model to all of the staff. I-1, IAF, Tab 8 at 11. He noted that the appellant was expected to obey the letter and spirit of the law and to avoid any action that could adversely affect the public’s confidence in the integrity of the federal government. Id. Given the nature of the allegations and the appellant’s responsibilities and duties, the deciding official concluded that the allegations contained in the indictment were serious. Id. Although the deciding official considered the appellant’s acceptable performance as a mitigating factor, he found that it did not outweigh the seriousness of the indictment. Id. Based on the allegations in the indictment, the deciding official concluded that the agency could not risk the appellant’s continued presence in the workplace and that he could not be entrusted with the care and custody of inmates unless he was cleared of the charges. Id. At the hearing, the deciding official testified that the prison did not have any non-law enforcement positions or positions without any inmate contact that the appellant could have been placed in rather than being indefinitely suspended. 4 See ID at 9. ¶9 In light of the above, we agree with the administrative judge’s finding that the agency responsibly exercised its managerial judgment and that an indefinite suspension was not unreasonable. The administrative judge correctly found that the agency was not obligated to return the appellant to duty prior to the resolution of the criminal charges. ¶10 The appellant argues that the agency should have reinstated him when it became aware that the indictment supporting the suspension was “not well 4 The administrative judge credited this testimony as it was further corroborated by a human resources manager and was not disputed by any other witness. ID at 8. The appellant does not challenge the administrative judge’s credib ility determination, and we find no reason to disturb it on review. See PFR File, Tab 3. The Board must give deference to an administrative judge’s credibility determ inations when, as here, they are based, explicitly or implicitly, on the observation of the demeanor of witnesses testify ing at a hearing; the Board may overturn such determ inations only when it has “sufficiently sound” reasons for doing so. See Haebe v. Department of Justice, 288 F.3d 1288, 1302 (Fed. Cir. 2002). 7 supported” and that the “prosecution against [him] was falling apart.” PFR File, Tab 3 at 10-11. Where an indefinite suspension based on an indictment was proper when effected, however, the indefinite suspension will remain proper as long as that indictment remains outstanding. Jarvis v. Department of Justice, 45 M.S.P.R. 104, 109 (1990); see Camaj, 119 M.S.P.R. 95, ¶¶ 9-10. For the reasons discussed above and as the administrative judge determined, the agency properly imposed the indefinite suspension; accordingly, it remained proper so long as the criminal matter based on the indictment was pending. See ID at 4-9. Thus, the agency had no obligation to independently evaluate the merits of the criminal case or to rescind the suspension due to any perceived weakness in the prosecution of the case. See ID at 4-5. The administrative judge correctly determined that the appellant failed to prove his affirmative defense. ¶11 Lastly, the appellant argues that the agency’s investigation into the use of force incident violated his constitutional due process rights to notice and warnings against self-incrimination, as well as his right to union representation during questioning. PFR File, Tab 3 at 11-18. Thus, he continues, the prosecution was “illegitimate,” and the suspension premised on the indictment violated his due process rights and was illegal. Id. at 17-18. The administrative judge rejected the appellant’s affirmative defense and noted that such arguments were inappropriate in this forum as they would require the agency to second guess the prosecution’s decision in the ongoing criminal complaint. See ID at 10 (citing Jarvis, 45 M.S.P.R. at 109). We agree. A grand jury indictment is a conclusive determination of the issue of reasonable cause in this context, and the agency is not required to “look behind an indictment” to ensure it is proper or founded upon sufficient proof. Dalton v. Department of Justice, 66 M.S.P.R. 429, 436 (1995). Accordingly, we find that the administrative judge correctly determined that the appellant has failed to prove his affirmative defense. 8 NOTICE TO THE APPELLANT REGARDING YOUR FURTHER REVIEW RIGHTS You have the right to request review of this final decision by the United States Court of Appeals for the Federal Circuit. You must submit your request to the court at the following address: United States Court of Appeals for the Federal Circuit 717 Madison Place, N.W. Washington, DC 20439 The court must receive your request for review no later than 60 calendar days after the date of this order. See 5 U.S.C. § 7703(b)(1)(A) (as rev. eff. Dec. 27, 2012). If you choose to file, be very careful to file on time. The court has held that normally it does not have the authority to waive this statutory deadline and that filings that do not comply with the deadline must be dismissed. See Pinat v. Office of Personnel Management, 931 F.2d 1544 (Fed. Cir. 1991). If you need further information about your right to appeal this decision to court, you should refer to the federal law that gives you this right. It is found in Title 5 of the United States Code, section 7703 (5 U.S.C. § 7703) (as rev. eff. Dec. 27, 2012). You may read this law as well as other sections of the United States Code, at our website, http://www.mspb.gov/appeals/uscode.htm. Additional information is available at the court's website, www.cafc.uscourts.gov. Of particular relevance is the court’s "Guide for Pro Se Petitioners and Appellants," which is contained within the court's Rules of Practice, and Forms 5, 6, and 11. If you are interested in securing pro bono representation for your court appeal, you may visit our website at http://www.mspb.gov/probono for a list of attorneys who have expressed interest in providing pro bono representation for Merit Systems Protection Board appellants before the court. The Merit Systems 9 Protection Board neither endorses the services provided by any attorney nor warrants that any attorney will accept representation in a given case. FOR THE BOARD: ______________________________ William D. Spencer Clerk of the Board Washington, D.C.	{ "pile_set_name": "FreeLaw" }
29 S.W.3d 767 (2000) 71 Ark.App. 309 Johnny TAYLOR and Joyce Taylor v. EAGLE RIDGE DEVELOPERS, LLC. No. CA 00-314. Court of Appeals of Arkansas, Division IV. October 25, 2000. 768 Southern & Allen, by: Byron S. Southern, Little Rock, for appellants. Giroir, Gregory, Holmes & Hoover, PLC, by: John Kooistra, III, Little Rock, for appellee. ANDREE LAYTON ROAF, Judge. Johnny and Joyce Taylor appeal the chancellor's grant of specific performance, which required them to sell a parcel of land to appellee Eagle Ridge Developers, LLC ("Eagle Ridge"), under the theory of detrimental reliance/promissory estoppel. The Taylors raise two issues on appeal: the chancellor erred in finding that there was sufficient evidence to grant Eagle Ridge specific performance and the chancellor's findings were unsupported by a preponderance of the evidence. We affirm. On May 29, 1998, Eagle Ridge and Johnny and Joyce Taylor entered into three separate agreements regarding a single parcel of land owned by the Taylors: the Taylors sold Eagle Ridge a sixty-foot easement for $5000; an Option Agreement, the Taylors granted Eagle Ridge an option to purchase the remainder of the parcel on or before December 1, 1998, for $95,000, approximately forty-one percent of the total proposed purchase price of $233,000; and the Taylors agreed to complete construction of an unfinished house on the parcel. Eagle Ridge initially sought only to purchase the sixty-foot easement. However, the Taylors refused to sell that portion and required that Eagle Ridge purchase the entire parcel, conditioned upon the Taylors' completion of the home. In October of 1998, Mrs. Taylor contacted Curtis Thomas, a member and manager of Eagle Ridge. Thomas testified that he met with Mrs. Taylor and she told him that the construction on the home would not be completed by December 1, that the house she and her husband were building across the street would not be completed by that time, and that the Taylors would not have a place to live on December 1. Thomas testified that Mrs. Taylor also told him that her husband's business was not doing well and that she also was concerned that if they were required to move, it would require them to take their son out of school, upsetting him. Thomas stated that 769 Mrs. Taylor requested an extension on the option contract from December 1, 1998, until June of 1999, with the Taylors paying $650 in rent from December 1 through the end of June. He stated that he told Mrs. Taylor that Eagle Ridge would do everything they could to help them and he would get back with her. Mrs. Taylor testified and did not contradict Thomas except to say that she did not say her husband had financial problems. Thomas testified that he called a meeting with his partners and they drew up an extension agreement to accommodate the Taylors until the end of June for a $750-a-month charge. A meeting was held to discuss the terms of the extension on November 4, 1998, with the Taylors, Thomas and Gary Aday, another managing partner. Thomas and Aday testified that Mr. Taylor said that he did not see a problem with the agreement and he was going hunting for a few days and would get back with them after talking to his attorney. Taylor testified that he did not agree to the extension but did not make any objections known, and he said that he would have his attorney look over it. Taylor agreed that he told Eagle Ridge that he would get back with them. Between November 4 and December 15, Eagle Ridge did not have contact with the Taylors. Thomas testified that he attempted to contact the Taylors numerous times, but they would not return his messages. Mr. Taylor testified he received a message on November 29, 1998, but that he did not return the call. He stated that he did not agree with the terms of the extension agreement, he never agreed to the extension at the November meeting and he thought that Eagle Ridge had decided to not exercise their option. Thomas testified that he drove to the Taylors' home on December 15, 1998. Taylor came outside and Thomas told him they needed to complete the agreement. Thomas testified that Taylor stated that there was nothing to complete as Eagle Ridge had not exercised its option by December 1, 1998. On December 23, 1998, Eagle Ridge mailed the Taylors a letter stating that it was exercising the option to purchase the property. On January 12, 1999, Eagle Ridge filed a cause of action in the Chancery Court of Pulaski County alleging fraud, detrimental reliance/promissory estoppel, and breach of the construction agreement. A trial was held on October 6, 1999. At the conclusion of trial, the chancellor ruled that Eagle Ridge was entitled to a decree of specific performance under the theory of promissory estoppel/detrimental reliance. The Taylors appeal, arguing that the chancellor erred in finding that there was sufficient evidence to grant Eagle Ridge specific performance and that the chancellor's findings were unsupported by a preponderance of the evidence. The Taylors' first argument is that the chancellor erred in finding there was sufficient evidence to grant specific performance. The chancellor concluded that sufficient evidence existed to show that Eagle Ridge relied on the Taylors' representations and conduct and that the Taylors should be estopped from asserting expiration of the option contract. Chancery cases are reviewed de novo on appeal; however, we will not reverse a chancellor's findings of fact unless they are clearly erroneous. McNamara v. Bohn, 69 Ark. App. 337, 13 S.W.3d 185 (2000). In reviewing the law of promissory estoppel, our supreme court has held that a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and that does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise; the remedy granted for breach may be limited as justice requires. Van Dyke v. Glover, 326 Ark. 736, 934 S.W.2d 204 (1996) (quoting Restatement (Second) of Contracts § 90 (1981)). The general rule is that claims of promissory estoppel are questions for the fact finder. See 770 Country Corner Food & Drug, Inc. v. Reiss, 22 Ark.App. 222, 737 S.W.2d 672 (1987); Dickson v. Delhi Seed Co., 26 Ark. App. 83, 760 S.W.2d 382 (1988). The party claiming estoppel must prove he relied in good faith on the wrongful conduct and has changed his position to his detriment. Ramsey v. Ramsey, 43 Ark.App. 91, 861 S.W.2d 313 (1993). Whether there was actual reliance by appellants and whether it was reasonable is also a question for the trier of fact. Van Dyke, supra. The chancellor found that negotiations were instigated by Mrs. Taylor and that Eagle Ridge detrimentally relied on statements made by Mr. and Mrs. Taylor, specifically, Mr. Taylor's statement that he would get back with them on the extension agreement. The chancellor also found that Mr. Taylor knew Eagle Ridge was relying on him regarding that representation. She found that the Taylors did not take any affirmative action at the time of the meeting to voice any objections to the extension agreement that they requested. Partners for Eagle Ridge testified that Mr. Taylor specifically said the extension looked good to him; however, Mr. Taylor refuted that statement. Conflicts in testimony are resolved by the trier of fact. Argo v. Buck, 59 Ark.App. 182, 954 S.W.2d 949 (1997). Here, the chancellor exercised her judgment and resolved the conflict in favor of Eagle Ridge. Such resolution was particularly justifiable in light of the chancellor's finding that Mr. Taylor was "a pretty incredible witness regarding some of his testimony on what happened." Based on the evidence presented and the chancellor's superior opportunity to assess the witnesses, we cannot say that the chancellor's finding of detrimental reliance on the part of Eagle Ridge was clearly erroneous or clearly against the preponderance of the evidence. The granting of specific performance was appropriate relief under the circumstances as the contract involved the sale of land. Where land or any estate or interest in land is the subject of an agreement, the right to specific performance is absolute. Stacy v. Lin, 34 Ark.App. 97, 806 S.W.2d 15 (1991). Whether the court should have ordered specific performance of the sale of the land is a question of fact for the chancellor and this decision under the current facts was not clearly erroneous. Stacy, supra. Therefore, sufficient evidence exists to support the chancellor's granting of specific performance. Next, the Taylors argue that the chancellor's findings were not supported by the preponderance of the evidence. In support of this argument, the Taylors assert that because the contract at issue was for an option to purchase land, any modification must be in writing to comply with the Statute of Frauds. They also argue that an option contract is distinguishable from a land sale contract and this distinction requires a finding that Eagle Ridge forfeited the consideration paid for the option upon its expiration December 1, 1998. The chancellor found sufficient facts to support detrimental reliance and specifically found that the Taylors waived their right to a forfeiture on December 1 by requesting an extension on the option agreement and then not getting back with Eagle Ridge, knowing that Eagle Ridge was awaiting their response. It is unquestioned that "[e]quity abhors a forfeiture and will seize upon slight circumstances indicating a waiver to avoid or prevent them." Berry v. Crawford, 237 Ark. 380, 373 S.W.2d 129 (1963). Although the option contract contained language that time was of the essence, the final effect of the agreement depended on the actual intent of the parties, as evidenced by their acts and conduct. Id. Here, the chancellor had before her not simply an option contract, but a series of agreements that clearly evidenced the Taylors' intent to sell the property and Eagle Ridge's intent to purchase it for $223,000, conditioned upon completion of the unfinished home, and by Eagle Ridge's payment of $95,000 towards this purchase price. Under these circumstances, 771 the Taylors' request for an extension on the contract and representation to Eagle Ridge that they would get back with them resulted in the waiver of their right to forfeiture. Indeed, the chancellor, in reaching her ruling, clearly considered the construction agreement in addition to the option, stating: "This is a court of equity. They [Eagle Ridge] didn't throw away their $95,000. They were relying on the representations made by the Taylors and in attempting to make their [the Taylors'] life a little more easy." In regards to the statute-of-frauds argument, our supreme court has held that where one has acted to his detriment solely in reliance on an oral agreement, estoppel may be raised to defeat the defense of the statute of frauds. Van Dyke, supra. Therefore, this argument has no merit. Likewise the option/contract distinction has no bearing on the outcome of this case. Our supreme court has further held that a party may waive his right to declare a forfeiture of a contract for sale of land without notice, or even if the contract had been an option contract. Berry, supra. As previously discussed, the chancellor's finding of detrimental reliance was supported by a preponderance of the evidence. A party who induces another to engage in conduct or dealings he would not have entered into but for such misleading will not be allowed, because of estoppel, to afterward assert his right to the detriment of the person so misled. Ramsey, supra. We affirm. Affirmed. JENNINGS and CRABTREE, JJ., agree.	{ "pile_set_name": "FreeLaw" }
872 F.2d 420Unpublished Disposition NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Garland R. HADDOCK, Defendant & Third Party Plaintiff-Appellant,v.Wayland J. HARDEE, Pansy Sue Hardee, Third Party Defendants. No. 88-2826. United States Court of Appeals, Fourth Circuit. Argued Dec. 8, 1988.Decided March 21, 1989. David Peter Voerman (David P. Voerman, P.A., on brief) for appellant. James Gordon Carpenter, Assistant United States Attorney (Margaret Person Currin, United States Attorney, Rudolf A. Renfer, Jr., Assistant United States Attorney, on brief) for appellee. Before K.K. HALL, PHILLIPS, and SPROUSE, Circuit Judges. PER CURIAM: 1 Garland Haddock appeals a $17,000 civil judgment entered against him in an action brought by the United States government, acting on behalf of the Farmers Home Administration ("FHA"), for violation of a North Carolina statute prohibiting the wrongful cutting of timber. For the reasons set forth below, we reverse. I. 2 The pertinent facts in this case are undisputed and were stipulated to by the parties. Wayland J. Hardee and his wife, Pansy Sue Hardee, had an ownership interest in certain property located in Pitt County, North Carolina. They owned an undivided one-half interest in fee simple and a life estate in the other one-half undivided interest, with the remainder in their daughter, Christy Michelle Hardee. On three separate occasions in 1980 and 1981, Wayland and Pansy Sue Hardee granted deeds of trust to the FHA to secure a promissory note owed by the Hardees to the FHA. The FHA recorded the deeds of trust in the Pitt County Registry of Deeds. 3 Sometime in the spring of 1985, Wayland Hardee contacted Garland Haddock, a logger, and made arrangements for Haddock to cut timber from the real estate covered by the deeds of trust. The Hardees did not give a timber deed to Haddock who was only to cut the timber, sell it to a mill, and then give the Hardees a certain percentage of the resulting profits from the sale. It was customary practice in the North Carolina timber business in 1985 to conduct a title search on a particular block of timber to be cut, only if a timber deed was to be given to the logger cutting the timber. Under the arrangement in this case, it was not customary practice to search the title on the timber. 4 It is uncontroverted that the Hardees were required under the deeds of trust to obtain the written consent of the government before cutting or removing any timber from the property.1 It is also uncontroverted that the Hardees did not obtain such consent. Nor did Garland Haddock, who had neither actual nor constructive knowledge of the government's security interest in the land when he cut the timber. 5 The FHA became aware that Haddock was cutting timber from the Hardees' property in June of 1985 when Jim Smith, the Assistant County Supervisor for the FHA in Greenville, saw a logging crew actually cutting the timber. Smith called Hardee to find out who was cutting the timber, but did not contact Haddock until almost two months later, in August. Haddock sold the timber to a lumber mill for $17,000. He paid Wayland and Pansy Hardee $10,322.18 out of that amount. 6 The United States brought suit against Haddock on June 30, 1986, for wrongfully cutting and removing the timber. Haddock in turn filed suit against Wayland and Pansy Hardee, as third-party defendants. The government's case proceeded on two theories, the common law tort of conversion and the violation of N.C.Gen.Stat. Sec. 1-539.1(a) which allows double damages for the wrongful cutting of timber. Haddock sued the Hardees for breach of contract. 7 The case was heard by a magistrate without a jury.2 At the conclusion of the trial, the magistrate denied recovery on the theory of conversion, but found a violation of the statute and awarded the government $17,000, double the value of the timber sold.3 The magistrate also found that Haddock was entitled to recover the same amount from the Hardees. Garland Haddock appeals from this final order. II. 8 On appeal, Haddock contends that the magistrate erred in holding that the government, as mortgagee, was entitled to recover damages for the cut timber under N.C.Gen.Stat. Sec. 1-539.1(a), which states: 9 Any person, firm or corporation not being the bona fide owner thereof or agent of the owner who shall without the consent and permission of the bona fide owner enter upon the land of another and injure, cut or remove any valuable wood, timber, shrub or tree therefrom, shall be liable to the owner of said land for double the value of such wood, timber, shrubs or trees so injured, cut or removed. 10 Haddock argues that the government had no right to recover under this statute because the Hardees, and not the FHA, were the bona fide owners of the land. There is no dispute about the fact that Haddock had the express consent of the Hardees to enter upon the land and cut the timber. Therefore, if the Hardees are deemed to be the owners of the land, the government may not recover under the statute. 11 The government, however, argues that it became the owner of the land when the Hardees executed the deeds of trust and that consequently, it was entitled to recover damages for the cutting and removal of timber from land that it owned. The magistrate agreed. This is a very creative theory advanced by the government, but we think an unsound one. 12 The only question before us is whether the government, by virtue of its security interest in the Hardees' property, is the "bona fide owner" of the property for purposes of N.C.Gen.Stat. Sec. 1-539.1(a). To answer this query in the affirmative would require an expansive reading of the statute that we believe would be unwarranted. 13 We begin with the well-established concept that statutes in derogation of the common law or statutes imposing a penalty are to be strictly construed. Thus, in Jones v. Georgia-Pacific Corp., 15 N.C.App. 515, 190 S.E.2d 422, 424 (1972), after noting this principle and the fact that N.C.Gen.Stat. Sec. 1-539.1(a) enhances the common law measure of damages allowed for trespass, the court said: "Strict construction of G.S. Sec. 1-539.1 requires that everything be excluded from the operation of the statute which does not come within the scope of the language used, taking the words in their natural and ordinary meaning." (citation omitted). 14 In order to recover penalties under N.C.Gen.Stat. Sec. 1-539.1(a), a plaintiff must show that he is the owner of the land from which the timber was cut. Woodard v. Marshall, 14 N.C.App. 67, 187 S.E.2d 430 (1972). The natural and ordinary meaning of the term owner in this case must be the Hardees, who except as against the mortgagee retained all the incidents of ownership. Cleve v. Adams, 222 N.C. 211, 22 S.E.2d 567 (1942). Although the government had legal title as against the Hardees, it did not own the property so that it could bring an action against a third person who entered upon the land with the express consent and approval of the Hardees, who were the only owners who could maintain an action under this specific statute. 15 While reaching this conclusion, we recognize that North Carolina is a title theory state. Thus, in North Carolina when a mortgage is executed to secure the payment of a note, legal title passes and vests in the mortgagee but only as a security for the payment of the note. Gregg v. Williamson, 246 N.C. 356, 98 S.E.2d 481 (1957). For all other purposes, and against all persons other than the mortgagee, the mortgagor is regarded as the owner of the land. Except as against the mortgagee, he retains all the incidents of ownership. Cleve v. Adams, supra. Thus, our conclusion that the Hardees owned the property at issue for purposes of the statute. III. 16 The government's remedies in this case were against the Hardees. For instance, the government could have brought an action for waste or it could have brought an equitable action to restrain the cutting of timber. Brown v. Daniel, 219 N.C. 349, 13 S.E.2d 623 (1941). More importantly, the government could have foreclosed under the deeds of trust, paragraph 18 of which provides in part: "SHOULD DEFAULT occur in the performance or discharge of any obligation in this instrument or secured by this instrument ... the Government, at its option, with or without notice, may: (a) declare the entire amount unpaid under the note and any indebtedness to the Government hereby secured immediately due and payable, ... (d) authorize and request Trustee to foreclose ... and sell the property as provided by law." The government merely chose the wrong method of relief by proceeding under a statute that provides no relief under the circumstances of this case. IV. 17 We conclude that a strict construction of the statute mandates a reversal of the judgment against Garland Haddock because the government was not a bona fide owner as contemplated by the statute. Accordingly, the judgment of the magistrate is reversed.4 18 REVERSED. 1 Paragraph 9 of the deeds of trust forbids the mortgagor to "without the written consent of the Government, cut, remove, or lease any timber, gravel, oil, gas, coal, or other minerals except as may be necessary for ordinary domestic purposes." 2 Both parties consented to trial by a magistrate pursuant to 28 U.S.C. Sec. 636(c) 3 The magistrate found that the FHA was only entitled to recover for timber cut on the Hardees' one-half undivided interest, the fair market value of which was $8,500. After the timber had been cut, the FHA discovered that they did not have a deed of trust for the interest of Christy Michelle Hardee. The Hardees defaulted on the note secured by the deeds of trust. A settlement was reached which released the Hardees from the deeds of trust and the FHA acquired title to part of the tracts of land and gave the Hardees' daughter a deed to the remaining tracts 4 The portion of the magistrate's order awarding Haddock damages from the Hardees is also reversed. If Haddock is not liable to the government, he has no damages against the Hardees	{ "pile_set_name": "FreeLaw" }
IN THE NINTH COURT OF APPEALS _____________________ _____ 09-11-00584-CR __________________________ Chidozie Robert Obialor v. The State of Texas _________________________________________________________________ On Appeal from the 252nd District Court of Jefferson County, Texas Trial Cause No. 10-09814 _________________________________________________________________ JUDGMENT THE NINTH COURT OF APPEALS, having considered this cause on appeal, concludes that the judgment of the trial court should be affirmed. IT IS THEREFORE ORDERED, in accordance with the Court’s opinion, that the judgment of the trial court is affirmed. Opinion of the Court delivered by Justice Hollis Horton October 24, 2012 AFFIRMED ********** Copies of this judgment and the Court’s opinion are certified for observance. Carol Anne Harley Clerk of the Court	{ "pile_set_name": "FreeLaw" }
453 Pa. Superior Ct. 70 (1996) 682 A.2d 1310 NATIONWIDE MUTUAL INSURANCE COMPANY v. Paul C. NIXON and Christine Ann Nixon, Station House Restaurant, Joyce M. Knouse, James H. Knouse, Danielle Lynch, Rachel McRae, Julie Laforme and Jamie Livingston, Heather Thomas, Kristin Schneck, Kenneth D. Reish and Phyllis Reish. Superior Court of Pennsylvania. Argued June 13, 1996. Filed September 9, 1996. 72 Richard C. Angino, Harrisburg, for appellants. Neil F. MacDonald, Wilkes-Barre, for Nationwide Mutual Ins., appellee. 73 Before TAMILIA, JOHNSON and MONTEMURO[], JJ. TAMILIA, Judge. Kenneth D. and Phyllis Reish appeal from the May 8, 1995 Order granting Nationwide Mutual Insurance Company's motion for summary judgment and declaring appellee is not legally obligated to provide coverage to its insureds or defend against any claims arising from an accident which caused injury to appellants and others. On October 10, 1993, Christine Nixon, during the course of her employment with Station House Restaurant, was the driver of a 1989 Dodge Caravan, owned by her employers, James and Joyce Knouse, which was involved in a two-vehicle accident. At the time, Christine and her fellow-employees were returning from an event catered by the Station House Restaurant. Injured in the accident were Christine, a number of her co-workers,[1] and the appellants, occupants of the other vehicle involved in the accident. Christine was a listed insured on the Nationwide policy presently under consideration, issued to her father, Paul C. Nixon.[2] On December 28, 1993, Nationwide issued a letter denying coverage and relying on an Automobile Business Operations exclusionary clause. On October 31, 1994, the appellants filed suit against Christine, the restaurant and the Knouses. In response thereto, Nationwide filed a declaratory judgment action relying on an exclusionary clause, other than that indicated in its December 28, 1993 letter, which precluded coverage for accidents involving motor vehicles owned by an employer of the insured. Both plaintiff and defendants filed motions for summary judgment, Nationwide's motion was granted, and this appeal followed. Appellants argue Christine's policy unreasonably extends coverage to an insured operating personal vehicles other than his own and, in a second clause, precludes coverage if the 74 other vehicle is owned, rented or leased by an employer of an insured. By including such conflicting, ambiguous clauses, appellants argue, Nationwide violates its insureds' reasonable expectations and public policy. The pertinent section of the Nixons' Nationwide Century II Auto Policy is set forth below: Auto Liability ..... Coverage Extensions Use of Other Motor Vehicles This insurance also applies to certain other motor vehicles as follows: ..... 3. a motor vehicle owned by a non-member of your household and not covered in item 1. of this section [which refers to vehicles used when your listed insured vehicle is out of commission]. a) This applies only to policies issued to individual persons (not organizations) and while the vehicle is being used by you or a relative. It protects the user, and any person or organization, except as noted below in b), who does not own the vehicle but is legally responsible for its use. b) This does not apply to losses involving a motor vehicle: (1) used in the business or occupation of you are a relative except a private passenger auto used by you, your chauffeur, or your household employee; (2) owned, rented or leased by an employer of an insured; (3) rented or leased by anyone for or on behalf of an employer of an insured; or (4) furnished to you or a relative for regular use. Furnished for regular use does not include a motor vehicle rented from a rental company for less than 28 days. 75 (Emphasis added.) It is appellants' position the policy is ambiguous in that it purportedly "extends coverage under § 3. b) (1) and (4) but takes it away under 3. b) (2) and (3)". (Appellants' brief at p. 7.) Based on the reasoning set forth below, we agree with the trial court's finding Nationwide is not obligated to provide coverage for or defend against claims brought against its insureds, the Nixons. "Generally, the proper construction of a policy of insurance is a matter of law which may properly be resolved by a court pursuant to a motion for summary judgment." Frain v. Keystone Ins. Co., 433 Pa.Super. 462, 466, 640 A.2d 1352, 1354 (1994). As an appellate court, we are bound to consider certain principles which dictate when and under what circumstances a trial court may properly enter summary judgment. Atkinson v. Haug, 424 Pa.Super. 406, 622 A.2d 983 (1993). The trial court must accept as true all well-pleaded facts relevant to the issues in the non-moving party's pleadings, and give to him or her the benefit of all reasonable inferences to be drawn therefrom. Stidham v. Millvale Sportsmen's Club, 421 Pa.Super. 548, 618 A.2d 945 (1992). A grant of summary judgment is proper where the pleadings, depositions, answers to interrogatories, admissions of record and affidavits on file support the lower court's conclusion no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Pa.R.C.P. 1035. The court must ignore controverted facts contained in the pleadings and restrict its review to material filed in support of and in opposition to a motion for summary judgment and to those allegations in pleadings that are uncontroverted. Overly v. Kass, 382 Pa.Super. 108, 554 A.2d 970 (1989). Summary judgment should not be entered unless the case is clear and free from doubt. Hathi v. Krewstown Park Apartments, 385 Pa.Super. 613, 561 A.2d 1261 (1989). We will overturn a trial court's entry of summary judgment only if there has been an error of law or a clear abuse of discretion. Accu-Weather Inc. v. Prospect Communications Inc., 435 Pa.Super. 93, 644 A.2d 1251 (1994). When interpreting an allegedly ambiguous insurance contract, the court must focus its attention on the reasonable 76 expectations of the insured. Everett Cash Mutual Ins. Co. v. Krawitz, 430 Pa.Super. 25, 633 A.2d 215 (1993). When the language is clear and unambiguous, the court is required to give effect to that language. Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (1983); Butterfield v. Giuntoli, 448 Pa.Super. 1, 670 A.2d 646 (1995). The Auto Liability section of the insureds' policy begins with an explanation of what particular damages the policy will cover if the insured is found legally liable. (See Appellants' Exhibit B, Nationwide's Century II Auto Policy, p. 6.) The section immediately following Coverage Agreement is titled Coverage Extensions and includes subsections titled Use of Trailers and Use of Other Motor Vehicles. (Id. at 7-8.) As set forth above, the latter section itemizes under what circumstances the Nationwide policy will provide coverage for vehicles other than those owned by the insured. Item 3 under the paragraph entitled Use of Other Motor Vehicles explains under what circumstances coverage will be extended to non-owned vehicles (other than the unique circumstances listed in section one). A reading of the Use of Other Motor Vehicles section, in its entirety, plainly and unambiguously states coverage will not be extended to losses involving a vehicle owned by an insured's employer. Appellants' argument that sections 3 b(1) and (4) provide coverage while sections 3 b(2) and (3) deny coverage is obscure and without merit. Joyce Knouse, Christine's employer, was the registered owner of the 1989 Caravan Christine was driving when, while in the course of her employment, she was involved in an accident. The Nationwide policy was issued to Paul C. Nixon, insured Christine Nixon, and in plain and unambiguous language precluded coverage under the factual circumstances of the underlying tort action. We agree with the trial court's decision granting summary judgment in favor of Nationwide. Appellants also contend Nationwide waived the defense of exclusion 3 b(2) by failing to include it in its reservation of rights letter sent to its insured Paul C. Nixon, as a result of the October 10, 1993 accident, on December 28, 1993. Appellants 77 argue "[i]t is apparent that Nationwide initially attempted to decline coverage based upon an inapplicable section of its policy and only later found another section on which to attempt to hang its hat". (Appellants' brief at 32.) Appellee Nationwide concedes it "inappropriately identified an inapplicable section of the policy" in its December 28, 1993 reservation of rights letter to the insured, but adds the letter did put its insureds on notice coverage would be denied. (Appellee's brief at 15.) Appellee also avers the insureds were not prejudiced by its misidentification of the clause upon which it planned to rely in support of its decision to deny coverage. Appellants have provided this Court with no controlling caselaw in support of their position.[3] Furthermore, contained in appellants' reproduced record, at exhibit D, belying claims of prejudice, is correspondence from appellants' counsel to appellee, referring to a December 20, 1993 Nationwide letter wherein pages 7 and 8 of the policy were referenced in support of its denial of the Nixons' claim. Pages 7 and 8 of the policy contain the Use of Other Motor Vehicles section, as well as section 3 b(2), the clause upon which Nationwide has correctly relied in denying coverage. Lastly, as averred by appellee, appellants received notice of Nationwide's intended defense in its January 4, 1995 action for declaratory judgment, allowing appellants sufficient time within which to formulate an informed response. We find appellee's failure to include section 3 b(2) as a possible defense in its reservation of rights letter denying coverage did not so prejudice appellants' ability to defend as to constitute reversible error. Having found appellants' arguments devoid of merit, we affirm the Order granting summary judgment in favor of Nationwide. Order affirmed. NOTES [] Retired Justice assigned to the Superior Court. [1] Co-defendants Danielle Lynch, Rachel McRae, Julie Laforme, Jamie Livingston, Eather Thomas and Kristin Schneck were passengers in the Caravan driven by Christine Nixon. [2] Paul C. Nixon is also a named defendant. [3] Appellants' reliance on Aetna Life and Casualty Co. v. McCabe, 556 F.Supp. 1342 (E.D.Pa.1983), is misplaced as the facts therein are distinguishable from those before this Court.	{ "pile_set_name": "FreeLaw" }
RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 13a0021p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _________________ X - ROBERT W. STOCKER, II and LAUREL A. Plaintiffs-Appellants, -- STOCKER, - No. 11-1890 , > - v. - Defendant-Appellee. N- UNITED STATES OF AMERICA, Appeal from the United States District Court for the Western District of Michigan at Grand Rapids. No. 1:09-cv-955—Robert Holmes Bell, District Judge. Decided and Filed: January 17, 2013 Before: BATCHELDER, Chief Circuit Judge; COLE, Circuit Judge; ROSEN, Chief District Judge.* _________________ COUNSEL ON BRIEF: James F. Mauro, Jeffery V. Stuckey, Michael J. Pattwell, DICKINSON WRIGHT PLLC, Lansing, Michigan, for Appellants. Tamara W. Ashford, Richard Farber, Carol Barthel, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. _________________ OPINION _________________ ROSEN, Chief District Judge. * The Honorable Gerald E. Rosen, Chief United States District Judge for the Eastern District of Michigan, sitting by designation. 1 No. 11-1890 Stocker, et al. v. United States Page 2 I. INTRODUCTION This case truly presents a “$64,000 Question”1 — namely, what sort of proof the Plaintiff/Appellant taxpayers, Robert W. Stocker, II and Laurel A. Stocker (the Stockers), may introduce in order to demonstrate the timely filing of a tax return in which they sought a federal tax refund of just over $64,000. The Internal Revenue Service (IRS) denied this claim for a refund on the ground that the Stockers failed to file their amended 2003 federal tax return within the statutory three-year period for amending a return. The Stockers then brought this suit challenging the IRS’s denial of their claim, but the district court dismissed the case for lack of subject matter jurisdiction, finding that the Stockers could not establish the jurisdictional prerequisite of a timely-filed tax return under any of the methods recognized in the Internal Revenue Code or this Circuit’s precedents for determining the date of delivery of a federal tax return. On appeal, the Stockers contend that the decisions relied upon by the district court are distinguishable, and that the pertinent tax code provisions and case law leave room for proof of timely mailing of a tax return through taxpayer testimony and circumstantial evidence. We conclude that the district court properly construed our precedents, and we therefore AFFIRM the dismissal of this action for lack of subject matter jurisdiction. II. FACTUAL AND PROCEDURAL BACKGROUND A. The Stockers’ Alleged Overpayment of Taxes This suit arises from the claim of Plaintiffs/Appellants Robert W. Stocker, II and Laurel A. Stocker that they overpaid their federal taxes for the 2003 tax year. After securing two extensions, the Stockers filed their initial 2003 federal income tax return on October 15, 2004. A few years later, in March of 2007, the IRS settled an audit of 1 For the benefit of our younger readers, “The $64,000 Question” was one of the earliest and most popular of the television game shows broadcast in the 1950s. It became embroiled in the game show scandals of the late 1950s, and was cancelled in 1958. No. 11-1890 Stocker, et al. v. United States Page 3 Windward Communications II, a “flow-through entity” in which the Stockers had invested and lost money. In light of this development, the certified public accountant who prepared the Stockers’ tax returns, Michael Flintoff, determined that the Stockers had overpaid their 2003 federal taxes in the amount of $64,058.00. B. The Preparation and Mailing of the Stockers’ Amended 2003 Return To assist the Stockers in securing the refund he believed they were owed, Mr. Flintoff prepared an amended 2003 federal tax return for Mr. Stocker to mail. He also prepared an amended state return for the 2003 tax year, as well as the Stockers’ 2006 federal and state tax returns. Each of these returns was due on October 15, 2007, with the Stockers having secured an extension of the due date for their 2006 returns, and with federal law dictating that any claim for a refund of the Stockers’ 2003 taxes had to be filed within three years of the October 15, 2004 filing of their initial 2003 return. See 26 U.S.C. § 6511(a). On October 15, 2007, Mr. Flintoff’s office manager, Karrin Fennell, prepared postage prepaid, certified mail, return receipt requested envelopes for the Stockers’ amended 2003 federal and state tax returns, as well as ordinary postage prepaid envelopes for the Stockers’ 2006 federal and state returns. Mr. Stocker drove to his tax preparer’s office that afternoon to collect and sign the 2003 and 2006 returns, and was advised by both Mr. Flintoff and Ms. Fennell that all four returns were due and had to be mailed that same day. Ms. Fennell, however, mistakenly retained the customer copies of the certified mail receipts for the Stockers’ 2003 amended returns, rather than giving these copies to Mr. Stocker so that he could present them at the post office as he mailed the returns. Mr. Stocker testified that upon receiving the four tax returns and accompanying envelopes, he proceeded to the post office and timely mailed all four returns on the day he received them, October 15, 2007. By using certified mail for the 2003 amended returns, Mr. Stocker ordinarily would have been able to obtain date-stamped receipts from the post office reflecting that he mailed the returns that day. He explained, however, that he was unable to get any such date-stamped receipts, due to Ms. Fennell’s No. 11-1890 Stocker, et al. v. United States Page 4 failure to give him the customer copies of the certified mail receipts while he was at his tax preparer’s office. The record discloses that the Stockers’ amended 2003 state tax return and 2006 state return were timely received by the Michigan Department of Treasury, and the Stockers received the refund sought in their amended 2003 state return. In addition, the IRS has acknowledged the timely receipt of the Stockers’ 2006 federal tax return. As for the Stockers’ amended 2003 federal tax return, however, the IRS claims that it did not receive this return until October 25, 2007, ten days after the date Mr. Stocker testified that he mailed the return. In addition, the agency’s records reflect that the envelope containing the Stockers’ amended 2003 federal return bore a postmark date of October 19, 2007.2 The IRS concedes, however, that it did not retain the envelope in which the Stockers’ amended 2003 return was sent. Moreover, although the Stockers requested a return receipt when they mailed their amended 2003 federal return, the portion of the return-receipt card that is to be completed by the recipient upon delivery was left blank when it was returned to the Stockers’ tax preparer. (See Certified Mail Receipt, R.22-3, Page ID# 239.) C. The IRS’s Rejection of the Stockers’ Claim for a Refund On November 27, 2007, the IRS sent the Stockers a notice disallowing the refund claimed in their amended 2003 federal tax return, citing the return’s untimely postmark past the October 15, 2007 deadline. On June 23, 2008, Mr. Flintoff submitted a written request for the IRS to reconsider its rejection of the Stockers’ claim for a refund, but the IRS denied this request on September 26, 2008. 2 An IRS representative, Ericka Watford, testified that the postmark date and date of receipt as reflected in the agency’s records are derived from dates that were stamped onto the face of the Stockers’ amended 2003 return by a clerk who is responsible for opening and sorting returns. The amended return, for example, bears a stamp stating “ENVELOPE POST MARKED OCT 19 2007.” (Form 1040X, Amended 2003 Federal Tax Return, R.26-4, Page ID# 291.) No. 11-1890 Stocker, et al. v. United States Page 5 D. Procedural History The Stockers commenced this action on October 15, 2009, challenging the IRS’s denial of their request for a refund of a portion of their 2003 federal tax payment. In their complaint, the Stockers alleged that their amended 2003 federal return was timely filed on October 15, 2007. The Government answered by denying that the Stockers’ amended 2003 return was timely filed, and it asserted the three-year statute of limitations codified at 26 U.S.C. § 6511 as an affirmative defense. The Stockers later moved for summary judgment, arguing that their amended 2003 federal tax return was properly mailed on October 15, 2007. In support of this contention, the Stockers pointed to evidence in the record reflecting the timely mailing of their amended 2003 return, including the testimony of Mr. Stocker and the evidence that the other three returns mailed contemporaneously with the amended 2003 federal return were deemed by the federal and state taxing authorities to be timely sent and received. The Stockers also requested that the district court draw an adverse inference of timely filing against the Government as a spoliation sanction, in light of the IRS’s failure to retain the postmarked envelope in which the Stockers had mailed their amended 2003 return. The Government opposed the Stockers’ motion, and also moved to dismiss the complaint under Fed. R. Civ. P. 12(b)(1) and (2), arguing that the district court lacked subject matter jurisdiction and that the Stockers’ suit was barred by sovereign immunity due to the Stockers’ failure to file their amended 2003 return within the three-year period for doing so. The district court agreed with the Government and held that it lacked jurisdiction over the case, and it therefore denied the Stockers’ summary judgment motion as moot. This appeal followed. No. 11-1890 Stocker, et al. v. United States Page 6 III. ANALYSIS A. The Standards Governing This Appeal We review de novo the district court’s dismissal of the Stockers’ complaint for lack of subject matter jurisdiction. See Wagenknecht v. United States, 533 F.3d 412, 415 (6th Cir. 2008). In this case, the existence of subject matter jurisdiction turns upon whether the Stockers can show that they filed their amended 2003 federal tax return within three years of the October 15, 2004 filing date of their original 2003 return. See 26 U.S.C. § 6511(a); see also Thomas v. United States, 166 F.3d 825, 828-29 (6th Cir. 1999) (recognizing that the timely filing of an administrative claim is a jurisdictional prerequisite to a suit for a refund); Miller v. United States, 784 F.2d 728, 729 (6th Cir. 1986) (holding that the taxpayer bears the burden of establishing this jurisdictional prerequisite). Thus, the federal courts may exercise subject matter jurisdiction over this suit only if the Stockers can establish, through some accepted means, that they filed their amended 2003 return within this three-year statutory period, or by October 15, 2007. Accordingly, we now turn to this question. B. The District Court Properly Concluded That the Stockers Failed to Produce Cognizable Evidence of the Timely Filing of Their 2003 Amended Return. Under well-established and familiar principles of sovereign immunity, the United States may not be sued without its consent, and the terms of this consent define the jurisdiction of the courts to entertain a suit against the Government. See United States v. Testan, 424 U.S. 392, 399 (1976). In this case, the pertinent expression of the Government’s consent to be sued is found at 28 U.S.C. § 1346(a)(1), which vests jurisdiction in the federal district courts to hear suits “against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected.” This waiver of sovereign immunity is limited, however, by an Internal Revenue Code provision mandating that no such suit may be brought “until a claim for refund or credit has been duly filed with the Secretary [of the Treasury], according to the provisions of law in that regard.” 26 U.S.C. § 7422(a). No. 11-1890 Stocker, et al. v. United States Page 7 Here, in determining whether the Stockers satisfied this jurisdictional requirement of a “duly filed” claim, the dispositive question is whether they timely filed their claim for a refund of a portion of their 2003 federal tax payment “within 3 years from the time [their original 2003] return was filed.” 26 U.S.C. § 6511(a). As the Supreme Court has emphasized, “unless a claim for refund of a tax has been filed within the time limits imposed by § 6511(a), a suit for refund, regardless of whether the tax is alleged to have been ‘erroneously,’ ‘illegally,’ or ‘wrongfully collected,’ may not be maintained in any court.” United States v. Dalm, 494 U.S. 596, 602 (1990) (citing 28 U.S.C. § 1346(a)(1) and 26 U.S.C. § 7422(a)). 1. The Law Governing the Determination of the Filing Date of a Federal Tax Return In order to decide whether the Stockers have established the jurisdictional prerequisite of a timely filed claim for a refund, we first must survey the law that determines the date upon which a federal tax return is deemed to be filed. As we explained in Miller, the courts initially determined the date of a tax filing by resort to the “physical delivery rule,” under which filing was “not complete until the document [wa]s delivered and received.” 784 F.2d at 730 (internal quotation marks, footnote, and citation omitted). Over time, however, some courts “carved out an exception” to the physical delivery rule, under which proof of “timely and accurate mailing raise[d] a rebuttable presumption that the mailed material was received, and thereby filed.” Miller, 784 F.2d at 730 (internal quotation marks and citation omitted). Against this backdrop, Congress enacted an Internal Revenue Code provision that established two statutory exceptions to the common-law physical delivery rule. First, a return or other document that is “delivered by United States mail” to the IRS is deemed to have been delivered — and hence filed, under the physical delivery rule — on “the date of the United States postmark stamped on the cover” of this mailing. 26 U.S.C. § 7502(a)(1). Next, if a return or other document “is sent by United States registered mail,” this registration “shall be prima facie evidence that the return . . . or No. 11-1890 Stocker, et al. v. United States Page 8 other document was delivered” to the IRS, and “the date of registration shall be deemed the postmark date.” 26 U.S.C. § 7502(c)(1).3 2. The Stockers Cannot Establish the Timely Filing of Their Amended 2003 Return Through the Means Set Forth in § 7502, Nor Through Any Other Method of Proof Recognized Under the Law of This Circuit. Returning to the facts of the present case, it is immediately apparent that neither of the two above-cited statutory exceptions to the physical delivery rule can assist the Stockers in their effort to demonstrate the timely filing of their amended 2003 federal tax return. First, the Stockers cannot show that the envelope in which they mailed this amended return bore a postmark date of October 15, 2007 or earlier, as necessary to establish timely delivery under § 7502(a)(1). Instead, the IRS’s records indicate that the envelope containing the Stockers’ amended return was postmarked October 19, 2007, four days after the due date.4 Next, while the Stockers state that they sent their amended return by certified mail, they failed to secure a date-stamped receipt that would corroborate their assertion that they timely delivered this return to the post office on October 15, 2007. Thus, they cannot avail themselves of § 7502(c)(2) and its corresponding administrative regulation, 26 C.F.R. § 301.7502-1(c)(2), under which a document sent by certified mail is deemed to be filed on the date stamped on the sender’s receipt by the postal employee to whom the document is presented. Nonetheless, the Stockers insist that the two methods set forth in § 7502 for establishing timely filing are not the sole avenues of proof for overcoming the physical delivery rule, and that taxpayers remain free to prove timely filing through other means. 3 Under § 7502(c)(2), the Secretary of the Treasury is “authorized to provide by regulations the extent to which” the provision governing registered mail also applies to certified mail. A regulation adopted pursuant to this authority provides that if a document “is sent by U.S. certified mail and the sender’s receipt is postmarked by the postal employee to whom the document . . . is presented, the date of the U.S. postmark on the receipt is treated as the postmark date of the document.” 26 C.F.R. § 301.7502-1(c)(2). As explained in this regulation, “the risk that the document . . . will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail.” Id. 4 As noted earlier, the IRS failed to retain the envelope in which the Stockers sent their return, so there is no way to confirm the statement in the agency’s records that this envelope had an October 19, 2007 postmark. The possible significance of this lost envelope is addressed below. No. 11-1890 Stocker, et al. v. United States Page 9 This contention, however, runs directly counter to our decision in Miller, in which we expressly held that “the only exceptions to the physical delivery rule available to taxpayers are the two set out in section 7502.” 784 F.2d at 731. In that case, the plaintiff sought to rely on an affidavit from his attorney stating that he had timely sent a claim for a refund by ordinary mail, but the IRS had no record of ever receiving this claim. Because the plaintiff could not produce a postmarked envelope that could confirm the timely filing of his claim, and because this claim had been sent by ordinary rather than registered or certified mail, we found that “the exceptions in section 7502 do not apply to the filing of [the plaintiff’s] refund claim.” Id. at 730. We then rejected the plaintiff’s contention that the two exceptions set forth in § 7502 merely created “safe harbor[s]” to which a taxpayer could appeal “without question, while not barring him from relying on other exceptions created by the courts.” Id. Instead, we elected to follow the decisions of other courts holding that the “exceptions embodied in [§ 7502] [a]re exclusive and complete.” Id. at 731 (following Deutsch v. Comm’r, 599 F.2d 44, 46 (2d Cir. 1979), and other cases cited therein).5 The Stockers seek to distinguish Miller, however, on the ground that the taxpayer’s claim in that case was never received, whereas the postmarked envelope in which the Stockers sent their amended return was received by the IRS and then lost or destroyed. In support of this proposed distinction, the Stockers point to language in Miller which, in their view, operates to limit the ruling in that case to situations where the taxpayer’s submission never reaches the IRS. In particular, the court in Miller construed the statutory “mailbox rule” set forth in § 7502(a)(1) as “appl[ying] only in cases where the document is actually received by the I.R.S. after the statutory period,” 5 As noted by the Stockers, there is a circuit split on this issue, with other circuits having concluded that § 7502 does not altogether displace the common-law rules, such as the mailbox rule, that the courts have invoked to determine whether a tax return or other document has been timely filed with the IRS. See, e.g., Philadelphia Marine Trade Ass’n — Int’l Longshoremen’s Ass’n Pension Fund v. Comm’r, 523 F.3d 140, 150 (3d Cir. 2008) (reasoning that Congress’s intent in enacting § 7502 “was to supplement, not supplant, [the] means by which taxpayers can timely file documents with the IRS”); Anderson v. United States, 966 F.2d 487, 491 (9th Cir. 1992) (“[W]e decline to read section 7502 as carving out exclusive exceptions to the old common law physical delivery rule.”). We, of course, are bound to adhere to this Circuit’s resolution of this issue in the published Miller decision. See Carroll v. Comm’r, 71 F.3d 1228, 1232 (6th Cir. 1995) (expressing reservations about the ruling in Miller but confirming that it “remain[s] good law in the Sixth Circuit”). No. 11-1890 Stocker, et al. v. United States Page 10 and it reasoned that the taxpayer in that case could not satisfy this statutory provision because his “claim was never received by the I.R.S.” Miller, 784 F.2d at 730 (emphasis in original) (footnote omitted). Similarly, in a more recent decision that reaffirmed the ruling in Miller, we stated that § 7502(a)(1) “do[es] not apply to this case” because “[t]he IRS did not receive” the tax return at issue in that case. Surowka v. United States, 909 F.2d 148, 150-51 (6th Cir. 1990). It follows, according to the Stockers, that Miller and its progeny do not preclude a taxpayer from satisfying § 7502(a)(1) (or perhaps some related common-law rule) through extrinsic evidence in cases where the IRS did receive the tax return or claim at issue, and where the only question is whether this document was timely filed. We see no principled basis for distinguishing Miller on this ground. In both Miller and this case, the plaintiff taxpayers were met with the objection that they could not bring suit for a refund because they had failed to timely file a claim with the IRS. In both cases, this purported absence of a timely filing — whether owing to late delivery to the IRS or to the IRS’s failure to receive the claim at all — could only be rebutted through extrinsic evidence indicating that the taxpayer presented the claim to the post office for mailing on or before the pertinent deadline. If we did not allow this extrinsic evidence to rebut the IRS’s claim of lack of receipt in Miller, we fail to see how we could consider such evidence here, based solely on the IRS’s acknowledgment that it received the Stockers’ amended return ten days late (and with a postmark four days after the filing deadline), rather than not at all.6 Indeed, it seems to us that this factual distinction from Miller cuts against the taxpayers here. As we explained in Miller, § 7502 is intended, at least primarily, to address cases in which a document reaches the IRS after a filing deadline. 784 F.2d at 730 & n.3; see also Philadelphia Marine Trade Ass’n, 523 F.3d at 149 (reasoning that “[b]y its terms, § 7502(a) applies only to cases where the pertinent document was delivered to the Government after the filing deadline”). Since this is precisely the 6 There is, of course, the separate question whether the Government might be subject to an adverse inference of a timely postmark, as a sanction for the IRS’s failure to preserve the envelope in which the Stockers sent their amended return. Again, we consider this matter below. No. 11-1890 Stocker, et al. v. United States Page 11 situation presented here, there is all the more reason for us to hold the Stockers to the terms of this statute and to insist that they meet the conditions imposed by Congress for excusing late delivery, rather than looking to judge-made rules that are intended to address different situations. Compare, e.g., id. at 149-152 (finding that the common-law mailbox rule should remain available where the “taxpayer does not need the protection of § 7502,” but instead seeks to invoke a presumption of timely delivery of a claim mailed well in advance of a deadline). Because § 7502 addresses the very dilemma confronted by the Stockers here — namely, the need for an exception to the physical delivery rule that would overcome the admitted arrival of a document after a filing deadline — we conclude, in accordance with Miller, that the Stockers’ failure to produce evidence that would satisfy either of this statute’s two specified exceptions is fatal to their suit for a refund.7 Moreover, the Stockers’ proposed basis for distinguishing Miller runs afoul of a prior (albeit unpublished) decision in which we applied Miller to a case involving late delivery of tax returns. In Schentur v. United States, No. 92-3605, 1993 WL 330640, at 1-2 (6th Cir. Aug. 30, 1993), the plaintiff taxpayers filed claims for refunds that were received by the IRS a year or more past the pertinent deadlines, and the IRS did not save the envelopes in which the plaintiffs submitted these claims. Although the plaintiffs offered affidavits from themselves, their secretary, and their accountant attesting that 7 We pause to observe, as an aside, that there is nothing inherently more suspicious or less plausible about the IRS’s claim in this case of a postmark after the filing deadline, as compared to the agency’s claim in Miller that a document was never received. In either case, the claim cannot be verified. Indeed, this potential predicament is explicitly acknowledged in the regulatory counterpart to § 7502, which advises that “the risk that [a] document . . . will not be postmarked on the day that it is deposited in the mail may be eliminated by the use of registered or certified mail.” 26 C.F.R. § 301.7502-1(c)(2). Accordingly, just as it is a recognized risk that mail might get lost in transport or that an IRS employee might inadvertently misplace a document upon its delivery to the agency, it is likewise a recognized risk that a postal employee might not postmark a document on the same day the taxpayer brings it to the post office. Section 7502(c) grants immunity from all of these risks through the use of registered or certified mail, but a taxpayer who uses ordinary mail and hopes to rely on § 7502(a)(1) is equally vulnerable to each of these risks. See Carroll, 71 F.3d at 1229 (“In this circuit, a taxpayer who sends a document to the IRS by regular mail, as opposed to registered or certified mail, does so at his peril.”). In this case, then, it is possible to credit the Stockers’ extrinsic evidence that they delivered their amended 2003 tax return to the post office on October 15, 2007, while also crediting the statement in the IRS’s records that the envelope in which the Stockers’ return arrived at the agency bore a postmark date of October 19, 2007. Thus, while we find that Miller precludes us from considering the Stockers’ extrinsic evidence that they brought their return to the post office on October 15, 2007, nothing in this mailing effort necessarily ensured that their return would bear an October 15, 2007 postmark, such that they could successfully invoke § 7502(a)(1) as establishing the timely filing of their return. No. 11-1890 Stocker, et al. v. United States Page 12 their tax returns were timely filed, we cited Miller as holding that § 7502 defines the “only exceptions” to the physical delivery rule, and we declined to consider the plaintiffs’ affidavits in ruling as a matter of law that the plaintiffs had failed to satisfy either of the statutory exceptions to the physical delivery rule. Schentur, 1993 WL 330640, at 3-4. While Schentur is not binding here, we concur in the panel’s determination in that case that Miller applies equally to late-delivered and never- delivered claims. Finally, taking a somewhat different tack, the Stockers suggest that their proffer of extrinsic evidence is not necessarily inconsistent with Miller’s holding that § 7502 states the only two exceptions to the physical delivery rule. In particular, the Stockers maintain that nothing in Miller prevents them from satisfying the “postmark” requirement of § 7502(a)(1) circumstantially through evidence of timely mailing, in lieu of direct evidence of the postmark date stamped on the envelope in which they mailed their amended 2003 return. In effect, the Stockers invite us to substitute the evidence of the October 15, 2007 mailing of their return for the statutory recognition of a postmark date as an acceptable proxy for the date of delivery. We once again conclude that Miller forecloses this proposed method of proof. In that case, as here, the plaintiff taxpayer was unable to produce the evidence called for under the statutory “postmark” exception — namely, proof of “the date of the United States postmark stamped on the cover” of the envelope or package in which the plaintiff taxpayer mailed his refund claim. 26 U.S.C. § 7502(a)(1). To be sure, the reasons for this absence of proof differ in the two cases — the mailing in Miller was never received, while the envelope containing the Stockers’ return was lost or destroyed. Yet, as explained earlier, we see no principled basis for concluding that § 7502(a)(1) confers upon taxpayers whose claims are delivered late additional avenues of proof that, under Miller, are unavailable to those whose claims are never received. Indeed, we declined to allow such an avenue of proof in Schentur — a case where, as here, the IRS failed to preserve the envelopes in which the plaintiffs mailed their tax returns — and instead found that the timeliness of the plaintiffs’ tax filings should be determined “without No. 11-1890 Stocker, et al. v. United States Page 13 looking to the affidavits” in which the plaintiffs sought to establish the date of mailing. 1993 WL 330640, at 4 (footnote omitted). In any event, it bears emphasis that the extrinsic evidence put forward by the Stockers does not purport to establish the fact of significance under § 7502(a)(1) — namely, the “date of the United States postmark” on their amended 2003 return — but instead is directed at the separate factual question of when they presented this return to the post office for mailing. As the Eighth Circuit has observed, “in section 7502 Congress dealt with issues of proof, and determined that a postmark is evidence verifiable beyond any self-serving testimony of a taxpayer who claims that a document was timely mailed.” Estate of Wood v. Comm’r, 909 F.2d 1155, 1161 (8th Cir. 1990). Thus, “[t]he act of mailing is not significant for purposes of the statute but placement of a postmark is.” Id. Consequently, we affirm the district court’s finding that the Stockers’ extrinsic evidence had no role to play in determining whether they could satisfy either of § 7502’s two exclusive exceptions to the physical delivery rule, and we further affirm the lower court’s ruling that neither of these exceptions is available here to establish the timely filing of the Stockers’ amended 2003 federal tax return. C. The District Court Did Not Abuse Its Discretion in Declining to Draw an Adverse Inference of Timely Filing as a Spoliation Sanction for the Government’s Failure to Preserve the Envelope in Which the Stockers Mailed Their Amended 2003 Tax Return. Apart from challenging the district court’s refusal to consider the extrinsic evidence that they mailed their amended 2003 federal tax return at the October 15, 2007 deadline, the Stockers also take issue with the district court’s failure to impose spoliation sanctions against the Government arising from the IRS’s failure to retain the envelope in which they sent this return. More specifically, the Stockers sought an inference that this lost or destroyed envelope bore a postmark date of October 15, 2007, but the district court declined without comment to draw such an adverse inference against the Government, or to otherwise impose any sort of spoliation sanctions based on the IRS’s loss or destruction of this envelope. We review the district court’s failure to impose the requested spoliation sanctions for an abuse of discretion, see Beaven v. U.S. Dep’t of No. 11-1890 Stocker, et al. v. United States Page 14 Justice, 622 F.3d 540, 553 (6th Cir. 2010), and we conclude that the court acted within its discretion when it declined to impose such sanctions here. As we recently explained, a “party seeking an adverse inference instruction based on the destruction of evidence must establish (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the destroyed evidence was relevant to [a] party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.” Id. (internal quotation marks and citations omitted). The requisite “culpable state of mind” may be established through a “showing that the evidence was destroyed knowingly, even if without intent to breach a duty to preserve it,” but even negligent conduct may suffice to warrant spoliation sanctions under the appropriate circumstances. Id. at 554 (internal quotation marks, alteration, and citations omitted). Turning to the first of these factors, the Stockers point to a provision in an IRS internal policy manual that seemingly requires the agency to retain the envelopes in which amended returns are received. In their view, this internal policy gave rise to an obligation to preserve the postmarked envelope in which they sent their amended 2003 return, and the Government does not contend otherwise. Thus, we agree that the first factor cited in Beaven has been established here. We conclude, however, that the Stockers have not demonstrated that the IRS acted with a sufficiently culpable state of mind to warrant an adverse inference of a timely postmark date. We explained in Beaven that “an adverse inference for evidence spoliation is appropriate” if the party with control over the evidence “knew the evidence was relevant to some issue at trial” or to “future litigation,” but nonetheless engaged in culpable conduct that “resulted in its loss or destruction.” Id. at 553 (internal quotation marks and citations omitted). The Stockers contend that the IRS knew or should have known that the evidence at issue here could prove relevant to future litigation, given (i) the legal significance that § 7502(a)(1) confers upon postmarks stamped on envelopes, and (ii) the recognition in the IRS’s internal policy manual that envelopes No. 11-1890 Stocker, et al. v. United States Page 15 containing amended returns should be retained and that postmark dates are used to determine timely filing. The Government, on the other hand, argues that the IRS reasonably could have failed to perceive the relevance of the envelope to future litigation, where (i) according to the agency’s records, the postmark date on the envelope was October 19, 2007, four days after the applicable deadline, and (ii) the Stockers’ use of certified mail to send their return gave rise to the reasonable assumption that they had obtained a date-stamped receipt at the post office that could establish timely filing under § 7502(c). On balance, we find that these considerations would warrant the adverse inference sought by the Stockers only if there were evidence that the IRS acted with a degree of culpability beyond mere negligence. To be sure, we have recognized that spoliation sanctions may properly be imposed even for lesser degrees of fault such as negligence. See Beaven, 622 F.3d at 554. Yet, the choice of an appropriate sanction should be linked to the degree of culpability, with more severe sanctions reserved for the knowing or intentional destruction of material evidence. Id. at 553-54. Here, the record discloses no culpable conduct beyond the negligent failure to preserve an envelope in accordance with internal agency regulations. Moreover, as we noted earlier, the extrinsic evidence produced by the Stockers, even if fully credited, does not definitively establish that the IRS employee who received and opened the Stockers’ amended 2003 return incorrectly recorded the postmark date on the envelope as October 19, 2007. To the contrary, it is possible that this notation in the IRS record was accurate, and that the fault for the late postmark date lies with a postal worker. If so, the lost or destroyed envelope would not have aided the Stockers’ cause in this litigation. As we have observed, under the present state of the law in this Circuit, “a taxpayer who sends a document to the IRS by regular mail, as opposed to registered or certified mail, does so at his peril.” Carroll, 71 F.3d at 1229. The Stockers recognized as much when they sent their amended 2003 federal return by certified mail, but they failed to take the necessary steps to ensure that they obtained the date-stamped receipt of certified mailing that would establish timely filing under § 7502(c). It is unfortunate, No. 11-1890 Stocker, et al. v. United States Page 16 to be sure, that the IRS did not retain the envelope that possibly could have enabled the Stockers to establish timely filing through the alternative route made available in § 7502(a)(1). Yet, as the Government points out, a review of the case law reveals no decisions in which the IRS’s failure to preserve a postmarked envelope resulted in an adverse evidentiary inference of timely mailing. Indeed, our unpublished decision in Schentur featured a similar failure by the IRS to retain the postmarked envelopes in which the plaintiff taxpayers mailed their returns, but we nonetheless held that the plaintiffs’ suit for a refund was time-barred. 1993 WL 330640, at 1-2, *4. Against this backdrop, we conclude that the district court did not abuse its discretion in declining to grant an adverse inference of timely filing as a spoliation sanction for the IRS’s loss or destruction of the envelope in which the Stockers mailed their amended 2003 federal tax return. IV. CONCLUSION For the reasons set forth above, we AFFIRM in all respects the district court’s June 20, 2011 opinion granting the Government’s motion to dismiss this suit for lack of subject matter jurisdiction.	{ "pile_set_name": "FreeLaw" }
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT NASHVILLE MAY SESSION, 1997 FILED August 15, 1997 Cecil W. Crowson STATE OF TENNESSEE, ) Appellate Court Clerk ) No. 01C01-9603-CR-00101 Appellant ) ) DAVIDSON COUNTY vs. ) ) Hon. THOMAS H. SHRIVER, Judge ANAND FRANKLIN, ) ) (Aggravated Sexual Battery) ) Appellee ) STATE APPEAL For the Appellee: For the Appellant: TERRY J. CANADY CHARLES W. BURSON 211 Printer's Alley Bldg, Suite 400 Attorney General and Reporter Nashville, TN 37201 KATHY MORANTE Assistant Attorney General Criminal Justice Division 450 James Robertson Parkway Nashville, TN 37243-0493 VICTOR S. (TORRY) JOHNSON III District Attorney General BILL REED Asst. District Attorney General Washington Square Building 222 2nd Avenue, N Nashville, TN 37201 OPINION FILED: REVERSED AND REMANDED David G. Hayes Judge OPINION The State of Tennessee appeals the sentencing decision of the Davidson County Criminal Court permitting the defendant, Anand Franklin, to serve his sentence in the local community corrections program. On appeal, the State challenges the eligibility of the defendant for sentencing under the Community Corrections Act.1 After review, we reverse the judgment of the trial court and remand. The defendant, a resident of India, was initially charged with three counts of aggravated rape and one count of aggravated sexual battery upon minor children. At a jury trial, the defendant was found guilty of aggravated sexual battery. The proof at the sentencing hearing established that the defendant was granted entry into the United States for a ninety day period to attend a “seminar.” The record suggests that this was in connection with his work as a missionary for the Seventh Day Adventist Church. On the date the offense was committed, the ninety day period had expired, thus, the defendant was in this country illegally. At the sentencing hearing, the defendant requested that he be permitted to return to India. The trial court was also informed that the victim’s mother did not oppose the defendant’s return to his native country. The State opposed any form of release, arguing instead that the defendant’s place of confinement should be the Department of Correction. At the conclusion of the sentencing hearing, the trial court imposed an eight year sentence upon the defendant with placement in the local community corrections program. The order further provided for the defendant’s release from jail on March 15, and, as “a condition of the Community Corrections, that he go to India on March 19th.” It is from this 1 As a subissue, the Sta te c ontes ts th e trial court’s autho rity to im pose banishm ent to In dia as a form of pu nishm ent. In view of our holding that the de fendan t is ineligible fo r com m unity corrections sentencing, we find it unnecessary to reach this question. 2 Order that the State now appeals. Eligibility for sentencing under the Tennessee Community Corrections Act of 1985 is governed by Tenn. Code Ann. § 40-36-106(a) and (c) (1990). In this case, the defendant was convicted of aggravated sexual battery, which is a felony offense “involving [a] crime[ ] against the person as provided in Title 39, . . . Chapter 13, parts 1-5; thus, he is ineligible for community corrections sentencing under subsection (a). Tenn. Code Ann. § 40-36-106(a)(2). In order to be eligible for community corrections sentencing under subsection (c), the offender must be statutorily eligible for probation. State v. Staten, 787 S.W.2d 934, 936 (Tenn. Crim. App. 1989); State v. Crowe, No. 01C01-9503-CC-0064 (Tenn. Crim. App. at Nashville, 1995); State v. Blackburn, No. 02C01-9111-CC- 00253 (Tenn. Crim. App. at Jackson, 1993); State v. Wilson, No. 03C01-9209- CR-00305, (Tenn. Crim. App. at Knoxville, 1993). Tenn. Code Ann. § 40-35-303(a) provides that “[a] defendant shall be eligible for probation . . . if the sentence actually imposed upon such defendant is eight (8) years or less; provided, that a defendant shall not be eligible for probation under the provisions of this chapter if he is convicted of a violation of . . . § 39-13-504.” Because the defendant was convicted of Tenn. Code Ann. § 39-13-504, aggravated sexual battery, he is statutorily ineligible for community corrections sentencing under subsection (c). Accordingly, the defendant’s sentence to community corrections is an illegal sentence and must be vacated. This matter is remanded to the trial court with instructions that the defendant, Anand Franklin, be ordered to serve his sentence of eight years as a Range one offender with the Tennessee Department of Correction. 3 ____________________________________ DAVID G. HAYES, Judge CONCUR: ______________________________________ PAUL G. SUMMERS, Judge ______________________________________ JERRY L. SMITH, Judge 4	{ "pile_set_name": "FreeLaw" }
924 F.2d 1052Unpublished Disposition NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Shirley A. LAYMON, individually and as Administratrix of theEstate of Herbert R. Laymon, Plaintiff-Appellant,v.The KROGER COMPANY, the Retirement Committee of the KrogerCompany, Defendants-Appellees,andPrudential Insurance Company of America, Defendant. No. 90-3115. United States Court of Appeals, Fourth Circuit. Argued Jan. 9, 1991.Decided Feb. 12, 1991. Appeal from the United States District Court for the Western District of Virginia, at Roanoke. James C. Turk, Chief District Judge. (CA-88-677-R) B.K. Cruey, Roanoke, Va., for appellant. William F. Rutherford, Jr., Woods, Rogers & Hazlegrove, Roanoke, Va. (Argued), for appellees; Diane M. Baun, Woods, Rogers & Hazlegrove, Roanoke, Va., on brief. W.D.Va. AFFIRMED. Before RUSSELL, WIDENER, and CHAPMAN, Circuit Judges. PER CURIAM: 1 The plaintiff, Shirley A. Laymon, brought an action for breach of contract against her deceased husband's former employer, the Kroger Company ("Kroger"). She alleged that a separation agreement and release, which stated an intention to replace a former employment contract, had been signed by her husband under duress and were therefore invalid. She also asserted claims for relief under the Employee Retirement Income Security Act ("ERISA") and the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Finding that Mrs. Laymon had failed to demonstrate sufficient evidence to support her claims, the district court granted summary judgment in favor of Kroger. We affirm. I. 2 Herbert R. Laymon, the husband of the appellant, worked for Kroger for over 35 years. He began as an apprentice meat cutter in 1951 and by 1979 was the supervisor of meat fabrication.1 In the mid-1970s changes began occurring in the market. Slaughtering companies began doing their own meat fabrication more economically than Kroger could. In response to this change, Kroger began closing regional plants across the country. Then, in early 1986, two-thirds of the hourly and management positions were cut at the Salem, Virginia, meat plant where Mr. Laymon was employed. As part of the process of cutting back on operations, in the summer of 1986, Mr. Laymon was transferred to a quality assurance position at the plant, retaining the same salary and benefits as before. Kroger finally decided that the remaining fabricating operations would be eliminated by the fourth quarter of 1986. Several supervisory jobs, including Mr. Laymon's, were eliminated, and the fabricating facility was converted to a facility for receiving "boxed beef," beef that had already been fabricated. 3 Two supervisors at the Salem facility were offered separation packages. Mr. Laymon was also offered a separation package, but it was much more favorable than the packages offered to the other two supervisors. The company took into account Mr. Laymon's long service with the company and the fact that he was close to retirement. Mr. Laymon's package offered two benefits not found in the others: a lump sum payment of one year's salary ($40,000) and inactive status as an employee on leave until October 5, 1988, when he would be 55 and eligible for early retirement. The alternative to the separation package was continued employment as a supervisor at the distribution center in Salem with the same pay and benefits as Mr. Laymon had received in the meat fabrication position. Mr. Laymon requested other positions as alternatives. Kroger denied these requests on the grounds that there were no openings for the positions he requested. 4 Mr. Laymon talked on several occasions with Alan Koehler, the Personnel Manager for the Mid-Atlantic Marketing Area. Mr. Laymon discussed the agreement and requested that additional terms be included. He asked for continued health care benefits, and his request was granted. He also asked that his group life insurance be extended. Kroger refused to extend the group plan because life insurance under Kroger's group plan terminates upon an employee's last day of work. However, Mr. Laymon was permitted to convert the group coverage to an individual policy. Also, Mr. Laymon asked for additional time to decide between signing the separation agreement and accepting the job offered him. This request was granted. 5 On January 2, 1987, Mr. Laymon went to Koehler's office to sign the separation agreement and a release of claims against Kroger. Koehler's office door was open during the meeting. According to affidavits filed by Kroger representatives, Mr. Laymon appeared familiar with the documents and nodded as he read each section. He also appeared calm, rational, and lucid. Mr. Laymon signed the documents and, on January 8, 1987, wrote a letter to Koehler confirming his understanding of the effect of the agreement. Mr. Laymon's attorney assisted him in drafting the letter. 6 On February 5, 1987, Mr. Laymon died from a self-inflicted gunshot wound. Mrs. Laymon subsequently instituted suit against Kroger, individually and in her capacity as administratrix of her husband's estate. Her complaint alleged a breach of the employment contract between her husband and Kroger and that Kroger had violated the notice provisions of ERISA and COBRA. Although Mr. Laymon had executed a release of all claims against Kroger arising out of the former employment contract, Mrs. Laymon argued that her husband had signed the release under duress and that it was therefore invalid. The district court, however, found that Mrs. Laymon had demonstrated insufficient evidence of duress in the execution of the separation agreement and release. Therefore, the court granted summary judgment in favor of Kroger on this issue. The district court also granted summary judgment for Kroger on the ERISA and COBRA claims because it found that these claims had been superseded by the valid release and settlement agreement. 7 Mrs. Laymon now appeals, arguing that the district court erred when it found that she had not offered evidence of duress sufficient to withstand a summary judgment and when it denied her claims for recovery under ERISA and COBRA. II. 8 Under Virginia law, duress exists when a person is compelled to manifest apparent assent to an agreement by means of wrongful acts or threats that overcome that person's free will. See Bond v. Crawford, 193 Va. 437, 69 S.E.2d 470 (1952); Norfolk Div. of Social Servs. v. Unknown Father, 2 Va.App. 420, 345 S.E.2d 533, 541 (1986). 9 To establish her claim of duress, Mrs. Laymon speculates that, because her husband was thin and had a chronic cough, he feared the physical demands of the job that Kroger offered as an alternative to the separation agreement. Aside from Mrs. Laymon's conjecture, there is no evidence that Mr. Laymon expressed concerns about the physical demands of the job offered. Instead, there is only evidence that Mr. Laymon had requested that Kroger place him in a job different from the one offered as an alternative.2 10 The mere fact that Mr. Laymon would have preferred a job other than the one offered to him is not sufficient to establish duress in the signing of the separation agreement. Mr. Laymon was offered the same salary and benefits to which he had been entitled in his previous position. As observed by the Seventh Circuit in Henn v. National Geographic Society, 819 F.2d 824 (7th Cir.), cert. denied, 484 U.S. 964 (1987), "When one option makes the recipient better off, and the other is the status quo, then the offer is beneficial." Id. at 826. The choice that the former employee faced in Henn is similar to the one Mr. Laymon faced. The plaintiff in Henn accepted an early retirement plan that included severance pay of one year's salary, retirement benefits calculated as if the retiree had quit at age 65, medical coverage for life as if the employee were still on the payroll, and some supplemental life insurance coverage. The court stated: 11 He may retire [and] receive the value of the package [or] ... elect to keep working and forfeit the package.... That the benefits may overwhelm the recipient and dictate the choice cannot be dispositive. The question "Would you prefer $100,000 to $50,000?" will elicit the same answer from everyone, but it does not on that account produce an "involuntary" response. 12 Id. 13 Mrs. Laymon also offers as evidence of duress a statement by Kroger to her lawyer. A Kroger representative allegedly told Mrs. Laymon's lawyer that Kroger would have fired her husband if he had refused to sign the separation agreement. Kroger denies that it would have fired Mr. Laymon and asserts that the quality assurance job remained open to him during the entire negotiation period. Even assuming that Kroger intended to fire Mr. Laymon, there is no evidence that such an intention was communicated to him, either expressly or impliedly. Mr. Laymon could not have been forced to act against his will by a threat that was never communicated to him. Therefore, the statement to the appellant's lawyer does not support an allegation of duress. 14 After viewing the evidence in the light most favorable to Mrs. Laymon, we find that she has failed to indicate sufficient evidence of duress to create a genuine issue of material fact.3 III. 15 The district court granted summary judgment for Kroger on Mrs. Laymon's ERISA and COBRA claims, finding that the release and settlement agreement superseded any prior agreements and that none of Mrs. Laymon's claims involve Kroger's failure to fulfill the settlement agreement. We agree with this finding. Under the release, Mr. Laymon covenants not to sue Kroger for any action of any nature, excepting only claims that may arise from a material breach of the settlement agreement. The release states that it is expressly intended as a waiver of all rights under local, state, and federal law. Therefore, any rights to an action for violation of the notice provisions found in ERISA and COBRA have been waived. The release leaves only an action for material breach of the settlement agreement, and Mrs. Laymon makes no claim of such a breach here. We affirm the district court's finding that Mrs. Laymon's claims are barred by the release and settlement agreement. 16 AFFIRMED. 1 Meat fabrication is the breaking down of quarters of beef into primal cuts 2 Mrs. Laymon also asserts that she has discovered a note in which her husband allegedly stated that he was being "backed into a corner." Mrs. Laymon has never produced this note 3 To the contrary, the evidence indicates that Mr. Laymon acted of his own free will. He negotiated additional favorable terms for himself in an agreement that was already very favorable and appeared calm and lucid at the time of signing the agreement. Also, Mrs. Laymon herself stated that her husband had consulted his lawyer several times during the period that he was trying to make a decision. In fact, Mrs. Laymon stated that her husband's lawyer told her that he had helped her husband draft the letter confirming his understanding of the agreement he had signed	{ "pile_set_name": "FreeLaw" }
33 Ill. App.3d 90 (1975) 337 N.E.2d 305 SCOA INDUSTRIES, INC., Plaintiff-Appellee, v. MICHAEL HOWLETT, Secretary of State, Defendant-Appellant. No. 59877. Illinois Appellate Court First District (3rd Division). October 16, 1975. 91 William J. Scott, Attorney General, of Chicago (Ann Sheldon, Assistant Attorney General, of counsel), for appellant. Schuyler, Stough & Morris, of Chicago, for appellee. Order and judgment reversed. Mr. JUSTICE MEJDA delivered the opinion of the court: This is an appeal from an order of the circuit court of Cook County denying defendant's motion to dismiss and for summary judgment, granting plaintiff's motion for summary judgment, and entering judgment for 92 plaintiff and against defendant in the sum of $8,824.09, plus interest. Defendant seeks reversal of the judgment order and contends that: (1) the doctrine of sovereign immunity bars the action; (2) the tax was paid voluntarily and cannot be recovered; (3) the Illinois Court of Claims has exclusive jurisdiction; (4) plaintiff failed to exhaust its administrative remedies; and (5) the claim is barred by laches. We reverse. On March 30, 1970, plaintiff, Scoa Industries, Inc., a Delaware corporation [Scoa], filed a "tentative" annual report with defendant, Illinois Secretary of State, using the printed form provided by defendant's office. (Ill. Rev. Stat. 1969, ch. 32, par. 157.13.) In response to a question on the form plaintiff stated that it did not elect to pay a franchise tax based upon its entire stated capital and paid-in surplus. The election required answers to questions 10 through 14 to provide information designating the value of its property and gross money amount of business transacted, everywhere and only in the State of Illinois. Plaintiff printed thereon: "10-14 cannot be answered at the present time. As soon as the information is available we will forward." On June 30, 1970, plaintiff wrote a letter to defendant which contained the supplemental information. The letter was returned to plaintiff with the handwritten notation on the bottom: "Sorry, can not accept. Please execute the form enclosed." On July 9, 1970, defendant's office caused to be issued a franchise tax assessment in the sum of $8,824.09, based upon the entire stated capital and paid-in surplus listed in Scoa's "tentative" annual report. The assessment notice advised plaintiff that objection to the assessed amount could be made within 10 days, so that a hearing could be held as provided by statute, and also that the instant notice would be the only notice sent. On July 20, 1970, plaintiff filed a supplemental annual report on the appropriate form which contained the previously omitted information in items 10 through 14. On July 20, 1970, defendant immediately sent to Scoa an assessment, designated "In re' adjustment supp." based on the additional information contained in the supplemental report. Plaintiff was therein advised that $93.47 was owed and that plaintiff could, within 10 days, object to the assessment. On July 28, 1970, plaintiff paid to defendant the sum of $8,824.09, and on August 4, 1970, paid the sum of $93.47. No protest or objection was made at the time of either payment. In a letter to defendant's office, dated April 14, 1972, plaintiff requested a refund of the "erroneous payment of $8,824.09" on the "erroneous billing of July 9, 1970," and stated: "Due to a change of personnel within the taxpayer's accounting office the erroneous bill was paid on July 28, 1970, and on August 93 4, 1970 the correct billing of $93.47 was also inadvertently paid by the taxpayer." On May 18, 1973, plaintiff filed a three-count complaint in which it sought a rescission of the payment and refund of the $8,824.09, together with interest. Each count alleged inter alia that the payment "was made under legal duress, and through mistake, inadvertence, and oversight, and without benefit of counsel." Throughout the entire complaint plaintiff characterized the payment as erroneous. Defendant filed a motion to dismiss the complaint, and alternatively, for summary judgment against plaintiff. Plaintiff answered and filed a cross-motion for summary judgment. Defendant's motion alleged that plaintiff's payment was voluntary, that no protest or objection was filed previously, that there are no statutory provisions allowing or providing for a refund of taxes erroneously paid, and that plaintiff's letter of August 14, 1972, clearly demonstrates that the tax was paid erroneously and not under duress. Plaintiff answered the motion by alleging that the payment constituted a mutual mistake of material fact. It was further alleged, for the first time and not in the alternative, that the tax payment was made under the threat or penalty of revocation of its certificate of authority to do business in Illinois (Ill. Rev. Stat. 1969, ch. 32, pars. 157.122(h), 157.142), and that such threat constituted duress. On August 24, 1973, the trial court denied defendant's motion, granted plaintiff's motion and entered judgment for plaintiff in the sum of $8,824.09, plus interest from the date of payment. The Business Corporation Act (Ill. Rev. Stat. 1973, ch. 32, par. 157.1 et seq.) substantially provides, in pertinent part: (1) that the Secretary of State refrain from filing articles, papers, certificates, reports and the like until fees, franchise taxes and charges are paid by any corporation, and during the period of default in such payment that the corporation is prohibited from maintaining any action at law or suit in equity (par. 157.142); (2) that the Secretary of State give notice of the franchise assessed, and upon request, hear objections thereto for adjustment after a hearing, and providing that if the taxes are not paid by July 31 the Secretary certify that fact to the Attorney General who may institute action against the corporation for recovery of the tax and any penalty (par. 157.143); (3) that a foreign corporation may appeal to the circuit court, inter alia, any revocation of the certificate of authority by the Secretary of State (par. 157.148); and (4) that the corporate annual report shall be filed on a form furnished by the Secretary of State and shall be verified (par. 157.151). Defendant contends that the doctrine of sovereign immunity bars the instant proceeding for monetary recovery against the State. 94 Section 26 of article IV of the Illinois Constitution of 1870 provided: "The state of Illinois shall never be made defendant in any court of law or equity." Section 4 of article XIII of the 1970 Illinois Constitution substituted the following: "Except as the General Assembly may provide by law, sovereign immunity in this State is abolished." The General Assembly promptly acted to retain sovereign immunity by enacting paragraph 801 of the Civil Administrative Code which became effective concurrently with the 1970 Constitution on January 1, 1972, and states: "Except as provided in `AN ACT to create the Court of Claims, to prescribe its powers and duties, and to repeal AN ACT herein named', filed July 17, 1945, as amended, the State of Illinois shall not be made a defendant or party in any court." Ill. Rev. Stat. 1973, ch. 127, par. 801. Section 8 of the Court of Claims Act (Ill. Rev. Stat. 1973, ch. 37, par. 439.8) in pertinent part provides: "The court shall have exclusive jurisdiction to hear and determine the following matters: (a) All claims against the State founded upon any law of the State of Illinois, or upon any regulation thereunder by an executive or administrative officer or agency, other than claims arising under the Workmen's Compensation Act or the Workmen's Occupational Diseases Act. (b) All claims against the State founded upon any contract entered into with the State of Illinois. * * * (d) All claims against the State for damages in cases sounding in tort, if a like cause of action would lie against a private person or corporation in a civil suit * * ." (Emphasis added.) 1 The State is immune from suit without its consent. (Powers v. Telander (1970), 129 Ill. App.2d 10, 262 N.E.2d 342.) A suit brought against an officer or agency with relation to matters in which the defendant represents the State in action and liability, even though the State is not a party to the record, is in effect a suit against the State. (Struve v. Department of Conservation (1973), 14 Ill. App.3d 1092, 303 N.E.2d 32.) Whether a particular action falls within the prohibition is dependent on the particular issues involved and the relief sought. (Moline Tool Co. v. Department of Revenue (1951), 410 Ill. 35, 101 N.E.2d 71.) Although only the Secretary of State is named as a party defendant, the instant suit in effect is against the State for the recovery of a monetary judgment payable out of State funds. 2 Plaintiff argues that where administrative review in the circuit court is provided by statute, then sovereign immunity is not a bar to an original action against a State official. Plaintiff relies on E.H. Swenson 95 & Son, Inc. v. Lorenz (1967), 36 Ill.2d 382, 223 N.E.2d 147, in which a declaratory judgment was entered to declare illegal certain deductions by the State on account of Retailer's Occupation Taxes and Service Occupation Taxes from payments due plaintiffs on certain State contracts. Plaintiff also relies on Struve, in which, although declaratory judgment was sought to determine whether a park lease had been violated, the court affirmed the dismissal in the trial court, holding that the claim should be resolved in the court of claims. Neither of these two cases involved any monetary claim against the State. Plaintiff further cites Moline Tool Co., which involved an administrative review pursuant to statute as to a denial by the Department of a tax refund. That case, as noted, was a review pursuant to statutory authority for such action and was not an original suit for a money judgment, as in the instant case. Plaintiff's action herein is for a refund of monies paid as franchise tax, a monetary claim. The Supreme Court has held that in an action to review the ruling of a State department under the Administrative Review Act, it was error for the circuit court to enter a monetary judgment against the State of Illinois. The court of claims has been established with exclusive jurisdiction to provide for the orderly disbursement of State funds if plaintiff's claim has merit. See Chicago Welfare Rights Organization v. Weaver (1972), 5 Ill. App.3d 655, 660, 284 N.E.2d 20, aff'd on other grounds (1973), 56 Ill.2d 33, 305 N.E.2d 140. Plaintiff further argues that the instant action is in substance a proceeding to review the determination by the Secretary of State which denied plaintiff's right to recover the admitted overpayment of the franchise tax and to review the refusal of defendant to accept plaintiff's letter containing the information to supplement its tentative annual report. In Johnson v. Department of Public Aid (1972), 3 Ill. App.3d 1045, 279 N.E.2d 791, the court held that an appeal to the circuit court from a decision of the Illinois Department of Public Aid was not barred in that the General Assembly, by providing that the Administrative Review Act shall apply to and govern judicial review of the decisions of the Department, has thereby affirmatively consented to the State's being made a defendant and a party in suits of that nature. 3-5 However, unlike Moline Tool Co., cited by plaintiff, as well as Johnson, the Administrative Review Act (Ill. Rev. Stat. 1973, ch. 110, par. 264 et seq.) has not been made applicable by the General Assembly to provide a judicial review of the actions of defendant Secretary of State in matters concerning the Business Corporation Act (Ill. Rev. Stat. 1973, ch. 32, par. 157.1 et seq.). It is applicable and governs judicial review only where the statute, creating or conferring power on the administrative agency or officer having power to make administrative decisions, by 96 express reference, adopts the provisions of the Administrative Review Act (ch. 110, par. 265). However, assuming arguendo that the instant action is in substance a proceeding to review the determination of the Secretary of State, in the absence of statute providing otherwise, the General Assembly has not authorized such proceeding nor consented to the State's being made a defendant or party. Even where an administrative decision is subject to the Administrative Review Act, the circuit court is without authority to enter therein a monetary judgment against the State. Campbell v. Department of Public Aid (1975), 61 Ill.2d 1, 329 N.E.2d 225. The gist of plaintiff's complaint is that it is equitably entitled to a refund or return of the overpayment of $8,824.09. The claim is founded upon the broad general principle that in equity and good conscience, defendant is not entitled to retain the money, and not upon any statutory provision relative to the refund of taxes. 6, 7 In the absence of an authoritative statute providing otherwise, taxes voluntarily paid may not be recovered back by a taxpayer notwithstanding that there may be justice to the claim. (S.A.S. Co. v. Kucharski (1972), 53 Ill.2d 139, 142, 290 N.E.2d 224; Snyderman v. Isaacs (1964), 31 Ill.2d 192, 201 N.E.2d 106; Eichman v. Anderson (1959), 23 Ill. App.2d 329, 162 N.E.2d 673; Bank & Trust Co. v. Cullerton (1975), 25 Ill. App.3d 721, 324 N.E.2d 29.) The obligation of a citizen to pay taxes is purely a statutory creation and, conversely, the right to a refund or credit can and does arise solely from the acts of the legislature (People ex rel. Eitel v. Lindheimer (1939), 371 Ill. 367, 371, 21 N.E.2d 318). The question of whether or not a payment is voluntary is moot if and when the legislature has, as a matter of grace, provided a statutory remedy for refund. (See Weil-McLain Co. v. Collins (1946), 395 Ill. 503, 507, 71 N.E.2d 91.) However, the legislature has not provided such remedy for refund herein. Plaintiff argues that the payment of the franchise tax was not voluntarily made but, in a legal sense, made under duress because plaintiff could face the loss or forfeiture of its franchise in Illinois, in the event of nonpayment. 8 In its complaint plaintiff made a singular and factually unsupported allegation of "legal duress," stating in paragraph 3, "The payment of $8,824.09 by the Plaintiff was made under legal duress, and through mistake, inadvertence, and oversight, and without benefit of counsel." Notwithstanding, the factual allegations of the complaint as supported by plaintiff's letter of April 14, 1972, indicate that the payment was made by inadvertence or mistake. The bare allegation of "legal duress" is not sufficient even as an allegation of ultimate fact. (See Van Dekerkhov v. City of Herrin (1972), 51 Ill.2d 374, 282 N.E.2d 723.) The allegation, 97 in addition to being totally inconsistent with the remaining allegations of mistake, inadvertence and oversight, cannot raise issues where the pleadings and exhibits contain only evidentiary facts to the contrary (Carruthers v. B.C. Christopher & Co. (1974), 57 Ill.2d 376, 381, 313 N.E.2d 457). However, plaintiff argues that it paid the franchise tax fearing revocation by defendant of its certificate of authority to do business in this State, and that the payment was therefore involuntarily made. The applicable rules as to duress and compulsion are set forth in Bank & Trust Co. v. Cullerton (1975), 25 Ill. App.3d 721, 726, 324 N.E. 2d 29, 33-34: "In the absence of statutory provision, taxing authorities have no power to refund illegal taxes not paid under duress. (Snyderman v. Isaacs (1964), 31 Ill.2d 192, 201 N.E.2d 106; People ex rel. Sweitzer v. Orrington Co. (1935), 360 Ill. 289, 195 N.E. 642.) For a payment of taxes to be deemed under duress there must be some actual or threatened exercise of power possessed, or believed to be possessed, by the party exacting the payment over the person or property of the party making the payment, from which the latter has no reasonable means of immediate relief except by making the payment. (72 Am.Jur.2d, State and Local Taxation § 1081 (1974).) To render a payment compulsory such pressure must be brought to bear upon the person paying as to interfere with the free enjoyment of his rights of person or property, and the compulsion must furnish the motive for the payment sought to be avoided. (School of Domestic Arts & Science v. Harding (1928), 331 Ill. 330, 163 N.E. 15.)" It is significant to note that upon failure for 30 days to pay fees, taxes or charges to be paid, the Secretary of State may revoke the corporation's certificate of authority to transact business in this State (Ill. Rev. Stat. 1973, ch. 32, par. 157.122(b)). However, the revocation is discretionary, and not mandatory or self-executing. In the instant case, the threat of revocation of its franchise by defendant did not pose any imminent injury. There is no allegation or evidence of any actual or threatened revocation by defendant, nor such pressure brought to bear upon plaintiff as to interfere with the enjoyment of its corporate status and property so as to render the payment compulsory. At most, plaintiff presented a subjective apprehension of a potential injury. (Bradford v. City of Chicago (1861), 25 Ill. 349; 162 East Ohio Street Hotel Corp. v. Lindheimer (1938), 368 Ill. 294, 13 N.E.2d 970.) Neither did plaintiff show that the alleged duress and compulsion furnished the controlling motive for payment and that plaintiff had no other reasonable means of relief except by such payment. 98 In determining whether the payment herein was under duress or compulsion it is further necessary to determine whether the taxpayer had no reasonable means of immediate relief except by making payment. Although plaintiff has alleged that it had no adequate remedy at law, other procedures were available in addition to the remedy in the court of claims. Plaintiff had a right to object and have a hearing as to the assessments made by defendant as specified in the notice of assessment served upon it and as provided by the applicable statute. (Ill. Rev. Stat. 1973, ch. 32, par. 157.143.) Plaintiff had a further right to pay the tax under protest and to institute proper court proceedings to enjoin the transfer of its payment to the State Treasury and to obtain a court determination of its liability for such tax. (Ill. Rev. Stat. 1973, ch. 127, par. 172.) The procedure by statute for payment under protest and injunctive relief in itself provides an adequate remedy at law. See Stratton, Seoretary of State v. St. Louis Southwestern Ry. Co. (1932), 284 U.S. 530. The following cases relied upon by plaintiff are distinguishable. In Atchison, Topeka & Santa Fe Ry. Co. v. O'Connor (1912), 223 U.S. 280, a Colorado franchise tax was in fact paid under protest, and a statute there provided for a refund of a tax erroneously paid under protest and was held to contemplate a suit for such recovery; significantly, the State auditor was authorized to draw a warrant to pay such refund. In Gaar, Scott & Co. v. Shannon (1912), 223 U.S. 468, decided on the same date as O'Connor, a Texas statute provided a self-operating forfeiture of the right to do business although the payment of the franchise tax was also made under protest, expressly reversing the right to sue because of the alleged unconstitutionality of the tax. In Stratton v. St. Louis Southwestern Ry. Co., the court dismissed an action to enjoin collection of the Illinois franchise tax prior to payment and held that the protest and injunction procedure under paragraph 172 of chapter 127 to recover a tax is essentially a legal remedy, "not any less so nor any less adequate because the State practice has annexed to it an equitable remedy" which was but incidental. Finally, in People ex rel. Carpentier v. Arthur Morgan Trucking Co. (1959), 16 Ill.2d 313, 157 N.E.2d 41, suit was brought by the State to recover a balance due upon an application for truck licenses. The court found that the taxpayer was exempt from such fees and had applied and paid partial fees under duress of further arrests of its drivers and the disruption of its business, and was therefore not estopped by such application and partial payment from asserting a defense as to the balance claimed by the State. No claim for refund was made by the taxpayer, the court observing that the result would have been different in such instance. 99 9, 10 Defendant has raised the issues of laches and exhaustion of administrative remedies for the first time on appeal. The defenses were not raised in the trial court and therefore, will not be considered here. Longenecker v. Hardin (1970), 130 Ill. App.2d 468, 472, 264 N.E.2d 878; Krajcir v. Rivera (1971), 49 Ill.2d 547, 549, 276 N.E.2d 314. Plaintiff, appellee herein, urges in its brief that defendant did not either in the trial court or on appeal "controvert the Constitutional issues raised by plaintiff in Counts II, III and IV [sic] of the Complaint." These counts alleged that the refusal of the State of Illinois to refund the monies was in violation "of due process and equal protection of the laws under both the United States and Illinois Constitutions, and the provision of the Illinois Constitution that for every wrong there must be a certain remedy." Plaintiff then states that a motion to dismiss admits of matters well pleaded and that the failure to controvert the constitutional provisions constitutes a binding admission which would be a separate and distinct ground for affirming the trial court's "decree." The argument so presented is a bare assertion of the issues sought to be raised, and defendant has not responded. Plaintiff has cited no authorities and has not here adequately argued the contention, as required of an appellee under Supreme Court Rule 341(f) (Ill. Rev. Stat. 1973, ch. 110A, par. 341(f)); therefore, consideration of the issues by this court is inappropriate. Deckard v. Joiner (1970), 44 Ill.2d 412, 255 N.E.2d 900, cert. denied, 400 U.S. 941, rehearing denied, 400 U.S. 1025. We conclude that the payment of franchise tax in the instant case has not been made under duress or compulsion and is therefore subject to the rules applicable to a tax voluntarily paid and without protest. Although plaintiff brought action on an equitable basis, the action is essentially to recover money which, regardless of the manner of acquisition, is alleged to be wrongfully withheld from plaintiff. The claim sounds in tort and, in the absence of the protest payment and injunctive remedy, is exclusively within the jurisdiction of the Court of Claims. For the reasons stated, the order and judgment of the circuit court of Cook County in favor of plaintiff and against defendant are reversed. Reversed. McGLOON, P.J., and McNAMARA, J., concur.	{ "pile_set_name": "FreeLaw" }
15-2185 Vasquez v. New York City Department of Education et al. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals 2 for the Second Circuit, held at the Thurgood Marshall United 3 States Courthouse, 40 Foley Square, in the City of New York, 4 on the 1st day of July, two thousand sixteen. 5 6 PRESENT: DENNIS JACOBS, 7 GUIDO CALABRESI, 8 REENA RAGGI, 9 Circuit Judges. 10 11 - - - - - - - - - - - - - - - - - - - -X 12 ANGEL VASQUEZ, 13 Plaintiff-Appellant, 14 15 -v.- 15-2185 16 17 NEW YORK CITY DEPARTMENT OF EDUCATION 18 & PAULA CUNNINGHAM, 19 Defendants-Appellees. 20 - - - - - - - - - - - - - - - - - - - -X 21 22 FOR APPELLANT: JOSHUA BELDNER, Tilton Beldner 23 LLP, Uniondale, New York. 24 25 FOR APPELLEES: DAMION K. L. STODOLA, Assistant 26 Corporation Counsel (with 27 Richard Dearing, on the brief), 28 for Zachary W. Carter, 29 Corporation Counsel of the City 30 of New York, New York, New York. 1 1 Appeal from a judgment of the United States District 2 Court for the Southern District of New York (Nathan, J.). 3 4 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED 5 AND DECREED that the judgment of the district court be 6 AFFIRMED. 7 8 Angel Vasquez appeals from the March 5, 2014 Decision 9 and Order1 of the United States District Court for the 10 Southern District of New York (Nathan, J.), granting summary 11 judgment with respect to the termination of Vasquez’s 12 probationary employment in favor of defendants-appellees New 13 York City Department of Education (“DOE”) and Principal 14 Paula Cunningham on claims of employment discrimination 15 under the Equal Protection Clause, the New York State Human 16 Rights Law (“NYSHRL”), and the New York City Human Rights 17 Law (“NYCHRL”). We assume the parties’ familiarity with the 18 underlying facts, the procedural history, and the issues 19 presented for review. 20 21 The sole issue on appeal is whether Vasquez adduced 22 sufficient evidence from which a rational jury could find 23 that the defendants’ proffered legitimate, nondiscriminatory 24 reason for Vasquez’s termination was pretext for 25 discrimination based on sex or race. See Vivenzio v. City 26 of Syracuse, 611 F.3d 98, 106 (2d Cir. 2010) (“The 27 substantive standards applicable to claims of employment 28 discrimination under Title VII . . . are also generally 29 applicable to claims of employment discrimination brought 30 under . . . the Equal Protection Clause, and the NYSHRL 31 . . . .”). The defendants relied on the results of an 32 investigation conducted by the Special Commissioner of 33 Investigation (“SCI”). The SCI investigation, conducted 34 independently of Principal Cunningham, substantiated 35 allegations that Vasquez physically and verbally abused 36 students based, in part, on his own admissions during the 37 investigation. 1 Judgment was entered on June 15, 2015, after a two- day trial at which a jury awarded Vasquez $22,700 on a separate sex-based discrimination claim (failure to be reappointed to his position running an after-school basketball program in January 2010, several months prior to the events leading to Vasquez’s termination). 2 1 Vasquez argues that Cunningham withheld evidence from 2 SCI investigators. The record belies this assertion. 3 Cunningham established that her assistant principals were 4 aware of protocol requiring the forwarding of pertinent 5 information to investigators, and told a teacher who 6 approached her with potentially probative information to 7 report that information to the superintendent’s office. 8 Vasquez cites an error in the disciplinary letter; but the 9 mistake was rectified, and in any event, the discrepancy has 10 no impact on the physical and verbal misconduct attributed 11 to Vasquez, including conduct he admitted to SCI 12 investigators. In essence, Vasquez takes issue with a 13 number of the allegations levied against him; however, the 14 veracity of these allegations is immaterial to the question 15 of pretext. See McPherson v. New York City Dep’t of Educ., 16 457 F.3d 211, 216 (2d Cir. 2006) (“In a discrimination case, 17 however, we are decidedly not interested in the truth of the 18 allegations against plaintiff. We are interested in what 19 ‘motivated the employer’; the factual validity of the 20 underlying imputation against the employee is not at issue.” 21 (emphasis in original) (quoting United States Postal Serv. 22 Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983))). 23 24 The grant of summary judgment on Vasquez’s NYCHRL claim 25 was similarly proper. Although NYCHRL claims must be 26 adjudicated “separately and independently from any federal 27 and state law claims” and are construed “‘broadly in favor 28 of discrimination plaintiffs,’” “a defendant is not liable 29 if the plaintiff fails to prove the conduct is caused at 30 least in part by discriminatory or retaliatory motives.” 31 Mihalik v. Credit Agricole Cheuvreux N. Am., Inc., 715 F.3d 32 102, 109, 113 (2d Cir. 2013) (quoting Albunio v. City of New 33 York, 947 N.E.2d 135, 137 (N.Y. 2011)). Vasquez adduced no 34 evidence that either race or sex discrimination influenced 35 his termination. See Bennett v. Health Mgmt. Sys., Inc., 92 36 A.D.3d 29, 46 (N.Y. App. Div. 2011) (“Plaintiff put forward 37 no evidence that defendant’s explanations were pretextual, 38 nor any evidence that a discriminatory motive coexisted with 39 the legitimate reasons supported by defendant’s evidence.”). 40 41 For the foregoing reasons, and finding no merit in 42 Vasquez’s other arguments, we hereby AFFIRM the judgment of 43 the district court. 44 45 FOR THE COURT: 46 CATHERINE O’HAGAN WOLFE, CLERK 47 3	{ "pile_set_name": "FreeLaw" }
482 F.Supp. 497 (1979) Josephine RICOTTA, Plaintiff, v. IBERIA LINEAS AEREAS DE ESPANA, Defendant. No. 79 C 1928. United States District Court, E. D. New York. November 30, 1979. 498 Anthony J. Crecca and Myron G. Lasser, Staten Island, N. Y., for plaintiff Ricotta. Aereas De Espana, Condon & Forsyth by Michael J. Holland, George N. Tompkins, Jr., New York City, for defendant Iberia Lineas. MEMORANDUM OF DECISION AND ORDER COSTANTINO, District Judge. Defendant, Iberia Lineas Aereas De Espana ("Iberia"), moves for summary judgment on the ground that the action is time barred by Article 29 of the Warsaw Convention ("Convention"). The issue presented to the court is whether the accident occurred while plaintiff was "disembarking" within the meaning of Article 17 of the Convention. If plaintiff was injured during the course of operations of disembarking, then the rights of the parties are governed by the provisions of the Warsaw Convention. The two year period of limitations contained in Article 27 of the Convention would therefore be applicable to the damage action and the failure to commence suit within the two year period perforce would extinguish plaintiff's remedy. Plaintiff, Josephine Ricotta, was injured when she fell out of a bus which was to take the Iberia airline passengers from the airplane to the Malaga Airport Terminal. The action against defendant airlines was commenced on July 10, 1979, more than two years after the accident had occurred. The following material facts have been garnered from the pleadings, affidavits of Iberia personnel and the deposition of plaintiff. On September 19, 1976, plaintiff, Josephine Ricotta arrived in Malaga, Spain from John F. Kennedy International Airport, New York. She lawfully and properly had been a passenger aboard an Iberia aircraft. The aircraft landed at Malaga Airport which had come to rest "at some distance from the airport terminal." The customary procedure provided by Iberia for incoming flights from the United States included the use of airport buses owned and operated by Iberia. Upon landing at Malaga Airport, 499 all passengers were directed by Iberia personnel to walk off the aircraft and to board an Iberia bus so as to be transported to the airport terminal. According to the affidavit of an Iberia employee, the passengers would then be directed by Iberia personnel to leave the bus and to proceed through Spanish immigration. Only after the passengers had completed the immigration procedures, were they permitted to retrieve their baggage and to proceed through Spanish customs. Once this latter requirement had been satisfied, passengers were able to enter the public areas of the airport. Plaintiff conceded that she had been directed to board one such bus which was to take her to the airport terminal. After plaintiff had positioned herself on the bus, plaintiff's friend realized that she had left a sweater aboard the plane. The friend then exited the bus. Plaintiff awaited the return of her friend near the doorway of the Iberia vehicle. Shortly thereafter the bus began to accelerate. As it turned, plaintiff fell off the bus on to the runway. It is well established that on a motion for summary judgment, the moving party has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Friedman v. Meyers, 482 F.2d 435 (2d Cir. 1973). Yet an action to determine the precise meaning of the terms of the Warsaw Convention is to be treated by the court as a question of law and not as a triable issue of fact. Block v. Compagnie Nationale Air France, 386 F.2d 323 (5th Cir. 1967), cert. denied, 392 U.S. 905, 88 S.Ct. 2053, 20 L.Ed.2d 1363 (1968); Evangelinos v. Trans World Airlines, Inc., 396 F.Supp. 95 (W.D. Pa.1975), rev'd on other grounds, 550 F.2d 152 (3d Cir. 1977). See generally Strong v. United States, 518 F.2d 556, 563, 207 Ct.Cl. 254 (1975); Citizen Band of Potawatomi Indians v. United States, 391 F.2d 614, 618, 179 Ct.Cl. 473 (1967), cert. denied 389 U.S. 1046, 88 S.Ct. 771, 19 L.Ed.2d 839 (1968). The scope of the Convention is a matter of federal law and federal treaty interpretation. Husserl v. Swiss Air Transport Co., Ltd., 388 F.Supp. 1238 (S.D.N.Y.1975). The rules laid down by the Convention compose an international code declaring the rights and liabilities of parties to contracts of international carriage by air. International transportation as governed by the Convention involves, inter alia, transportation where the place of departure and the place of destination are situated within the territories of two High Contracting Parties. Mertens v. Flying Tiger Line, Inc., 341 F.2d 851 (2d Cir. 1965), cert. denied 382 U.S. 816, 86 S.Ct. 38, 15 L.Ed.2d 64 (1965). The parties do not dispute the fact that the Iberia flight number 1954 which plaintiff took from New York to Spain constituted international transportation within the meaning of the Convention. Specifically, both the Republic of Spain and the United States are parties to the Convention. 49 Stat. 3000 (1934). An action which may be brought for damages under the Convention must be commenced within a two year time period. Molitch v. Irish International Airlines, 436 F.2d 42 (2d Cir. 1970). Article 29(1) of the Convention states: The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped. This article, being a treaty provision takes precedence over anything inconsistent in any state statute of limitations. United States v. State of Washington, 520 F.2d 676 (9th Cir. 1975), cert. denied 424 U.S. 978, 96 S.Ct. 1487, 47 L.Ed.2d 750 (1976). Thus, if this claim is governed by the Convention any right to damages must necessarily be extinguished by plaintiff's failure to commence an action within the two year period beginning on September 19, 1976. Article 17 of the Convention provides: The carrier shall be liable for damage sustained in the event of the death or *500 wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. The sole dispute involved in this motion for summary judgment is whether plaintiff's injury is comprehended by Article 17. The court must therefore direct its attention to the scope of the phrase "operations of disembarking." In interpreting the scope of Article 17 many circuits, including the Second Circuit have developed a tripartite test. Evangelinos v. Trans World Airlines, Inc., 550 F.2d 152 (3d Cir. 1977); Maugnie v. Compagnie Nationale Air France, 549 F.2d 1256 (9th Cir. 1977), cert. denied 431 U.S. 974, 97 S.Ct. 2939, 53 L.Ed.2d 1072 (1977); Day v. Trans World Airlines, Inc., 528 F.2d 31 (2d Cir. 1975), cert. denied 429 U.S. 890, 97 S.Ct. 246, 50 L.Ed.2d 172 (1976); Husserl v. Swiss Air Transport Co., 388 F.Supp. 1238 (S.D.N. Y.1975). Specifically, a court should consider the location of the passengers, the nature of the passengers' activity and whether the passengers were under the control of the carrier at the time of the injury. Day v. Trans World Airlines, Inc., supra. Indeed, the Second Circuit has rejected a rigid location based rule in favor of an examination of the total circumstances surrounding a passenger's injuries in order to determine whether the accident occurred during the operations of disembarkation. Here, plaintiff had descended from the plane, but she had neither reached a safe point inside the terminal nor left the control of Iberia personnel. The area where the incident occurred was not a public portion of the airport and only aircraft passengers, airline staff and airport ground personnel were permitted in the area. Further, the accident occurred immediately after plaintiff had descended the steps of the aircraft and prior to the time that she entered any common passenger area. Plaintiff had not proceeded through Spanish immigration or customs and had not located her baggage. She was not roaming at will but was within the control of Iberia personnel who were directing passengers to board airport buses owned and operated by Iberia. The buses were located near the plane and the terminal was some distance from the aircraft. Significantly, on the date of the accident, the Iberia bus driver completed an Iberia accident report in accordance with Iberia company policy. Under such factual circumstances, the court finds that plaintiff was in the course of disembarking as envisioned by Article 17. The court's determination is further supported both by the French text and the purpose of the Convention. The binding meaning of the terms of the Convention is the French legal meaning. 49 Stat. 3000; Block v. Compagnie Nationale Air France, 386 F.2d 323 (5th Cir. 1967), cert. denied, 392 U.S. 905, 88 S.Ct. 2053, 20 L.Ed.2d 1363 (1968). The French word "operation" contained in the official version of the Convention connotes "a process of many acts" combined to achieve a result. Nouveau Petit Larousse (1950). Finally, the minutes of the Convention proceedings undermine any contention that the delegates wished to implement a narrow construction or a rigid rule in determining accident coverage pursuant to Article 17. Lowenfeld and Mendelsohn, The United States and the Warsaw Convention, 80 Harv.L.Rev. 497 (1967). Accordingly, the Warsaw Convention is applicable to the accident in question. The claim is therefore barred by the two year time period of Article 29(1) and summary judgment is granted on behalf of the defendant. So ordered.	{ "pile_set_name": "FreeLaw" }
477 U.S. 131 (1986) MAINE v. TAYLOR ET AL. No. 85-62. Supreme Court of United States. Argued March 24, 1986 Decided June 23, 1986 APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT 132 Cabanne Howard, Deputy Attorney General of Maine, argued the cause for appellant. With him on the briefs was James E. Tierney, Attorney General. Jerrold J. Ganzfried argued the cause for the United States, as appellee under this Court's Rule 10.4, in support of appellant. With him on the brief were Solicitor General Fried, Assistant Attorney General Habicht, Deputy Solicitor General Wallace, Donald A. Carr, Dirk D. Snel, and Margaret A. Hill. E. Paul Eggert argued the cause for appellee Taylor. With him on the brief was Robert Edmond Mittel. JUSTICE BLACKMUN delivered the opinion of the Court. Once again, a little fish has caused a commotion. See Hughes v. Oklahoma, 441 U. S. 322 (1979); TVA v. Hill, 437 U. S. 153 (1978); Cappaert v. United States, 426 U. S. 128 (1976). The fish in this case is the golden shiner, a species of minnow commonly used as live bait in sport fishing. Appellee Robert J. Taylor (hereafter Taylor or appellee) operates a bait business in Maine. Despite a Maine statute prohibiting the importation of live baitfish,[1] he arranged to have 158,000 live golden shiners delivered to him from outside the State. The shipment was intercepted, and a federal grand jury in the District of Maine indicted Taylor for violating and conspiring to violate the Lacey Act Amendments of 1981, 95 Stat. 1073, 16 U. S. C. §§ 3371-3378. Section 3(a)(2)(A) of those Amendments, 16 U. S. C. § 3372(a)(2)(A), makes it a federal crime "to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce. . . any fish or wildlife taken, possessed, transported, 133 or sold in violation of any law or regulation of any State or in violation of any foreign law." Taylor moved to dismiss the indictment on the ground that Maine's import ban unconstitutionally burdens interstate commerce and therefore may not form the basis for a federal prosecution under the Lacey Act. Maine, pursuant to 28 U. S. C. § 2403(b), intervened to defend the validity of its statute, arguing that the ban legitimately protects the State's fisheries from parasites and nonnative species that might be included in shipments of live baitfish. The District Court found the statute constitutional and denied the motion to dismiss. United States v. Taylor, 585 F. Supp. 393 (Me. 1984). Taylor then entered a conditional plea of guilty pursuant to Federal Rule of Criminal Procedure 11(a)(2), reserving the right to appeal the District Court's ruling on the constitutional question. The Court of Appeals for the First Circuit reversed, agreeing with Taylor that the underlying state statute impermissibly restricts interstate trade. United States v. Taylor, 752 F. 2d 757 (1985). Maine appealed. We set the case for plenary review and postponed consideration of Taylor's challenges to our appellate jurisdiction. 474 U. S. 943 (1985). I Maine invokes our jurisdiction under 28 U. S. C. § 1254(2), which authorizes an appeal as of right to this Court "by a party relying on a State statute held by a court of appeals to be invalid as repugnant to the Constitution, treaties or laws of the United States." Appellee, however, contends that this provision applies only to civil cases, and that, in any event, Maine lacks standing to appeal the reversal of a federal conviction. These contentions both relate to the unusual procedural posture of the case: an appeal by a State from the reversal of a federal conviction based on a violation of state law. We consider them in turn. First, despite its procedural peculiarities, this case fits squarely within the plain terms of § 1254(2): Maine relies on a state statute that the Court of Appeals held to be unconstitutional. 134 Although statutes authorizing appeals as of right to this Court are strictly construed, see e. g., Silkwood v. Kerr-McGee Corp., 464 U. S. 238, 247 (1984), nothing in the language or legislative history of § 1254(2) suggests that its scope is limited to civil litigation. In arguing for such a limitation, appellee relies principally on the fact that §§ 1254(1) and (3) which authorize discretionary review of cases from the Courts of Appeals by writ of certiorari and certification, respectively both apply explicitly to "any civil or criminal case."[2] Since this express language is absent from § 1254(2), appellee contends that Congress must have intended this Court's appellate jurisdiction over cases from the courts of appeals to remain limited to civil cases, as indeed it was limited prior to the 1925 enactment of § 1254's predecessor.[3] 135 We find the argument unconvincing. While some statutes governing this Court's jurisdiction, such as §§ 1254(1) and (3), expressly apply to both civil and criminal cases, others are explicitly limited to civil actions. See, e. g., 28 U. S. C. §§ 1252 and 1253. The absence of either sort of provision from § 1254(2) hardly demonstrates that Congress had only civil cases in mind, and we see no reason to read such a limitation into the straightforward and unambiguous terms of the statute. This is not a situation where "the sense of the statute and the literal language are at loggerheads," or where adherence to the plain terms of the statute " `would confer upon this Court a jurisdiction beyond what "naturally and properly belongs to it." ' " Heckler v. Edwards, 465 U. S. 870, 879 (1984), quoting Florida Lime & Avocado Growers, Inc. v. Jacobsen, 362 U. S. 73, 94 (1960) (Frankfurter, J., dissenting), in turn quoting American Security & Trust Co. v. District of Columbia, 224 U. S. 491, 495 (1912). Section 1254(2) serves to ensure that a state statute is struck down by the federal judiciary only when it is found invalid by this Court, or when the parties acquiesce in the decision of a lower federal court. Federal nullification of a state statute is a grave matter whether it occurs in civil litigation or in the course of a criminal prosecution, and review by this Court is particularly warranted in either event.[4] 136 Appellee's second jurisdictional argument is based on the fact that the only appellant before this Court is the State of Maine only an intervenor in the District Court not the United States, which brought the original prosecution.[5] Since the United States and its attorneys have the sole power to prosecute criminal cases in the federal courts, appellee contends that Maine may not seek review of the Court of Appeals' reversal of his conviction. By statute, however, Maine intervened with "all the rights of a party," 28 U. S. C. § 2403(b),[6] and appeals may be taken to this Court under § 1254(2) by any "party relying on a State statute" held invalid under federal law by a Court of Appeals. We previously have recognized that intervenors in lower federal courts may seek review in this Court on their own, so long as they have "a sufficient stake in the outcome of the controversy" to satisfy the constitutional requirement of genuine adversity. Bryant v. Yellen, 447 U. S. 352, 368 (1980); see 137 also, e. g., Diamond v. Charles, 476 U. S. 54, 68 (1986). Maine's stake in the outcome of this litigation is substantial: if the judgment of the Court of Appeals is left undisturbed, the State will be bound by the conclusive adjudication that its import ban is unconstitutional. See, e. g., Stoll v. Gottlieb, 305 U. S. 165 (1938). And although private parties, and perhaps even separate sovereigns, have no legally cognizable interest in the prosecutorial decisions of the Federal Government, cf., e. g., Diamond v. Charles, supra, at 64-65; Linda R. S. v. Richard D., 410 U. S. 614, 619 (1973), a State clearly has a legitimate interest in the continued enforceability of its own statutes, see Diamond v. Charles, supra, at 65; Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U. S. 592, 601 (1982). Furthermore, because reversal of the judgment of the Court of Appeals would result in the automatic reinstatement of appellee's guilty plea, the controversy before us clearly remains live notwithstanding the Federal Government's decision to abandon its own appeal.[7] We turn to the merits. II The Commerce Clause of the Constitution grants Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Art. I, § 8, cl. 3. "Although the Clause thus speaks in terms of powers bestowed upon Congress, the Court long has recognized that it also limits the power of the States to erect barriers against interstate trade." Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 35 (1980). Maine's statute restricts interstate trade in the most direct manner possible, blocking all inward shipments of live baitfish at the State's border. Still, as both the District Court and the Court of 138 Appeals recognized, this fact alone does not render the law unconstitutional. The limitation imposed by the Commerce Clause on state regulatory power "is by no means absolute," and "the States retain authority under their general police powers to regulate matters of `legitimate local concern,' even though interstate commerce may be affected." Id., at 36. In determining whether a State has overstepped its role in regulating interstate commerce, this Court has distinguished between state statutes that burden interstate transactions only incidentally, and those that affirmatively discriminate against such transactions. While statutes in the first group violate the Commerce Clause only if the burdens they impose on interstate trade are "clearly excessive in relation to the putative local benefits," Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970), statutes in the second group are subject to more demanding scrutiny. The Court explained in Hughes v. Oklahoma, 441 U. S., at 336, that once a state law is shown to discriminate against interstate commerce "either on its face or in practical effect," the burden falls on the State to demonstrate both that the statute "serves a legitimate local purpose," and that this purpose could not be served as well by available nondiscriminatory means. See also, e. g., Sporhase v. Nebraska ex rel. Douglas, 458 U. S. 941, 957 (1982); Hunt v. Washington State Apple Advertising Comm'n, 432 U. S. 333, 353 (1977); Dean Milk Co. v. Madison, 340 U. S. 349, 354 (1951). The District Court and the Court of Appeals both reasoned correctly that, since Maine's import ban discriminates on its face against interstate trade, it should be subject to the strict requirements of Hughes v. Oklahoma, notwithstanding Maine's argument that those requirements were waived by the Lacey Act Amendments of 1981. It is well established that Congress may authorize the States to engage in regulation that the Commerce Clause would otherwise forbid. See, e. g., Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 769 (1945). But because of the important role 139 the Commerce Clause plays in protecting the free flow of interstate trade, this Court has exempted state statutes from the implied limitations of the Clause only when the congressional direction to do so has been "unmistakably clear." South-Central Timber Development, Inc. v. Wunnicke, 467 U. S. 82, 91 (1984). The 1981 Amendments of the Lacey Act clearly provide for federal enforcement of valid state and foreign wildlife laws, but Maine identifies nothing in the text or legislative history of the Amendments that suggests Congress wished to validate state laws that would be unconstitutional without federal approval. Before this Court, Maine concedes that the Lacey Act Amendments do not exempt state wildlife legislation from scrutiny under the Commerce Clause. See Reply Brief for Appellant 3, n. 2. The State insists, however, that the Amendments should lower the intensity of the scrutiny that would otherwise be applied. We do not agree. An unambiguous indication of congressional intent is required before a federal statute will be read to authorize otherwise invalid state legislation, regardless of whether the purported authorization takes the form of a flat exemption from Commerce Clause scrutiny or the less direct form of a reduction in the level of scrutiny. Absent "a clear expression of approval by Congress," any relaxation in the restrictions on state power otherwise imposed by the Commerce Clause unacceptably increases "the risk that unrepresented interests will be adversely affected by restraints on commerce." South-Central Timber, supra, at 92. In this case, there simply is no unambiguous statement of any congressional intent whatsoever "to alter the limits of state power otherwise imposed by the Commerce Clause," United States v. Public Utilities Comm'n of California, 345 U. S. 295, 304 (1953). In arguing to the contrary, Maine relies almost exclusively on the following findings in the Senate Report on the Lacey Act Amendments: 140 "It is desirable to extend protection to species of wildlife not now covered by the Lacey Act, and to plants which are presently not covered at all. States and foreign government are encouraged to protect a broad variety of species. Legal mechanisms should be supportive of those governments." S. Rep. No. 97-123, pp. 3-4 (1981). Maine reads this passage, particularly the last sentence, to direct federal courts to treat state wildlife laws more leniently. We find this interpretation not only less than obvious but positively strained; by far the more natural reading of the last sentence is that it refers only to the availability of federal investigative and prosecutorial resources to enforce valid state wildlife laws. The passage certainly does not make "unmistakably clear" that Congress intended in 1981 to alter in any way the level of Commerce Clause scrutiny applied to those laws. Maine's ban on the importation of live baitfish thus is constitutional only if it satisfies the requirements ordinarily applied under Hughes v. Oklahoma to local regulation that discriminates against interstate trade: the statute must serve a legitimate local purpose, and the purpose must be one that cannot be served as well by available nondiscriminatory means. III The District Court found after an evidentiary hearing that both parts of the Hughes test were satisfied, but the Court of Appeals disagreed. We conclude that the Court of Appeals erred in setting aside the findings of the District Court. To explain why, we need to discuss the proceedings below in some detail. A The evidentiary hearing on which the District Court based its conclusions was one before a Magistrate. Three scientific experts testified for the prosecution and one for the defense. The prosecution experts testified that live baitfish imported 141 into the State posed two significant threats to Maine's unique and fragile fisheries.[8] First, Maine's population of wild fish including its own indigenous golden shiners would be placed at risk by three types of parasites prevalent in out-of-state baitfish, but not common to wild fish in Maine. See, e. g., App. 39-55.[9] Second, nonnative species inadvertently included in shipments of live baitfish could disturb Maine's aquatic ecology to an unpredictable extent by competing with native fish for food or habitat, by preying on native species, or by disrupting the environment in more subtle ways. See, e. g., id., at 59-70, 141-149.[10] The prosecution experts further testified that there was no satisfactory way to inspect shipments of live baitfish for parasites or commingled species.[11] According to their testimony, the small size of baitfish and the large quantities in which they are shipped made inspection for commingled species "a physical impossibility." Id., at 81.[12] Parasite inspection posed a separate set of difficulties because the examination procedure required destruction of the fish. Id., at 81-82, 142 195. Although statistical sampling and inspection techniques had been developed for salmonids (i. e., salmon and trout), so that a shipment could be certified parasite-free based on a standardized examination of only some of the fish, no scientifically accepted procedures of this sort were available for baitfish. See, e. g., id., at 71, 184, 193-194.[13] Appellee's expert denied that any scientific justification supported Maine's total ban on the importation of baitfish. Id., at 241. He testified that none of the three parasites discussed by the prosecution witnesses posed any significant threat to fish in the wild, id., at 206-212, 228-232, and that sampling techniques had not been developed for baitfish precisely because there was no need for them. Id., at 265-266. He further testified that professional baitfish farmers raise their fish in ponds that have been freshly drained to ensure that no other species is inadvertently collected. Id., at 239-240. Weighing all the testimony, the Magistrate concluded that both prongs of the Hughes test were satisfied, and accordingly that appellee's motion to dismiss the indictment should be denied. Appellee filed objections, but the District Court, after an independent review of the evidence, reached the same conclusions. First, the court found that Maine "clearly has a legitimate and substantial purpose in prohibiting the importation of live bait fish," because "substantial uncertainties" surrounded the effects that baitfish parasites would have on the State's unique population of wild fish, and the consequences of introducing nonnative species were similarly 143 unpredictable. 585 F. Supp., at 397.[14] Second, the court concluded that less discriminatory means of protecting against these threats were currently unavailable, and that, in particular, testing procedures for baitfish parasites had not yet been devised. Id., at 398. Even if procedures of this sort could be effective, the court found that their development probably would take a considerable amount of time. Id., at 398, n. 11.[15] Although the Court of Appeals did not expressly set aside the District Court's finding of a legitimate local purpose, it noted that several factors "cast doubt" on that finding. 752 F. 2d, at 762. First, Maine was apparently the only State to bar all importation of live baitfish. See id., at 761. Second, Maine accepted interstate shipments of other freshwater fish, subject to an inspection requirement. Third, "an aura 144 of economic protectionism" surrounded statements made in 1981 by the Maine Department of Inland Fisheries and Wildlife in opposition to a proposal by appellee himself to repeal the ban. Ibid. Finally, the court noted that parasites and nonnative species could be transported into Maine in shipments of nonbaitfish, and that nothing prevented fish from simply swimming into the State from New Hampshire. Id., at 762, n. 12. Despite these indications of protectionist intent, the Court of Appeals rested its invalidation of Maine's import ban on a different basis, concluding that Maine had not demonstrated that any legitimate local purpose served by the ban could not be promoted equally well without discriminating so heavily against interstate commerce. Specifically, the court found it "difficult to reconcile" Maine's claim that it could not rely on sampling and inspection with the State's reliance on similar procedures in the case of other freshwater fish. Id., at 762.[16] Following the reversal of appellee's conviction, Maine and the United States petitioned for rehearing on the ground that the Court of Appeals had improperly disregarded the District Court's findings of fact. The court denied the petitions, concluding that, since the unavailability of a less discriminatory alternative "was a mixed finding of law and fact," a reviewing court "was free to examine carefully the factual record and to draw its own conclusions." Id., at 765. B Although the proffered justification for any local discrimination against interstate commerce must be subjected to "the strictest scrutiny," Hughes v. Oklahoma, 441 U. S., at 337, the empirical component of that scrutiny, like any other form of factfinding, " `is the basic responsibility of district courts, 145 rather than appellate courts,' " Pullman-Standard v. Swint, 456 U. S. 273, 291 (1982), quoting DeMarco v. United States, 415 U. S. 449, 450, n. (1974). As this Court frequently has emphasized, appellate courts are not to decide factual questions de novo, reversing any findings they would have made differently. See, e. g., Anderson v. Bessemer City, 470 U. S. 564, 573 (1985); Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 123 (1969). The Federal Rules of Criminal Procedure contain no counterpart to Federal Rule of Civil Procedure 52(a), which expressly provides that findings of fact made by the trial judge "shall not be set aside unless clearly erroneous." But the considerations underlying Rule 52(a) the demands of judicial efficiency, the expertise developed by trial judges, and the importance of firsthand observation, see Anderson, supra, at 574-575 all apply with full force in the criminal context, at least with respect to factual questions having nothing to do with guilt. Accordingly, the "clearly erroneous" standard of review long has been applied to nonguilt findings of fact by district courts in criminal cases. See Campbell v. United States, 373 U. S. 487, 493 (1963); 2 C. Wright, Federal Practice and Procedure § 374 (2d ed. 1982). We need not decide now whether all such findings should be reviewed under the "clearly erroneous" standard, because appellee concedes that the standard applies to the factual findings made by the District Court in this case. See Tr. of Oral Arg. 27. We note, however, that no broader review is authorized here simply because this is a constitutional case, or because the factual findings at issue may determine the outcome of the case. See Bose Corp. v. Consumers Union of United States, Inc., 466 U. S. 485, 501 (1984); Pullman-Standard v. Swint, 456 U. S., at 287.[17] 146 No matter how one describes the abstract issue whether "alternative means could promote this local purpose as well without discriminating against interstate commerce," Hughes v. Oklahoma, 441 U. S., at 336, the more specific question whether scientifically accepted techniques exist for the sampling and inspection of live baitfish is one of fact, and the District Court's finding that such techniques have not been devised cannot be characterized as clearly erroneous. Indeed, the record probably could not support a contrary finding. Two prosecution witnesses testified to the lack of such procedures, and appellee's expert conceded the point, although he disagreed about the need for such tests. See App. 74-75, 184, 265-266. That Maine has allowed the importation of other freshwater fish after inspection hardly demonstrates that the District Court clearly erred in crediting the corroborated and uncontradicted expert testimony that standardized inspection techniques had not yet been developed for baitfish. This is particularly so because the text of the permit statute suggests that it was designed specifically to regulate importation of salmonids, for which, the experts testified, testing procedures had been developed.[18] 147 Before this Court, appellee does not argue that sampling and inspection procedures already exist for baitfish; he contends only that such procedures "could be easily developed." Brief for Appellee 25. Perhaps this is also what the Court of Appeals meant to suggest. Unlike the proposition that the techniques already exist, the contention that they could readily be devised enjoys some support in the record. Appellee's expert testified that developing the techniques "would just require that those experts in the field . . . get together and do it." App. 271. He gave no estimate of the time and expense that would be involved, however, and one of the prosecution experts testified that development of the testing procedures for salmonids had required years of heavily financed research. See id., at 74. In light of this testimony, we cannot say that the District Court clearly erred in concluding, 585 F. Supp., at 398, n. 11, that the development of sampling and inspection techniques for baitfish could be expected to take a significant amount of time. More importantly, we agree with the District Court that the "abstract possibility," id., at 398, of developing acceptable testing procedures, particularly when there is no assurance as to their effectiveness, does not make those procedures an "[a]vailabl[e] . . . nondiscriminatory alternativ[e]," Hunt, 432 U. S., at 353, for purpose of the Commerce Clause. A State must make reasonable efforts to avoid restraining the free flow of commerce across its borders, but it is not required to develop new and unproven means of protection at an uncertain cost. Appellee, of course, is free to work on his own or in conjunction with other bait dealers to develop scientifically acceptable sampling and inspection procedures for golden shiners; if and when such procedures are developed, Maine no longer may be able to justify its import ban. The State need not join in those efforts, however, and it need not pretend they already have succeeded. 148 C Although the Court of Appeals did not expressly overturn the District Court's finding that Maine's import ban serves a legitimate local purpose, appellee argues as an alternative ground for affirmance that this finding should be rejected. After reviewing the expert testimony presented to the Magistrate, however, we cannot say that the District Court clearly erred in finding that substantial scientific uncertainty surrounds the effect that baitfish parasites and nonnative species could have on Maine's fisheries. Moreover, we agree with the District Court that Maine has a legitimate interest in guarding against imperfectly understood environmental risks, despite the possibility that they may ultimately prove to be negligible. "[T]he constitutional principles underlying the commerce clause cannot be read as requiring the State of Maine to sit idly by and wait until potentially irreversible environmental damage has occurred or until the scientific community agrees on what disease organisms are or are not dangerous before it acts to avoid such consequences." 585 F. Supp., at 397. Nor do we think that much doubt is cast on the legitimacy of Maine's purposes by what the Court of Appeals took to be signs of protectionist intent. Shielding in-state industries from out-of-state competition is almost never a legitimate local purpose, and state laws that amount to "simple economic protectionism" consequently have been subject to a "virtually per se rule of invalidity." Philadelphia v. New Jersey, 437 U. S. 617, 624 (1978); accord, e. g., Minnesota v. Clover Leaf Creamery Co., 449 U. S. 456, 471 (1981).[19] But 149 there is little reason in this case to believe that the legitimate justifications the State has put forward for its statute are merely a sham or a "post hoc rationalization." Hughes, 441 U. S., at 338, n. 20. In suggesting to the contrary, the Court of Appeals relied heavily on a 3-sentence passage near the end of a 2,000-word statement submitted in 1981 by the Maine Department of Inland Fisheries and Wildlife in opposition to appellee's proposed repeal of the State's ban on the importation of live baitfish: " `[W]e can't help asking why we should spend our money in Arkansas when it is far better spent at home? It is very clear that much more can be done here in Maine to provide our sportsmen with safe, home-grown bait. There is also the possibility that such an industry could develop a lucrative export market in neighboring states.' " 752 F. 2d, at 760, quoting Baitfish Importation: The Position of the Maine Department of Inland Fisheries and Wildlife, App. 294, 309-310. We fully agree with the Magistrate that "[t]hese three sentences do not convert the Maine statute into an economic protectionism 150 measure." App. to Juris. Statement E-6, n. 4.[20] As the Magistrate pointed out, the context of the statements cited by appellee "reveals [they] are advanced not in direct support of the statute, but to counter the argument that inadequate adequate bait supplies in Maine require acceptance of the environmental risks of imports. Instead, the Department argues, Maine's own bait supplies can be increased." Ibid. Furthermore, the comments were made by a state administrative agency long after the statute's enactment, and thus constitute weak evidence of legislative intent in any event. See ibid.[21] The other evidence of protectionism identified by the Court of Appeals is no more persuasive. The fact that Maine allows importation of salmonids, for which standardized sampling and inspection procedures are available, hardly demonstrates that Maine has no legitimate interest in prohibiting the importation of baitfish, for which such procedures have not yet been devised. Nor is this demonstrated by the fact that other States may not have enacted similar bans, especially 151 given the testimony that Maine's fisheries are unique and unusually fragile.[22] Finally, it is of little relevance that fish can swim directly into Maine from New Hampshire. As the Magistrate explained: "The impediments to complete success. . . cannot be a ground for preventing a state from using its best efforts to limit [an environmental] risk." Id., at E-10, n. 8. IV The Commerce Clause significantly limits the ability of States and localities to regulate or otherwise burden the flow of interstate commerce, but it does not elevate free trade above all other values. As long as a State does not needlessly obstruct interstate trade or attempt to "place itself in a position of economic isolation," Baldwin v. G. A. F. Seelig, Inc., 294 U. S. 511, 527 (1935), it retains broad regulatory authority to protect the health and safety of its citizens and the integrity of its natural resources. The evidence in this case amply supports the District Court's findings that Maine's ban on the importation of live baitfish serves legitimate local purposes that could not adequately be served by available nondiscriminatory alternatives. This is not a case of arbitrary discrimination against interstate commerce; the 152 record suggests that Maine has legitimate reasons, "apart from their origin, to treat [out-of-state baitfish] differently," Philadelphia v. New Jersey, 437 U. S., at 627. The judgment of the Court of Appeals setting aside appellee's conviction is therefore reversed. It is so ordered. JUSTICE STEVENS, dissenting. There is something fishy about this case. Maine is the only State in the Union that blatantly discriminates against out-of-state baitfish by flatly prohibiting their importation. Although golden shiners are already present and thriving in Maine (and, perhaps not coincidentally, the subject of a flourishing domestic industry), Maine excludes golden shiners grown and harvested (and, perhaps not coincidentally, sold) in other States. This kind of stark discrimination against out-of-state articles of commerce requires rigorous justification by the discriminating State. "When discrimination against commerce of the type we have found is demonstrated, the burden falls on the State to justify it both in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake." Hunt v. Washington State Apple Advertising Comm'n, 432 U. S. 333, 353 (1977). Like the District Court, the Court concludes that uncertainty about possible ecological effects from the possible presence of parasites and nonnative species in shipments of out-of-state shiners suffices to carry the State's burden of proving a legitimate public purpose. Ante, at 142-143, 148. The Court similarly concludes that the State has no obligation to develop feasible inspection procedures that would make a total ban unnecessary. Ante, at 147. It seems clear, however, that the presumption should run the other way. Since the State engages in obvious discrimination against out-of-state commerce, it should be put to its proof. Ambiguity about dangers and alternatives should actually defeat, rather than sustain, the discriminatory measure. 153 This is not to derogate the State's interest in ecological purity. But the invocation of environmental protection or public health has never been thought to confer some kind of special dispensation from the general principle of nondiscrimination in interstate commerce. "A different view, that the ordinance is valid simply because it professes to be a health measure, would mean that the Commerce Clause of itself imposes no restraints on state action other than those laid down by the Due Process Clause, save for the rare instance where a state artlessly discloses an avowed purpose to discriminate against interstate goods." Dean Milk Co. v. Madison, 340 U. S. 349, 354 (1951). If Maine wishes to rely on its interest in ecological preservation, it must show that interest, and the infeasibility of other alternatives, with far greater specificity. Otherwise, it must further that asserted interest in a manner far less offensive to the notions of comity and cooperation that underlie the Commerce Clause. Significantly, the Court of Appeals, which is more familiar with Maine's natural resources and with its legislation than we are, was concerned by the uniqueness of Maine's ban. That court felt, as I do, that Maine's unquestionable natural splendor notwithstanding, the State has not carried its substantial burden of proving why it cannot meet its environmental concerns in the same manner as other States with the same interest in the health of their fish and ecology. Cf. ante, at 151, n. 22 (describing less restrictive procedures in other States). I respectfully dissent. NOTES [1] "A person is guilty of importing live bait if he imports into this State any live fish, including smelts, which are commonly used for bait fishing in inland waters." Me. Rev. Stat. Ann., Tit. 12, § 7613 (1981). [2] Section 1254 reads in full: "Cases in the courts of appeals may be reviewed by the Supreme Court by the following methods: "(1) By writ of certiorari granted upon the petition of any party to any civil or criminal case, before or after rendition of judgment or decree; "(2) By appeal by a party relying on a State statute held by a court of appeals to be invalid as repugnant to the Constitution, treaties or laws of the United States, but such appeal shall preclude review by writ of certiorari at the instance of such appellant, and the review on appeal shall be restricted to the Federal questions presented; "(3) By certification at any time by a court of appeals of any question of law in any civil or criminal case as to which instructions are desired, and upon such certification the Supreme Court may give binding instructions or require the entire record to be sent up for decision of the entire matter in controversy." [3] Congress in 1925 amended § 240(b) of the Judicial Code to read as follows: "Any case in a circuit court of appeals where is drawn in question the validity of a statute of any State, on the ground of its being repugnant to the Constitution, treaties, or laws of the United States, and the decision is against its validity, may, at the election of the party relying on such State statute, be taken to the Supreme Court for review on writ of error or appeal; but in that event a review on certiorari shall not be allowed at the instance of such party, and the review on such writ of error or appeal shall be restricted to an examination and decision of the Federal questions presented in the case." Act of Feb. 13, 1925, § 1, 43 Stat. 939. Until then, appeals were allowed as of right from decisions of the courts of appeals only in civil cases involving more than $1,000, and not arising under the diversity, admiralty, patent, or revenue jurisdiction of the federal courts. See Act of Mar. 3, 1891, § 6, 26 Stat. 828. The relevant portion of the 1925 Act was added on the floor of the Senate, and the debates surrounding the amendment contain no suggestion that it was intended to apply only in civil cases. See 66 Cong. Rec. 2753-2754, 2757, 2919-2925 (1925). [4] Even if this case fell outside the scope of 28 U. S. C. § 1254(2), we would still have discretion under 28 U. S. C. § 2103 to grant review by writ of certiorari. See Doran v. Salem Inn, Inc., 422 U. S. 922, 927 (1975); El Paso v. Simmons, 379 U. S. 497, 502-503 (1965). [5] The United States filed a timely notice of appeal to this Court, App. 311, but later moved in the Court of Appeals to dismiss its appeal. Id., at 313. This was "[b]ecause the Acting Solicitor General determined that other cases were entitled to priority in selecting the limited number of cases the government would ask this Court to review." Brief for United States 14-15. The Court of Appeals granted the Government's motion. App. 315. [6] Title 28 U. S. C. § 2403(b) provides: "In any action, suit, or proceeding in a court of the United States to which a State or any agency, officer, or employee thereof is not a party, wherein the constitutionality of any statute of that State affecting the public interest is drawn in question, the court shall certify such fact to the attorney general of the State, and shall permit the State to intervene for presentation of evidence, if evidence is otherwise admissible in the case, and for argument on the question of constitutionality. The State shall, subject to the applicable provisions of law, have all the rights of a party and be subject to all liabilities of a party as to court costs to the extent necessary for a proper presentation of the facts and law relating to the question of constitutionality." [7] The United States advises us that it does not intend to seek dismissal of the indictment if Maine prevails in this Court. See Brief for United States 17, n. 17. [8] One prosecution witness testified that Maine's lakes contain unusually clean water and originally supported "a rather delicate community of just a few species of fish." App. 57. Another stressed that "no other state . . . has any real landlocked salmon fishing. You come to Maine for that or you live in Maine for that." Id., at 137. [9] Two of these types of parasites were found in appellee's confiscated shipment of golden shiners. See United States v. Taylor, 585 F. Supp. 393, 395-396 (Me. 1984). [10] Although appellee's shipment was not found to contain any fish other than golden shiners, it did contain "some polliwogs and . . . some crustacean crawfish." App. 69. There was testimony suggesting that these could pose the same ecological risks as nonnative fish. See id., at 70. [11] The expert who examined appellee's shipment testified that, although his inspection of the shipment revealed only two of the three parasites he described as prevalent in baitfish outside Maine, "I certainly could not put my signature on a certificate to say that [none of the third parasite] was present in that lot." Id., at 85. [12] The shipment intercepted in this case contained approximately 158,000 fish, with about 70 specimens to the pound. Id., at 80. [13] According to the prosecution testimony, the design of sampling and inspection techniques must take into account the particular parasites of concern, and baitfish parasites differ from salmonid parasites. See, e. g., id., at 184, 193-194. Appellee's expert agreed. Id., at 237, 265-267. There was also testimony that the physical layout of bait farms makes inspection at the source of shipment particularly difficult, and that border inspections are not feasible because the fish would die in the time it takes to complete the tests. Id., at 75-79. [14] For several reasons, the District Court discounted the testimony of appellee's expert that baitfish parasites did not pose so serious a threat as disease organisms found in salmonids. The court noted that "considerable scientific debate" surrounded even the threat posed by salmonid diseases, that appellee's expert testified largely about the effects that baitfish parasites had in commercial hatcheries rather than in the wild, and that he was unfamiliar with northeast fisheries. 585 F. Supp., at 397. [15] While the District Court approved the Magistrate's general finding that "there are no obviously workable alternatives to the outright prohibition of importation," id., at 398, neither the court nor the Magistrate made any specific finding as to whether Maine could adequately protect against the inadvertent introduction of nonnative species by allowing baitfish to be imported only from professional bait farmers using freshly drained ponds. There was conflicting evidence on this point. Appellee's expert suggested that such methods largely eliminated the problem of commingled species, App. 239-240, but a prosecution witness testified that complete success was "unlikely." Id., at 170. See also id., at 150 (prosecution testimony that shipments cannot be screened reliably for commingled species because "[t]his is a business. You have living material that you have to move; you can't hold them in tanks and this kind of thing for any length of time"). We are in no position to resolve this factual dispute, and we conclude in any event that the District Court's findings regarding parasites adequately support the constitutionality of the challenged statute. [16] The court also noted that "a restriction on the number and size of importations would be less restrictive than a total ban," 752 F. 2d, at 762, but it identified no reason to believe that such a restriction would protect against parasites and commingled species as effectively as a ban. [17] In support of its conclusion that it "was free to examine carefully the factual record and to draw its own conclusions," id., at 765, the Court of Appeals cited Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984), and Boston Stock Exchange v. State Tax Comm'n, 429 U. S. 318 (1977). The question in each of these cases was whether a given set of facts amounted to discrimination forbidden by the Commerce Clause; in neither case did this Court reject underlying factual findings made by the trial court. Indeed, there were no such findings to reject the facts were stipulated in Bacchus, see 468 U. S., at 269, and Boston Stock Exchange was decided on a motion to dismiss, see 429 U. S., at 320. [18] The statute provides: "The commissioner may grant permits" for the importation of freshwater fish upon an application that describes the fish and their source and includes "[a] statement from a recognized fish pathologist, from a college or university, from a state conservation department or from the United States Fish and Wildlife Service, certifying that the fish. . . are from sources which show no evidence of viral hemorrhagic septicemia, infectious pancreatic necrosis, infectious hematopoietic necrosis, Myxosomo cerebralis or other diseases which may threaten fish stocks within the State." Me. Rev. Stat. Ann., Tit. 12, § 7202 (1981) (emphasis added). The listed diseases all were identified at the hearing before the Magistrate as salmonid disorders. See App. 193. [19] This rule has been applied not only to laws motivated solely by a desire to protect local industries from out-of-state competition, but also to laws that respond to legitimate local concerns by discriminating arbitrarily against interstate trade, for "the evil of protectionism can reside in legislative means as well as legislative ends." Philadelphia v. New Jersey, 437 U. S., at 626. The Court has held, for example, that New Jersey may not conserve the disposal capacity of its landfill sites by banning importation of wastes, see ibid., and that Oklahoma may not fight depletion of its population of natural minnows by prohibiting their commercial exportation, see Hughes v. Oklahoma, 441 U. S. 322 (1979). In each case, out-of-state residents were forced to bear the brunt of the conservation program for no apparent reason other than that they lived and voted in other States. See Philadelphia v. New Jersey, 437 U. S., at 629; Hughes, 441 U. S., at 337-338, and n. 20. Not all intentional barriers to interstate trade are protectionist, however, and the Commerce Clause "is not a guaranty of the right to import into a state whatever one may please, absent a prohibition by Congress, regardless of the effects of the importation upon the local community." Robertson v. California, 328 U. S. 440, 458 (1946). Even overt discrimination against interstate trade may be justified where, as in this case, out-of-state goods or services are particularly likely for some reason to threaten the health and safety of a State's citizens or the integrity of its natural resources, and where "outright prohibition of entry, rather than some intermediate form of regulation, is the only effective method of protecti[on]." Lewis v. BT Investment Managers, Inc., 447 U. S. 27, 43 (1980). [20] The District Court did not address appellee's argument that the import ban was protectionist, because it did not believe that appellee had objected to the Magistrate's rejection of that argument. See 585 F. Supp., at 395, n. 5. The Court of Appeals disagreed, concluding that appellee's objections to the Magistrate's recommended decision incorporated all the arguments included in his motion to dismiss. See 752 F. 2d, at 760, n. 7. In the objections he filed with the District Court, appellee did not specifically contend that the statute was protectionist, but he concluded by asking that the indictment be dismissed "[f]or the reasons stated herein and also for those reasons stated in Defendant's Memorandum of Law in Support of Motion to Dismiss." Defendant's Objection to the Magistrate's Recommended Decision on Defendant's Motion to Dismiss Indictment 4 (Mar. 12, 1984) (emphasis added). Because we think the Magistrate was clearly right to reject the argument that Maine's bait statute constitutes economic protectionism, we need not decide whether this catchall language sufficed to preserve the argument for later review. Cf. Thomas v. Arn, 474 U. S. 140, 148-149 (1985). [21] The import ban was originally enacted in 1959. See 1959 Me. Acts, ch. 112. [22] Although Maine's flat statutory ban on the importation of all live baitfish is apparently unique, Minnesota prohibits the use of imported minnows for bait purposes "[e]xcept as otherwise specifically permitted," Minn. Stat. § 101.42, subd. 6 (1984), and several other States require administrative approval for the importation and introduction of any live fish, see, e. g., Utah Code Ann. § 23-15-12 (1984); Va. Code § 28.1-183.2 (1985); Wis. Stat. § 29.535 (Supp. 1985); cf. S. D. Codified Laws § 41-14-30 (1977) (minnows may be transported "into or through South Dakota" only pursuant to a 12-hour permit). Other States have granted authority to their wildlife agencies to prohibit the importation of particular species. See, e. g., Ala. Code § 9-2-13 (1980); N. C. Gen. Stat. § 113-160 (1983); cf. Nev. Rev. Stat. § 503.310(1) (1985) ("The [state wildlife] commission is empowered to regulate or prohibit the use of live bait in fishing to the end that no undesirable species of fish intentionally or unintentionally may be introduced into the public waters of this state").	{ "pile_set_name": "FreeLaw" }
685 F.2d 430 Herringv.Hooper 81-6886 UNITED STATES COURT OF APPEALS Fourth Circuit 7/15/82 1 E.D.N.C. AFFIRMED	{ "pile_set_name": "FreeLaw" }
878 F.2d 1472 279 U.S.App.D.C. 15, 112 Lab.Cas. P 56,069,4 Indiv.Empl.Rts.Cas. 887 Quince FLEMING, Appellant,v.AT & T INFORMATION SERVICES, INC., a Delaware Corporation.Quince FLEMINGv.AT & T INFORMATION SERVICES, INC., a Delaware Corporation, Appellant. Nos. 88-7134, 88-7135. United States Court of Appeals,District of Columbia Circuit. Argued April 25, 1989.Decided June 27, 1989. Appeals from the United States District Court for the District of Columbia (Civil Action No. 87-01329). William F. Krebs, for appellant in No. 88-7134 and for appellee in No. 88-7135. Stephen W. Robinson, with whom Thomas P. Murphy, Washington, D.C., was on the brief, for appellee/cross appellants, in Nos. 88-7134 and 88-7135. Before WALD, Chief Judge, and EDWARDS and D.H. GINSBURG, Circuit judges. Opinion for the Court filed by Circuit Judge D.H. GINSBURG. D.H. GINSBURG, Circuit Judge: 1 After being fired by AT & T, Quince Fleming sued the company for breach of an alleged employment contract and for slander. The district court (Richey, J.), applying District of Columbia law, granted AT & T's motion to dismiss the contract count for failure to state a claim. The court denied AT & T's motion for summary judgment on the slander count, but after Fleming had presented his case-in-chief, directed a verdict for AT & T on that count. We affirm. I. FACTS 2 Fleming began his employment with AT & T as a rank and file employee at the company's local telephone operating subsidiary in 1979. In 1984, he accepted a management position at AT & T Information Systems, where he was responsible for the accounts of the D.C. government. He entered into negotiations that culminated in a contract under which the District would purchase telephone equipment that it had been leasing. Almost immediately after entering into the contract, however, the parties were at odds over its terms. On January 9, 1987, after negotiations to resolve the parties' disputes had apparently foundered, Fleming's superiors held a meeting to discuss the District contract. During that meeting, they decided to fire Fleming. This they did on January 12, and shortly thereafter Fleming brought this suit. 3 First, he claimed that, at the January 9 meeting, one of his superiors (Kenneth Bour) had slandered him by accusing him of attempting to defraud AT & T of $3 million in connection with the D.C. purchase contract. Fleming states, and AT & T does not dispute, that he neither attempted nor committed any fraud. Second, Fleming claimed for breach of contract, contending in substance that, although he had no integrated written employment contract with AT & T, statements made by AT & T officials in company publications and orally gave rise to an employment contract terminable only for cause, and that his firing violated this contract. 4 AT & T moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, to dismiss the complaint for failure to state a claim. Before the court could rule on the motion, Fleming filed an amended complaint, in which he incorporated the allegations of the original complaint and added certain new allegations. With respect to the slander count, Fleming added that Bour's statement was later republished "to at least [six] other persons who were not present at the meeting at which the slanderous statement was made;" with respect to the contract count, he added that AT & T's Employment and Benefits Manuals "provide[d] certain meaning, terms, and intent" to the alleged employment contract. 5 In ruling on AT & T's motion to dismiss the contract count, the court noted that under District of Columbia law an employment contract is presumed to be at-will, Minihan v. American Pharmaceutical Ass'n, 812 F.2d 726, 728 (1987), and found that Fleming had "failed to allege the terms and conditions of his employment relationship with sufficient particularity to support his contention that an exception to the general rule regarding at-will employment contracts applies to his situation." The court therefore treated the motion to dismiss the contract count as a Rule 12(e) motion for a more definite statement, which it granted, ordering Fleming to amend his complaint once again. Fleming then filed a second amended complaint, in which he identified particular documents and conversations upon which he relied to rebut the presumption of at-will employment. AT & T subsequently renewed its motion to dismiss the contract count, and this time the court granted the motion. 6 With respect to the slander claim, AT & T filed a motion for summary judgment, which the court denied. Accordingly, the case was set for trial on that claim, but before trial, AT & T made a motion in limine to prohibit Fleming from presenting any evidence of his firing, because of the danger of jury prejudice and confusion. The court granted the motion, but indicated that if Fleming produced evidence that would permit the jury to conclude that he was fired because of the alleged slander, then he could adduce testimony regarding his firing, which would be relevant to the issue of damages. 7 At trial, Richard Regensburg testified that "Bour said something that opportunity existed for fraud and that [Fleming] could have or might have been involved with something like that," and that Bour said "[t]hat Mr. Fleming possibly could have committed fraud." In addition, Wesley Peace testified that he had overheard Regensburg tell Fleming on the telephone that Bour had said at the meeting that Fleming had defrauded the company. The court permitted Peace's testimony into evidence, however, for the limited purpose of impeaching Regensburg with a prior inconsistent statement, and not as direct evidence. Fleming does not now contest the court's ruling on this point, and thus we do not consider Peace's testimony as substantive evidence that Bour unequivocally accused Fleming of fraud. 8 At the close of plaintiff's case, AT & T moved for a directed verdict, arguing that there was insufficient evidence from which the jury could conclude either that the alleged statements were capable of bearing a defamatory meaning or that they had been published. Although the court rejected the first ground, it granted the motion for want of evidence of publication. Accordingly, the court entered judgment for AT & T. 9 Fleming appeals the dismissal of the contract count, the grant of AT & T's motion in limine, and the directed verdict on the slander count. AT & T cross-appeals the denial of its motion for summary judgment on the slander count. II. ANALYSIS 10 Our resolution of Fleming's appeal moots AT & T's cross-appeal, on which we therefore do not rule. A. Breach of Contract 11 Fleming relies entirely upon the allegations in his second amended complaint to support his argument that we should reverse the district court's dismissal of his breach of contract count. In that complaint, Fleming alleged that: (1) he had received "many" corporate documents stating that "longevity of employment with [AT & T] has been a continual goal of [the company]"; (2) AT & T's Force Management Program was intended to "[e]nsure fair and consistent treatment of all employees" and to "[e]nsure a successful transition for managers who leave the business by providing professional career counseling and assistance"; (3) AT & T has published "continuous statements ... which corroborate a term of lifetime employment"; (4) various supervisors assured him "that his position was not in jeopardy"; (5) AT & T's Personnel Guide defines "dismissal" as "company initiated termination of employment (performance, code of conduct violations, etc....)"; and (6) a superior, Theodore Deutsche, once assured him that "as long as I have a branch, you have a job." 12 Fleming's allegations are manifestly insufficient to rebut the at-will presumption. An employer's literature stating generally that the company has policies of treating employees fairly and of providing post-termination counseling is irrelevant to whether a particular employee's contract is at-will, and Fleming's conclusory allegation that various company publications "corroborate" the existence of the claimed contract, especially in light of the other evidence he seems to think supports him, adds nothing to his case. Similarly, statements by Fleming's superiors that his position was not, at some undisclosed time, in jeopardy imply, if anything, that AT & T retained the power (even if it did not have at a particular moment the inclination) to fire Fleming at any time. Additionally, his reliance upon AT & T's "definition" of dismissal is misplaced, since the "definition" on its face suggests that performance and code of conduct violations are merely illustrative of reasons for which an employee might be dismissed. Finally, Fleming claims that Deutsche's alleged statement of assurance was made in 1986 (or thereafter), i.e., long after he began working for AT & T, and although he did allege in his first amended complaint that he relied upon "the terms, meaning and intent of the Contract of employment" in 1979 when he first decided to join AT & T, he never alleged that he relied upon Deutsche's statement in continuing his employment. The statement, if it occurred, is therefore irrelevant to the terms of any employment contract that might have existed. 13 In addition to the specific allegations in his second amended complaint, Fleming also had in his original complaint general allegations of the existence of a lifetime contract of employment and of its breach. Although such allegations would have been sufficient on their own to satisfy the requirements of Rule 8(a), the purpose of which is merely to ensure that the defendant gets fair notice of the nature of the claim asserted, see, e.g., Wright & Miller, Federal Practice and Procedure: Civil Sec. 1202, Fleming relies before this court not upon those general allegations, but upon the specific claims in his second amended complaint. Because Fleming eschews reliance on his general claims, and because he does not suggest that their particularization in the second amended complaint was anything less than exhaustive, we need not decide whether a complaint making sufficient general allegations may nonetheless be dismissed on the ground that the specific allegations in the complaint do not, by themselves, state a claim upon which relief can be granted. B. Slander 14 "[I]n a libel case, it is the role of the court to determine whether the challenged statement is 'capable of bearing a particular meaning' and whether 'that meaning is defamatory.' " Tavoulareas v. Piro, 817 F.2d 762, 779 (D.C.Cir.1987) (en banc ) (quoting Restatement (Second) of Torts Sec. 614(i) at 311 (1977)). If the court answers each question in the affirmative, then it is for the jury to determine whether, in fact, those who heard the statement understood it to have such defamatory meaning as the court determined it could have. Id. 15 Here, Fleming claims that (1) Bour's alleged statement is capable of bearing the meaning that Fleming defrauded or attempted to defraud AT & T, and (2) that meaning is defamatory per se as, among other things, a statement that he committed a crime. The second step in Fleming's argument is unobjectionable; the false imputation of criminal conduct is inherently defamatory. See, e.g., Washington Annapolis Hotel Co. v. Riddle, 171 F.2d 732, 736 (D.C.Cir.1948). The first step, however, is problematic. 16 Even viewing the evidence in the light most favorable to the plaintiff, Bour's statement is simply not susceptible to interpretation as an accusation that Fleming committed fraud. Keeping in mind that the district court did not admit Peace's account of his conversation with Regensburg as substantive evidence of the alleged slander (see page 4), we note that the strongest evidence for Fleming's version of the facts regarding the meeting at which Bour allegedly slandered him is Regensburg's testimony: "Bour said something that opportunity existed for fraud and that [Fleming] could have or might have been involved with something like that"; and Bour said "[t]hat Mr. Fleming possibly could have committed fraud." On cross-examination, moreover, Regensburg answered "No" when asked specifically whether Bour or anybody else ever accused Fleming of fraud. 17 The D.C. Court of Appeals has established a high standard for judging a statement slanderous: "an allegedly defamatory remark must be more than unpleasant or offensive; the language must make the plaintiff appear 'odious, infamous, or ridiculous.' " Howard University v. Best, 484 A.2d 958, 989 (D.C.1984) (quoting Johnson v. Johnson Publishing Co., 271 A.2d 696, 697 (D.C.1970)). The plaintiff has the burden of proving the defamatory nature of the publication. Id. 18 On this record, and under the law of this jurisdiction, it is clear that no reasonable jury could find that Bour accused Fleming of fraud. True, he said that there was an opportunity for someone to have committed a fraud, and even that Fleming might have taken advantage of that opportunity; but, also true, he stopped short of making any allegation against Fleming. Fleming's whole case thus comes down to whether a statement that he might have been involved in a fraud--without any claim that the statement was uttered in such a way, or in such a context, that it could reasonably have been interpreted as a subtle accusation that Fleming had in fact done so--is capable of bearing a defamatory meaning. Under the relatively strict standard enunciated in Best, Fleming did not carry his burden of proving that Bour's statement is capable of bearing a defamatory meaning. III. CONCLUSION 19 For the foregoing reasons, the district court's grant of the motion to dismiss the breach of contract count and its direction of a verdict for AT & T on the slander count are affirmed. 20 Because the directed verdict was proper, we need not consider AT & T's cross-appeal from the order denying its motion for summary judgment on the slander count. For the same reason, we need not review the grant of the motion in limine; all that did was to deny Fleming the opportunity to get before the jury evidence on damages which, without a prima facie case on liability, are irrelevant. 21 Judgment accordingly.	{ "pile_set_name": "FreeLaw" }
722 F.Supp. 629 (1989) Thomas J. CAENEN, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant. No. CV-S-88-721-PMP (RJJ). United States District Court, D. Nevada. October 3, 1989. 630 Thomas J. Caenen, Las Vegas, Nev., pro se. William A. Maddox, U.S. Atty., Carlos A. Gonzalez, Asst. U.S. Atty., Las Vegas, Nev., for defendant. ORDER PRO, District Judge. Plaintiff Thomas J. Caenen filed an application for supplemental security income on December 16, 1986, before the Secretary of Health and Human Services pursuant to the Social Security Act, 42 U.S.C. § 405(g) as amended. He alleged disability commencing in December 1986 as a result of muscular fibrosis and degenerative arthritis. Plaintiff presented medical records and oral testimony to Administrative Law Judge Allard ("ALJ") regarding these conditions, but on January 21, 1988 the ALJ found that Plaintiff was not under a "disability," and was therefore not entitled to receive supplemental security income under sections 1602 and 1614(a)(3)(A) of the Social Security Act. Plaintiff filed a request for review by the Appeals Council on March 28, 1988, and on June 7, 1988 his request was denied. Having exhausted his administrative remedies, Plaintiff filed a Complaint in this Court on August 12, 1988 (# 1) seeking judicial review of the Secretary's decision. Defendant Secretary of Health and Human Services' Answer was filed on January 20, 1989 (# 4), following a delay in achieving service of process. Plaintiff filed a Motion to Remand the case based on new evidence on July 6, 1989 (# 15). Defendant filed an Opposition to the Motion on July 21, 1989 (# 16), and Plaintiff filed a Reply on August 21, 1989 (# 20). In addition, Defendant filed a Motion for Summary Judgment on June 30, 1989 (# 13). Although Plaintiff, who is proceeding pro se, has never filed an Opposition to this Motion, he has responded to it in his briefs regarding the Motion to Remand. This Court will therefore consider both Motions on their merits. I. MOTION TO REMAND Plaintiff has filed a Motion to Remand to the ALJ based on medical evidence obtained 631 since the ALJ decision. Under 42 U.S.C. § 405(g) (1983), whose standards for judicial review apply to supplemental security income claims under 42 U.S.C. § 1383(c)(3), a remand may be ordered "only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding." The Fifth Circuit has held that the materiality requirement is satisfied "only where there is a reasonable possibility that the new evidence would have changed the outcome of the Secretary's determination had it been before him." Dorsey v. Heckler, 702 F.2d 597, 604-05 (5th Cir.1983). This test was adopted by the Ninth Circuit in Booz v. Secretary of Health and Human Services, 734 F.2d 1378, 1380-81 (9th Cir.1984). This Court must therefore determine whether there is a reasonable possibility that the new evidence proffered by the Plaintiff would have changed the ALJ's decision if he had considered it. The first piece of evidence relied on by the Plaintiff is a finding by the Veterans Administration ("VA") that he is fully disabled. Attached to Plaintiff's Motion to Remand as Exhibit "A" is a letter dated January 10, 1989 from the VA approving Plaintiff's claim for a Disability Pension. It declares that there is a service-connected disability of limited motion in Plaintiff's right wrist, and there is no other explanation in the letter as to the basis for the disability determination. Such a disability determination by an agency other than Health and Human Services is not binding on the Secretary, see 20 C.F.R. 416.904 (1988), and it may be given "as much or as little weight as [the Secretary] deems appropriate." Wilson v. Heckler, 761 F.2d 1383, 1385 (9th Cir.1985). It appears that the VA determination is deserving of little or no weight in this context where the issue is whether it might have affected the ALJ decision. First, if it is based on the wrist condition, it is not new evidence for Plaintiff testified in the oral hearing before the ALJ that the VA had declared his problem with his wrist to be a service-connected disability. (Tr. 40) Second, even if it is based upon a finding of Chronic Pain Disorder and Dysthymic Disorder, as Plaintiff alleges, it is still deserving of little weight. Chronic Pain Syndrome means only that there are complaints of pain, a fact well-known and considered by the ALJ. (Tr. 14) On the other hand, Dysthymic Disorder means depression, a condition that appears to have begun after Plaintiff's young son died in a drowning accident nineteen years ago. Plaintiff worked in spite of this condition until 1986, so it should not be considered a disabling condition now. Plaintiff asserts, however, that the current depression results not from this tragic accident but from the pain he claims to experience from his arthritis. The VA Medical Certificate signed by a Dr. Anderson (fifth page of medical records attached as exhibits to Motion) indicates that the Plaintiff "reported he has been depressed 19 yrs. since his 8 yr. old son drowned." The statement to the doctor while seeking treatment and counseling is much more reliable than the statements made in these proceedings seeking Social Security benefits. The VA determination therefore does not meet the test of materiality and does not warrant a remand. The other evidence presented by the Plaintiff is the diagnosis of Rheumatoid Arthritis by Dr. Wicker, who the Plaintiff has been seeing regularly since February 1988. There are a number of reasons why this, too, fails to meet the materiality requirement. The medical reports indicate that "rheumatoid panels" have been done repeatedly with normal results, and X-rays have not supported the diagnosis either. In fact, these contrary indications have led Dr. Shumaker to doubt that the Plaintiff has Rheumatoid Arthritis, and to suggest testing for other possible causes for his discomfort. (Notes of 8/16/88 in exhibits to Motion). Besides the doubt about whether the diagnosis is correct, its materiality is also called into question because it does not appear to be based on any new symptoms not considered by the ALJ. There is no 632 allegation that the condition of Plaintiff's joints has significantly worsened or that his range of motion has decreased. In light of all this, there is no reasonable possibility that this evidence would have affected the outcome of Plaintiff's claim if the ALJ had considered it. Plaintiff's Motion to Remand is therefore denied. II. MOTION FOR SUMMARY JUDGMENT Under Fed.R.Civ.P. 56, summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Defendant has moved for summary judgment on Plaintiff's request for judicial review of the ALJ ruling, and has requested that the final decision of the Secretary be affirmed. Both parties have stipulated to the accuracy of the ALJ's summaries of the medical evidence and the hearing testimony (subject to a clarification by the Plaintiff on one point that is not pertinent to this Court's decision.) Therefore, there is no genuine issue of material fact, and the Court now turns to the applicable law. The decision of the Secretary of Health and Human Services on a disability claim may be reviewed by the district court if the complaint is filed within 60 days of the decision. See Thompson v. Schweiker, 665 F.2d 936, 940 (9th Cir.1982); 42 U.S.C. § 405(g). The standards of judicial review prescribed for disability claims also apply to supplemental security income claims. 42 U.S.C. § 1383(c)(3); 42 U.S.C. § 405(g). This Court's standard of review asks whether the Secretary's decision is supported by substantial evidence. See Lewin v. Schweiker, 654 F.2d 631, 633 (9th Cir. 1981); 42 U.S.C. § 405(g). "Substantial evidence" has been defined as "`more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938)); Cox v. Califano, 587 F.2d 988, 989-90 (9th Cir.1978). The Plaintiff, on appeal from denial of his claim for supplemental security income benefits, has the burden of proving some medically determinable impairment which prevents him from engaging in any substantial gainful activity. See Emler v. Califano, 462 F.Supp. 109 (D.Kan.1978); 42 U.S.C. §§ 423(d)(1)-(3). In a disability benefits proceeding, the administrative law judge is not bound by the uncontroverted opinions of the claimant's physicians on the ultimate issue of disability, but he cannot reject them without presenting clear and convincing reasons for doing so. See Montijo v. Secretary of Health and Human Services, 729 F.2d 599, 601 (9th Cir.1984); Rhodes v. Schweiker, 660 F.2d 722, 723 (9th Cir.1981). If an administrative law judge wishes to disregard the opinion of the treating physician in determining eligibility for social security benefits, he or she must make findings setting forth specific, legitimate reasons for doing so that are based on "substantial evidence" in the record. Murray v. Heckler, 722 F.2d 499 (9th Cir.1983). Social Security Regulation No. 16 requires the ALJ to proceed through the following sequential analysis. If it is determined that a claimant is or is not disabled at any point in the review, further review is not necessary. The steps are in sequence: 1. An individual who is working and engaging in substantial gainful activity will not be found to be "disabled" regardless of medical findings (20 C.F.R. 416.920(b)); 2. If an individual is not working and is suffering from a severe impairment which meets the duration requirement and which "meets or equals a listed impairment in Appendix 1" of Subpart P of Regulations No. 4, a finding of "disabled" will be made without consideration of vocational factors (20 C.F.R. 416.920(d)); 633 3. If an individual is capable of performing work he or she has done in the past, a finding of "not disabled" must be made (20 C.F.R. 416.920(e)); 4. If an individual's impairment is so severe as to preclude the performance of past work, other factors including age, education, past work experience and residual functional capacity must be considered to determine if other work can be performed (20 C.F.R. 416.920(f)). The ALJ, in denying Plaintiff's application for supplemental security income, made the following findings: 1. The claimant has not engaged in substantial gainful activity since July 1986. 2. The medical evidence establishes that the claimant has the following medically determinable impairments: osteoarthritis, degenerative joint disease, hypertension and obesity, but that he does not have an impairment or combination of impairments listed in or medically equal to one listed in Appendix 1, Subpart P, Regulations No. 4. 3. The claimant's subjective symptoms do not preclude substantial gainful activity. 4. The claimant has the residual functional capacity to perform work-related activities except for work involving greater than sedentary-level exertion (20 C.F.R. 416.945). 5. The claimant's past relevant work as an attorney or operations officer did not require the performance of the work-related activities precluded by the above limitation(s) (20 C.F.R. 416.965). 6. The claimant's impairments do not prevent the claimant from performing his past relevant work. 7. The claimant was not under a "disability" as defined in the Social Security Act, at any time through the date of the decision (20 C.F.R. 416.920(e)). Having read the medical reports and other evidence in the record, this Court finds that the above conclusion is supported by "substantial evidence," Cox v. Califano, 587 F.2d 988, 989-90 (9th Cir. 1978), and the Defendant is entitled to judgment in his favor as a matter of law. IT IS THEREFORE ORDERED that the Motion to Remand (# 15) is denied. IT IS FURTHER ORDERED that Defendant's Motion for Summary Judgment (# 13) is granted, and the ALJ's decision is affirmed. IT IS FURTHER ORDERED that the Clerk of Court shall forthwith enter Judgment on behalf of Defendant Secretary of Health and Human Services and against Plaintiff Thomas J. Caenen.	{ "pile_set_name": "FreeLaw" }
GLD-158 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ___________ No. 12-1186 ___________ MARILYN KENT, Appellant v. ED CARBER INC. ____________________________________ On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 11-cv-07862) District Judge: Honorable Juan R. Sanchez ____________________________________ Submitted for Possible Summary Action Pursuant to Third Circuit L.A.R. 27.4 and I.O.P. 10.6 April 12, 2012 Before: FUENTES, GREENAWAY, JR. and NYGAARD, Circuit Judges (Opinion filed: April 24, 2012) ___________ OPINION ___________ PER CURIAM Marilyn Kent appeals pro se from the United States District Court for the Eastern District of Pennsylvania’s order dismissing her complaint. For the following reasons, we will affirm in part and vacate in part the District Court’s order. I. In December 2011, Kent filed a motion to proceed in forma pauperis (“IFP”) in the District Court. Her complaint against Ed Carber, Inc. (“Carber”) was entered on the District Court’s docket on January 13, 2012, the same day that the District Court entered an order granting Kent’s motion to proceed IFP and dismissing her complaint pursuant to 28 U.S.C. § 1915(e). Kent’s complaint appears to assert that in 2008 she leased Carber’s barn to house her horses and that they entered into an agreement to advertise for boarding, clients, riding lessons, and training. She claims that Carber soon became aggressive and harassed her when she refused to “be one of his girlfriends,” and that he was violent “with his vehicle.” She and her horses “experienced fear, harassment, terrorism and violence.” Kent asserts that Carber violated several criminal statutes, sexually harassed her, discriminated against her, and breached his contract with her. In the District Court’s order dismissing the complaint, it explained that Kent, as a private citizen, did not have the right to bring a criminal case against the defendants nor could she proceed on a civil cause of action based on federal criminal laws. Additionally, she could not bring a breach of contract action under the District Court’s diversity jurisdiction because she and the defendant are Pennsylvania residents. Kent now appeals. 2 II. We have jurisdiction pursuant to 28 U.S.C. § 1291. Our review of the District Court’s sua sponte dismissal of a complaint under 28 U.S.C. § 1915(e)(2) is plenary. Allah v. Seiverling, 229 F.3d 220, 223 (3d Cir. 2000). If a complaint is vulnerable to dismissal, a district court generally must first permit the plaintiff to file a curative amendment. See Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007) (observing that in civil rights cases, “leave to amend must be granted sua sponte before dismissing” the complaint). “Dismissal without leave to amend is justified only on the grounds of bad faith, undue delay, prejudice, or futility.” Alston v. Parker, 363 F.3d 229, 236 (3d Cir. 2004). Here, the District Court properly dismissed Kent’s criminal claims against Carber, as amendment of those claims would be futile because a private person does not have a “judicially cognizable interest in the prosecution . . . of another.” See Linda R.S. v. Richard D., 410 U.S. 614, 619 (1973). However, the District Court erred in dismissing the remainder of the claims for lack of diversity jurisdiction without providing Kent with an opportunity to amend her complaint. See Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). There is no doubt that, in its current form, Kent’s complaint is wholly inadequate and that it appears as though she cannot meet the requirements for diversity jurisdiction. See 28 U.S.C. § 1332(a)(1) (stating that federal courts have original diversity jurisdiction over all civil actions where the matter in controversy exceeds the sum of $75,000 and is between citizens of different states). Nevertheless, we 3 cannot say, at this stage, whether Kent could amend the complaint to satisfy the jurisdictional requirements. See 28 U.S.C. § 1653 (“Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”). Indeed, we have indicated that federal courts have a duty to consider whether a defective jurisdictional allegation may be remedied through amendment. See Chem. Leaman Tank Lines, Inc. v. Aetna Cas. & Surety Co., 177 F.3d 210, 222 n.13 (3d Cir. 1999). Accordingly, we will affirm in part, vacate in part, and remand the matter for proceedings consistent with this opinion. 4	{ "pile_set_name": "FreeLaw" }
STATE OF VERMONT ENVIRONMENTAL COURT In re: Appeal of David and } Joyce Fifield } } Docket No. 198-9-00 Vtec } } Decision and Order Appellants David and Joyce Fifield appealed from a decision of the Zoning Board of Adjustment (ZBA) of the Town of South Hero, denying a variance for the construction of a porch. Appellant David Fifield appeared and represented himself; the Town is represented by Paul S. Gillies, Esq. An evidentiary hearing was held in this matter before Merideth Wright, Environmental Judge. The parties presented their oral arguments on the record. Upon consideration of the evidence and oral arguments, the Court finds and concludes as follows. Appellants own a 1.5-acre parcel of property on the shore of Lake Champlain, at 55 Hochelaga Road. The parcel was created in 1970 and formerly contained a camp that was in existence prior to the adoption of zoning in South Hero. Appellants obtained a permit in 1992 to construct the present house in the footprint of the previously existing camp. The house is 30' by 28' and is set back 200 feet from the shoreline (measured from the lake at an elevation at 95.5 feet above sea level). The side setbacks are 45 feet from the northeast property line and 20 feet from the southwest property line1. The side setback required by the zoning regulation is 25 feet. The house as it currently exists has two sliding glass doors on the lake side of the house, each about two feet from each respective side wall, and each about five or six feet wide. Appellants wish to add a ten-foot-wide, screened-in and roofed porch to the lake side of the structure, extending across the full 28 feet of the width of the house and thereby extending five feet into the side setback on the southwest side. All other setbacks and requirements would be met by the proposal. Appellants have applied for a variance of five feet so that the porch can extend across the entire width of the house. Appellants do not wish to shorten the porch on one side only, to enable them to avoid the porch= s encroaching into the side setback. Rather, citing reasons of symmetry, they claim it would have to be shortened by five feet on both sides, and would therefore block both sliding glass doors. Other variances have been granted in the recent past in the Town of South Hero, including one entered in evidence regarding an addition that was given a variance to enable it to avoid the septic system and some mature trees. That other variance was not appealed and the court makes no determination of whether it would have met the variance criteria had it been appealed. Each variance application must be considered on its own merits under the Town= s regulations regarding variances. In order to qualify for a variance, Appellants must meet all five requirements of 24 V.S.A. ' 4468(a), as provided in ' 507.3 of the Town of South Hero Zoning Bylaw Regulations: (1) That there are unique physical circumstances or conditions, including irregularity, narrowness, or shallowness of lot size or shape, or exceptional topographical or other physical conditions peculiar to the particular property, and that unnecessary hardship is due to such conditions, and not the circumstances or conditions generally created by the provisions of the zoning regulation in the neighborhood or district in which the property is located; (2) That because of such physical circumstances or conditions, there is no possibility that the property can be developed in strict conformity with the provisions of the zoning regulation and that the authorization of a variance is therefore necessary to enable the reasonable use of the property; (3) That the unnecessary hardship has not been created by the appellant; (4) That the variance, if authorized, will not alter the essential character of the neighborhood or district in which the property is located, substantially or permanently impair the appropriate use or development of adjacent property, reduce access to renewable energy resources, nor be detrimental to the public welfare; and (5) That the variance, if authorized, will represent the minimum variance that will afford relief and will represent the least deviation possible from the zoning regulation and from the plan. Appellants= parcel meets only subsection four of these five provisions. It will not alter the essential character of the neighborhood or impair adjacent property. However, if it fails any one of the provisions, it fails to qualify for a variance. Appellants= parcel has no unusual physical circumstances or conditions; rather, the hardship asserted by Appellants is due to the position of the building they built in 1992 within the side setback as allowed under their 1992 permit to replace the existing camp in that position. Not only has the property already been developed in conformity with the regulations, but it would even be possible for Appellants to put a covered porch across most of the lake end of their existing building, if they would build it five feet shorter on the southwest side. Therefore the variance is not necessary to enable the reasonable use of the property. The hardship asserted by Appellants has been created by them in that they placed the building in 1992 within the side setback, and it is their reluctance to construct a porch shorter by five feet that causes the asserted need for the variance. Finally, the requested variance does not represent the least deviation possible from the zoning regulations, as it would be possible to design a porch that meets the zoning regulations. Accordingly, based on the foregoing, it is hereby ORDERED and ADJUDGED that Appellants= application for a variance must be and it hereby is DENIED. Dated at Barre, Vermont, this 26th day of December, 2001. ___________________ Merideth Wright Environmental Judge Footnotes 1. Appellants own some adjacent property, although there has been no suggestion of merger nor any evidence as to whether the adjacent property is on the side with the inadequate setback. If it is, it may be possible for Appellants to execute a boundary adjustment of the property line adjacent to and in the vicinity of the porch to render their proposal conforming with the side setback at that location. Such a proposal would make a variance unnecessary, but is beyond the scope of this appeal.	{ "pile_set_name": "FreeLaw" }
251 Ga. 845 (1984) 310 S.E.2d 224 TUGGLE v. TUGGLE. 40379. Supreme Court of Georgia. Decided January 4, 1984. George P. Graves, for appellant. Don M. Jones, for appellee. WELTNER, Justice. This interlocutory appeal raises questions involving jurisdiction and service of process. The wife filed her sworn complaint for divorce in the Superior Court of Gwinnett County, alleging that her husband was a resident of that county. The husband was served by second original in DeKalb County. By special appearance, he moved to dismiss the complaint for lack of jurisdiction, and alleging that he was a resident of DeKalb County. The trial court heard evidence on this issue and denied the motion. 1. The record contains no transcript of the evidence. We therefore must assume that the trial court was correct in its factual finding relative to venue. Lowry v. Norris Lake Shores Dev. Corp., 231 Ga. 547 (203 SE2d 169) (1974). 2. The husband claims error in the service of process by second original, relying upon Long v. Ga. Farm Bureau Mut. Ins. Co., 155 Ga. App. 702 (272 SE2d 565) (1980) as support for his contention that service may be made by second original only where there are two or more defendants, one of whom resides in the county where the action *846 is brought, and another in some other county. Our Civil Practice Act provides that "[p]rocess shall be served by the sheriff of the county where the action is brought or where the defendant is found. ..." OCGA § 9-11-4 (c) (emphasis supplied). (Code Ann. § 81A-104). "All process may be served anywhere within the territorial limits of the state and, when a statute so provides, beyond the territorial limits of the state." OCGA § 9-11-4 (f) (Code Ann. § 81A-104). These provisions authorize service upon a defendant in a county other than that of his domicile, and other than that in which the action is filed. As to the validity of service by second original, OCGA § 9-10-72 (Code Ann. § 81-215) states: "[i]f any of the defendants reside outside the county where the action is filed, the clerk shall issue a second original and copy for such other county or counties and forward the same to the sheriff, who shall serve the copy and return the second original, with his entry thereon, to the clerk of the court from which the same issued." The only difference between the copy of complaint and process served upon the husband in this case and that of the usual circumstance is that his copy has thereon the words "Second Original to DeKalb County." We have long ago departed that realm of law where runes and sigils supplant reason and substance. Judgment affirmed. All the Justices concur.	{ "pile_set_name": "FreeLaw" }
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66 P.3d 111 (2002) NATIONAL REAL ESTATE INVESTMENT, LLC, Plaintiff-Appellant and Cross-Appellee, v. WYSE FINANCIAL SERVICES, INC.; Irvin Borenstein, individually; and Real-America Ventures, LLC, Defendants-Appellees and Cross-Appellants, and Marilyn G. Green, Public Trustee, Douglas County, Defendant. No. 01CA0799. Colorado Court of Appeals, Div. III. April 11, 2002. Certiorari Granted April 14, 2003. 112 John M. Dudgeon, Lakewood, Colorado, for Plaintiff-Appellant and Cross-Appellee. Irvin Borenstein, Aurora, Colorado, for Defendants-Appellees and Cross-Appellants WYSE Financial Services, Inc. and Irvin Borenstein. Overton, Babiarz & Associates, P.C., A.L. Overton, Mark J. Overton, Englewood, Colorado, for Defendant-Appellee and Cross-Appellant RealAmerica Ventures, LLC. Opinion by Chief Judge HUME. In this dispute concerning the purchaser at a foreclosure sale and the assignee of a junior judgment lien, plaintiff, National Real Estate Investment, LLC (assignee), appeals the summary judgment in favor of defendants, WYSE Financial Services, Inc. (assignor); Irvin Borenstein (assignor's attorney); Marilyn C. Green, in her capacity as Douglas County Public Trustee; and Real-America Ventures, LLC (purchaser). Defendants, other than Green, cross-appeal the trial court's order denying attorney fees pursuant to C.R.C.P. 11 and § 13-17-102, C.R.S. 2001. We reverse and remand. Certain real property was subject to a first deed of trust and was also encumbered by a junior judgment lien against the property in favor of assignor. The holder of the deed of trust foreclosed, and the Douglas County Public Trustee sold the property to purchaser at a foreclosure sale and issued a certificate of purchase. The owner did not redeem the property during the period provided by § 38-38-302, C.R.S.2001, which expired on June 5, 2000. Assignor assigned the judgment lien to assignee on June 5, 2000, which assignment was promptly recorded. Assignee filed a notice of intent to redeem the property that same day. On June 8, 2000, assignee tendered to the trustee the redemption funds for the property in the approximate amount of $405,000, and the trustee issued a certificate of redemption. Assignee did not file a substitution of parties or counsel after obtaining the assignment, and assignor's attorney remained the attorney of record. The certificate of redemption was recorded on June 12, 2000, before assignee's redemption period expired on June 15, 2000. On June 14, 2000, purchaser requested that the county court accept payment in satisfaction of assignor's judgment. The court refused to accept the tender and directed purchaser to tender the funds to the attorney of record for the judgment creditor of record, assignor. The attorney accepted the funds and executed a satisfaction of judgment on behalf of assignor on June 15, 2000. Purchaser filed an acknowledgment of satisfaction of judgment with the county court and recorded the certificate of satisfaction with the public trustee that same day. The public trustee refused to issue a deed after assignee's redemption because of the conflicting demands made upon her. Assignee filed a motion to vacate the satisfaction of judgment with the county court, which was denied. Assignee did not appeal that denial, but filed an independent action with the district court, again seeking to vacate the satisfaction of judgment, to require the public trustee to issue a public trustee's deed to assignee, and to recover damages against defendants on various grounds. The district court denied defendants' motion for summary judgment, holding that the judgment lien was not effectively discharged by tender of payment to the attorney of record. Later, the district court granted summary judgment in favor of defendants, holding that the judgment was satisfied by the tender, without acceptance, of the funds to the county court. The district court held that the judgment lien was satisfied prior to the expiration of assignee's redemption period and therefore extinguished assignee's right to redeem. 113 I. Assignee contends that the district court erred by holding that purchaser extinguished assignee's right to redeem by satisfying the judgment through the tender of funds to the county court, without acceptance and deposit into the court registry. We agree. Appellate review of a summary judgment is de novo. See Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995). A debtor or debtor's agent has the legal right to pay the judgment and thereby prevent a redemption by the assignee of a judgment. See Plute v. Schick, 101 Colo. 159, 71 P.2d 802 (1937); Craft v. Storey, 942 P.2d 1211 (Colo.App.1996); Osborn Hardware Co. v. Colorado Corp., 32 Colo.App. 254, 510 P.2d 461 (1973). In Kellum v. RE Services, LLC, 30 P.3d 875 (Colo.App.2001), and Davis Manufacturing & Supply Co. v. Coonskin Properties, Inc., 646 P.2d 940 (Colo.App.1982), other divisions of this court have held that the holder of a certificate of purchase on a foreclosure sale does not have the right to prevent a judgment lien holder from redeeming by paying the amount of the lien. Those divisions held that the holder of the certificate of purchase acquires only the alternative rights to receive the redemption money when tendered, if another lien holder redeems, or a deed for the property after the time for redemption has expired, if no other superior right holder has intervened. Section 38-38-304(3), C.R.S.2001, states that "[i]f redemption is made by a lienor, his certificate of redemption, duly recorded, operates as an assignment to him of the estate and interest acquired by the purchaser at the sale, subject, however, to the rights of persons who may be entitled subsequently to redeem." Thus, here, purchaser's rights and interest in the property were assigned to assignee by operation of law immediately upon assignee's recording the certificate of redemption on June 12, 2000. Purchaser argues that pursuant to § 38-38-302(2), C.R.S.2001, a certificate of redemption may be issued only after the expiration of the redemption period. Purchaser contends that consequently the satisfaction of judgment extinguished assignee's redemption rights because the certificate of redemption was executed and delivered in violation of the statute and therefore was a nullity. We disagree. The requirement of § 38-38-302(2) that a certificate of redemption be issued only after the expiration of the proper redemption period contemplated by § 38-38-302 is inapplicable to judgment lienors. Section 38-38-302(1), C.R.S.2001, expressly reserves the right of redemption under that section to only "the owner of the property, or any other person liable after the foreclosure sale for the deficiency." Thus, because the limitation on the execution and delivery of a certificate of redemption under § 38-38-302(2) applies only to persons redeeming "under this section," it applies to only those persons contemplated under § 38-38-302(1), that is, owners and other persons liable for deficiencies after the foreclosure sale. By contrast, § 38-38-303, C.R.S.2001, entitled "Time of redemption by lienor," applies to lienors and expressly addresses the circumstance in which no party redeems within the redemption period contemplated by § 38-38-302, and subsequent lienors choose to redeem. Unlike § 38-38-302, § 38-38-303 contains no limitation on when the certificate of redemption may be issued. In Craft v. Storey, supra, the division noted that nothing in the foreclosure statutes requires the public trustee to issue a certificate of redemption immediately upon tender of the lienor's redemption amount. Similarly, unlike § 38-38-302(2), nothing in § 38-38-303 precludes the public trustee from issuing a certificate of redemption to a redeeming lienor immediately upon tender of the funds. Had the General Assembly intended to delay the execution and delivery of the certificate where lienors redeem, it could easily have inserted that requirement into § 38-38-303, as it did in § 38-38-302(2). *114 Defendants' reliance on Craft v. Storey, supra, is misplaced. Craft v. Storey did not address whether a foreclosure sale purchaser could satisfy a judgment lien and extinguish the judgment lienor's right to redeem after the issuance of a certificate of redemption in favor of the judgment lienor. In that case, no certificate of redemption had been issued, so there was no need to address the effect of § 38-38-304(3) in such a circumstance. Thus, once a lienor is issued a certificate of redemption, a purchaser at a foreclosure sale who is not the debtor is precluded from affecting the lienor's redemption rights. The purchaser is entitled only to recover the redemption funds. See §§ 38-38-304(3), 38-38-302(2) ("The public trustee or sheriff shall forthwith pay said [redemption] money to the holder of the certificate of purchase."). Purchaser could not extinguish assignee's right to redeem after the issuance of a certificate of redemption, see Kellum v. RE Services, LLC, supra. Assignee's redemption was subject only to the rights of persons subsequently entitled to redeem, see § 38-38-304(3). Because no other persons were subsequently entitled to redeem in this case, title to the property vested in assignee at the end of the redemption period on June 15, 2000. See § 38-38-501, C.R.S.2001. The public trustee is thus required to execute and deliver to assignee a deed confirming the transfer of title to the property. II. Defendants argue that assignee's action in the district court was barred by the principles of res judicata and collateral estoppel. We disagree. Collateral estoppel bars relitigation of an issue previously litigated in a separate action if (1) the issue precluded is identical to an issue actually litigated and necessarily adjudicated in a prior proceeding; (2) the party against whom estoppel is sought was a party to, or in privity with a party to, the prior proceeding; (3) there was a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. See Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44 (Colo.2001); Michaelson v. Michaelson, 884 P.2d 695 (Colo.1994). The county court denied assignee's initial motion to vacate the satisfaction of judgment because it lacked jurisdiction over the subject matter, and it indicated that further action on the matter would have to proceed pursuant to C.R.C.P. 105. When a court refuses to adjudicate a dispute because of a lack of subject matter jurisdiction, there has been no actual, full, and fair litigation and no necessary adjudication of any substantive issue other than the issue of the court's jurisdiction. Assignee's independent action in the district court therefore was not barred by collateral estoppel. III. In light of our decision, we affirm the trial court's denial of defendants' claims for attorney fees and deny relief on defendants' cross-appeal. The judgment in favor of defendants is reversed, and the case is remanded with directions that the trial court (1) order the Douglas County Public Trustee to execute and deliver to plaintiff a deed confirming the transfer of title to the property to plaintiff and (2) consider plaintiff's claims for damages against defendants. Judge NEY and Judge DAILEY concur.	{ "pile_set_name": "FreeLaw" }
Case: 19-2356 Document: 36 Page: 1 Filed: 04/16/2020 NOTE: This disposition is nonprecedential. United States Court of Appeals for the Federal Circuit ______________________ GARTH K. TRINKL, Petitioner v. MERIT SYSTEMS PROTECTION BOARD, Respondent DEPARTMENT OF COMMERCE, Intervenor ______________________ 2019-2356 ______________________ Petition for review of the Merit Systems Protection Board in No. DC-0752-16-0387-M-2. ______________________ Decided: April 16, 2020 ______________________ GARTH K. TRINKL, Washington, DC, pro se. DEANNA SCHABACKER, Office of General Counsel, United States Merit Systems Protection Board, Washing- ton, DC, for respondent. Also represented by TRISTAN LEAVITT, KATHERINE MICHELLE SMITH. TANYA KOENIG, Commercial Litigation Branch, Civil Case: 19-2356 Document: 36 Page: 2 Filed: 04/16/2020 2 TRINKL v. MSPB Division, United States Department of Justice, Washing- ton, DC, for intervenor. Also represented by JOSEPH H. HUNT, STEVEN JOHN GILLINGHAM, ROBERT EDWARD KIRSCHMAN, JR. ______________________ Before LOURIE, REYNA, and HUGHES, Circuit Judges. PER CURIAM. Petitioner Garth K. Trinkl seeks review of the Merit Systems Protection Board’s post-hearing decision dismiss- ing his appeal for lack of jurisdiction because he had failed to establish an involuntary retirement. Because we con- clude that the Board’s decision is supported by substantial evidence, we affirm. BACKGROUND Mr. Trinkl was an economist with the Department of Commerce in the Bureau of Economic Analysis (“BEA”) from 1998 until his retirement in 2015. In 2013 and 2014, he submitted complaints against two supervisors alleging that they had harassed and discriminated against him on the basis of age and that they had subjected him to a “near physical attack” during a meeting. Gov. App. 2. 1 In August 2014, Mr. Trinkl applied for retirement, ex- plaining in an email to the agency’s Human Resources Di- vision that he no longer felt safe working with his supervisors. Id. at 2, 193. After he submitted his retire- ment application, but before his separation, he was placed on a Performance Improvement Plan (“PIP”), which re- quired him to meet regularly with his supervisors. Id. at 2–3, 197. Mr. Trinkl refused to meet with his supervisors 1 Citations to “Gov. App.” refer to pages in the Cor- rected Appendix for Respondent’s Informal Brief, Dkt. No. 16. Case: 19-2356 Document: 36 Page: 3 Filed: 04/16/2020 TRINKL v. MSPB 3 and requested transfer to a different supervisor, but his re- quest was denied. Id. at 3. Mr. Trinkl retired on January 10, 2015. Id. On February 25, 2016, Mr. Trinkl filed an appeal with the Merit Systems Protection Board (“the Board”) alleging that he had involuntarily retired due to coercion and agency deception. The administrative judge (“AJ”) issued an Initial Decision granting the government’s motion to dismiss for lack of jurisdiction on the ground that Mr. Trinkl failed to state a non-frivolous allegation that his re- tirement was involuntary. The Board later issued a final order affirming dismissal. Mr. Trinkl sought review of the Board’s order in this court. In our initial review of this case, we held that the Board erred in considering and dismissing Mr. Trinkl’s allega- tions individually, rather than collectively, and in weighing the relative probative value of Mr. Trinkl’s allegations without holding a jurisdictional hearing. Trinkl v. Merit Sys. Prot. Bd., 727 F. App’x. 1007, 1010–11 (Fed. Cir. 2018). We concluded that Mr. Trinkl’s allegations, if assumed true, were not frivolous when considered as a series of es- calating events leading to his retirement. Id. at 1010. We thus remanded to the Board for a jurisdictional hearing. On remand, the AJ allowed the parties to engage in ju- risdictional discovery. The AJ then held a two-day hearing and Mr. Trinkl and the government presented witnesses and other evidence. Based on the full record of the proceed- ing, the AJ issued another Initial Decision, once again dis- missing the appeal for lack of jurisdiction because Mr. Trinkl failed to prove by a preponderance of the evidence that his retirement was involuntary. In his decision, the AJ first considered whether Mr. Trinkl had established that his retirement was coerced by evaluating three elements: (1) whether the agency effec- tively imposed the terms of his retirement; (2) whether Mr. Trinkl had no realistic alternative but to retire; and (3) Case: 19-2356 Document: 36 Page: 4 Filed: 04/16/2020 4 TRINKL v. MSPB whether the decision to retire was the result of coercive or improper acts by the agency. Gov. App. 6. The AJ found that the evidence did not support the first element because Mr. Trinkl’s supervisors were unaware of his pending re- tirement until after his departure. Id. at 6–7. The AJ also found that the totality of Mr. Trinkl’s allegations—that he had witnessed a physical altercation between his co-worker and supervisor in 2007; that he was passed over for promo- tion and job-assignment opportunities; that he was sub- jected to a “near physical attack” by his supervisors during a meeting in 2013; that he was placed on a PIP shortly be- fore his decision to retire; and that he witnessed other in- cidents of harassment based on age—either did not occur as described or were insufficient under the circumstances to objectively “give rise to an environment which is so un- pleasant for an employee that he would have no option but to leave.” Id. at 8. The AJ then considered whether Mr. Trinkl had established that his retirement was the result of deception and concluded that the evidence did not sup- port any material misrepresentations by the agency. Id. at 17–19. Neither party petitioned for full-Board review of the decision, and it became the Board’s final decision. Mr. Trinkl timely appealed. We have jurisdiction pursuant to 5 U.S.C. § 7703(b)(1)(A) and 28 U.S.C. § 1295(a)(9). DISCUSSION We review the legal question of whether the Board has jurisdiction over an appeal de novo and its underlying fac- tual findings for substantial evidence. Parrott v. Merit Sys. Prot. Bd., 519 F.3d 1328, 1334 (Fed. Cir. 2008); Forest v. Merit Sys. Prot. Bd., 47 F.3d 409, 410 (Fed. Cir. 1995). The Board’s determination will only be overturned if it is found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) obtained without procedures required by law, rule or regulation having been followed; or (3) unsupported by substantial evidence. Case: 19-2356 Document: 36 Page: 5 Filed: 04/16/2020 TRINKL v. MSPB 5 Covington v. Dep’t of Health and Human Servs., 750 F.2d 937, 941 (Fed. Cir. 1984). When an employee retires from government employ- ment, the Board has jurisdiction to review the circum- stances of the employee’s departure only if the employee proves by a preponderance of the evidence that the retire- ment was involuntary, and thus “tantamount to forced re- moval.” Shoaf v. Dep’t of Agric., 260 F.3d 1336, 1341 (Fed. Cir. 2001). While a decision to retire is presumed volun- tary, Covington, 750 F.2d at 941, the presumption can be overcome by establishing that the decision was the result of coercion or deception, among other circumstances that undermine the employee’s ability to exercise free choice. Scharf v. Dep’t of the Air Force, 710 F.2d 1572, 1575 (Fed. Cir. 1983). To establish that a retirement was involuntary due to coercion, the employee must generally prove that (1) the agency effectively imposed the terms of the employee’s res- ignation, (2) the employee had no realistic alternative but to resign or retire, and (3) the employee’s resignation or re- tirement was the result of improper acts by the agency. Shoaf, 260 F.3d at 1341. Alternatively, to establish that a retirement was involuntary based on deception or misrep- resentation, the employee must establish that the agency provided misleading information on which the employee reasonably relied to his detriment in deciding to retire. Covington, 750 F.2d at 942; Scharf, 710 F.2d at 1575. Un- der both theories, the voluntariness inquiry is objective, and the Board must consider the totality of the circum- stances in determining whether a reasonable person in the employee’s position would have felt compelled to resign or would have been materially misled to his detriment. Shoaf, 260 F.3d at 1341; Scharf, 710 F.2d at 1575. Mr. Trinkl makes two principal arguments in challeng- ing the Board’s dismissal of his appeal. First, he contends that in concluding that his retirement was voluntary, the Case: 19-2356 Document: 36 Page: 6 Filed: 04/16/2020 6 TRINKL v. MSPB AJ evaluated his allegations of coercion and deception in isolation rather than as a whole under the totality of the circumstances. In particular, Mr. Trinkl argues that the AJ failed to consider the alleged events in light of Mr. Trinkl’s alleged symptoms of post-traumatic stress disor- der (“PTSD”) as well as other specific allegations in the rec- ord. Second, Mr. Trinkl contends that he should have been given access to an incident report allegedly generated by a security officer regarding the “near physical attack” during Mr. Trinkl’s meeting with his supervisors. We consider these allegations in turn. I Mr. Trinkl contends that in considering the voluntari- ness of his retirement, the AJ improperly considered and analyzed his allegations “piecemeal” and failed to revisit the combined effects of the alleged events as a whole. Ap- pellant Br. 21–27. We disagree. In concluding that Mr. Trinkl failed to meet his burden of establishing that any conduct by the agency rendered his retirement involuntary, the AJ found that Mr. Trinkl had proved the following facts between 2007 and his retirement in January 2015: the appellant witnessed a confrontation between [one of Mr. Trinkl’s supervisors] and Mr. Pomsou- van; was not selected for promotion; was told by his supervisors to “sit down” during a meeting; en- gaged in heated conversations with his supervi- sors; witnessed his supervisors “hyperventilate” or get frustrated; and was placed on a PIP. Gov. App. 16–17. The AJ found that “even if these acts did occur,” Mr. Trinkl had failed to show by a preponderance of the evidence that “he was subjected to an environment suf- ficiently hostile as to lead to involuntary resignation.” Id. at 17. This was in light of testimony by his supervisors, which the AJ found credible, that they had not threatened Case: 19-2356 Document: 36 Page: 7 Filed: 04/16/2020 TRINKL v. MSPB 7 Mr. Trinkl, had not physically blocked his exit from the room during their meeting, and had not witnessed any in- cidence of violence at the office. Id. We see no error in this analysis by the AJ under the totality of the circumstances standard. Contrary to Mr. Trinkl’s argument, the mere fact that the AJ preceded this discussion with a detailed assessment of the evidence re- garding each incident does not render the ALJ’s reasoning “piecemeal.” Appellant Br. 22–24. Rather, a thorough and impartial evaluation of the totality of the circumstances must often begin with a detailed and methodical assess- ment of the evidence concerning each contested fact at is- sue. In order to fully evaluate whether a reasonable person in the employee’s position would have felt compelled to re- sign or would have been materially misled to his detriment, Shoaf, 260 F.3d at 1341; Scharf, 710 F.2d at 1575, the AJ must first engage in fact finding to determine what the rel- evant circumstances are. Mr. Trinkl also contends that the AJ should have con- sidered the alleged incidents in light of his symptoms of PTSD, which he traces to stressful circumstances he en- countered while traveling abroad on and immediately after September 11, 2001. Appellant Br. 23, 32–33. The AJ’s decision, however, expressly addressed Mr. Trinkl’s allega- tions of PTSD and concluded that regardless of any effect the condition might have had on Mr. Trinkl’s perception of the alleged events leading to his retirement, the totality of the circumstances did not render his departure involuntary under an objective standard. Gov. App. 17. This is con- sistent with our precedent, which generally evaluates vol- untariness from the perspective of a reasonable person. See Scharf, 710 F.2d at 1575. Here, Mr. Trinkl did not al- lege or present any evidence that his PTSD symptoms ren- dered him mentally incapable of exercising free choice or constituted a disability under the Americans with Disabil- ities Act for which he had requested reasonable accommo- dations. Cf. Scharf, 710 F.2d at 1574 (citing Manzi v. Case: 19-2356 Document: 36 Page: 8 Filed: 04/16/2020 8 TRINKL v. MSPB United States, 198 Ct. Cl. 489, 492 (1972) (recognizing that a retirement is involuntary where an employee fails to un- derstand the situation due to mental incompetence)); Be- navidez v. Dep’t of Navy, 241 F.3d 1370, 1375 (Fed. Cir. 2001) (noting that a claim of involuntary disability retire- ment requires a showing that there was an accommodation available on the date of his separation that would have al- lowed him to continue his employment, and that the agency did not provide him that accommodation). Thus, the AJ did not err in declining to consider how Mr. Trinkl’s alleged PTSD may have affected his subjective perception of events. Mr. Trinkl also argues that the AJ erred in failing to consider “misinformation” provided by his supervisors when they required him to meet with them in person for his PIP reviews even though such meetings were not a “re- quirement in the CFR [Code of Federal Regulations].” Ap- pellant Br. 26–27. We disagree. The AJ considered the PIP in assessing the voluntariness of Mr. Trinkl’s retirement and found that the PIP was imposed after Mr. Trinkl sub- mitted his application for retirement, undermining his ar- gument that the conditions of the PIP caused his departure. Gov. App. 13. Moreover, the mere fact that an in-person meeting requirement is absent from the Code of Federal Regulations does not render his supervisors’ deci- sion to impose such a requirement an improper act of “mis- information.” As the AJ appropriately found, Mr. Trinkl’s supervisors could legitimately impose such a requirement in the exercise of their discretion. Gov. App. 13–14. Finally, we reject Mr. Trinkl’s arguments that the AJ should have given more weight to Mr. Trinkl’s history of favorable performance, his allegations of past “employee abuse” by his supervisors, or specific inconsistencies in wit- ness statements. Appellant Br. 19, 25–26, 27–29, 29–31. It is not our role to second guess the AJ’s weighing of the evidence and credibility determinations. See Bieber v. Dep’t of the Army, 287 F.3d 1358, 1364 (Fed. Cir. 2002). Case: 19-2356 Document: 36 Page: 9 Filed: 04/16/2020 TRINKL v. MSPB 9 Based on the record and the reasoning provided in the AJ’s opinion, we conclude that the Board’s decision was sup- ported by substantial evidence. II Mr. Trinkl also requests a new hearing on the grounds that he should have been given access to an “internal secu- rity office investigation” report allegedly prepared by a sen- ior physical security officer concerning the “near-physical attack” incident. Appellant Br. 33–34. However, Mr. Trinkl does not explain how he was prejudiced by the ab- sence of such a report in the record other than bare specu- lation that the alleged report “may well establish beyond a reasonable doubt that Mr. Trinkl involuntarily separated from the Agency under coercion and duress.” Id. at 33. Nor does the record disclose that this discovery issue was raised before the AJ or otherwise preserved below. Based on the current record, given that Mr. Trinkl was given the oppor- tunity at the hearing to present his own direct account of the incident at issue and to question both the security of- ficer who prepared the alleged report and the two supervi- sors directly involved, we are not persuaded that Mr. Trinkl was materially prejudiced at the hearing by not hav- ing access to the alleged report. CONCLUSION We have considered the remaining arguments pre- sented by Mr. Trinkl and find them either unpersuasive or waived because they were not raised in his opening brief. For the reasons set forth above, we affirm the decision of the Board. AFFIRMED COSTS No costs.	{ "pile_set_name": "FreeLaw" }
51 P.3d 570 (2002) 2002 OK 51 STATE of Oklahoma ex rel. OKLAHOMA BAR ASSOCIATION, Complainant, v. Fred M. SCHRAEDER, Respondent. No. 4597. Supreme Court of Oklahoma. June 18, 2002. Loraine Dillinder Farabow, Assistant General Counsel, Oklahoma Bar Association, Oklahoma City, OK, for complainant. 573 William G. LaSorsa, Jones, Givens, Gotcher & Bogan, Tulsa, OK, for respondent. 572 OPALA, J. ¶ 1 In this disciplinary proceeding against a lawyer, the issues to be decided are: [1] Does the record[1] submitted for our examination provide sufficient evidence for a meaningful de novo consideration of the complaint and of its disposition? and [2] Is a license suspension for thirty (30) days an appropriate disciplinary sanction for respondent's breach of professional ethics? We answer both questions in the affirmative. I INTRODUCTION TO THE RECORD ¶ 2 On 26 January 2001 the Oklahoma Bar Association [Bar] commenced this disciplinary proceeding against Fred M. Schraeder [Schraeder or respondent], a licensed lawyer, by filing a formal complaint in accordance with the provisions of Rule 6 of the Rules Governing Disciplinary Proceedings [RGDP].[2] The complaint alleges in four counts multiple violations of the Oklahoma Rules of Professional Conduct [ORPC][3] and of the RGDP. The charges include two grievances advanced by separate clients and respondent's failure to respond to the Bar's investigative inquiries in both matters. The Bar has since withdrawn its reliance on ORPC Rules 1.1, 1.2, 1.3, 3.2 and 8.4(c) in Count I (the McMinn grievance); ORPC Rules 1.1, 1.3, 1.5, 1.16(b)(2), (d), 3.2 and 8.4(c) in Count II (the Parsons grievance); and on ORPC Rule 8.4(c) in Counts II and IV (for respondent's failure timely to respond to the Bar's inquiries). The Bar now rests the four counts solely on: (1) ORPC Rules 1.4, 1.5, 1.15(b), 1.16(b)2, (d), 3.2, 8.4(a) and RGDP Rule 1.3 in Count I; (2) ORPC Rules 1.4, 1.15(b), 8.4(a) and RGDP Rule 1.3 in Count III; and (3) ORPC Rules 8.1(b), 8.4(a) and RGDP Rules 1.3 and 5.2 in Counts II and IV. ¶ 3 At the commencement of its hearing on 16 May 2001 a trial panel of the Professional Responsibility Tribunal [panel or PRT] recognized for the record the admission of the parties' stipulations of fact, conclusions of law and an agreed disciplinary recommendation. As for mitigation, the parties agreed that respondent had never before been disciplined (by the Professional Responsibility Commission or by this court) or been the subject of a formal investigation by the Bar's counsel. The parties submit professional burnout syndrome[4] as a factor to be considered in mitigation of respondent's culpability. ¶ 4 Upon completion of the hearing and consideration of the stipulations and testimony on file, the trial panel issued its report (which incorporates the parties' stipulations). The panel recommended that respondent receive a private reprimand and be directed to pay the costs of this proceeding. II THE RECORD BEFORE THE COURT PROVIDES SUFFICIENT EVIDENCE FOR A MEANINGFUL DE NOVO CONSIDERATION OF ALL FACTS RELEVANT TO THIS PROCEEDING ¶ 5 In a bar disciplinary proceeding the court functions as an adjudicative licensing authority that exercises exclusive original cognizance.[5] The court's jurisdiction rests 574 on the court's constitutionally vested, nondelegable power to regulate the practice of law, including the licensure, ethics, and discipline of this State's legal practitioners.[6] In deciding whether discipline is warranted and what sanction, if any, is to be imposed for the misconduct charged, the court conducts a full-scale, nondeferential, de novo examination of all relevant facts,[7] in which the findings, conclusions and recommendations of the trial panel are neither binding nor persuasive.[8] In its task, the court is not guided by the scope-of-review rules that govern corrective relief on appeal or in certiorari proceedings in which another tribunal's findings of fact may have to be left undisturbed by adherence to some law-imposed standards of deference.[9] ¶ 6 The court's duty can be discharged only if the trial panel submits a complete record of the proceedings.[10] Our initial task is to ascertain whether the tendered record is sufficient to permit (a) an independent on-the-record determination of the critical facts and (b) the crafting of an appropriate discipline.[11] The latter is that which (1) is consistent with the discipline imposed upon other lawyers who have committed similar acts of professional misconduct and (2) avoids the vice of visiting disparate treatment of an offending lawyer.[12] ¶ 7 Having carefully scrutinized the record submitted, we conclude that it is adequate for de novo consideration of the respondent's alleged professional misconduct and of the discipline to be imposed. III FACTS ADMITTED BY STIPULATION ¶ 8 The parties have tendered their stipulations by which respondent admits the facts which serve as the basis of the charges against him. A stipulation of fact is an agreement by the parties that a particular fact (or facts) in controversy stands admitted. It serves as an evidentiary substitute that dispenses with a need for proof of facts that are conceded by the parties' agreement. Stipulations are subject to the approval of the court in which they are entered.[13] Respondent's 575 stipulations of facts (a) have been made voluntarily and with knowledge of their meaning and legal effect and (b) are not inconsistent with any facts otherwise established by the record. We hence approve and adopt the parties' tendered stipulations. A Count I The McMinn Grievance ¶ 9 Count one is predicated upon a grievance by Perry A. McMinn [McMinn]. McMinn hired respondent to assist in a criminal appeal filed in the United States District Court for the Northern District of Oklahoma.[14] He paid respondent on 4 September 1997 the sum of $2,000 by cashier's check as part of the agreed fee of $10,000 and gave Schraeder an additional $800 on 21 January 1998. ¶ 10 After writing McMinn in February, March and May of 1998, respondent ceased communicating with his client and failed to file any motions or briefs in his appeal. Following respondent's inactivity, McMinn filed a motion on his own behalf and wrote respondent a letter, dated 5 May 1999, asking him to review and revise the document. When respondent failed to reply, McMinn wrote him again on 2 June 1999 and enclosed copies of several cases that he wanted him to review. Respondent did not answer the June 2 letter; he claims that he never received the letter or the enclosed cases. By letter dated 27 September 1999 McMinn requested a detailed accounting of all costs and legal services expended on his behalf and a refund of the unearned portion of the $2,800 fee. Respondent failed to answer the September 27 letter. ¶ 11 Schraeder insists (1) that he filed no briefs or pleadings in the McMinn case because he was waiting to receive pertinent information from McMinn's family to proceed with the appeal[15] and claims (2) that he neither responded to the September 27 letter nor provided the requested accounting because he believed that he had earned the $2,800 fee by (a) researching the various issues in the McMinn appeal, (b) speaking on several occasions to members of McMinn's family and (c) traveling twice to visit McMinn at the Adult Detention Center in Tulsa, Oklahoma. ¶ 12 The Bar and respondent agree that the latter's misconduct violates the mandatory provisions of ORPC Rules 1.4[16] (failure promptly to communicate with his client's request for information),1.5[17] (failure to charge reasonable fees), 1.15(b)[18] (failure promptly to account for and return any unearned fees), 1.16(b)(2) and (d)[19] (failure 576 promptly to notify McMinn of his withdrawal from the appeal), 8.4(a)[20] (misconduct) and RGDP Rule 1.3[21] (bringing discredit upon the legal profession). Upon de novo review of the record, we hold the charges are supported by clear and convincing proof that respondent's conduct warrants the imposition of discipline. B Count III The Parsons Grievance ¶ 13 In Count three of the complaint the Bar charged respondent with failure to communicate with a client and to perform the work for which he was hired. Around 13 February 1999 Loretta Parsons [Parsons] retained Schraeder to represent her grandchildren's interest in her deceased daughter's estate. He was also to represent another granddaughter in both a criminal and a domestic matter. Parsons paid him $1,500.00. She also delivered to him several documents relevant to the estate as well as to possible civil litigation pertaining to her daughter's death. Respondent claims that Parsons paid him the fee to represent two of Parsons' adult children in three legal matters but that he never agreed to represent her in any wrongful death or other civil action. He insists that he completed the criminal and domestic matters for one granddaughter and performed work in the probate case. ¶ 14 The record is replete with letters from Parsons to respondent in which she insists that her efforts to communicate with respondent and to retrieve from him personal documents relating to a wrongful death suit proved unsuccessful. Schraeder takes the position that he terminated all communications with Parsons because his representation ended after the conclusion of the estate matters for her grandchildren and another family member's criminal case and annulment. ¶ 15 A constant flow of communication between an attorney and client constitutes a vital part of a lawyer's professional undertaking.[22] When a client seeks information from one who is retained for representation, prompt responsive action should be forthcoming. Prolonged and willful silence by the lawyer's failure to return calls or answer letters is the very kind of neglect that destroys the public's confidence in the lawyer's integrity.[23] ¶ 16 Both the Bar and respondent agree that the latter's actions violate the 577 mandatory provisions of ORPC Rules 1.4,[24] 1.15(b),[25] and 8.4(a)[26] and RGDP Rule 1.3[27] and constitute grounds for the imposition of professional discipline. On de novo review of the record, we hold there is clear and convincing probative support in the record for a breach of professional ethics and that the imposition of discipline is warranted. C COUNTS II AND IV Failure Timely to Respond to the Bar's Investigative Inquiries into the McMinn and Parsons Grievances ¶ 17 Counts II and IV address respondent's delay in filing his response to the Bar's investigative inquiries in the McMinn and Parsons grievances. Respondent failed timely to respond to the Bar's three written requests and promptly to take action with respect to statements he made on two occasions to the Bar's investigator. The McMinn Grievance ¶ 18 The Bar notified respondent by letter dated 16 February 2000 that the McMinn grievance was being opened for formal investigation, invoking the requirement that Schraeder provide a complete response within a twenty-day (20) period.[28] On March 14 the Bar notified Schraeder by certified mail containing a warning that failure to respond would result in the issuance of a subpoena duces tecum and require his testimony at the Bar Center. Respondent offered an explanation in a belated letter to the Bar (dated March 13 and postmarked March 16). He claimed that McMinn failed to provide critical information in a timely fashion and that any delay was caused by the lack of information he needed to proceed with the McMinn appeal. ¶ 19 The Bar's assigned investigator, Ray Page [Page or investigator] met with Schraeder concerning the McMinn and Parsons grievances. Schraeder assured Page that he would attempt to resolve with McMinn the dispute over the unearned portion of fees. Respondent's undated letter to the Bar, received 22 November 2000, shows that he wrote McMinn asking what portion of the fee he desired to have returned to him. McMinn's November 28 letter to respondent requested a refund of the entire $2,800. ¶ 20 By a 16 December 2000 facsimile transmission, respondent advised Page of his letter to McMinn and of McMinn's November 28 response. Contrary to respondent's statement that he would send Page a copy of his response to McMinn's November 28 request, the Bar received a December 26 letter from McMinn advising that he had not received a response to his November 28 letter. Respondent concedes that he did not promptly respond to McMinn's November 28 refund request, but claims that the delay was caused by the closing of his private practice and the moving of his law office. Respondent eventually provided McMinn with a full accounting of legal services and has refunded approximately $1,195.00 of the $2,800 fee. The respondent's conduct violates the mandatory provisions of ORPC Rules 8.1(b)[29] and 578 8.4(a)[30] and RGDP Rules 1.3[31] and 5.2[32] and warrants the imposition of discipline. The Parsons Grievance ¶ 21 By letter of 10 May 2000 the Bar advised respondent of Parsons' complaint and directed him to communicate with her within two weeks. Respondent wrote to Parsons and was informed by her letter of May 23 which items she wanted him to return. Because respondent neither returned the requested documents nor responded to her letter, the Bar demanded (by letter of June 5) that respondent return the items to her by June 13 or at least offer an explanation as to why it would have been impossible for him to do so. Respondent was advised by the Bar's letter that failure timely to respond would be grounds for discipline and result in a formal investigation. ¶ 22 One 14 June 2000 the Bar received a letter from Parsons stating that respondent had neither communicated with her nor returned the requested items. Two days later the Bar received a letter from respondent, dated June 12 and post-marked June 15, which advised that he had previously forwarded all documents to Parsons and that he could find no additional items in his office. ¶ 23 The Bar notified Schraeder by letter of 10 July 2000 that it was opening the Parsons matter for formal investigation, again invoking the requirement of a written response within twenty days. On August 1 Parsons notified Page, the Bar's investigator, that she had entrusted certain documents to respondent when she retained him to file a wrongful death action. She explained that the documents were needed so that a lawsuit could be filed by another lawyer before it became time barred. Page's August 11 letter to respondent requested that he again search for the items, stressing that a response was needed within 10 days to prevent the statute of limitations from running out. No reply was forthcoming from Schraeder. ¶ 24 After being advised by Parsons on August 22 that respondent had not contacted her about the missing documents, Page called respondent, leaving a message on his machine to return his call. Schraeder failed to respond. ¶ 25 Page finally met with respondent at his Drumright office on 7 November 2000. Respondent assured him that he would contact his former secretary to see if she could help him locate Parsons' missing documents. The following day respondent telephoned Parsons, advising her of his plan to enlist the aid of his former secretary. On December 14 respondent advised Page that he had located the missing documents and would mail them to Parsons the next day, as well as send the Bar a copy of the returned mail receipt. Respondent confirmed these plans by December 16 facsimile transmission to Page. The record indicates respondent did not return the remainder of Parsons' files until on or about 21 March 2001. Respondent insists that the delay was due to activity in closing his private practice. ¶ 26 The terms of RGDP Rule 5.2 provide that the failure of a lawyer to answer the Bar's request for information shall be grounds for discipline.[33] A lawyer's obligation to respond to a Bar complaint is mandatory and leaves no room for interpretation about the proper form or time for filing a response.[34] Respondent admits that he violated the mandatory provisions of ORPC 579 Rules 8.1(b),[35] 8.4(a)[36] and RGDP Rules 1.3,[37] 5.2[38] and that his misconduct constitutes grounds for the imposition of professional discipline. We agree. The only question remaining here is the proper disciplinary measure to be imposed for respondent's breach of professional ethics. IV FACTORS TO BE CONSIDERED IN MITIGATION OF DISCIPLINE ¶ 27 Mitigating circumstances may be considered in the process of assessing the appropriate quantum of discipline.[39] Respondent has raised several factors in mitigation. ¶ 28 Respondent submits medical proof that he suffered from occupational burnout[40] diagnosed by his physician during the time of the breach. When the condition is tendered as a mitigating factor for assessment of one's culpability there must be a causal relationship between a medical condition and the professional misconduct 580 charged.[41]Yet emotional or psychological disability, though it may serve to reduce the actor's ethical culpability, does not immunize one from imposition of disciplinary measures that are necessary to protect the public.[42] The record provides a sufficient causal connection between respondent's ethical lapses and his professional burnout syndrome. His condition is now believed by his physician to have been arrested. Respondent continues to be seen once a week as part of an ongoing counseling program. ¶ 29 Shortly after he became aware of his inability fully to serve his clients respondent sought to correct certain deficiencies in the way his office was managed by closing out his private practice and joining an assemblage of practitioners who can assist him. ¶ 30 Respondent has been a member of the bar for over 19 years and his professional record reflects neither previous blemishes nor a pattern of misconduct.[43] He has acknowledged and accepted responsibility for his professional derelictions. The record shows that respondent's actions caused no grave economic harm. We note that respondent's dealings with the Bar, albeit dilatory during the initial investigative stages, were characterized by candor and cooperation during the latter stages and in the PRT proceedings. ¶ 31 We have taken these matters into account in fashioning the appropriate measure of discipline. V RESPONDENT'S MISCONDUCT WARRANTS A LICENSE SUSPENSION FOR THIRTY (30) DAYS TOGETHER WITH PAYMENT OF THE COSTS OF THIS PROCEEDING ¶ 32 A bar disciplinary process, including that for imposition of a disciplinary sanction, is designed not to punish the delinquent lawyer, but to safeguard the interests of the public, of the judiciary, and of the legal profession.[44] Neglect of a lawyer's responsibilities compromises the independence of the profession and the public interest which that independence serves.[45] A license to practice law is not conferred for the benefit of an individual, but for that of the public.[46] The disciplinary measure imposed upon an offending lawyer should be consistent with the discipline imposed upon other practitioners for similar acts of professional misconduct.[47] ¶ 33 A lawyer's failure to respond to the bar's investigative inquiries is a serious offense. This court in State ex rel. Oklahoma Bar Association v. Robb[48] imposed a suspension of two years and one day for a lawyer's failure to respond to three client grievances or appear for depositions in response to subpoenas and for failure to respond to the disciplinary complaint. ¶ 34 The trial panel recommends a private reprimand as a fit discipline for respondent's breach of professional ethics. After a review of the record and the court's acceptance of the tendered mitigating factors, we hold that the appropriate disciplinary measure to be imposed is a thirty-day suspension of license to practice law. Today's decision is based upon the cumulative 581 effect of the following factors: (1) respondent's utter failure promptly to respond to the bar's investigative inquires, (2) his lack of concern for a client's economic interest by refusal promptly to account for and restore the unearned portion of fees for nearly a three-year period and (3) his disregard for a client's right to know the status of her case. Although we take note that upon his own initiative respondent sought to determine if there was an underlying cause for his apathy and lost sense of career satisfaction and now seeks professional counseling on a continual basis, the standards to be followed are those that best protect the public and not those that shield the offending lawyer. VI SUMMARY ¶ 35 In sum, the record bears clear and convincing proof that respondent's participation in several episodes of unprofessional conduct violates the rules governing professional ethics. After a thorough review of the record and recognition of the tendered mitigating factors, RESPONDENT'S LICENSE TO PRACTICE LAW STANDS ORDERED SUSPENDED FOR THIRTY (30) DAYS AND HE IS DIRECTED TO PAY THE COSTS OF THE INVESTIGATION, RECORD AND PROCEEDING IN THE AMOUNT OF $571.03, WHICH SHALL BECOME DUE NOT LATER THAN THIRTY (30) DAYS AFTER THIS OPINION BECOMES FINAL. ¶ 36 HARGRAVE, C.J., KAUGER, SUMMERS, BOUDREAU and WINCHESTER, JJ., concur. ¶ 37 WATT, V.C.J., HODGES and LAVENDER, JJ., concur in part and dissent in part. LAVENDER, J., with whom WATT, V.C.J., and HODGES, J., join, concurring in part and dissenting in part. ¶ 1 I would administer a public reprimand. NOTES [1] The record consists of a transcript of the PRT hearing, the PRT's report, the parties' stipulations of fact, conclusions of law, factors to be considered in mitigation of charges, sixty-three (63) exhibits offered by the parties (including joint exhibits on professional burnout syndrome) and a joint brief of the parties in support of the report and recommendation of the PRT. [2] The provisions of RGDP Rule 6.1, 5 O.S.2001, Ch. 1, App. 1-A, state in pertinent part: "The proceeding shall be initiated by a formal complaint prepared by the General Counsel, approved by the Commission, signed by the chairman or vice-chairman of the Commission, and filed with the Chief Justice of the Supreme Court." [3] 5 O.S.2001, Ch. 1, App. 3-A. [4] For a discussion of professional burnout syndrome, see infra note 40. [5] State ex rel. Okla. Bar Ass'n v. Leigh, 1996 OK 37, ¶ 10, 914 P.2d 661, 666; State ex rel. Okla. Bar Ass'n v. Eakin, 1995 OK 106, ¶ 8, 914 P.2d 644, 647-48; State ex rel. Okla. Bar Ass'n v. Bolton, 1994 OK 53, ¶ 15, 880 P.2d 339, 344; State ex rel. Okla. Bar Ass'n v. Donnelly, 1992 OK 164, ¶ 11, 848 P.2d 543, 545; State ex rel. Okla. Bar Ass'n v. Raskin, 1982 OK 39, ¶ 11, 642 P.2d 262, 265-66. [6] Eakin, supra note 5, at ¶ 8, at 648; State ex rel. Okla. Bar Ass'n v. Downing, 1990 OK 102, ¶ 12, 804 P.2d 1120, 1122-23; Raskin, supra note 5, at ¶ 11, at 265-66. [7] Leigh, supra note 5, at 666-67; Eakin, supra note 5, at ¶ 8, at 647-48; State ex rel. Okla. Bar Ass'n v. Lloyd, 1990 OK 14, ¶ 8, 787 P.2d 855, 858; State ex rel. Okla. Bar Ass'n v. Stubblefield, 1988 OK 141, ¶ 7, 766 P.2d 979, 982; State ex rel. Okla. Bar Ass'n v. Brandon, 1969 OK 28, ¶ 5, 450 P.2d 824, 827. Because this court's cognizance of disciplinary proceedings cannot be shared with any other institution, every aspect of the Bar's adjudicative process must be revisited by our de novo consideration. The attribute of nondelegable jurisdiction serves to distinguish the conduct of bar disciplinary functions from trial de novo a retrial in a different court or even from de novo appellate review on the record, which stands for an independent, non-deferential examination of another tribunal's record. [8] Eakin, supra note 5, at ¶ 8, at 648; Raskin, supra note 5, at ¶ 11, at 265. [9] The court's range of options in a disciplinary proceeding is set forth in RGDP Rule 6.15(a), 5 O.S.1991, Ch. 1, App 1-A, which states: "The Supreme Court may approve the Trial Panel's findings of fact or make its own independent findings, impose discipline, dismiss the proceedings or take such other action as it deems appropriate." Eakin, supra note 5 at ¶ 8, at 648; State ex rel. Okla. Bar Ass'n v. Farrant, 1994 OK 13, ¶ 7, 867 P.2d 1279, 1284; Bolton, supra note 5, at ¶ 15, at 344; Levi v. Mississippi State Bar, 436 So.2d 781, 782 (Miss.1983). [10] Eakin, supra note 5, at ¶ 9, at 648. A deficient record can never afford grounds for this court's abdication of its constitutional responsibility to conduct a meaningful de novo review. This court has declined to exercise jurisdiction by returning a case for a full-scale evidentiary hearing before the trial panel, see Lloyd, supra note 7, at 858 (for a complete explanation of the applicable procedure). [11] Eakin, supra note 5, at ¶ 9, at 648, Bolton, supra note 5, at ¶ 16 at 345. [12] Eakin, supra note 5, at ¶ 9, at 648; Bolton, supra note 5, at ¶ 16, at 345; State ex rel. Okla. Bar Ass'n v. Perceful, 1990 OK 72, ¶ 5, 796 P.2d 627, 630. [13] State ex rel. Okla. Bar Ass'n v. Livshee, 1994 OK 12, ¶ 7, 870 P.2d 770, 774. [14] United States of America v. Perry A. McMinn, 97-CR-26 (United States District Court for the Northern District of Oklahoma). [15] Schraeder's main reason for not proceeding with the appeal is that he was waiting on information from McMinn's family about his genealogy (whether they had proof of his Native American heritage) to either materially assist a motion to dismiss the case from federal court for lack of jurisdiction over a criminal matter that allegedly occurred on Indian land or ask for re-sentencing to a term that would require McMinn's immediate release. [16] The critical terms of ORPC Rule 1.4, 5 O.S. 2001, Ch. 1, App. 3-A provide: (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. [17] The pertinent terms of ORPC Rule 1.5(a), 5 O.S.2001, Ch. 1, App. 3-A provide: (a) A lawyer's fee shall be reasonable. * * * [18] The pertinent terms of ORPC Rule 1.15(b), 5 O.S.2001, Ch.1, App. 3-A provide: (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. (emphasis added). [19] The terms of ORPC Rule 1.16(b)(2) and (d), 5 O.S.2001, Ch. 1, App. 3-A provide in part: (b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if: * * * (2) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer's services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled; * * * (d) 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 that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law. [20] The terms of ORPC Rule 8.4, 5 O.S.2001, Ch. 1, App. 3-A provide in pertinent part: It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; * * * [21] The pertinent terms of RGDP Rule 1.3, 5 O.S.2001, Ch. 1, App. 1-A provide: The commission by any lawyer of any act contrary to prescribed standards of conduct, whether in the course of his professional capacity, or otherwise, which act would reasonably be found to bring discredit upon the legal profession, shall be grounds for disciplinary action . . . . [22] "Professional competence i.e., acting promptly in pending matters and communicating with a client is a mandatory obligation imposed upon licensed practitioners. Albeit onerous, this obligation is the very minimum to be expected from a lawyer. It epitomizes professionalism. Anything less is a breach of a lawyer's duty to serve the client." State ex rel. Oklahoma Bar Ass'n v. Evans, 1994 OK 45, ¶ 16, 880 P.2d 333, 338-39 (citing Raskin, supra note 5 at 267) (emphasis in the original). [23] Id. [24] For the pertinent terms of ORPC Rule 1.4, see supra note 16. [25] For the pertinent terms of ORPC Rule 1.15(b) see supra note 18. [26] For the pertinent terms of ORPC Rule 8.4(a), see supra note 20. [27] For the terms of RGDP Rule 1.3, see supra note 21. [28] See the terms of RGDP Rule 5.2, infra note 32. [29] The terms of ORPC Rule 8.1(b) provide in pertinent part: An applicant for admission to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not: * * * (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority . . . . [30] For the critical terms of ORPC Rule 8.4(a), see supra note 20. [31] For the pertinent terms of RGDP 1.3, see supra note 21. [32] The terms of RGDP Rule 5.2 (Investigations), 5 O.S.1981, Ch. 1, App. 1-A provide in pertinent part: After making such preliminary investigation as the General Counsel may deem appropriate, the General Counsel shall . . . (2) file and serve a copy of the grievance . . . upon the lawyer who shall thereafter make a written response which contains a full and fair disclosure of all facts and circumstances pertaining to the respondent lawyer's alleged misconduct . . . . The failure of the lawyer to answer within twenty (20) days after service of the grievance . . . shall be grounds for discipline. . . . (emphasis added). [33] Id. [34] Id. [35] The relevant portion of ORPC Rule 8.1(b), 5 O.S.1991, Ch.1, App. 1-A provides in part: An applicant for admission to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not ... (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this rule does not require disclosure of information otherwise protected by Rule 1.6. [36] For the terms of ORPC Rule 8.4(a), see supra note 20. [37] See supra note 21 for the terms of ORPC Rule 1.3. [38] For the pertinent terms of RGDP Rule 5.2, see supra note 32. [39] See State ex rel. Okla. Bar Ass'n v. Colston, 1989 OK 74, 777 P.2d 920; see also Raskin, supra note 5 at 267. [40] Professional burnout syndrome has been used in bar disciplinary matters either as a defense or as a mitigating factor. See State ex rel. Okla. Bar Ass'n v. Wolfe, 1996 OK 75, 919 P.2d 427 (lawyer's license to practice law was suspended for two years and one day despite the use of burnout as a defense); In re Conduct of Loew, 292 Or. 806, 642 P.2d 1171 (1982) (a lawyer's license was suspended for thirty days despite the court's recognition of burnout as mitigating factor for neglect of a legal matter and for misrepresentation to a client); In re Ontell, 593 A.2d 1038, 1042 (D.C.1991) (a lawyer's license was suspended for thirty days for two instances of neglect of legal matters coupled with misrepresentation to clients despite the court's recognition of burnout as a mitigating factor). In Loew, supra, at 1173, the respondent's psychiatrist described the condition as follows: "A number of things occur when somebody has reached this so[-]call[ed] burn out point. They feel fatigue all the time, they have difficulty sleeping, they feel drained, may have an array of physical ailments which occur which are quite real, maybe hospitalized as you were, have memory lapses, impaired concentration, frequently miss deadlines, backlog of work, financial problems, begin to view patients or clients or whatever people you're working with, or you begin to view your work as the enemy and `Oh, my God, here comes another patient, another client,' and so on. Rather than someone who is a team member, it's an opponent." In Judith L. Maute, Balanced Lives in a Stressful Profession: an Impossible Dream?, 21 Cap. U.L.Rev. 797, 812 n. 54 (1992), the author observes that in many discipline cases evidence of burnout results in neglect, citing in footnote 54: In re Sullivan, 530 A.2d 1115 (Del.1987) (lawyer disbarred for pattern of serious misconduct; court rejected claim of mental incompetence); Colorado v. Heilbrunn, 814 P.2d 819 (Colo.1991) (repeated instances of neglect related to lawyer's severe chronic depression which led to drug and alcohol abuse). A number of articles have been written on the subject. See, e.g., Michael J. Sweeney, Stress, Anxiety & Burnout, Practical Skills Seminar (1989); Thomas L. Cory, Stress: How it Affects Trial Lawyers and Their Clients, 24 TRIAL 54-57 (May 1988); Sarah B. Singer, Stress and the Sole Practitioner Hard Times for Lawyers, Boston B. J., Nov-Dec.1987 at 16; Stress Takes Heavy Toll on Profession . . . [B. Leader-Sept. Oct.1990, at 19]; Marion R. Frank, How to Avoid Burnout, Penn. L.J. Rep., March 7, 1988, at § 2. In Charles J. Ogletree, Jr. Beyond Justifications: Seeking Motivations to Sustain Public Defenders, 106 Harv. L.Rev. 1239, 1241 n. 9 (1993), the author states: Burnout has been studied empirically in various contexts. See, e.g., Deborah L. Arron, RUNNING FROM THE LAW: WHY GOOD LAWYERS ARE GETTING OUT OF THE LEGAL PROFESSION 2-3 (1989); Barry A. Farber, CRISIS IN EDUCATION: STRESS AND BURNOUT IN THE AMERICAN TEACHER 24 (1991) ("Burnout is a work related syndrome that stems from an individual's perceptions of a significant discrepancy between effort (input) and reward (output) . . . . It occurs most often in those who work face to face with troubled or needy clients . . . ." (emphasis omitted)); Paul Ligda, Work Overload and Defender Burnout, 35 NLADA Briefcase 5, 5 (1977) (noting the effects of working environment on public defender performance). . . . [41] "When alcoholism is tendered as a mitigating factor there must be some causal relationship between one's alcoholic affliction and the professional misconduct charged." State ex rel. Okla. Bar Ass'n v. Giger, 2001 OK 96, ¶ 15, 37 P.3d 856, 863 n. 31 (quoting Donnelly, supra note 5, at ¶ 17, n. 21, at 548 n. 21). [42] Coppock v. State Bar, 44 Cal.3d 665, 244 Cal. Rptr. 462, 749 P.2d 1317 (1988) (citing Palomo v. State Bar, 36 Cal.3d 785, 205 Cal.Rptr. 834, 685 P.2d 1185 (1984)). [43] A lawyer's good character, reputation and exemplary professional standing are factors to be considered in mitigation of charges. State ex rel. Okla. Bar Ass'n v. Steger, 1966 OK 188, 433 P.2d 225, 227. [44] State ex rel. Okla. Bar Ass'n v. Smith, 1980 OK 126, ¶ 21, 615 P.2d 1014, 1018. [45] See Preamble to the Oklahoma Rules of Professional Conduct, 5 O.S.2001, Ch. 1, App. 3-A. [46] Smith, supra note 44, at ¶ 21, at 1018; State ex rel. Okla. Bar Ass'n v. Lowe, 1982 OK 20, ¶ 19, 640 P.2d 1361, 1363. [47] Eakin, supra note 5, at ¶ 9, at 648; Bolton, supra note 5, at ¶ 16, at 345. [48] 1997 OK 84, 942 P.2d 196.	{ "pile_set_name": "FreeLaw" }
104 P.3d 601 (2004) 337 Or. 669 CLARK v. SCHIEDLER. No. S51889. Supreme Court of Oregon. December 21, 2004. Petition for review denied.	{ "pile_set_name": "FreeLaw" }
529 F.2d 524 Dayton X-Ray Co.v.Diapulse Corp. of America 75-1738, 75-1739 UNITED STATES COURT OF APPEALS Sixth Circuit 12/31/75 S.D.Ohio AFFIRMED	{ "pile_set_name": "FreeLaw" }
551 F.2d 21 NATIONAL SURETY CORPORATION, a corporation of the State ofNew York, Appellant,v.The MIDLAND BANK, a corporation of New Jersey, Appellee. No. 76-1686. United States Court of Appeals,Third Circuit. Argued Jan. 14, 1977.Decided Feb. 25, 1977. Lum, Biunno & Tompkins, Newark, N.J., for appellant; David A. Birch, Charles H. Hoens, Jr., Newark, N.J., on the brief. Milton, Keane & Brady, Jersey City, N.J., for appellee; Thomas J. Brady, Jersey City, N.J., on the brief. Shearman & Sterling, New York City, for American Ins. Ass'n as amicus curiae; Henry Harfield, New York City, of counsel. Sullivan & Cromwell, New York City, for N.Y. Clearing House Ass'n as amicus curiae; William E. Willis, Hamilton F. Potter, Jr., H. Rodgin Cohen, New York City, of counsel. Before GIBBONS and GARTH, Circuit Judges, and BECHTLE,* District Judge. OPINION OF THE COURT GARTH, Circuit Judge. 1 This diversity suit resulted from defendant Midland Bank & Trust Company's (Bank's) refusal to honor drafts submitted by plaintiff National Surety Corporation pursuant to so-called "standby" letters of credit issued by the Bank. The Bank justified its refusal to honor the drafts by claiming that the letters of credit were invalid, asserting that New Jersey law prohibited banks from issuing such standby letters of credit if they exceeded one year in duration. 2 The district court sustained the Bank's contention, 408 F.Supp. 684 (D.N.J.1976), and held the letters of credit invalid. We reverse. I. 3 On January 9, 1967, the Bank issued Irrevocable Letter of Credit No. 1549 in favor of National Surety. This letter of credit had issued at the behest of Astrorico Compania Naviera, S.A., which required collateral security to secure a release of libel bond which National Surety had executed for one of Astrorico's vessels. In its letter of credit, the Bank authorized National Surety 4 to draw on us at sight up to an aggregate amount of $10,250 available by your drafts at sight accompanied by your written certification that you have incurred liability, loss, costs or expense by reason of your having executed Bond of Indemnity or undertaking on behalf of Astrorico Compania Naviera, S.A. As to duration, the bank's letter stated: 5 It is a condition of this letter of credit that it shall be deemed automatically extended without amendment for one year from the present or any future expiration date hereof, unless thirty days prior to any such date we shall notify you by registered letter that we elect not to consider this letter of credit renewed for any such additional period.1 6 As the district court noted,2 the parties had thus executed a "standby" letter of credit. The undisputed facts underlying this dispute may be simply stated. The shipping company's vessel had been seized by United States Marshals pursuant to unrelated litigation. To obtain a release from such seizure, the shipping company required a "release of libel" bond, which it sought from National Surety. National Surety refused to post surety in the absence of collateral. To obtain collateral for the issuance of National Surety's bond, the shipping company arranged with the Bank to issue Irrevocable Letter of Credit No. 1549, described above, with National Surety named as beneficiary. Upon the execution of the Letter of Credit securing National Surety, National Surety issued its bond, and the vessel was released. 7 The Bank's conditional extension of credit was called into play by Astrorico's failure to satisfy a judgment rendered against it. As surety on the release of libel bond, National Surety became obligated to pay over the sum of $7,878.00, the aggregate of the judgment, interest and costs. National Surety tendered payment of this amount, and it then forwarded a sight draft, together with the required documents certifying loss, to the Bank. The Bank refused to honor the sight draft.3 8 Meanwhile, on February 1, 1967, the Bank had issued its Irrevocable Letter of Credit No. 1553.4 National Surety was again authorized to draw upon the Bank by sight draft (this time, to an amount not to exceed $50,000), although its release of libel bond was executed in this instance on behalf of Asopos Shipping Company, S.A. Like Letter of Credit No. 1549, Letter of Credit No. 1553 was to remain in effect for one year, subject to automatic renewal without amendment, unless, at least 30 days before expiration the Bank notified National Surety that the Letter of Credit would not be renewed. Upon receipt of notice of non-renewal, National Surety was authorized to submit sight drafts to the amount of the release of libel bond, $50,000. The only proof required in such a case would be National Surety's certification that its release of libel bond was still outstanding. 9 On June 25, 1971, the Bank, through its counsel, repudiated Letter of Credit No. 1553.5 National Surety treated the Bank's disavowal as an exercise of the Bank's option not to renew. Pursuant to its authorization under the Letter of Credit, National Surety on December 13, 1971 submitted a sight draft for the full amount of its outstanding release of Libel bond $50,000.6 The Bank refused to honor this draft. 10 National Surety then initiated this action in the United States District Court for the District of New Jersey. Its complaint initially sought (1) a declaration of the rights and duties of the parties under Letter of Credit No. 1553, and a declaration that this Letter was valid and binding upon the Bank, and (2) judgment against the Bank for $50,000 under the Letter's terms. A third count, added by supplemental complaint and involving Letter of Credit No. 1549, alleged that National Surety had satisfied a judgment against Astrorico, that it had submitted a draft for the amount paid ($7,878.00) under Letter of Credit No. 1549 and that the Bank had refused to honor this demand. National Surety under this count sought compensatory and punitive damages for this alleged breach of the Bank's obligations under Letter of Credit No. 1549. 11 The Bank asserted the same defenses to both the complaint and supplemental complaint. Its first defense was that the respective Letters of Credit were "illegal and void at (their) inception;" its second defense, that the respective Letters of Credit had expired prior to the drawing of the drafts in question; and its third defense, that the Letters of Credit were issued without authority.7 National Surety served interrogatories upon the Bank, and the Bank's answer focused the dispute between the parties: 12 Answer: Midland Bank Letter(s) of Credit . . . (were, by their) terms, drawn to be automatically extended indefinitely in time and N.J.S.A. 17:9A-25(3) limits Letters of Credit to a one year term.8 13 With these submissions before the district court, both parties moved for summary judgment. After hearing argument, on May 28, 1974, the court denied both motions, as it found that the motions revealed "genuine issues of material fact."9 14 Thereafter, on October 7, 1974, the case was tried. National Surety established that judgment had been entered against Astrorico, the principal on its release of libel bond; that National Surety had presented a sight draft to the Bank with certification of loss pursuant to Letter of Credit No. 1549; and that this draft had been dishonored. 15 Through its single witness,10 National Surety also established that the Bank's counsel had advised by letter that any drafts drawn on Letter of Credit No. 1553 would not be honored, and that National Surety had responded to this communication by immediately submitting a sight draft for $50,000, as it was empowered to do upon notice of nonrenewal. (See pp. 23-24 supra.) 16 The Bank called but one witness Thomas Stagnitti, its president and chief executive officer. His testimony bulwarked the Bank's contention that the Letters of Credit were void and unenforceable. His interpretation of the applicable banking law in New Jersey was that New Jersey state banks were denied the power to issue letters of credit exceeding one year's duration. He testified regarding State Department of Banking Examiners' reports which indicated that the New Jersey Department of Banking considered letters of credit with automatic renewal provisions (such as contained in Nos. 1549 and 1553) to violate the statute. See Finding of Fact # 13, 408 F.Supp. at 695. 17 The conclusion of the one-day trial did not signal an end to the court's quest for information concerning interpretation of New Jersey banking law. New Jersey's Deputy Commissioner of Banking, writing in response to an apparent sua sponte inquiry by the district court, gave his opinion that the Banking Department would read the relevant New Jersey statute as barring letters of credit, as well as drafts drawn upon such letters of credit, if either exceeded one year in duration.11 18 On February 17, 1976 the district court filed its opinion which included its findings of fact and conclusions of law. The court held 19 that (N.J.S.A. 17:9A-25(3), containing the one-year limitation,) does not authorize issuance of an irrevocable letter of credit valid for more than a year from the date of its issuance, and that this matter raised in defense is sufficient to defeat the surety company's claim as beneficiary under the letters. 20 408 F.Supp. at 686. On March 23, 1976 judgment was entered in favor of the defendant on all claims. This appeal followed.12 21 While not taking issue with the district court's findings of fact, National Surety does dispute the district court's conclusion that New Jersey's banking laws render nugatory letters of credit effective for more than one year.13 Notwithstanding the district court's analysis, we are left unpersuaded that New Jersey requires the result reached by the district court. Indeed, under our analysis a different conclusion is required. We conclude that the statute in question, N.J.S.A. 17:9A-25(3), imposes its one-year limitation not on letters of credit, but only on drafts which are drawn upon letters of credit. This conclusion results in our upholding the validity of these Letters of Credit, and mandates that we reverse the district court judgment. II. 22 Under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 we must ascertain and apply New Jersey law in this diversity case. The relevant statutory law here is found in N.J.S.A. 17:9A-25: 23 In addition to the powers specified in section 24, every bank shall, subject to the provisions of this act, have the following powers, whether or not such powers are specially set forth in its certificate of incorporation: 24 (3) to issue letters of credit authorizing holders thereof to draw drafts upon it or upon its correspondents at sight or on time not exceeding one year; to guarantee, for a period not exceeding one year from the date of such guarantee, the payment by its customers of amounts due or to become due upon the purchase by such customers of real or personal property. The district court observed that 25 (t)he quoted clause on letters of credit was apparently patterned after New York Banking Law § 96(2) (McKinney 1975), from which it differs only in immaterial detail. 26 No case brought to the attention of the Court construes the relevant portion of either the New York or New Jersey statute or any similar piece of legislation. Nor has any legislative history been found.14 27 In addition, the court noted the observations of several legal commentators, but found that the "precise question has apparently not been adequately addressed". 408 F.Supp. at 688 n.5. 28 We will begin our analysis with an examination of the rationale of the district court opinion, and will then consider the effect of intervening rulings by state judicial and administrative authorities. 29 We agree that at the time the district court filed its opinion the New Jersey statute at issue here had not been construed under New Jersey law. Since that time, as we have observed (see note 13 supra ), the Superior Court of New Jersey, Appellate Division has discussed this statute in a similar context but in dictum. New Jersey Bank v. Palladino, 146 N.J.Super. 6, 368 A.2d 943 (1976). Notwithstanding Palladino, there is still no holding by the courts of New Jersey involving the issue presented here under N.J.S.A. 17:9A-25(3). Hence, we start our analysis as if the question were one of first impression. Initially, we will examine the rationale of the district court's opinion before proceeding to a discussion of Palladino, recent administrative rulings (as they may affect our conclusion), and the legislation itself. A. The District Court's Opinion 30 The district court began its opinion by examining the statute for clarity and definitiveness. The relevant portion of the statute on which the court focused grants banks the power: 31 to issue letters of credit authorizing holders thereof to draw drafts upon it . . . at sight or on time not exceeding one year. 32 (Emphasis added). 33 National Surety had urged that the one-year limitation clause (italicized above) modifies the word "time" as a type of draft and not the more remote antecedent term, "letters of credit." It referred the district court to the "last antecedent" rule, which states that 34 a limiting clause or phrase modifies the last antecedent unless the subject matter requires a different construction. U. S. ex rel. Santarelli v. Hughes, 116 F.2d 613 (, 616) (3d Cir.1940) (footnote omitted).15 35 The district court determined, however, that the "subject matter" of this case indeed required a different construction, and that the last antecedent rule was not applicable.16 The court thus concluded "that the controverted statute is not clear on its face, and that it is therefore necessary to look . . . beyond the words of the statute in order to ascertain its meaning." 408 F.Supp. at 689. 36 Accordingly, the district court's opinion then proceeded to examine the legislative intent underlying the statute. Letters of credit, the district court found, are typically employed in the sale of goods, where the issuing bank's risks are minimal: "not only does the bank engage its credit for a relatively short period of time, but it also acquires a security interest in the goods." 408 F.Supp. at 690.17 Nonetheless, the district court saw a potential for abuse: because letters of credit create only contingent liabilities, banks can overextend themselves. 37 The district court construed the statute at issue as a response to this potential danger of overextension, declaring that "(t)his case . . . illustrates the need for a statute to limit the power of banks to issue letters of credit," 408 F.Supp. at 690. It continued with the observation that the legislature, in enacting the statute at issue, must have intended precisely the limitation for which the defendant contends, i.e., that letters of credit are limited to a one-year duration. 38 To support this conclusion, the district court also noted the role played by New Jersey's Commissioner of Banking in regulating bank practices and in granting powers to banks. The opinion "deems significant" "the interpretation of the state Department of Banking" "that the controverted statute limits the duration of (a letter of) credit."18 39 Thus the district court's interpretation of N.J.S.A. 17:9A-25(3) rests upon three bases first, the court's finding that the statute was facially ambiguous, forcing resort to legislative intent; second, the court's interpretation of that intent, and third, the "position" ostensibly taken by New Jersey's Department of Banking. B. Subsequent Developments In a diversity case: 40 The Court of Appeals applies the law as it is at the time the judgment is reviewed, even though the law has been changed since the judgment of the District Court.19 41 The Supreme Court's decision in Vandenbark v. Owen-Illinois Glass Co., 311 U.S. 538, 61 S.Ct. 347, 85 L.Ed. 327 (1941) established this rule for diversity cases. The Vandenbark Court announced that a change in state law, whether effected by an intervening decision or by a newly enacted statute, may well "cause the reversal of judgments which were correct when entered." 311 U.S. at 543, 61 S.Ct. at 350. Thus, in the present context, where no state interpretation of N.J.S.A. 17:9A-25(3) was to be found at the time that the district court rendered its opinion, we must nevertheless be mindful of state interpretations that have arisen since that time. 42 And indeed, the interval between the district court's decision in this case and our review of that decision has seen two developments which we must evaluate. On December 13, 1976 the Appellate Division of the Superior Court of New Jersey decided New Jersey Bank v. Palladino, 146 N.J.Super. 6, 368 A.2d 943 (1976), in which that court, relying upon the district court's opinion in that case, expressed approval of the district court's interpretation of N.J.S.A. 17:9A-25(3). Also, on October 1, 1976 the State Department of Banking adopted rules concerning standby letters of credit which appear to be at odds with the letter written by a staff member of the Department of Banking stating that letters of credit are limited to one year. Our discussion as to the effect of these two events follows. 1. 43 We are not persuaded that the discussion in Palladino of N.J.S.A. 17:9A-25(3) affects our conclusion that the district court incorrectly interpreted that statute. Ultimately, of course, we must determine how the New Jersey Supreme Court would decide the question before us.20 Here, however, New Jersey's highest court has never addressed that question or the authority of state-charter banks to issue letters of credit which exceed one year in duration. Only the Palladino decision touches upon this question, and that decision, as we have noted, was rendered by the Superior Court of New Jersey, Appellate Division. 44 In Palladino, plaintiff New Jersey Bank sued First State Bank of Hudson County on Palladino's note, which First State Bank had guaranteed. Plaintiff obtained judgment against First State Bank (and a default judgment against Palladino, the debtor) for the amount of the note, plus counsel fees and interest. By the time the Appellate Division heard the appeal from the trial court judgment, First State Bank had been declared insolvent, and the Federal Deposit Insurance Corporation (FDIC) had succeeded to its interest. The FDIC argued that the letter from the First State Bank's president to plaintiff bank extending the bank's credit21 was an illegal guaranty, under N.J.S.A. 17:9A-213.1. The FDIC's position prevailed, and the judgment against First State Bank was reduced to the amount of benefits it had received. 45 In attempting to preserve the trial court judgment in its favor, plaintiff bank contended that this letter of guaranty was in fact a letter of credit, and that N.J.S.A. 17:9A-25(3)22 authorized its issuance. The Appellate Division unequivocally rejected plaintiff bank's effort to construe the guaranty letter as a letter of credit: "We hold that (the bank president's) letters were not 'letters of credit' . . . as that term is used in N.J.S.A. 17:9A-25(3)." Thus, by its own explicit holding, the Appellate Division vitiated any need for it to discuss letters of credit or to construe N.J.S.A. 17:9A-25(3). The ensuing discussion, irrelevant to its holding, can only be described as dictum. That discussion reads: 46 Moreover, assuming arguendo that the letter of October 11, 1972 was a 'letter of credit,' plaintiff's attempt to impose liability on the defendant bank based on the letter fails, as being beyond the express statutory limitation of one year on such undertakings. The default on the Palladino note occurred February 15, 1974, the date plaintiff first demanded payment, i.e., 16 months after the date of Dooley's letter. 47 Plaintiff argues that since the note was for six months and dated October 12, 1972, the one year period mentioned in the statute did not commence to run until April 12, 1973. We disagree. The plain intent and meaning of the statute is to limit the obligation of a bank on 'letters of credit' to a one-year period from the issuance of the letter. Cf. National Surety Corp. v. Midland Bank & Trust Co., 408 F.Supp. 684, 687-691 (D.N.J.1976). 48 Palladino, supra, at 12, 368 A.2d at 946. 49 By including that discussion in its opinion, however, we are required to determine, under Erie, the weight to be afforded a statement of what purports to be the law of New Jersey made by the intermediate appellate court of that state when that statement is no more than dictum. 50 In Paoletto v. Beech Aircraft Corporation, 464 F.2d 976 (3d Cir.1972), this Court in a diversity action followed the principle announced in Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1967) and prescribed the effect of inferior court determinations in ascertaining the state law in question: 51 We are not precluded from giving 'proper regard' to the holdings of the lower courts of the forum state in fashioning a conflict-of-laws rule, although, unlike the holdings of the state's highest court, they are not necessarily dispositive of the question. See Commissioner of Internal Revenue v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 18 L.Ed.2d 886 (1966).23 52 Paoletto thus counsels that state intermediate appellate decisions are not automatically controlling. The Supreme Court in Bosch summarized current practice in diversity cases as follows: 53 (E)ven in diversity cases this Court has further held that while the decrees of 'lower state courts' should be 'attributed some weight . . . the decision (is) not controlling . . .' where the highest court of the State has not spoken on the point. King v. Order of Travelers, 333 U.S. 153, 160-161, 68 S.Ct. (488), at 492, 92 L.Ed. 608 (1948). And in West v. A.T.&T. Co., 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139 (1940), this Court further held that 'an intermediate appellate state court . . . is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.' At 237, 61 S.Ct. (179) at 183. (Emphasis supplied.) Thus, under some conditions, federal authority may not be bound even by an intermediate state appellate court ruling. . . . 54 This is but an application of the rule of Erie R. Co. v. Tompkins, supra, where state law as announced by the highest court of the State is to be followed. This is not a diversity case but the same principle may be applied for the same reasons, viz., the underlying substantive rule involved is based on state law and the State's highest court is the best authority on its own law. If there be no decision by that court then federal authorities must apply what they find to be the state law after giving 'proper regard' to relevant rulings of other courts of the State. In this respect, it may be said to be, in effect, sitting as a state court. Bernhardt v. Polygraphic Co., 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1956). 55 Commissioner v. Estate of Bosch, 387 U.S. at 465, 87 S.Ct. at 1782.24 56 We conclude, therefore, that while we may not ignore the decision of an intermediate appellate court, we are free to reach a contrary result if, by analyzing "other persuasive data,"25 we predict that the New Jersey Supreme Court would hold otherwise. In short, an intermediate appellate court holding is presumptive evidence, rather than an absolute pronouncement, of state law. Thus we would not be bound to follow the Appellate Division's statement of law in Palladino even if that statement represented the Court's holding, which it does not. 57 As we have noted above, Palladino's discussion of the alleged one-year limitation on letters of credit is dictum. Although one commentator has aptly observed that "the obligation to accept local law extends not merely to definitive decisions, but to considered dicta as well,"26 we note that those courts accepting state court dicta have indicated that they do so not in blind adherence to gratuitous discussion in a state court opinion but rather in deference to the persuasiveness of its reasoning.27 For example, in Metropolitan Life Insurance Co. v. Chase, 294 F.2d 500 (3d Cir.1961), this Court found dicta in a New Jersey Appellate Division case to be "adequate evidence" of the state's position on the domicile of the parties to a common-law marriage. This dicta was convincing because it was "in line with" an analogous decision of the New Jersey Supreme Court. Thus the dicta, given its support in Supreme Court case law, was properly followed. 58 The difference between the dictum in Palladino28 and the dictum in Metropolitan Life is manifest. Unlike the Metropolitan Life decision, supra, Palladino's dictum on letter of credit limitations has no foundation in New Jersey case law. The Palladino court's observation was based on its perception of N.J.S.A. 17:9A-25(3) as it was construed not by another state court but by a federal district court in the very decision which we are reviewing here. 59 Palladino's interpretation of this statute, was said to emanate from the statute's "plain intent and meaning."29 Still, Palladino offers no hint as to why the statute must be read to proscribe letters of credit exceeding one year. "Plain intent and meaning" is a standard of statutory construction, yet the decision gives no indication of why the statute, on its face, permits no other interpretation. 60 Indeed, we note that the Palladino opinion fails to even mention a rule adopted by New Jersey's Department of Banking which was issued some months prior to Palladino.30 The new standby rules N.J.A.C. 3:11-9.1 et seq.31 while certainly not dispositive of this appeal suggest a result different from that reflected in the district court's opinion, which gave weight to an "administrative interpretation" of the Department of Banking.32 N.J.A.C. 3:11-9.3(a) refutes any interpretation that the statute "plainly" bars letters of credit exceeding one year's duration, since it endorses the concept that duration is a matter for agreement by the parties. 61 Turning to the sole judicial precedent relied upon by Palladino for its construction of the statute, we observe that the case cited for support is the very one (National Surety Corp. v. Midland Bank, 408 F.Supp. 684) which we are here reviewing. While it may well be that the New Jersey Supreme Court could preclude our disagreement with a district court decision in a diversity case by adopting the district court's construction of a state statute, prior to our review of that decision, the New Jersey Supreme Court has yet to speak in support of the district court's interpretation. Under the instant circumstances (1) where only an intermediate appellate court has discussed the sole issue before us; (2) where even that discussion is dictum; (3) where the only precedent upon which reliance is had is the very case which we are reviewing; (4) where the reasoning in that case is not persuasive; (5) where the interpretation of the statute in both cases is inconsistent with its terms; and (6) where an important intervening administrative development has not been recognized or discussed we decline to give weight to the Palladino decision of the Appellate Division. We are convinced that the New Jersey Supreme Court would decide this issue otherwise. Bosch, supra, 387 U.S. at 465, 87 S.Ct. 1776. 2. 62 As discussed above, our analysis must also consider the Department of Banking's recent promulgation of rules governing letters of credit. Notes 30 and 31 supra. The New Jersey legislature has delegated substantial authority to the State Commissioner of Banking and Insurance. The Commissioner may regulate the exercise of the statutory powers of banks and prescribe other necessary powers that banks may exercise.33 A significant factor to be weighed by the Commissioner in promulgating rules and regulations governing bank powers is the maintenance of parity between state and national banks. See statutes quoted, note 33 supra; N.J.A.C. 3:11-9.4, note 31 supra. Not surprisingly, then, the newly adopted "Rules on Standby Letters of Credit" set the same limits on letter-of-credit duration that govern national banks. The new rules permit a bank to issue a letter of credit in a stated amount in the normal course of business. The letter of credit must include "a specified expiration date or be for a definite term."34 It is significant that this rule does not reflect the existence or requirement of any statutory letter of credit time limitation, regardless of whether the "specified expiration date" or "definite term" is for one, five or ten years. 63 N.J.A.C. 3:11-9.3, see note 31 supra, does more than establish parity between state-charter and national banks with respect to letters of credit. The new rules undercut the district court's interpretation of the statute insofar as its interpretation relied upon the Department's practice. The Department has now issued for the first time an official administrative interpretation concerning letter-of-credit duration. Even if N.J.A.C. 3:11-9.3 is not an outright repudiation of the Department's prior practice (as we think it is), the Department's newly adopted regulation severely undercuts the earlier informal observations of its Deputy Commissioner. In so doing, it necessarily undercuts the district court opinion. 64 Nonetheless, the Department's adoption of N.J.A.C. 3:11-9.3 does not resolve our inquiry. Although the new rule may represent a change from the Deputy Commissioner's informal opinion, and the Department's prior practice (if such it was), it clearly does not represent an authoritative construction of the statute in question which alone would require reversal of the district court's decision. Thus, although we believe that the intervening adoption of N.J.A.C. 3:11-9.3 has removed a factor which the district court deemed significant in its analysis of N.J.S.A. 17:9A-25(3), we still find it necessary to conduct an independent examination of the statue at issue here and the district court's interpretation of that statute. III. 65 As we previously stated, the district court's construction of N.J.S.A. 17:9A-25(3) rests on three bases first, its determination of ambiguity, which mandated resort to legislative intent; second, the district court's reading of that intent; and third, the "significant" opinion of the state Deputy Commissioner of Banking. 66 In light of our preceding discussion concerning N.J.A.C. 3:11-9.3, this third factor need not detain us. The Department of Banking's new rules drain the Deputy Commissioner's opinion of whatever significance it may have made. See note 32 and Part II.B.2 supra. 67 The district court's determination that the statute is ambiguous is similarly suspect. In its opinion the district court adverted to this Court's long-standing reliance on the "last antecedent" rule. 408 F.Supp. at 688. More to the point in this diversity context is the New Jersey courts' consistent application of this rule of construction. New Jersey Insurance Underwriting Association v. Clifford, 112 N.J.Super. 195, 270 A.2d 723, 727-28 (1970); State v. Wean, 86 N.J.Super. 283, 206 A.2d 765, 768 (1965). 68 In Clifford, for example, the Appellate Division construed a definitional section of the banking statute, N.J.S.A. 17:37A-2(a). That section reads: 69 (a) "Essential property insurance" means insurance against direct loss to property as defined and limited in the standard fire policy and extended coverage endorsement thereon, as approved by the commissioner, and insurance for such types, classes, and locations of property against the perils of vandalism, malicious mischief, burglary, or theft, or such other classes of insurance as the commissioner may designate in order to comply with Federal legislation and obtain Federal reinsurance ; 70 (Emphasis supplied). The appellant there contended that the italicized language modified "vandalism, malicious mischief, burglary or theft". The court rejected this construction, finding that the qualifying language applied only to commissioner-designated "other classes of insurance." In so holding, the court said: 71 The difficulty with this contention is that the clause of which the cited qualifying words are a part is set off by itself from the remainder of the paragraph. We are satisfied that the cited phrase was intended to refer to its last antecedent, 'such other classes of insurance as the commissioner may designate.' See 82 C.J.S. Statutes § 334 at 670 (1953); cf. State v. Wean, supra, 86 N.J.Super. at 288, 206 A.2d 765. Had the modifying phrase been intended to relate to more than its last antecedent, a comma could have been used to set off the modifier from the entire series. T. I. McCormack Trucking Co. v. United States, 298 F.Supp. 39, 41 (D.C.N.J.1969). 72 112 N.J.Super. at 204, 270 A.2d at 727-28. 73 Applied to the statute before us, this rule requires rejection of the district court's finding of ambiguity. N.J.S.A. 17:9A-25(3) gives banks the power 74 to issue letters of credit authorizing holders thereof to draw drafts upon it or upon its correspondents at sight or on time not exceeding one year . . . . 75 Common English usage, let alone the last antecedent rule of statutory construction, requires that the italicized language be read to modify "time", rather than the more remote phrase "letters of credit". 76 Indeed, as appellant argues here and contended below, the legislature, with the simple addition of a comma after "time", could have opted for a time limit restricting the duration of both drafts and letters of credit. Had that option been elected, New Jersey courts undoubtedly would have construed the statute as did the district court, and we would have followed suit. See Gudgeon v. County of Ocean, 135 N.J.Super. 13, 17, 342 A.2d 553, 555-56 (1973) ("Where a comma is used to set a modifying phrase off from previous phrases, the modifying phrase applies to all the previous phrases, not just the immediately preceding phrase.") See also T. I. McCormack Trucking Co. v. United States, 298 F.Supp. 39, 41 (D.N.J.1970) (three-judge court), cited in Clifford, supra. 77 Here, however, the language of the statute leaves no doubt that the legislature opted for a one-year time limit applicable only to drafts drawn on letters of credit, and not to the letters of credit themselves. Such is the plain meaning of the statute. 78 Even if we were to concede that the legislative draftsmen were guilty of grammatical inexactitude in drafting N.J.S.A. 17:9A-25(3) which we do not we are not persuaded that their intent was to place New Jersey state-charter banks at a competitive disadvantage vis-a-vis national banks. 79 The district court speculated that the legislature's foremost considerations were in the areas of fulfilling commercial needs and serving the significant public interest by a stable banking system. 408 F.Supp. at 690. From this, the court concluded that the legislature must have intended to keep state banks on a short rein by restricting open-ended contingent extensions of credit. 80 But we need not rely upon the district court's view of legislative intent, where the legislature itself has given expression to that intent. Without denigrating the concededly important considerations which guided the district court's discussion, we believe that the overriding intent of the legislature was the creation and maintenance of parity between state-charter and national banks. In three separate provisions N.J.S.A. 17:9A-25.2; 9A-25.3; and 9A-25.5B35 the legislature has manifested its concern that state banks be permitted to compete with national banks under materially similar rules. Indeed, the legislature in N.J.S.A. 17:9A-25.3 granted the State Commissioner of Banking broad regulatory and interpretive powers, thereby enabling him to achieve this objective of keeping state banks competitive. In light of the very considerable discretionary powers held by the Commissioner and the legislature's expressed intent that state banks achieve and maintain parity with national banks, we are satisfied that the district court erred in its interpretation of N.J.S.A. 17:9A-25(3). 81 Having examined and rejected the three bases for the district court's construction of Section 9A-25(3), we conclude that the district court's construction cannot be sustained. We hold that the New Jersey Supreme Court, if confronted with an issue similar to the question before us, would interpret as do we the relevant provision of N.J.S.A. 17:9A-25(3) so as to limit to a one year duration only drafts drawn upon letters of credit, and further, that the statute does not provide or require any restriction on letter-of-credit duration. IV. 82 Our determination that New Jersey by statute has not restricted the duration of letters of credit issued by its banks to a one-year period resolves the issue framed by the parties. We recognize that in attempting to have this issue determined in its favor, the plaintiff contended that New Jersey common law would hold as valid a draft under a letter of credit if drawn within a reasonable time from issuance of the letter of credit. We need not resolve the issue of New Jersey's common law rule for two reasons. First, we have held that N.J.S.A. 17:9A-25(3) imposes no time restriction on letters of credit. Second, on this record, even if the common law rule advocated by plaintiff was determinative, the findings made by the district court would dispose of that issue in plaintiff's favor. The district court found (Findings of Fact nos. 9, 23 and 27) that both of National Surety's drafts were presented within a reasonable period from the issuance of the respective letters of credit. No one attacks these findings as clearly erroneous. See Krasnov v. Dinan, 465 F.2d 1298, 1302-03 (3d Cir.1972). Hence they are binding upon us. V. 83 Having concluded that the letters of credit are valid, we will reverse the March 23, 1976 order of the district court and will direct that judgment be entered in favor of National Surety and against Midland Bank. * Louis C. Bechtle, United States District Judge for the Eastern District of Pennsylvania, sitting by designation 1 The district court's opinion sets out the Letter in its entirety. 408 F.Supp. at 694 2 Id. at 687, 692-93 3 The bank's letter of rejection reads as follows: We are rejecting herewith your sight draft and are returning attached hereto, the sight draft presented to us for payment together with a Letter of Credit, # 1549, dated January 9, 1967 in the amount of $7,878.00, running to the National Surety Corporation. This request for payment is being rejected for many reasons and among the reasons are the following: (a) Issued without proper authorization (b) Presentation for payment, even if it were properly issued, is not timely (c) It is our opinion that the Letter of Credit at this particular date constitutes an illegal and valueless document. I am sure that you will understand our reasons for not honoring payment. App. at A-59. This letter bore the signature of the bank's president. 4 The underlying arrangements pertaining to Letter of Credit No. 1553 were identical (except for amount and date) to those described in text in connection with Letter of Credit No. 1549 5 Counsel's letter of disavowal reads in pertinent part: With regard to the above captioned letter of credit, please be advised that the Midland Bank and Trust Company can accept no obligation under it because among other reasons it is illegal and void pursuant to N.J.S. 17:9A-25(3) and because it was issued without authority. Please be further advised that the Midland Bank and Trust Company can accept no obligation because of any action you may take in the situation which was the occasion of this letter of credit. App. at A-62. 6 The anniversary date of Letter of Credit No. 1553 was February 1. It had last been renewed on February 1, 1971. National Surety ultimately paid out the sum of $27,500.00 under its release of libel bond. Record of October 7, 1974, at 18-19 7 See Defendant's Answer, App. at A-14; Defendant's Answer to Supplemental Complaint, App. at A-23 to A-24 8 App. at A-25, A-26. N.J.S.A. 17:9A-25(3) is set out at p. 26 infra 9 Order of August 6, 1974, App. at A-28 10 Albert Mayell, an employee of National Surety's parent corporation, testified as to the circumstances of these Letters of Credit and the customs and practice of the industry 11 The district court set out the relevant portion of the Deputy Commissioner's letter as follows: While the Department of Banking has not issued any administrative interpretations of the section in question, it has long been the Department's position that the words 'not exceeding one year' applies to the whole subsection, including letters of credit. A prudent banker would not issue a letter of credit without a maturity or termination date. It would not be sound banking to allow a contingent liability to possibly exist forever. You will note in subsection 2 of section 25 that banks have the power 'to accept for future payment at future dates drafts drawn upon it by its customers' without a maturity limitation placed upon those drafts. Why, therefore, should drafts drawn upon letters of credit have a maturity when the letter of credit itself has no maturity? You might also refer to the Comptroller of the Currency's interpretive ruling (12 C.F.R. s) 7.7016 with respect to letters of credit. You will note the Comptroller rules that letters of credit must be written with a maturity date. 408 F.Supp. at 691 n.12 12 On August 25, 1976 an order was entered by this Court permitting American Insurance Association to file an amicus brief. On September 8, 1976 the New York Clearinghouse Association was granted leave to file its brief as amicus curiae. Both amici support National Surety's position before us and consequently urge us to reverse the order of the district court 13 National Surety also contends that ". . . the Court below erred in holding that a state bank is not estopped from raising as a defense the alleged impropriety of its own actions in issuing a letter of credit automatically renewable from year-to-year," and that "the Court below erred in its ex parte solicitation, receipt and reliance upon evidence not contained within the record." In light of our result, we need not address the estoppel issue. We note, however, that since the district court opinion was filed, the Superior Court of New Jersey, Appellate Division, has held that, in the absence of a showing of justifiable reliance, a bank is not estopped to assert the illegality and invalidity of its guaranty to another bank. New Jersey Bank v. Palladino, 146 N.J.Super. 6, 368 A.2d 943 (1976) (construing N.J.S.A. 17:9A-213.1). Because we do not decide this issue, we do not discuss the factor of "reliance" as it may appear in this record. We make reference to National Surety's "evidence" contention at note 32 infra. 14 408 F.Supp. at 687-88 (footnotes omitted). As we find it unnecessary to look to New York law, we express no opinion as to the district court's discussion of New York cases. Nor, for the same reason, need we attach any weight to the opinion of the State of New York Banking Department solicited by counsel for the American Insurance Association (one of the amici here). That opinion criticized the holding of the district court 15 408 F.Supp. at 688. This Court's statement of the last antecedent doctrine in Santarelli has been cited with approval by other courts. See, e.g., FTC v. Mandel Bros., 359 U.S. 385, 389-90, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959); Azure v. Morton, 514 F.2d 897, 900 (9th Cir.1975) 16 The court also rejected National Surety's claim that New Jersey permits drafts to be drawn upon letters of credit of indeterminate duration so long as the draft itself is drawn within a reasonable time of the letter of credit's issuance. The district court held that New Jersey statutes overruled this statement of the common law. See 408 F.Supp. at 688-89. In light of our disposition, we do not reach this issue. See Part IV infra 17 A recent opinion of this Court discusses letters of credit generally in a somewhat similar context. Chase Manhattan Bank v. Equibank, 550 F.2d 882 (3d Cir.1977) 18 Id. at 691. The court based its finding on a letter which it sua sponte solicited from the Deputy Commissioner of Banking (set out in relevant part at note 11 supra ). Compare note 32 infra 19 Branch v. United States Fidelity & Guaranty Co., 198 F.2d 1007, 1011 (6th Cir.1952). Accord, Nelson v. Brunswick Corp., 503 F.2d 376, 381-82 & n.12 (9th Cir.1974); McLarty v. Borough of Ramsey, 270 F.2d 232, 234 (3d Cir.1959) 20 Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); 1A J. Moore, Federal Practice P 0.307(1), at 3301 21 The letter of guaranty read, in pertinent part: This letter will serve as a commitment to you that the First State Bank of Hudson County will assume the obligation arising from a note signed by Mr. Joseph P. Palladino on October 12, 1972 in the amount of $50,000.00. We will honor this commitment six (6) months after the date of the note upon notice to us that the loan has not been paid by Mr. Joseph P. Palladino. Palladino, supra, at 10, 368 A.2d at 945. 22 N.J.S.A. 17:9A-25(3) is, of course, the very statute which this Court must construe in deciding this appeal. See p. 26 supra 23 Id. at 979 24 See also 387 U.S. at 476, 87 S.Ct. at 1788 (Harlan, J., dissenting) ("The Court has . . . never held, even in diversity cases, where the federal interest consists at most in affording a 'neutral' forum, that the judgments of state trial courts must in all cases be taken as conclusive statements of state law; apart from a series of cases decided at the 1940 Term, the Court has consistently acknowledged that the character both of the state proceeding and of the state court itself may be relevant in determining a judgment's conclusiveness as a statement of state law") 25 Bosch, supra. Accord, Gates Rubber Co. v. USM Corp., 508 F.2d 603, 607 (7th Cir.1975); Klingebiel v. Lockheed Aircraft Corp., 494 F.2d 345, 346 n.2 (9th Cir.1974); Benante v. Allstate Ins. Co., 477 F.2d 553, 554 (5th Cir.1973); Simpson v. Jefferson Standard Life Ins. Co., 465 F.2d 1320, 1323 (6th Cir.1972); Paoletto, supra See also, Shelp v. National Surety Corp., 333 F.2d 431, 439 (5th Cir.1964), cert. denied, 379 U.S. 945, 85 S.Ct. 439, 13 L.Ed.2d 543 (1965) ("there is no Erie obligation when there is 'persuasive data that the highest court of the state would decide otherwise' than the intermediate appellate State court."). 26 1A, J. Moore, Federal Practice, P 0.307(2), at 3312 27 See, e.g., Rocky Mountain Fire & Cas. Co. v. Dairyland Ins. Co., 452 F.2d 603, 603-04 (9th Cir.1971) (per curiam) ("considered" dicta); Hardy Salt Co. v. Southern Pac. Transp. Co., 501 F.2d 1156, 1163 (10th Cir.1974) ("considered" dicta to be followed); Hartford Accident & Indemnity Co. v. First Nat'l Bank & Trust Co., 287 F.2d 69, 73 (10th Cir.1961) ("well-considered" dictum) 28 See pp. 29-30 supra 29 We cannot help but observe that the federal district court upon whose opinion Palladino predicates its interpretation held that the statute is ambiguous, requiring resort "beyond the words of the statute in order to ascertain its meaning." 408 F.Supp. at 689 30 On September 30, 1976, the Department of Banking proposed rules governing standby letters of credit which became effective October 1, 1976. The district court opinion in this case was filed some months before, on February 17, 1976. Palladino, as previously noted, was decided on December 13, 1976 31 These rules provide: Proposed Rules on Standby Letters of Credit The Department of Banking, pursuant to authority of N.J.S.A. 17:9A-25.2, proposes to adopt new rules concerning standby letters of credit. Full text of the proposed rules follows: Subchapter 9. Standby Letters of Credit 3:11-9.1 Definitions of standby letters of credit (a) A "standby letter of credit" is any letter of credit, or similar arrangement however named or described, which represents an obligation to the beneficiary on the part of the issuer: 1. To repay money borrowed by or advanced to or for the account of the account party; or 2. To make payment on account of any indebtedness undertaken by the account party; or 3. To make payment on account of any default by the account party in the performance of an obligation. 3:11-9.3 Authority to issue standby letters of credit (a) A bank may issue a standby letter of credit on behalf of its customers in the normal course of business: 1. Provided that the bank's undertaking contains a specified expiration date or be for a definite term; and 2. The bank's liability is limited to a stated amount. 3:11-9.4 Parity provision This Subchapter is directed toward the creation and maintenance of a substantial parity between banks and national banks in accordance with Section 25.2 of the Banking Act of 1948. Interested persons may present statements or arguments in writing relevant to the proposed action on or before September 29, 1976, to: Roger F. Wagner Deputy Commissioner Department of Banking Trenton, New Jersey 08625 The Department of Banking, upon its own motion or at the instance of any interested party, may thereafter adopt these rules substantially as proposed without further notice. Roger F. Wagner Deputy Commissioner Department of Banking Rules on Standby Letters of Credit On September 30, 1976, Roger F. Wagner, Acting Commissioner of Banking, pursuant to authority of N.J.S.A. 17:9A-25.2 and in accordance with applicable provisions of the Administrative Procedure Act, adopted new rules, to be cited as N.J.A.C. 3:11-9.1 et seq., concerning standby letters of credit, as proposed in the Notice published September 9, 1976, at 8 N.J.R. 411(a). An order adopting these rules was filed and became effective on October 1, 1976, as R.1976 d. 306. G. Duncan Fletcher Director of Administrative Procedure Department of State 32 The plaintiff contends that the district court erred by unilaterally soliciting after the case had concluded (408 F.Supp. at 691 n.12) and relying upon a Department interpretation of banking practice without affording the plaintiff an opportunity to question the writer of the letter, the practice or custom of the Department, and the interpretation of the Department. We note that the letter upon which the district court relied: (1) was not part of the evidence; (2) therefore is not in the record; (3) in any event was not predicated upon an announced rule of the Department; and (4) is accordingly entitled to little (if any) weight or deference to which a published official ruling might otherwise be entitled. Our disposition of this appeal, however, does not require us to reach or resolve the issue of the alleged impropriety of the district court's reliance on this document. In any event, as a reading of N.J.A.C. 3:11-9.1 et seq., effective October 1, 1976, reveals, the issue of letter of credit time limitations is no longer in doubt 33 N.J.S.A. 17:9A-25.2 provides: The Commissioner of Banking and Insurance shall have power to make, amend and repeal regulations authorizing banks to make specified kinds of loans or investments not authorized by the act to which this act is a supplement, or not otherwise authorized; except that the commissioner shall not make or continue in force any regulation authorizing banks to make any kind of loan or investment which national banks are not authorized to make. L.1966, c. 279, § 1. Similarly § 9A-25.3 provides: In exercising the power conferred upon him by this act, the commissioner shall consider the statutes, regulations and rulings governing the lending and investing powers of national banks, and the regulations made by him shall have as their objective the placing of banks on a substantial competitive parity with national banks, in order that the dual banking system may be preserved. L.1966, c. 279, § 2. And finally, § 9A-25.5B reads: B. The commissioner may, by regulation, prescribe the manner in which and the extent to which the foregoing powers may be exercised, and may, by regulation, prescribe other powers, not otherwise expressly authorized or prohibited, which banks may exercise. Regulations so made shall be directed toward creating or maintaining substantial equality between State-regulated and Federally-regulated banks, to the end that no class or group of banks shall have any substantial competitive advantage over another. L.1969, c. 244, § 5, eff. Dec. 23, 1969, supplementing P.L.1948, c. 67. 34 N.J.A.C. 3:11-9.3. The Comptroller of the Currency has issued regulations governing the issuance of letters of credit by national banks which set the following limit of duration: (2) The bank's undertaking must contain a specified expiration date or be for a definite term. 12 C.F.R. § 7.7016 35 These provisions are set out in note 33 supra	{ "pile_set_name": "FreeLaw" }
58 F.3d 825 64 USLW 2063, 23 Media L. Rep. 2089 UNITED STATES of America, Appellee,v.Bruce CUTLER, Defendant-Appellant. No. 930, Docket 94-1382. United States Court of Appeals,Second Circuit. Argued March 23, 1995.Decided June 19, 1995. Frederick P. Hafetz, Goldman & Hafetz, New York City (Susan Necheles, Herald Price Fahringer, of counsel), for defendant-appellant. John J. Gallagher, Sp. Prosecutor on behalf of the U.S. of America, New York City, for appellee. John H. Doyle, III, New York City, for amicus curiae New York Council of Defense Lawyers. Leon Friedman, New York City (Arthur N. Eisenberg, of counsel), for amicus curiae The New York Civil Liberties Union. Before: McLAUGHLIN, JACOBS, Circuit Judges, and KAUFMAN, District Judge.* McLAUGHLIN, Circuit Judge: 1 The underworld exploits of John Gotti and the courtroom legerdemain of his attorney, Bruce Cutler, are now the stuff of legend. Cutler's last appearance on Gotti's behalf was in the United States District Court for the Eastern District of New York (I. Leo Glasser, Judge). Notwithstanding the court's pre-trial admonition and orders to comply with Local Criminal Rule 7 of the Southern and Eastern Districts of New York ("Local Rule 7"), Cutler spoke repeatedly and heatedly to the media on the merits of the government's case against his client. 2 Exasperated with Cutler, Judge Glasser issued an order to show cause why he should not be held in criminal contempt. Judge Glasser then recused himself, and the matter was reassigned to then-Chief Judge Platt. After a five-day bench trial, the district court found Cutler guilty of criminal contempt, in violation of 18 U.S.C. Sec. 401(3). The court sentenced Cutler to ninety days' house arrest and three years' probation, and also suspended him from practicing law in the Eastern District of New York for 180 days. 3 On appeal, Cutler argues that: (1) the orders and Local Rule 7 are unconstitutional; (2) the evidence, under the heightened standard applicable in First Amendment cases, does not support his contempt conviction; and (3) several aspects of his sentence were an abuse of discretion. Because Cutler could have challenged the orders (and Local Rule 7) by appealing them, or seeking a writ of mandamus or declaratory relief, his constitutional challenge is collaterally barred. Moreover, the evidence amply supports his conviction. Finally, although aspects of his probation give us pause, we will not disturb his sentence. BACKGROUND 4 John Gotti was arrested on December 11, 1990, on racketeering charges. The murder of Paul Castellano, a rival mobster, was one of many predicate acts. This marked the fourth time that the government tried to end Gotti's criminal career, the previous attempts having failed. The then-United States Attorney, Andrew Maloney, announced the indictment at a press conference, where he called Gotti a "murderer, not a folk hero" and boasted that this time the government's case, which included extensive wiretap evidence, was much stronger than in the prior trials. 5 Gotti's lawyer, Bruce Cutler, a member of the New York Bar, countered by calling the prosecutors "publicity-hungry" and on a vendetta to frame his client. He was quoted in New York's four major newspapers--the Daily News, Newsday, the New York Post, and the New York Times. He also gave an interview on Prime Time Live, a nationally-broadcast television show, where he emphatically denied that Gotti was a mob boss. A. Local Rule 7 6 Cutler's and Maloney's comments seemed to be in tension with Local Rule 7, to phrase it charitably. That rule provides: 7 It is the duty of the lawyer or law firm not to release or authorize the release of information or opinion which a reasonable person would expect to be disseminated by means of public communication, in connection with pending or imminent criminal litigation with which a lawyer or law firm is associated, if there is a reasonable likelihood that such dissemination will interfere with a fair trial or otherwise prejudice the due administration of justice.... 8 From the time of arrest, issuance of an arrest warrant or the filing of a complaint, information or indictment, in any criminal matter until the commencement of trial or disposition without trial, a lawyer or law firm associated with the prosecution or defense shall not release or authorize the release of any extrajudicial statement which a reasonable person would expect to be disseminated by means of public communication, relating to that matter and concerning: 9 (1) The prior criminal record (including arrests, indictments or other charges of crime) or the character or reputation of the accused, except that the lawyer or law firm may make a factual statement of the accused's name, age, residence, occupation and family status; and if the accused has not been apprehended, a lawyer associated with the prosecution may release any information necessary to aid in the accused's apprehension or to warn the public of any dangers the accused may present; 10 .... 11 (4) The identity, testimony or credibility of prospective witnesses, except that the lawyer or law firm may announce the identity of the victim if the announcement is not otherwise prohibited by law; 12 .... 13 (6) Any opinion as to the accused's guilt or innocence or as to the merits of the case or the evidence in the case. 14 E.D.N.Y.Crim.R. 7(a). 15 B. The December 20, 1990 "Admonition" 16 When a detention hearing was scheduled, the district court granted Gotti's motion to close the hearing and seal all evidentiary submissions, including transcripts from the wiretaps. See United States v. Gotti, 753 F.Supp. 443 (E.D.N.Y.1990). 17 On December 20, 1990, after the hearing, Judge Glasser admonished the parties (and Cutler in particular) to try the case only in the courtroom, not in the press: 18 I feel very strongly about the conduct of this trial in an orderly and fair way and I feel very strongly about Local Rule 7 of the local rules of this Court.... That rule spells out, I believe, in some detail, what it is that it is appropriate for defense lawyers to be commenting about. You Mr. Cutler.... 19 My admonition simply is, observe Local Rule 7 20 .... 21 The statements that this is a circus, it is a frame up, try your case in the courtroom. Okay I feel strongly about that.... It applies to the government, it applies to the defense. I propose to take such steps as I regard as being appropriate. 22 .... 23 Ladies and gentlemen, again, I am serious about fair trials. I am serious about Local Rule 7.... I don't want this trial to be conducted anywhere else but in this courtroom, in accordance with the rules, which are designed to [e]nsure fairness for the government, fairness for the defendant. 24 Undeterred, Cutler held a press conference outside the courthouse. He declaimed that the government had "thrown the Constitution out the window," mocked the government's witnesses as "bums," and erroneously described the government's tape recordings of wire-tapped conversations as the same ones used in earlier prosecutions. Cutler's performance at the press conference made the local news that night and the tabloids the next morning. C. The January 9, 1991 Order 25 Three weeks later, the parties again appeared before Judge Glasser. The judge was not pleased with the continuing swirl of publicity, and again he instructed both parties to comply with Local Rule 7: 26 ... Local Rule 7 ... carefully proscribes out-of-court comments by defense and by prosecutors. 27 .... I want [the leaks] to stop. 28 .... 29 .... I've made my position clear and I'll exercise all the power which is at my disposal to do whatever I can to enforce the orders of this Court and to hold those persons who I may discover to be responsible for violating those orders accountable. I don't see any need to belabor that. 30 Nonetheless, the very next day, Newsday quoted Cutler about the tapes. He said the tapes contained denials by Gotti of involvement in the murder of Paul Castellano. 31 A week later, the government moved to disqualify Cutler and his co-counsel, Gerald Shargel, from representing Gotti during the trial, contending that Cutler and Shargel were "house counsel" for Gotti, and thus likely to be called as witnesses. Although the government filed its motion under seal, the district court elected to hold a public oral argument on the motion. After the hearing, New York's major daily newspapers, the television networks, and the Associated Press (the "media"), supported by the government, moved to unseal the briefs and evidence submitted in connection with the disqualification motion. 32 Gotti's lawyers opposed the motion, arguing that dissemination of the disqualification briefs and evidence would so taint potential jurors as to deny him a fair trial. The media, in support of the motions, noted that Cutler had already argued Gotti's case to the public and to the potential jury pool by "present[ing] a compelling, sympathetic portrait of a notorious defendant as a victim of prosecutorial zeal" and "government overreaching in the extreme." The court reserved decision on both the disqualification motion and the motion to unseal the briefs and record. 33 Meanwhile, Cutler continued to ignore the court's direction to comply with Local Rule 7. He was quoted in February, March, and July in all four major New York dailies. In addition, he gave a long interview to Interview Magazine, a glossy magazine, in which he repeated his allegations about government vendettas and accused the government of suborning perjury. He also showed up on 60 Minutes, praising Gotti for his loyalty, integrity, and honesty, denying the existence of the mob, comparing the prosecutors to Senator Joseph McCarthy, and deprecating the tapes. Finally, he appeared on a local television news program, Thirteen Live, where he accused the government of persecuting Gotti. D. The July 22, 1991 Order 34 After four letters of complaint from the government about Cutler's extrajudicial statements, the parties appeared before Judge Glasser a third time on July 22, 1991. Judge Glasser once again ordered counsel to follow Local Rule 7: "Local Rule 7 ... is, in essence, a kind of gag order. The thing you ought to say is, there is a case pending, the rules of this Court say I can't comment on it." Judge Glasser made clear he wanted no more comments to the press. 35 Days later, the district court disqualified Cutler and Shargel, primarily because they were likely to be called as witnesses at Gotti's trial. United States v. Gotti, 771 F.Supp. 552 (E.D.N.Y.1991). Two days after that, the court unsealed the tapes played at Gotti's detention hearing, noting that Cutler had called into question the integrity of the court and finding that any "[a]dditional publicity which may flow from unsealing the record at this time would ... not give rise to a probability, substantial or otherwise, that the defendants' right to a fair trial will be prejudiced." United States v. Gotti, 771 F.Supp. 567, 569 (E.D.N.Y.1991) (emphasis added). 36 In the following week, stories about Gotti adorned the front pages of New York's dailies, together with excerpts from the transcripts of the wire-tapped conversations. In addition, television news programs obtained copies of the tapes of the conversations and repeatedly broadcast portions of them, allowing potential jurors to hear Gotti describe murders and other crimes. 37 Although he no longer represented Gotti in connection with the racketeering charges, Cutler countered with a media barrage of his own. The piece de resistance came on August 13, 1991, a mere month before the scheduled trial date. (Gotti's new lawyers expected Judge Glasser to adjourn the trial to give them more time to prepare, but an adjournment had not yet been granted.) That day, Cutler appeared on a one-hour live television show called 9 Broadcast Plaza. His performance, aptly summarized by the district court, included the following:wherever Gotti lives, there is no problem with drugs and crime in the neighborhood; Gotti is not a danger to any community other than federal prosecutors; Gotti has "admirable qualities[,"] including being courageous, loyal, sincere, selfless and devoted to his family; Gotti is a "good man" and an "honorable man"; Gotti is not a "ruthless man"; Gotti is one of "the most compassionate men" Cutler knows; Gotti is "deadly against drugs"[;] .... the prosecutors "are doing everything they can to destroy John Gotti" and are "dealing in vendettas[,"] "on a witch hunt[,"] and "framing people"; the Government "threw the Constitution out the window" and is on a "vendetta" against Gotti; the prosecution is an "example of McCarthyism"; Gotti was being "persecuted" because of his "lifestyle" and "friends"; the prosecutors want to "destroy" Gotti "because of his popularity" and because "he's deadly against drugs"; the "evidence is phony"; the "tapes are phony"[;] .... the Government is "creating cases against individuals they target" by "giving freedom to drug dealers and murderers if they will sing the government's tune against the likes of John Gotti"; and ... jurors realize that "the witnesses lie" and that "even the federal investigators lie" and that is why they vote "not guilty unabashedly." 38 United States v. Cutler, 815 F.Supp. 599, 606 (E.D.N.Y.1993). E. The Contempt Proceedings 39 Not surprisingly, the 9 Broadcast Plaza interview provoked yet another government letter complaining about Cutler. This time, Judge Glasser had had enough. He issued an order to show cause why Cutler should not be held in criminal contempt, in violation of 18 U.S.C. Sec. 401(3). The order cited twenty-five instances of media coverage stemming from Cutler's public comments about the upcoming trial (the vast majority coming after the January 9 order), in which a common theme emerged: Gotti would be vindicated again; the prosecutors were a "sick and demented lot"; and the government's tapes were "snippets deliberately taken out of context." The highlight was Cutler's performance on 9 Broadcast Plaza. 40 After appointing a special prosecutor, Judge Glasser recused himself, and the matter was reassigned to then-Chief Judge Platt for trial. Cutler promptly moved to recuse all judges of the Eastern District of New York. He proposed that the case be transferred to the Southern District of New York, or to a judge from the Second Circuit Court of Appeals. The district court denied the motion. United States v. Cutler, 796 F.Supp. 710 (E.D.N.Y.1992). 41 Cutler then moved to dismiss the criminal contempt charges in their entirety, or, alternatively, some of them. He argued that Local Rule 7 was unconstitutional. The district court denied the motions. Cutler, 815 F.Supp. at 601-18. 42 Meanwhile, voir dire of the Gotti jury pool began. Of the 215 jurors interviewed, 214 had read or heard something about Gotti. Only forty-seven had formed an opinion about Gotti's guilt or innocence. Of these, forty-six thought he was guilty; only one believed he was innocent, based on things he had heard in his neighborhood. (Gotti was subsequently convicted and sentenced to life imprisonment; we affirmed. United States v. Locascio, 6 F.3d 924 (2d Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1645, 128 L.Ed.2d 365 and cert. denied, --- U.S. ----, 114 S.Ct. 1646, 128 L.Ed.2d 365 (1994).) 43 Cutler's contempt trial lasted five days. He did not contest the facts the government proffered. Moreover, he did not argue that he had no duty to comply with the orders and Local Rule 7 after his disqualification from representing Gotti. Instead, Cutler challenged the validity of the orders, arguing that Local Rule 7 was unconstitutional. In addition, he called two defense lawyers, James LaRossa and Jack Litman, as expert witnesses. Each testified that Cutler's comments had little chance of prejudicing the administration of justice or interfering with the trial. Cutler also relied heavily on the government's position earlier that publicity (from, e.g., unsealing the detention hearing records or the disqualification briefs) would not taint the jury pool. Finally, one of his lawyers summarized the results of the voir dire, which suggested that Cutler's PR campaign had reaped little reward. 44 The district court found Cutler guilty of criminal contempt of two specific orders--those of January 9, 1991, and July 22, 1991--in violation of 18 U.S.C. Sec. 401(3). United States v. Cutler, 840 F.Supp. 959 (E.D.N.Y.1994). The district court held that Cutler was collaterally barred from contesting the validity of Judge Glasser's orders, since Cutler had chosen to violate them rather than appeal them. In addition, the court held that both orders categorically prohibited certain extrajudicial statements, if a reasonable person would expect the media to disseminate them. Alternatively, the court held that Cutler intended to influence prospective jurors, and that his conduct was reasonably likely to do so. 45 At sentencing, the district court imposed three years' probation on Cutler, coupled with three conditions: (1) a ninety-day period of house arrest; (2) a 180-day concurrent period of suspension from practicing within the Eastern District of New York; and (3) 600 hours of "non-legal" community service. Cutler was also ordered to pay a $5,000 fine. Cutler moved to "correct" the sentence to eliminate the probation and to vacate the suspension. The district court denied the motion, but did vacate the $5,000 fine, ordering Cutler to pay only the cost of his supervision during the probationary period. 46 Cutler now appeals. DISCUSSION 47 Cutler challenges the validity of the orders, contending that Local Rule 7 is unconstitutional. In addition, he argues that, under the heightened scrutiny employed in First Amendment cases, the evidence does not support his conviction. Finally, he challenges various aspects of his sentence. I. The Collateral Bar Doctrine 48 The government argues that Cutler is collaterally barred from contesting the validity of the orders. We agree. 49 Under the collateral bar doctrine, a party may not challenge a district court's order by violating it. Instead, he must move to vacate or modify the order, or seek relief in this Court. If he fails to do either, ignores the order, and is held in contempt, he may not challenge the order unless it was transparently invalid or exceeded the district court's jurisdiction. See Walker v. City of Birmingham, 388 U.S. 307, 317-21, 87 S.Ct. 1824, 1830-32, 18 L.Ed.2d 1210 (1967); United States v. Terry, 17 F.3d 575, 579 (2d Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 355, 130 L.Ed.2d 310 (1994); Matter of Providence Journal Co., 820 F.2d 1342, 1346-47 (1st Cir.1986), modified, 820 F.2d 1354 (1st Cir.1987) (in banc), cert. dismissed, 485 U.S. 693, 108 S.Ct. 1502, 99 L.Ed.2d 785 (1988). Even to invoke the "transparently invalid" "exception," however, a defendant must make some " 'good faith effort to seek emergency relief from the appellate court,' " Terry, 17 F.3d at 579 (quoting Matter of Providence Journal Co., 820 F.2d 1354, 1355 (1st Cir.1987) (in banc), cert. dismissed, 485 U.S. 693, 108 S.Ct. 1502, 99 L.Ed.2d 785 (1988)), or show compelling circumstances, such as a need to act immediately, excusing the decision not to seek some kind of emergency relief, see Matter of Providence Journal Co., 820 F.2d at 1355. 50 Cutler concedes that he made no effort whatever to vacate or modify the order, or seek relief in this Court. But, relying on the briefs of the amici curiae, he tries to avoid the collateral bar doctrine by arguing that: (1) there was no appealable order until he was held in contempt; and (2) the orders were transparently unconstitutional. These arguments lack merit. A. Appealable Order 51 Cutler assumes that the orders were not appealable when issued. Yet, three years before then, we suggested that such orders were appealable. See Application of Dow Jones & Co., Inc., 842 F.2d 603, 609 (2d Cir.) ("Here nothing prevented the restrained parties in the present litigation from challenging the [gag] order. Hence, despite their unquestioned standing to maintain this appeal, the news agencies may not assert defendants' First Amendment rights when defendants refuse to challenge that infringement themselves."), cert. denied, 488 U.S. 946, 109 S.Ct. 377, 102 L.Ed.2d 365 (1988). We confirmed this in United States v. Salameh, 992 F.2d 445 (2d Cir.1993) (per curiam), where we heard an interlocutory appeal of an oral gag order. Id. at 446-47. 52 Moreover, if Cutler truly believed that he could not appeal the orders, he unquestionably could have sought mandamus. See Weight Watchers v. Weight Watchers Int'l, Inc., 455 F.2d 770, 775 (2d Cir.1972) (treating appeal of gag order as petition for mandamus); see also In re Perry, 859 F.2d 1043, 1046-50 (1st Cir.1988) (mandamus jurisdiction to hear appeal of gag order); Levine v. United States Dist. Ct. for the Cent. Dist. of Cal., 764 F.2d 590, 593-601 (9th Cir.1985) (writ of mandamus granted modifying gag order), cert. denied, 476 U.S. 1158, 106 S.Ct. 2276, 90 L.Ed.2d 719 (1986); In re Russell, 726 F.2d 1007, 1008-11 (4th Cir.) (gag order reviewable by mandamus), cert. denied, 469 U.S. 837, 105 S.Ct. 134, 83 L.Ed.2d 74 (1984). 53 Alternatively, Cutler could have sought a declaratory judgment striking down Local Rule 7, upon which the orders were based. See Bernard v. Gulf Oil Co., 619 F.2d 459 (5th Cir.1980) (in banc) (addressing constitutionality of local rule requiring gag orders), aff'd, 452 U.S. 89, 101 S.Ct. 2193, 68 L.Ed.2d 693 (1981); Hirschkop v. Snead, 594 F.2d 356 (4th Cir.1979) (in banc) (same); Chicago Council of Lawyers v. Bauer, 522 F.2d 242 (7th Cir.1975) (same), cert. denied, 427 U.S. 912, 96 S.Ct. 3201, 49 L.Ed.2d 1204 (1976). That Cutler might have been unlikely to obtain a writ of mandamus or prevail in a suit for declaratory relief does not mean he should not have tried. 54 Finally, Cutler could have asked Judge Glasser to modify the orders. As the district court noted: 55 If truly confounded by the requirements of Local Rule 7, he could have, at the very least, requested some clarification or guidance from the Court as to the acceptable parameters of extrajudicial speech. But, although he certainly had ample opportunity to do so in his three conferences with Judge Glasser, defendant never objected. 56 Cutler, 815 F.Supp. at 611; see E.D.N.Y.Crim.R. 7(c) ("[i]n a widely publicized or sensational case, the court, on motion of either party ..., may issue a special order governing extrajudicial statements"). B. Transparent Invalidity 57 Cutler attempts to clear these procedural hurdles by contending that the orders were transparently invalid. He points to vagueness, overbreadth, viewpoint discrimination, and prior restraint arguments raised by the amici. We need not address these arguments, however, because he made no " 'good faith effort to seek emergency relief from the appellate court,' " Terry, 17 F.3d at 579 (quoting Matter of Providence Journal Co., 820 F.2d at 1355), and can point to no compelling circumstances justifying his decision to ignore the orders, see Matter of Providence Journal Co., 820 F.2d at 1355 (newspaper facing deadline only eight hours after gag order issued acted in good faith). Accordingly, the "transparently invalid" exception cannot save him. 58 In sum, Cutler could have, and should have, sought modification of the orders in district court, challenged them on a direct appeal, or sought a writ of mandamus or declaratory relief. Having failed utterly to make any good faith effort to undertake even one of these steps, he cannot now challenge the orders' validity. II. Sufficiency of the Evidence 59 Before turning to the elements of the contempt conviction, we must clarify our scope of review. The orders here prohibited Cutler from discussing the merits of the Gotti case with the media only if his comments were reasonably likely to "interfere with a fair trial or otherwise prejudice the due administration of justice." E.D.N.Y.Crim.R. 7(a). As prior restraints, these orders implicate the First Amendment. See Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 556-62, 96 S.Ct. 2791, 2801-04, 49 L.Ed.2d 683 (1976). 60 As eight Justices of the Supreme Court have noted, in First Amendment cases, we independently review "the whole record in order to make sure that the judgment does not constitute a forbidden intrusion on the field of free expression." Gentile v. State Bar, 501 U.S. 1030, 1038, 111 S.Ct. 2720, 2726, 115 L.Ed.2d 888 (1991) (quotation marks and citations omitted) (Kennedy, J., dissenting in part, joined by Marshall, Blackmun, and Stevens, JJ.); accord id. at 1079, 111 S.Ct. at 2747 (Rehnquist, C.J., dissenting in part, joined by White, Scalia, and Souter, JJ.). We do so, however, only for so-called "constitutional facts," a concept that has confounded courts and commentators alike. See, e.g., Container Corp. v. Franchise Tax Bd., 463 U.S. 159, 176, 103 S.Ct. 2933, 2945-46, 77 L.Ed.2d 545 (1983) ("the line between 'historical fact' and 'constitutional fact' is often fuzzy at best"); George C. Christie, Judicial Review of Findings of Fact, 87 Nw.U.L.Rev. 14 (1992); Henry P. Monaghan, Constitutional Fact Review, 85 Colum.L.Rev. 229 (1985). 61 We need not limn the precise contours of the constitutional fact doctrine. Suffice it to say that in First Amendment cases, we must scrutinize carefully the lower court's application of the relevant standards to the facts at hand. For example, in defamation suits brought by public figures, we review de novo whether the defendants acted with malice. See New York Times Co. v. Sullivan, 376 U.S. 254, 283-91, 84 S.Ct. 710, 727-32, 11 L.Ed.2d 686 (1964). In breach of the peace prosecutions, we review de novo whether the defendants' conduct actually breached the peace. See Cox v. Louisiana, 379 U.S. 536, 544-51, 85 S.Ct. 453, 458-62, 13 L.Ed.2d 471 (1965); Edwards v. South Carolina, 372 U.S. 229, 235-38, 83 S.Ct. 680, 683-85, 9 L.Ed.2d 697 (1963). In contempt cases involving media coverage critical of the administration of criminal justice in pending cases, we review de novo whether the coverage presents a "threat of clear and present danger to the impartiality and good order of the courts." See Pennekamp v. Florida, 328 U.S. 331, 335, 66 S.Ct. 1029, 1032, 90 L.Ed. 1295 (1946). These issues resemble mixed questions of law and fact, which we review de novo. 62 Accordingly, we are prepared to review de novo whether Cutler's comments were reasonably likely to prejudice the proceedings, as set forth in Local Rule 7. We are also prepared to review de novo whether Cutler knew that his comments were reasonably likely to prejudice the proceedings, for if he did not, he could not have willfully disobeyed the orders. Cf. Gentile, 501 U.S. at 1037-38, 111 S.Ct. at 2725 ("the record does not support the conclusion that petitioner knew or should have known his remarks created a substantial likelihood of material prejudice") (Kennedy, J., dissenting in part, joined by Marshall, Blackmun, and Stevens, JJ.); id. at 1079, 111 S.Ct. at 2747 (after independently reviewing the record, "we are convinced that petitioner's statements were 'substantially likely to cause material prejudice' " and that petitioner made them "for the express purpose of influencing the venire") (Rehnquist, C.J., dissenting in part, joined by White, Scalia, and Souter, JJ.). 63 With these principles in mind, we proceed to parse each element of the contempt conviction. To hold Cutler in criminal contempt, the government had to prove beyond a reasonable doubt that: (1) the court entered a reasonably specific order; (2) defendant knew of that order; (3) defendant violated that order; and (4) his violation was willful. See 1 Leonard B. Sand et al., Modern Federal Jury Instructions: Criminal, p 20.02, at 20-26.1 (1994); see also Rojas v. United States, 55 F.3d 61, 63 (2d Cir.1995) (per curiam) (federal court may punish, by fine or imprisonment, a person who " 'willfully violate[s] the specific and definite terms of a court order' ") (quoting United States v. Twentieth Century Fox Film Corp., 882 F.2d 656, 659 (2d Cir.1989), cert. denied, 493 U.S. 1021, 110 S.Ct. 722, 107 L.Ed.2d 741 (1990)). A. Reasonably Specific Orders 64 A defendant cannot be held in contempt absent a "definite and specific" order of which he had notice. United States v. Charmer Indus., Inc., 722 F.2d 1073, 1079 (2d Cir.1983). Obviously, Cutler had notice of the orders; he was present when Judge Glasser issued them. He argues, however, that the orders never made clear what sort of comments were verboten, because the orders referred to two other standards in addition to Local Rule 7: the standard upheld in Gentile, which prohibits statements substantially likely to cause material prejudice to a judicial proceeding; and the general prohibition against public disclosure of sealed materials. Cutler did not raise this issue below, however, and thus cannot raise it now. See Hill v. City of New York, 45 F.3d 653, 663 (2d Cir.1995) (generally, "appellate courts do not consider issues that were not raised in the district court"). 65 In any event, Cutler has cited, and we have unearthed, no case where an appellate court reviewed the specificity of an order as a constitutional fact. Accordingly, the ordinary rules regarding sufficiency apply: Cutler bears a heavy burden on this issue, and we view the evidence of the orders' specificity in a light most favorable to the government. See United States v. LaPorta, 46 F.3d 152, 162 (2d Cir.1994). Moreover, the clarity of an order must be evaluated by a reasonableness standard, considering both the context in which it was entered and the audience to which it was addressed. See United States v. Turner, 812 F.2d 1552, 1565 (11th Cir.1987). 66 Here, Judge Glasser repeatedly mentioned Local Rule 7 every time he met with counsel to discuss pre-trial publicity. Moreover, on the latter two occasions he expressly ordered counsel to comply with Local Rule 7. And, if this was not enough, on the last occasion, he warned "that unless the kind of statements which I regard as being violative of [Local] Rule 7 don't cease," he would initiate contempt proceedings. Given that courts can expect lawyers to comply with less specific orders than laymen, see id., the orders were more than specific enough to support a contempt conviction. B. Violations of the Orders 67 Next, Cutler mounts a two-pronged challenge to the finding that he violated the orders. He argues that: (1) even when comments fall within the six categories specifically mentioned in Local Rule 7, the rule proscribes them only if they are reasonably likely to prejudice the proceedings; and (2) none of the comments cited in the order to show cause were reasonably likely to prejudice the proceedings. The first argument has merit; the second does not. 68 Local Rule 7 proscribes generally any statements by counsel that "a reasonable person would expect to be disseminated by means of public communication, in connection with pending or imminent criminal litigation ..., if there is a reasonable likelihood that such dissemination will interfere with a fair trial or otherwise prejudice the due administration of justice." The rule then enumerates several specific categories of forbidden speech, but without repeating the "reasonable likelihood" standard. For example, an attorney cannot offer his opinion as to his client's guilt or innocence, or as to the merits of the case. E.D.N.Y.Crim.R. 7(a)(6). Reasoning that the reasonable likelihood standard did not apply to comments within the six categories, the district court held that if a comment fell within a category and if a reasonable person would expect that the comment would be disseminated by the press, the comment was prohibited. See Cutler, 840 F.Supp. at 963 n. 3, 965; Cutler, 815 F.Supp. at 612. This goes too far. 69 Were we writing on a completely clean slate, we might adopt the district court's approach. But, the Fourth Circuit has already rejected it. See Hirschkop, 594 F.2d at 365-68. Reviewing a local rule virtually identical to Local Rule 7, the Hirschkop court held that a per se proscription of certain types of speech was overbroad and violated the First Amendment. To pass muster, speech that fell within a proscribed category had to be reasonably likely to interfere with a fair trial or otherwise prejudice the due administration of justice. See id. at 367-68. 70 We see no need to adopt an interpretation of Local Rule 7 that might offend the Constitution. Accordingly, we conclude that speech falling within the six categories violates Local Rule 7 only if it is also reasonably likely to interfere with a fair trial or the administration of justice. Cf. In re Application of Dow Jones & Co., Inc., 842 F.2d at 610 (reviewing under "reasonable likelihood" standard gag order imposed by district court under Local Rule 7(c) that barred virtually all categories of extrajudicial speech by parties). 71 That said, we believe there is a strong, albeit rebuttable, presumption that speech falling within the six categories violates Local Rule 7, as these categories "furnish the context in which the 'reasonable likelihood' standard is intended to operate." Cutler, 815 F.Supp. at 612; see Revised Report of the Judicial Conference Committee on the Operation of the Jury System on the "Free Press-Fair Trial" Issue, 87 F.R.D. 519, 523-24 (1980) ("reasonable likelihood" standard "together with the explicit rules that follow it, suffices to inform attorneys what they may or may not say for publication regarding imminent or pending criminal litigation in which they are involved"); cf. Chicago Council of Lawyers, 522 F.2d at 251 (court may formulate a rule that "comment concerning certain matters will presumptively be deemed a serious and imminent threat to the fair administration of justice"). 72 Despite our different approach to Local Rule 7, we need not disturb the result reached by the district court. The district court, at the government's request, made findings of fact under the assumption that the reasonable likelihood standard did apply to speech that fell within proscribed categories, and concluded that, under that standard, Cutler had still violated the orders. Cutler challenges this finding on several grounds. They all lack merit. 73 First, he contends that the district court ignored his expert witnesses' testimony. We disagree. The experts, criminal trial lawyers, stated their opinion that Cutler's extensive comments could have had no prejudicial effect. The court characterized this testimony as self-serving and worthy of little weight, given that as defense lawyers, the experts shared an inherent bias. Thus, the court did not ignore the testimony; it simply discounted its probative value, which was well within its discretion. Contrast Bradford Trust Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 805 F.2d 49, 54-55 (2d Cir.1986) (district court erred by giving properly admitted evidence no weight at all). 74 Next, Cutler argues that the voir dire of the Gotti jury venire demonstrates that his comments were not reasonably likely to prejudice the proceedings. Again, we disagree. True, evidence that the Cutler-generated publicity did not in fact taint the jury pool may be relevant to the issue whether those statements were likely to interfere with a fair trial. See Gentile, 501 U.S. at 1047, 111 S.Ct. at 2730-31 (Kennedy, J., dissenting in part, joined by Marshall, Blackmun, and Stevens, JJ.). But Gentile never said that such evidence was dispositive, nor did Gentile require that actual prejudice be shown. Instead, Local Rule 7's "standard for controlling pretrial publicity must be judged at the time a statement is made." Id.; see id. at 1081, 111 S.Ct. at 2748 (Rehnquist, C.J., dissenting in part, joined by White, Scalia, and Souter, JJ.) (rejecting argument that attorney could not be sanctioned for statements to media if no prejudice actually resulted). 75 Finally, Cutler chastises the district court for taking his comments out of context. He notes that Gotti's trial received more press coverage and publicity than any other trial in New York history. He contends that in the midst of a veritable firestorm of anti-Gotti publicity, the few cinders he added could not possibly have tainted the proceedings. He adds that the timing of his comments--made five months before the trial began--underscores their relative harmlessness. We are not persuaded, however, by Cutler's Uriah Heep pose. 76 Cutler vastly understates the effect defense lawyers can have on prospective jurors. As Gentile cautions, "lawyers' statements are likely to be received as especially authoritative" because "lawyers have special access to information through discovery and client communications." Id. at 1074, 111 S.Ct. at 2744-45 (majority opinion). Indeed, Gentile affirmed the very portion of Nevada's pre-trial publicity rule that considered statements of the sort Cutler made as "ordinarily" likely to have a "substantial likelihood of materially prejudicing" a pending criminal proceeding. See id. at 1065-76, 111 S.Ct. at 2740-46; id. at 1081-82, 111 S.Ct. at 2748-49 (O'Connor, J., concurring). 77 Moreover, although the timing of Cutler's comments may be significant, see id. at 1044, 111 S.Ct. at 2729 (Kennedy, J., dissenting in part, joined by Marshall, Blackmun, and Stevens, JJ.) (when comments preceded trial by six months, "only the most damaging information could give rise to any likelihood of prejudice"), this factor does not necessarily weigh in Cutler's favor. Our review of the record makes clear that his "statements were timed to have a maximum impact, when public interest in the case was at its height immediately after" the disqualification briefs and record were unsealed. Id. at 1079, 111 S.Ct. at 2747 (Rehnquist, C.J., dissenting in part, joined by White, Scalia, and Souter, JJ.). 78 Finally, we note that in Gentile, four Justices were prepared to hold that relatively innocuous statements made at a single press conference some six months before trial in the midst of extensive and sensationalized publicity were substantially likely to materially prejudice the proceedings. See id. at 1076-81, 111 S.Ct. at 2745-48. In contrast, Cutler spoke repeatedly and heatedly to the press in the months preceding Gotti's trial. Given the more lenient "reasonable likelihood" standard here, coupled with Cutler's performance on 9 Broadcast Plaza alone, we do not doubt that a majority of the Gentile Court would find that Cutler violated the orders.1 79 We thus find that Cutler's comments were reasonably likely to prejudice the Gotti proceedings. C. Willfulness 80 Criminal contempt generally "requires a specific intent to consciously disregard an order of the court." United States v. Berardelli, 565 F.2d 24, 30 (2d Cir.1977) (quotation marks omitted). Cutler contends that he did not willfully disobey the orders because he did not know the comments listed in the order to show cause were reasonably likely to prejudice the proceedings. This argument taxes the most generous credulity. 81 We hold attorneys to a higher standard of conduct than we do lay persons. See Turner, 812 F.2d at 1565. Accordingly, we may infer Cutler's willfulness from his " 'reckless disregard for his professional duty.' " Rojas, at 55 F.3d at 63 (quoting In re Levine, 27 F.3d 594, 596 (D.C.Cir.1994) (internal quotation omitted), cert. denied, --- U.S. ----, 115 S.Ct. 1356, 131 L.Ed.2d 214 (1995)). Cutler's persistent attempts to try Gotti's case in the media, despite Judge Glasser's repeated warnings, belie any notion that he did not intend these particular comments to prejudice the proceedings, or that he did not recklessly disregard the orders. 82 Any doubt about this is dispelled by Cutler's participation in a Brooklyn Law School symposium on April 25, 1991, before the Gotti trial began. There, he expounded upon the virtues of a friendly press: 83 ... I've really grown to appreciate and respect Anthony DeStefano from New York Newsday[,] Pete Bowles for New York Newsday, Lenny Buder for The New York Times, and Arnie Lubasch from The New York Times and some of the other reporters who I think do a conscientious job. Do I have selfish reasons? I have honest reasons that I don't want to alienate them, that I want the prospective veniremen out there to feel that I mean what I say and say what I mean, and if that can spill over and help my client, then I feel it's important for me to do that. 84 Joint App. at 1659 (emphasis added). With a smoking gun like this, we cannot fault the district court for finding that the government proved Cutler's willfulness "not only beyond any reasonable doubt, but beyond any possible doubt." Cutler, 840 F.Supp. at 970. 85 In short, the record amply supports findings that the orders were specific, and that Cutler's comments were reasonably likely to prejudice prospective jurors and were willfully made with the intent of prejudicing prospective jurors. Accordingly, we affirm Cutler's criminal contempt conviction. III. The Sentence 86 Finally, Cutler challenges his sentence of probation on several grounds. He largely repeats arguments he raised below in his motion to correct his sentence. Although the potentially severe collateral consequences of his probation gave us pause, we, like the district court, find his arguments unconvincing. 87 The Guidelines offer little guidance on sentences for defendants convicted of criminal contempt, in violation of 18 U.S.C. Sec. 401(3), a misdemeanor. The applicable guideline, U.S.S.G. Sec. 2J1.1, instructs the court to apply U.S.S.G. Sec. 2X5.1, which is for "Other Offenses." Section 2X5.1, in turn, tells the court to "apply the most analogous offense guideline," and, "[i]f there is not a sufficiently analogous guideline, the provisions of 18 U.S.C. Sec. 3553(b)." That statute, in turn, commands the court to "impose an appropriate sentence." 18 U.S.C. Sec. 3553(b). 88 Attempting to do just that, and relying on 18 U.S.C. Sec. 3561(c)(2), which allows up to five years' probation for misdemeanors, the district court imposed three years' probation on Cutler. Relying on 18 U.S.C. Sec. 3563(b)(20) and (22), the court added a ninety-day period of house arrest. In addition, apparently relying on its authority to impose occupational restrictions as a condition of probation, see 18 U.S.C. Sec. 3583(d), as well as 18 U.S.C. Sec. 3563(b)(22), the court imposed a 180-day concurrent period of suspension from practicing within the Eastern District of New York. Cutler challenges the suspension, the house arrest, and the probation. 89 Because a sentencing court has broad discretion in fixing conditions of probation, we review a sentence of probation only for an abuse of discretion. See United States v. Tolla, 781 F.2d 29, 32 (2d Cir.1986). We will, however, carefully scrutinize "unusual and severe conditions, such as one requiring the defendant to give up 'a lawful livelihood.' " United States v. Sterber, 846 F.2d 842, 843 (2d Cir.1988) (quoting United States v. Pastore, 537 F.2d 675, 681-82 (2d Cir.1976)). 90 Pointing to our decisions in Sterber and Pastore, Cutler argues that because New York's Appellate Division already has well-established procedures for disciplining attorneys, the district court should have referred the matter to it, rather than summarily suspend him from practicing law. Those cases are inapposite, however. 91 In Sterber, we vacated a probation condition that required a probationer to surrender a professional license granted by the state because the state had a well-defined statutory procedure for resolving allegations of professional misconduct. Id. at 843-44. Similarly, in Pastore, we vacated a probation condition that required the defendant to resign from the Bar, reasoning that disbarment should take place only under the procedures and for the reasons prescribed by state statutes and regulations. Pastore, 537 F.2d at 683. Underlying both decisions was our concern over intruding upon areas regulated by states. See Sterber, 846 F.2d at 844 (revoking a professional license "implicates important notions of federalism"); Pastore, 537 F.2d at 682 (questioning whether a federal district judge may require a defendant to give up a state-granted professional license where the state provides a comprehensive regulatory system to handle the professional misconduct of those it licenses). 92 Here, however, Cutler was not ordered to surrender his license, nor was he required to resign from the Bar. The court did no more than prohibit Cutler "from practicing [law] during the probationary period," which we suggested in Sterber would not "constitute an abuse of the court's discretion." Sterber, 846 F.2d at 844. Moreover, the probation condition simply suspended Cutler from practicing law before a single federal court, the Eastern District of New York. Accordingly, the condition does not implicate significantly the federalism concerns of Sterber and Pastore. 93 Next, Cutler argues that the district court erred by not following the Eastern District's detailed procedures for disciplining attorneys who practice there. We disagree. True, the Eastern District has an elaborate procedure for disciplining attorneys, and requires that an attorney convicted of a misdemeanor be given "notice and an opportunity to be heard" before he or she can be suspended from the practice of law. E.D.N.Y.Gen.R. 4(c), (g). But, in the Eastern District: 94 [m]isconduct of any attorney in the presence of this court or in any manner in respect to any matter pending in this court may be dealt with directly by the judge in charge of the matter or at said judge's option referred to the committee on grievances, or both. 95 E.D.N.Y.Gen.R. 4(k) (emphasis added). Cutler's criminal contempt stemmed from a "matter pending in" the Eastern District of New York. Since Judge Glasser had voluntarily recused himself, Chief Judge Platt represented the court in charge of that matter and thus could discipline Cutler directly. 96 Noting that the order to show cause mentioned only the possibility of a $5,000 fine or six months' imprisonment, Cutler also contends that he had no notice that he could be summarily suspended from practicing law. This argument has superficial appeal, as neither party could point to another case where a district court suspended an attorney from practice. But, Cutler concedes that a sentencing court can impose occupational restrictions as a condition of probation. See U.S.S.G. Sec. 5F1.5(a). Moreover, the district court could have referred the matter to the Eastern District Grievance Committee, which in turn could have suspended him. E.D.N.Y.Loc.R. 4(g), (k). Finally, had Cutler been imprisoned for six months, he could not have practiced law anyway. Thus, a lawyer like Cutler should have known that interruption of his practice was a very real possibility. 97 Next, Cutler argues that the district court failed to make sufficient findings of fact to justify suspending him from practicing law in the Eastern District. We disagree. The Guidelines recommend imposing restrictions on a defendants' professional activities if there is "a reasonably direct relationship between [his] ... profession and the conduct relevant to the offense," U.S.S.G. Sec. 5F1.5(a)(1), and there is a reasonable basis to believe such a restriction is necessary to deter defendant from committing similar conduct in the future, U.S.S.G. Sec. 5F1.5(a)(2). 98 The connection here between Cutler's profession and his contemptuous behavior--committed while acting in his professional capacity--is readily apparent. Moreover, Cutler's flagrant disregard of Judge Glasser's orders provides ample "reason to believe that, absent such a restriction, [he] will continue to engage in unlawful conduct similar to that for which [he] was convicted." U.S.S.G. Sec. 5F1.5(a)(2). Thus, a remand for further factfinding is pointless. Cf. United States v. Tropiano, 50 F.3d 157, 164 (2d Cir.1995) (suggesting that, where relationship between uncharged conduct and offense of conviction is intuitively obvious, court need not make detailed findings of fact to support an upward departure). 99 Cutler also challenges the house arrest provision. The district court sentenced Cutler to ninety days' house arrest, but did not include a provision allowing Cutler to work. This may conflict with 18 U.S.C. Sec. 3563(b)(20), which allows a district court to require a defendant on probation to "remain at his place of residence during non-working hours." Id. (emphasis added). However, that statute also permits a district court to impose "other conditions" as may be appropriate, Sec. 3563(b)(22), making absolute home-confinement an option. We therefore decline to set aside this aspect of the sentence. Rather, Cutler may seek clarification from the district court as to whether he may work a lawyer's usual hours during the house arrest. We read the government's brief to suggest that he will have little opposition on this score. Presumably, the government recognizes that a court's discretion on this issue will ordinarily be exercised to permit (or even encourage) defendants to pursue their livelihoods. 100 Finally, Cutler challenges the length of his probation. Three years, however, is well within the five-year maximum term of probation for misdemeanors. See 18 U.S.C. Sec. 3561(c)(2). And, we do not doubt that the term of probation here will "promote respect for the law," "provide just punishment for the offense," and "afford adequate deterrence" to future contemptuous conduct by attorneys. 18 U.S.C. Secs. 3562(a), 3553(a). 101 That said, the potentially severe collateral consequences of Cutler's probation are troubling. Cutler fears that his probation will likely result in his suspension by the New York courts from practice for three years. See Matter of Kazdin, 183 A.D.2d 108, 109, 590 N.Y.S.2d 405, 406 (1st Dep't 1992) (per curiam) ("attorney on probation may not practice law"). The district court dismissed this specter summarily, noting that it "never intended and does not now intend ... to put any limit on any disciplinary authority to suspend or even disbar the defendant for any period of time whatsoever for his conduct here." United States v. Cutler, No. 91-CR-1189 (TCP), slip op. at 2 (E.D.N.Y. June 21, 1994) (emphasis added). 102 We agree with the district court that the state licensing consequences of Cutler's contempt conviction are for the Appellate Division to address, not us. We emphasize, however, that we consider Cutler's probation necessary to punish past contemptuous conduct and deter similar conduct in future federal proceedings. We have no occasion to pass judgment on Cutler's conduct in state proceedings, nor do we believe it necessary for his rehabilitation to require that he not practice at all for the duration of his probation. Finally, we are not unmindful that New York courts in the past have merely censured attorneys convicted of criminal contempt in federal courts, rather than suspend them from practicing law. See Matter of Perkins, 69 A.D.2d 160, 419 N.Y.S.2d 1 (1st Dep't 1979) (per curiam); Matter of Castellano, 46 A.D.2d 792, 361 N.Y.S.2d 23 (2d Dep't 1974) (memorandum). CONCLUSION 103 We have considered all of Cutler's arguments, and find them without merit. We recognize that Cutler did not singlehandedly generate the media circus that threatened the fairness of the final Gotti trial; federal prosecutors and law enforcement officials deserve their share of the blame. Moreover, we sympathize with the plight of a defense lawyer torn between his duties to act as an officer of the court and to zealously defend his client. Nonetheless, a lawyer, of all people, should know that in the face of a perceived injustice, one may not take the law into his own hands. Defendant did, and now he must pay the price. 104 In some quarters, doubtless, this affirmance will elicit thunderbolts that we are chilling effective advocacy. Obviously, that is neither our intention nor our result. The advocate is still entitled--indeed encouraged--to strike hard blows, but not unfair blows. Trial practice, whether criminal or civil, is not a contact sport. And, its tactics do not include eye-gouging or shin-kicking. 105 In this case, a conscientious trial judge tried mightily to limit the lawyers to press statements that were accurate and fair. The defendant's statements were dipped in venom and were deliberately couched to poison the well from which the jury would be selected. Such conduct goes beyond the pale, by any reasonable standard, and cannot be condoned under the rubric of "effective advocacy." 106 We are not unaware that it has become de rigueur for successful criminal defense lawyers to cultivate cozy relationships with the media. See Joyce Egginton, Circle of Fire: Murder and Betrayal in the "Swiss Nanny Case" (1994) (commending a media-savvy defense lawyer and criticizing a prosecutor for not taking advantage of the media in an age where "old ethics" may no longer apply). Indeed, in this very case, defendant urged law students to do just that. As Seneca once observed, "quae fuerant vitia mores sunt" ("what once were vices are now the manners of the day"). L. Annaeus Seneca, Epistulae ad Lucilium, Epis. xxxix, at p 6. The Bruce Cutler case must now stand as a caution that enough of the "old ethics" survive to bar flouting the Canons of Professional Conduct. See DR 1-102(A); Matter of Giampa, 211 A.D.2d 212, 628 N.Y.S.2d 323 (2d Dep't 1995). 107 Lord Henry Brougham, who defended Queen Caroline on a criminal charge of adultery, was an early apostle of what today would be known as Rambo litigation tactics. In his argument before the House of Lords, he summed up his view of the advocate's role: "the first great duty of an advocate [is] to reckon everything subordinate to the interests of his client." Twenty-three years later, at a dinner for barristers, with the eighty-six-year-old Lord Brougham in the audience, Chief Justice Alexander Cockburn responded--to loud cheers from the distinguished assembly-- 108 "[t]he arms which an advocate wields he ought to use as a warrior, not as an assassin. He ought to uphold the interests of his clients per fas, not per nefas. He ought to know how to reconcile the interests of his clients with the eternal interests of truth and justice." 109 The Times (London), Nov. 9, 1864, quoted in 5 Encyclopedia Britannica 941 (1947). 110 The judgment of conviction and sentence are AFFIRMED. * The Honorable Frank A. Kaufman, of the United States District Court for the District of Maryland, sitting by designation 1 Significantly, Cutler neither argued below nor argues now that, having been disqualified from the case, he was no longer subject to the orders--and Local Rule 7--when he appeared on 9 Broadcast Plaza. In any case, Local Rule 7 governs attorneys "associated with the ... defense." Cutler's disqualification came some seven months after Gotti's arrest and indictment. During these months, Cutler played a crucial role in Gotti's defense. Moreover, even after the disqualification, Cutler continued to press Gotti's case to the media, the performance on 9 Broadcast Plaza being only the most egregious example. We thus have little difficulty in finding that Cutler was still "associated" with Gotti's defense after the disqualification and therefore subject to Local Rule 7 and the orders to comply therewith	{ "pile_set_name": "FreeLaw" }
565 F.2d 179 UNITED STATES of America, Appellee,v.Clarke D. JOHNSON, Defendant, Appellant. No. 77-1147. United States Court of Appeals,First Circuit. Argued Sept. 13, 1977.Decided Nov. 9, 1977. William C. Madden, Boston, Mass., by appointment of the court, for appellant. Charles E. Chase, Asst. U. S. Atty., with whom Edward F. Harrington, U. S. Atty., Boston, Mass., was on brief, for appellee. Before COFFIN, Chief Judge, CAMPBELL, Circuit Judge, and TUTTLE, Circuit Judge.* LEVIN H. CAMPBELL, Circuit Judge. Clarke D. Johnson appeals his conviction by a jury on one count of conspiracy to distribute cocaine and three counts of possession with intent to distribute and distribution of cocaine. Appellant's main defense at trial was entrapment. He contends that government agents, acting under cover, badgered him over a period of months, and occasionally even threatened him, finally inducing him to arrange a sale of $100,000 worth of cocaine to them. On appeal, two actions of the district court are assigned as error:1 (1) its refusal to give the "fundamental fairness" entrapment instruction requested by appellant; (2) its denial of appellant's motion for a new trial based on the contention that appellant was denied a fair opportunity to meet the Government's allegedly false rebuttal testimony. Appellant claims that in addition to giving the standard entrapment instructions,2 which focus on a defendant's predisposition to commit the unlawful act, the court should have charged the jury that in some cases the depth of government involvement in the crime committed will be so great as to require a dismissal as a matter of due process, regardless of the defendant's predisposition.3 He asserts that the substance of the instruction requested was drawn from Justice Powell's concurring opinion in Hampton v. United States, 425 U.S. 484, 493, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976). Hampton is not an easy case to interpret in view of the lack of a majority opinion. The plurality opinion maintaining that predisposition was the only issue to consider in assessing an entrapment defense commanded only three votes. Since both Justice Powell and Justice Blackmun, in a separate concurring opinion, took the position that fundamental fairness might in extreme circumstances require dismissal of a prosecution because of outrageous police conduct, it can be said counting the three dissenters that a majority of the Justices would go at least that far. But while, in this sense, Justice Powell's views may be taken as reflecting a current consensus, appellant still must fail in his contentions here, since there is no support in Hampton and its predecessors for placing the question of fundamental fairness before the jury. To the contrary, in his dissent in Hampton, Justice Brennan quoted Justice Stewart, also dissenting, in United States v. Russell, 411 U.S. 423, 441, 93 S.Ct. 1637, 1647, 36 L.Ed.2d 366 (1973), as follows: 1 "(T)he determination of the lawfulness of the Government's conduct must be made as it is on all questions involving the legality of law enforcement methods by the trial judge, not the jury." 2 It is true, of course, that only the dissenters in Hampton focus on whether the fundamental fairness defense should go to the jury. The plurality opinion simply holds that there is no such defense, while the concurring Justices, who point to the exceptional case that has not yet been decided, do not discuss whether judge or jury is to pass on the issue when it properly arises. It is possible that the exceptional case, now recognized by a majority of the Court, may be hotly disputed on the facts. For example, the defendant may testify that he was directly threatened by government agents that if he did not commit the crime his wife or daughter might be arrested, or some such thing as that. The government agents might testify that no such conversation ever occurred. Is this issue a fact to be resolved by the trial court or is it to be resolved by the jury? Quite possibly, it should be decided by the trial court just as is a disputed fact issue concerning an allegedly illegal search or seizure. On the other hand, Justice Stewart's language that "the determination of the lawfulness of the government's conduct must be made . . . by the trial judge, not the jury" may contemplate only a ruling on the effect of particular conduct once it has been established. 3 But we need not attempt to resolve this issue here. Under any view, it is the court's province to decide whether defendant's case was such that, if believed, it would fall into the exceptional category mentioned by Justice Powell. If such a determination were left to a jury's unguided discretion, as under the instruction proposed here, the entrapment defense as now understood would be transformed into an invitation to twelve jurors to consider in virtually any case whether defendant was treated "fairly". Whatever its possible role in resolving contested factual issues raised by an entrapment defense, the jury is not equipped and should not be permitted to speculate on whether particular facts do or do not amount to fundamental fairness. We hold that the court properly rejected the proposed instruction. 4 While this ends the precise issue framed by appellant on appeal, we think it appropriate to consider the related question of whether, on this record, the district court should, as a matter of law, have found the existence of such shocking police conduct as to preclude a conviction. Appellant filed a "motion for judgment of acquittal on the ground of entrapment", which argued that "as a matter of law on the evidence in this case the defendant was entrapped by government agents." This motion was denied by the district court, and while appellant does not now contest this disposition we are inclined to treat appellant as having preserved on appeal the question of fundamental fairness in view of his having raised it in the context of the requested instruction. 5 We do not believe the Government's conduct was so outrageous as to render Johnson's conviction unconstitutional. Government involvement in the offense was less than in Hampton, supra, or its forebear, Russell v. United States, supra. In Hampton, the Court upheld a conviction for distribution of narcotics that government agents had both supplied to defendant and bought from him. In Russell, government agents had supplied defendants with a somewhat scarce but not contraband chemical that was necessary to manufacture the illicit substance. 6 In the instant case, the drug was not furnished by the Government. Johnson relied on his own sources to procure $100,000 worth of cocaine for sale to Agents Staffieri and Doyle. To be sure, Johnson testified that he acted in response to demands persisting over a period of months, and also that as he had sent one agent on a wild goose chase to Florida the agents applied pressure that became occasionally angered and even threatening. Thus, according to Johnson, Staffieri "lost his temper", or cursed Johnson, and promised that Johnson "would be sorry" if he didn't compensate Staffieri for the cost of the fruitless trip South. 7 But even accepting Johnson's version as true, the "pressure" he describes seems scarcely the "outrageous conduct" that would cause a majority of the Justices in Hampton and Russell to join in reversing a conviction on due process grounds. In so concluding we have considered the entire course of the relationship described by Johnson and the agents, the context surrounding the two or three threats Johnson complains of, and the words allegedly used "you'll be sorry", "you damn well better come through". Johnson might well have expected an angry reaction to the expensive false lead he gave to Staffieri, thinking he was a dealer in narcotics. 8 Additionally, to the extent that the district court was entitled to rely on its assessment of the witnesses' credibility ruling on defendant's motion for acquittal, any damage to Johnson's credibility, that it perceived would further weaken Johnson's due process argument. The agents drew a much less passive picture of Johnson than Johnson presented in his defense. We are thus unpersuaded that the alleged government misconduct so tainted Johnson's conviction as to render it invalid under the Constitution. 9 Appellant's second assignment of error is grounded in the court's denial of his motion for new trial. That motion was based on appellant's allegation that he was denied a fair opportunity to refute the Government's rebuttal evidence, which placed him at a "crucial" meeting in Boston on or about November 12, 1973. Appellant claimed that this testimony would be proved false by an examination of his passport, which he expected would support his statement that he was in Switzerland during all of November of that year. The passport had not been submitted in evidence at trial, but had apparently been surrendered to the court as a condition of bail. 10 The court below denied the motion for new trial, stating: 11 "The passport was not offered in evidence during the trial. However, for purposes of this motion, the Court has examined all entries therein and finds that the passport does not support defendant's present contention, and in fact, rebuts defendant's story in part by showing his arrival in the United States on November 2, 1973. It further appears that defendant elected to testify at the trial and that he was present during the testimony about which he now complains, but made no attempt to deny it during the trial." 12 Consideration of a motion for new trial is committed to the sound discretion of the trial court. United States v. Zannino, 468 F.2d 1299 (1st Cir. 1972), cert. denied, 410 U.S. 954, 93 S.Ct. 1419, 35 L.Ed.2d 687 (1973); United States v. Leach, 427 F.2d 1107 (1st Cir.), cert. denied,400 U.S. 829, 91 S.Ct. 95, 27 L.Ed.2d 59 (1970). This court can find no convincing reason to believe that this assessment and disposition of appellant's motion by the trial court constituted an abuse of that court's discretion. In fact, the trial court may have done more than was strictly required of it on such a motion by examining appellant's passport. The appellant had failed of his own accord to respond to the Government's testimony. Appellant makes no claim that he was surprised by the Government's testimony, nor that he was denied an opportunity to present witnesses who would refute that testimony. Nothing in the Government's testimony about the meeting rendered it "so indefinite (that) it gave the defendant no chance or opportunity to refute it", as appellant contends in his brief. 13 Affirmed. * Of the Fifth Circuit, sitting by designation 1 In his appellate brief, appellant also argues that the court below erred by denying without a hearing his pre-trial motion to dismiss the prosecution. That motion had been based on the contention that the statute under which appellant was later convicted was unconstitutional because it "went beyond the valid exercise of the police power of the United States . . . in its improper classification of cocaine as a narcotic. . . ." so far as to be arbitrary and irrational. Further, appellant maintained that he merited a hearing on this issue because the Government had in its possession, but did not submit to the trial court, a "White Paper on Drug Abuse" which, among other things, listed cocaine as a non-narcotic There is no merit to these contentions. See United States v. Foss, 501 F.2d 522 (1st Cir. 1974). The district court was not required under the Local Rules or for any other reason to hold a hearing before deciding the motion to dismiss. D.C.Mass. R.12(d), (e). The Government's alleged access to the White Paper is irrelevant. 2 The court's comprehensive instructions on entrapment were an extended version of those found at § 13.09 of Devitt and Blackmar, Federal Jury Practice and Instruction, (3d ed. 1977). The court said inter alia : "If you find that the acts for which defendant was prosecuted in this case were instigated by government agents and that the defendant had no prior disposition toward making this kind of sale . . . then you should acquit the defendant on any count as to which you find that he was lured into . . . commission . . . by repeated and persistent solicitation of federal agents. . . . The defense of entrapment is not available for the purpose of discussion here where a crime was being committed and the officer merely furnished an opportunity for the commission of the crime to someone who would have committed it as soon as the opportunity presented itself." 3 Appellant requested the court to instruct the jury that, "Where there is governmental (police) involvement in criminal activity, predisposition of the defendant is not the only matter to be considered in determining the defendant's guilt or innocence. The concept of fundamental fairness inherent in the constitutional guaranty of Due Process, must be taken into consideration. There is certainly a constitutional limit to allowing governmental involvement in crime. It would be unthinkable to permit government agents to instigate the crimes charged in the indictments in this case merely to gather evidence to convict this defendant."	{ "pile_set_name": "FreeLaw" }
DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT RICHARD RINGEL, Appellant, v. CLAUDINE CERMAK, Appellee. No. 4D19-22 [July 11, 2019] Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Jessica Ticktin, Judge; L.T. Case No. 502009DR008782XXXXSB. Richard Ringel, Boynton Beach, pro se. Joseph A. Costello of Costello Law, LLC, Fort Lauderdale, for appellee. PER CURIAM. Affirmed. LEVINE, C.J., KUNTZ, J. and BOATWRIGHT, JOE, Associate Judge, concur. * * * Not final until disposition of timely filed motion for rehearing.	{ "pile_set_name": "FreeLaw" }
In The Court of Appeals Ninth District of Texas at Beaumont ____________________ NO. 09-13-00320-CV ____________________ IN RE COMMITMENT OF JASON FRANZ SCHOENFELD _______________________________________________________ ______________ On Appeal from the 435th District Court Montgomery County, Texas Trial Cause No. 12-10-10526 CV ________________________________________________________ _____________ MEMORANDUM OPINION Jason Franz Schoenfeld appeals from an order of commitment, rendered following a trial in which the jury found Schoenfeld to be a sexually violent predator. See Tex. Health & Safety Code Ann. §§ 841.001-.151 (West 2010 & Supp. 2013) (SVP statute). In one appellate issue, Schoenfeld contends that he was denied the assistance of counsel at a post-petition psychiatric examination, an examination conducted by the State’s expert. Because Schoenfeld was not entitled to have counsel present when being examined by the State’s expert, a physician, we affirm the trial court’s judgment. 1 In October 2012 the State filed a petition alleging that Schoenfeld is a sexually violent predator and seeking his civil commitment. Schoenfeld then asked the trial court to appoint counsel to represent him, and the trial court appointed an attorney with the office of State Counsel for Offenders to do so. Schoenfeld’s attorney filed an original answer, and the State filed a motion asking that the trial court require Schoenfeld to undergo an examination by an expert. By order, the trial court authorized the State’s expert to examine Schoenfeld in a manner “[c]onsistent with Texas Health and Safety Code § 841 specifications[.]” See id. § 841.061(c), (f) (West 2010). On the same day that the trial court ordered the examination, Schoenfeld’s attorney filed a document that asserts that Schoenfeld had a right to have counsel present during the examination. Subsequently, the trial court signed an order denying Schoenfeld’s request to have counsel present during the examination. The record shows that in December 2012, the State’s expert, Dr. Sheri Gaines, examined Schoenfeld, as had been authorized by the trial court’s order. During Schoenfeld’s trial, she testified about the examination and the role that it played in her risk assessment and evaluation. In a series of cases decided after Schoenfeld filed his brief, we have rejected the same claims that Schoenfeld raises in his sole issue. For example, in In re Commitment of Smith, we observed that “neither the SVP statute nor the 2 Fourteenth Amendment require that counsel be present during a psychiatrist’s post- petition examination.” 422 S.W.3d 802, 807 (Tex. App.—Beaumont 2014, pet. denied); see In re Commitment of Richard, No. 09-13-00539-CV, 2014 WL 2931852, at 4 (Tex. App.—Beaumont June 26, 2014, no pet. h.) (mem. op); In re Commitment of Cardenas, No. 09-13-00484-CV, 2014 WL 2616972, at 4 (Tex. App.—Beaumont June 12, 2014, no pet.) (mem. op.); In re Commitment of Muzzy, No. 09-13-00496-CV, 2014 WL 1778254, at 1 (Tex. App.—Beaumont May 1, 2014, pet. denied) (mem. op.); In re Commitment of Speed, No. 09-13-00488-CV, 2014 WL 1663361, at 1 (Tex. App.—Beaumont Apr. 24, 2014, pet. denied) (mem. op.); In re Commitment of Lemmons, 09-13-00346-CV, 2014 WL 1400671, at 1 (Tex. App.—Beaumont Apr. 10, 2014, pet. denied) (mem. op.); see also In re Commitment of Letkiewicz, No. 01-13-00919-CV, 2014 WL 2809819, at 11 n.4 (Tex. App.—Houston [1st Dist.] June 19, 2014, no pet.) (mem. op.). Schoenfeld argues that the examination authorized by section 841.061(c) of the Texas Health and Safety Code is a “‘stage’” of the proceeding that occurs after the right to counsel attaches under the provisions of section 841.144(a). See Tex. Health & Safety Code Ann. §§ 841.061(c), 841.144(a) (West 2010). However, in a reply brief that Schoenfeld filed in his appeal, he concedes that “[t]he assistance of 3 counsel during the adversarial mental health evaluation does not necessitate the actual physical presence of counsel in the interview room.” In this case, the record shows that the trial court appointed counsel to represent Schoenfeld well before the examination occurred. In his brief, Schoenfeld does not argue that the trial court’s ruling prevented counsel from providing adequate advice or from protecting Schoenfeld’s rights. See Smith, 422 S.W.3d at 805. Schoenfeld and Dr. Gaines were both deposed before trial, and had there been issues related to Dr. Gaines’s examination, the parties could have developed them then. Additionally, Schoenfeld’s brief does not explain why any concerns about the information that Dr. Gaines obtained when she examined Schoenfeld could not adequately be addressed in motions or objections that he filed either before or during trial. See id. at 806-07. The record does not support Schoenfeld’s claim that he was deprived of the assistance of counsel. We overrule Schoenfeld’s sole issue and affirm the trial court’s judgment. AFFIRMED. ________________________________ HOLLIS HORTON Justice Submitted on April 30, 2014 Opinion Delivered September 4, 2014 Before McKeithen, C.J., Kreger and Horton, JJ. 4	{ "pile_set_name": "FreeLaw" }
508 F.2d 8 UNITED STATES of America, Plaintiff-Appellee,v.Joseph B. McDEVITT, Defendant-Appellant. No. 74-1182. United States Court of Appeals, Tenth Circuit. Argued Oct. 23, 1974.Decided Dec. 26, 1974. Don J. Svet, Asst. U.S. Atty., Albuquerque, N.M., for plaintiff-appellee. Frank Oliver, Chicago, Ill., for defendant-appellant. Before SETH, BARRETT and DOYLE, Circuit Judges. WILLIAM E. DOYLE, Circuit Judge. 1 Defendant was convicted of possession of marijuana with intent to distribute it in violation of 21 U.S.C. 841(a)(1). The defendant moved to suppress the large quantity, 800 pounds, which in the course of a subsequent search, had been discovered in the bed of the rented truck which he had been driving. 2 The trial court after hearing arguments denied the motion to suppress and this is our problem on appeal. The evidence presented in the motion to suppress is virtually undisputed. An Officer Olson, who made the arrest and search, was the only witness. From his testimony it was established that on December 1, 1973, at about 11:00 a.m. the officer followed a U-Haul truck which was then being driven by the defendant along the highway near Tucumcari, New Mexico. The officer did not notice anything unusual about the truck, but he said he stopped it because he wanted to ascertain whether or not it was carrying goods for hire contrary to the New Mexico Statutes Annot., 64-27-5 and 64-27-8.1 It turned out that appellant's papers were in order and there was no basis for detention or confinement of appellant. At the request of the officer appellant joined him in the police car. The officer then made an inquiry to his headquarters which communicated with a Washington, D.C. computer service, part of the National Crime Information Center, to ascertain whether appellant was wanted on any charge. Almost immediately the National Crime Information Center notified the officer that McDevitt was subject to being arrested as a Navy deserter. Thereupon, Officer Olson conducted a search of appellant's person and advised him that he was under arrest. The total time between the stopping of the truck and the formal arrest took approximately 20 minutes. 3 Following this initial encounter, appellant was taken to State Police headquarters which were nearby. He was placed in the custody of Officer Boarman, a narcotics agent. Subsequently, the truck was towed to the headquarters. An effort was made to obtain a warrant to search the truck, but because it was Saturday the officers were unable to locate a magistrate. The aid of the County District Attorney and his assistant was obtained and these two individuals approached the truck for the purpose of inventorying its contents, but before they could carry out this effort Officer Boarman told them that the truck had 800-900 pounds of marijuana in it. It turned out that this was true. I. 4 The stopping of the truck must have been the result of impulse on the part of the officer because appellant was not, to the knowledge of the officer, violating the law. It is appellant's contention that the illegality of this arrest contaminated the subsequent acts of Officer Olson and the attorneys and that as a consequence the search of the vehicle was also illegal. 5 The ruling of the trial court was that this search was incident to a valid arrest and hence a warrant was not necessary and the search itself was legal. The trial court based this on its view that the original arrest was justified and on the further fact that defendant was wanted by the United States as a deserter from the Navy. 6 In order for an officer to stop and search a vehicle there must exist some basis for suspicion, at least, that the driver has violated the law even though the facts need not be sufficient to establish probable cause. See Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968); Stone v. Patterson, 468 F.2d 558 (10th Cir. 1972); United States v. Self, 410 F.2d 984 (10th Cir. 1969). Cf. Adams v. Williams, 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972). 7 Similarly, an automobile may be stopped for inspection without probable cause, but the act of stopping may not be arbitrary. Thus, our court has said that 'even an investigatory detention must be based on reasonable ground, if not probable cause.' See United States v. Fallon, 457 F.2d 15, 18 (10th Cir. 1972). 8 The relatively recent decision of the Supreme Court in Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973) involved a stopping by a border patrol officer and the discovery of a large quantity of marijuana. 9 As in the case at bar, there was no probable cause or even reasonable suspicion to justify the stop. The prosecution sought to support its position by resorting to the border decisions. The Supreme Court, however, differentiated those checkpoint and stop cases involving as they did some semblance of probable cause. It condemned the arrest before it as arbitrary since the stopping and detention was not based on either probable cause or reasonable suspicion. 10 Long ago the Supreme Court in Carroll v. United States, 267 U.S. 132, 153-154, 45 S.Ct. 280, 69 L.Ed. 543 (1925), recognized that the arbitrary and unreasoned stopping of a vehicle is prohibited under the Fourth Amendment. In that case the Court said: 11 It would be intolerable and unreasonable if a prohibition agent were authorized to stop every automobile on the chance of finding liquor, and thus subject all persons lawfully using the highway to the inconvenience and indignity of such a search. 12 267 U.S. 132, 153-154, 45 S.Ct. 280, 285 (1925). 13 Unless the police officer was empowered to stop and search every truck regardless of cause or suspicion, it is not possible to justify the original stopping at bar because it does not qualify as a justified temporary inspection incident. Cf. Terry v. Ohio, supra. The problem is further complicated by the fact that the obtaining of the information from the National Crime Information Center is not separable from the original stopping and detention. Indeed, the information obtained from the Crime Center appears to us to be the product of the original stopping. Since, then, it is clear that there was not a search incident to a valid arrest, the only possible salvation for the search of the truck lies in the existence of an independent basis for the search of the truck and the discovery of the enormous cache of marijuana. 14 The government's theory is that there was no arrest until word came through from the Crime Center that appellant was wanted as a deserter. We disagree. Appellant was taken to Officer Olson's car and his papers were impounded. The duration of the stay was fifteen to twenty minutes. There is not the slightest evidence suggesting that he was free to go, and it is highly unlikely that he was. 15 Our Circuit has had several relatively recent cases involving preliminary detentions such as that in Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). See for example United States v. Bowman, 487 F.2d 1229 (10th Cir. 1973); United States v. McCormick, 468 F.2d 68 (10th Cir. 1972), cert. denied, 410 U.S. 927, 93 S.Ct. 1361, 35 L.Ed.2d 588 (1972); United States v. Lepinski, 460 F.2d 234 (10th Cir. 1972); United States v. Fallon, 457 F.2d 15 (10th Cir. 1972); United States v. Sheppard, 455 F.2d 1081 (10th Cir. 1972); United States v. Granado, 453 F.2d 769 (10th Cir. 1972); United States v. Saldana, 453 F.2d 352 (10th Cir. 1972); United States v. Sanchez, 450 F.2d 525 (10th Cir. 1971); United States v. Self, 410 F.2d 984 (10th Cir. 1969). 16 In the Bowman and McCormick cases the officer detected the odor of marijuana emanating from the defendant's automobile. 17 In Lepinski and Fallon the accused did not have an automobile registration certificate. In Sheppard the defendant produced a stack of counterfeit bills. 18 In Granado the occupants of the vehicle said that they were from Mexico. This was the condition also in Saldana. There, one of the occupants stated that he had 'swum the river.'In Sanchez defendant threw a sack into the woods. 19 In Self the defendant did not have an automobile registration certificate. 20 In each of the above cases the original stopping of the vehicle and the temporary detention were not invalid. The present case, however, stretches the Terry doctrine to the breaking point. The Terry concept cannot apply to an arbitrary stopping of a vehicle for the purpose of possible discovery of a law violation. Nor can a stopping together with a lengthy detention be upheld as a valid arrest on the ground that there was no physical seizure; and the fact that it is a routine type of action does not improve the condition. Cf. United States v. Robinson, 414 U.S. 218, 94 S.Ct. 467, 38 L.Ed.2d 427 (1973); Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973). Repetition of an unlawful act does not render it valid. 21 More recent decisions of our court have, consistent with the Almeida-Sanchez doctrine, taken a more guarded or cautious view of arrest and detention such as we have here. See United States v. King, 485 F.2d 353 (10th Cir. 1973); United States v. Maddox, 485 F.2d 361 (10th Cir. 1973). II. 22 We now consider the final stage of this unusual sequence of events. The record discloses that when Officer Olson took appellant to the police station he delivered him to the custody of an Officer Boarman. Olson's testimony at the hearing on motion to suppress was to the effect that Boarman questioned McDevitt 'in a sense.'2 23 The testimony sheds little light on the happenings at the police station. We gather that appellant was turned over to Officer Boarman. We also learn that Boarman came out the front door of the police office and advised the District Attorney that appellant had informed them that marijuana was in the vehicle. We are not told whether appellant's statement was a spontaneous type of utterance or whether it was a confession which was laboriously obtained from him. If it was a spontaneous statement it might be sufficiently independent of the illegal arrest to furnish probable cause for the search. See Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970). If the material was in plain view and was thus readily obtained in an inventory of the vehicle, again the discovery might be valid.3 24 The testimony at the hearing on motion to suppress leaves some unanswered questions. At a subsequent trial or hearing the testimony of Officer Boarman should be obtained so as to clarify the evidence as to the appellant's admission. Also, further information should be obtained from Officer Olson as to the location and condition or position of the marijuana in the truck in relation to the taking of inventory. Thus, was it in plain view and subject to ready discovery in the course of inventory?4 25 The case at bar is a serious one involving as it does a violation of great magnitude. It deserves careful preparation and presentation together with specific funds from Indian tribal organization fact. Because of that, the cause must be remanded for further proceedings or a new trial. 26 The judgment is, then, reversed and the cause is remanded for a new trial or other proceedings consistent with the views which are expressed herein. 1 The latter provision requires that all common carriers have a certificate of public convenience and necessity Section 64-27-5 provides as follows: No common motor carrier of property or passengers shall operate any motor vehicle for the transportation of either persons or property for hire on any public highway in this state except in accordance with the provisions of this act. We fail to see that this contributes anything to the validity of the original arrest. 2 The questions by the defense lawyer were as follows: Q. And did you then-- did Mr. Boarman then question him: A. First of all. Q. Well, just did he or didn't he, first of all? A. In a sense, yes, sir. Q. Were you questioning Mr. McDevitt at the time? A. I believe I asked one question of him. Q. Were you present at all times while Mr. Boarman was talking to Mr. McDevitt? A. Not at all times. Later, on cross-examination by the prosecutor, Officer Olson testified that as he and the two district attorneys were walking to the truck to inventory it, Officer Boarman told them that McDevitt had just told him that there was marijuana in the truck. Q. Now as you went to the vehicle, what happened? A. Agent Boarman came out the front doors of the state police office and he advised the district attorney and myself that Mr. McDevitt had just informed him there was marijuana in the vehicle. Q. Okay. Were you already unlocking the vehicle at that time? A. We were approaching the vehicle at that time. 3 Cf. United States v. Ducker, 491 F.2d 1190 (5th Cir. 1974); United States v. Kelehar, 470 F.2d 176 (5th Cir. 1972); United States v. Edwards, 441 F.2d 749 (5th Cir. 1971); United States v. Pennington, 441 F.2d 249 (5th Cir. 1971); United States v. Boyd, 436 F.2d 1203 (5th Cir. 1971). Several of the above Fifth Circuit cases rely on Cady v. Dombrowski, 413 U.S. 433, 93 S.Ct. 2523, 37 L.Ed.2d 706 (1973) and Harris v. United States, 390 U.S. 234, 88 S.Ct. 992, 19 L.Ed.2d 1067 (1968) for these rulings In Harris the police found a registration certificate in an impounded auto. The policeman was attempting to roll up the window so as to protect the auto when he discovered a registration certificate in plain view. A police regulation demanded that impounded vehicles be inventoried. The Court upheld the admissibility of the registration certificate. The Court, however, stated that: The admissibility of evidence found as a result of a search under the police regulation is not presented by this case. The precise and detailed findings of the District Court, accepted by the Court of Appeals, were to the effect that the discovery of the card was not the result of a search of the car, but of a measure taken to protect the car while it was in police custody. Harris v. United States, supra, at 236, 88 S.Ct. at 993. 4 It is difficult to understand why the officers would proceed without seeking a warrant in these complex circumstances	{ "pile_set_name": "FreeLaw" }
NOT RECOMMENDED FOR PUBLICATION File Name: 17a0465n.06 No. 16-6085 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT UNITED STATES OF AMERICA, ) FILED ) Aug 09, 2017 Plaintiff-Appellee, ) DEBORAH S. HUNT, Clerk ) v. ) ON APPEAL FROM THE ) UNITED STATES DISTRICT THOMAS SAYLOR, ) COURT FOR THE WESTERN ) DISTRICT OF KENTUCKY Defendant-Appellant. ) ) ) BEFORE: BOGGS, BATCHELDER, and WHITE, Circuit Judges. BOGGS, Circuit Judge. This case turns on whether the appellant, Thomas Saylor, was “in custody” for the purposes of Miranda when he made incriminating statements to law- enforcement officers in an interview conducted at the halfway house where he lived. Saylor was the target of a six-month-long federal investigation for his involvement in the possession and distribution of child pornography. The investigation culminated in the execution of a search warrant at Saylor’s home, a halfway house for convicted sex offenders in Louisville, Kentucky. During the execution of that warrant, law-enforcement officers conducted a brief interview with Saylor, which both parties agree was not preceded by a Miranda warning. Saylor made several incriminating statements about his possession and distribution of child pornography and was subsequently arrested and charged with multiple counts of possessing child pornography and exploiting children, in violation of 18 U.S.C. §§ 2251 and 2252A. He filed a pretrial motion to No. 16-6085, United States v. Saylor suppress his incriminating statements, which was denied. Saylor pleaded guilty to the charges, reserving his right to file this appeal challenging the district court’s denial of his suppression motion, and was sentenced to 300 months in prison. For the following reasons, we affirm the district court’s denial of Saylor’s suppression motion. I A In August 2013, the Federal Bureau of Investigation (FBI) received a tip from the National Center for Missing and Exploited Children (NCMEC) indicating that Microsoft had reported that a user sent known child pornography to another email address on July 27, 2013. NCMEC had traced the authoring email address to Thomas Saylor, a registered sex offender in Louisville, Kentucky, who had previously been convicted of two sex offenses involving minors: (1) prohibited use of electronic communication to procure a minor for sex, and (2) possession of matter portraying sexual performance by a minor. The FBI agents confirmed Saylor’s presence in the sex-offender registry and communicated with his state probation officer, but did nothing further at that time. In March 2014, the FBI received another tip implicating Saylor, this time from an Immigration and Customs Enforcement (ICE) agent. The agent stated that, in October 2013, an individual emailed an account that had been taken over by ICE agents, requesting to trade child pornography. The individual specifically requested “2/6 yo girls only,” and included in the email an image of a prepubescent girl exposing herself to the camera. Subsequent subpoenas for the email address returned the number of a disposable cell phone that was registered in Saylor’s name. -2- No. 16-6085, United States v. Saylor In response to this new information, the FBI secured a federal search warrant for Saylor’s residence. At this time, Saylor lived in a halfway house for sex offenders in Louisville. On March 27, 2014, a team of approximately ten FBI agents and Louisville Metro Police Department (LMPD) officers, led by Special Agent Tracey Riley, executed the search warrant at Saylor’s address. Because the three-story home housed nearly a dozen convicted felons, agents entered the building with their weapons drawn and began directing residents into a central room in order to keep track of everyone. Residents were informed that they could leave if they chose, but they were initially handcuffed for the agents’ safety. During this sweep of the home, an agent spotted Saylor in the hallway outside one of the home’s kitchens. Unlike the other residents in the home, Saylor was not immediately handcuffed and escorted to the centralized location. Instead, Special Agent Riley confirmed Saylor’s identity, informed him that they were there to execute a search warrant, and asked him if he would be willing to speak with law-enforcement agents in the kitchen. Saylor agreed and entered the kitchen, where he remained under monitoring by an agent standing at the kitchen door until FBI interviewers could arrive at the scene. No one else interacted with Saylor until the interviewers arrived, and at no point was Saylor informed that he was free to leave or read his Miranda rights. After waiting approximately fifteen minutes, Saylor was met by FBI Special Agent Adam Keown and LMPD Detective Shawn Hamilton. The agents offered Saylor water and took seats opposite Saylor at the kitchen table with their backs to the hallway door, which was no longer manned by an FBI agent. In a tactical decision, the agents kept their initial questions vague and generalized, telling Saylor that they simply wanted to discuss his online activity, including several online accounts that they believed belonged to him. As the interview progressed, -3- No. 16-6085, United States v. Saylor however, the agents made it clear that they were there to discuss Saylor’s involvement in the trade of child pornography. In the interview, which lasted somewhere between fifteen and thirty minutes, Saylor made a number of incriminating statements regarding his involvement in the transmission of child pornography. He admitted using the email addresses identified by the FBI, sending emails with child pornography attached, and possessing child pornography on his cell phone. When presented with copies of the images that he had sent via his email address, he admitted that they belonged to him and initialed them accordingly at the officers’ request. Throughout the interview, Saylor appeared remorseful and avoided making eye contact with the interviewing officers. His remorse gave way to despondence, however, when he threatened to stab himself with the pen that officers gave him to write his confession. This ended the interview. Because Saylor was not deemed an immediate risk to any nearby children, FBI agents did not arrest Saylor after the interview was completed. At no point did the agents read Saylor his Miranda rights or place him under arrest. Although the agents did not inform Saylor that he was free to leave at any time, they insist that he was free to do so. Agents did, however, inform Saylor’s probation officer—who, at Special Agent Riley’s invitation—observed the execution of the search warrant, of the details of Saylor’s confession. After conferring with his supervisor, Saylor’s probation officer placed him under arrest immediately following the interview. FBI agents insist that they did not coordinate with the probation officer to have Saylor arrested and did not direct him to do so. Subsequent to Saylor’s arrest, FBI agents executed search warrants on several of the email addresses Saylor admitted using to transmit child pornography. One of the email addresses contained over 4,000 images and 300 movies of child pornography in attachments to -4- No. 16-6085, United States v. Saylor messages sent to and from that address, including a particularly distressing image of a three- year-old female who had been bound and gagged. B Saylor’s actions led to a four-count indictment, charging him with violations of 18 U.S.C. §§ 2251 and 2252A. Saylor filed a pretrial motion to suppress the statements he made to agents on the day that they searched his home, arguing that he was in custody for the purposes of Miranda and never read his rights. A magistrate judge held a hearing and, in a 17-page memorandum, concluded that Saylor was not in custody for the purposes of Miranda. Saylor objected to the magistrate judge’s findings, but the district court agreed with the magistrate judge and denied Saylor’s suppression motion. Saylor subsequently pleaded guilty to the charges, but reserved his right to challenge the district court’s denial of his suppression motion on appeal. He was sentenced to 300 months in prison and brings this timely appeal. II We review the district court’s findings of fact regarding a suppression motion for clear error and its conclusions of law de novo. United States v. Al-Cholan, 610 F.3d 945, 953 (6th Cir. 2010) (citations omitted). Because Saylor’s motion to suppress was denied below, we review the evidence “in the light most likely to support the district court’s decision.” Id. at 954 (quoting United States v. Adams, 583 F.3d 457, 463 (6th Cir. 2009)). A In Miranda v. Arizona, 384 U.S. 436 (1966), the Supreme Court interpreted the Self- Incrimination Clause of the Fifth Amendment “to protect persons in all settings in which their freedom of action is curtailed in any significant way from being compelled to incriminate themselves.” Id. at 467. In practice, this places a burden upon state and federal officers to -5- No. 16-6085, United States v. Saylor ensure that a suspect in custody is “adequately and effectively apprised of his rights” and to honor those rights when exercised unless they have been waived. Ibid. As the warning of rights and their subsequent waiver are both “prerequisites to the admissibility of any statement made by a defendant,” the failure of law-enforcement officers to adequately warn a suspect in custody of his constitutional rights is fatal to the admission of any testimony induced by subsequent police interrogation. Id. at 476. If, however, the suspect is not in police custody at the time that the statements are made, then the safeguards of Miranda do not apply and the testimony is admissible. Oregon v. Mathiason, 429 U.S. 492, 495 (1977). Here, neither party contests that Saylor was interrogated within the meaning of Miranda and that he was not read his Miranda rights. The only issue is whether Saylor was in police custody when the interview within the halfway house took place. Saylor argues that he was; the United States disagrees. Whether a suspect is “in custody” for the purposes of Miranda is an objective inquiry that asks whether there was “a formal arrest or restraint on freedom of movement of the degree associated with formal arrest.” J.D.B. v. North Carolina, 564 U.S. 261, 270 (2011) (quoting Thompson v. Keohane, 516 U.S. 99, 112 (1995)). Considering the totality of the circumstances, “courts focus on the ‘objective circumstances of the interrogation’ to determine ‘how a reasonable person in the position of the individual being questioned would gauge the breadth of his or her freedom of action.’” United States v. Panak, 552 F.3d 462, 465 (6th Cir. 2009) (quoting Stansbury v. California, 511 U.S. 318, 323, 325 (1994)). Factors that guide this inquiry include “the location of the interview; the length and manner of questioning; whether the individual possessed unrestrained freedom of movement during the interview; and whether the -6- No. 16-6085, United States v. Saylor individual was told she need not answer the questions.” Ibid. (citing United States v. Swanson, 341 F.3d 524, 529 (6th Cir. 2003)). B The location of Saylor’s interview produces the closest question of law in this case. Saylor was interviewed in his home, which is the type of suspect-friendly environment that typically does “not [give] rise to the kind of custodial situation that necessitates Miranda warnings.” Id. at 466 (quoting United States v. Salvo, 133 F.3d 943, 950 (6th Cir. 1998)). Saylor’s home, however, was a halfway house under the authority of the Kentucky Department of Corrections and subject to that department’s policies and procedures. See 501 Ky. Admin. Regs. 6:020 § 25.6 (defining “Community Service Centers” as including “jails, halfway houses, and residential treatment facilities that house state inmates and parolees”). Saylor argues that these regulations worked to limit his freedom of movement, transforming his home from “a secure redoubt from the cares of the world” into something more akin to a police interrogation room. Panak, 552 F.3d at 465. Although some of these regulations appear quite limiting, it is unclear how many (if any) applied to a probationer like Saylor. For instance, Saylor uses a portion of his brief to highlight a provision in the Kentucky Corrections Policies and Procedures that prohibits escape from a community center, such as a halfway house. Appellant’s Br. at 14; see also 501 Ky. Admin. Regs. 6:020 § 25.6.II.K. The text of the policy, however, plainly limits its application to inmates residing in a community center. Probationers, like Saylor, would presumably be afforded far greater freedom of movement. Saylor would have been subject to the Conditions of -7- No. 16-6085, United States v. Saylor Supervision,1 a set of policies applicable to probationers and parolees that is promulgated by the Kentucky Department of Corrections. These include subjection to a warrantless search if the probation officer has reasonable suspicion that the probationer possesses contraband and a requirement that the probationer inform his supervising officer within 72 hours if questioned by any law-enforcement official. Although these factors certainly contribute to the creation of the kind of police-dominated atmosphere that triggers Miranda protections, it cannot be the case that an individual’s home is transformed into a custodial environment by virtue of the fact that the individual is a probationer. In any event, none of the regulations applicable to Saylor rendered him unable to leave the halfway house at the time that the search warrant was executed, and he was generally free to do so when he pleased. In sum, under the circumstances presented, the fact that Saylor’s residence was a halfway house does not make it the kind of “inherently intimidating” environment that would have made him feel “constrained or intimidated.” Salvo, 133 F.3d at 950–51 (holding interviews in a dormitory computer room and a Burger King parking lot chosen by a defendant to be noncustodial). Saylor also points to the Ninth Circuit’s decision in United States v. Craighead, 539 F.3d 1073 (9th Cir. 2008), which the magistrate judge cited in light of the limited case law dealing with facts similar to those of this case. There, the Ninth Circuit confronted a set of facts rather similar to our own: eight law-enforcement officers executed a search warrant in conjunction with a child-pornography investigation and interviewed the suspect in his home. Id. at 1078–79. Although the officers informed him that he was not under arrest and that any statement he made would be voluntary, the Ninth Circuit held that a custodial interrogation had occurred and that Miranda warnings were required. Id. at 1089. The Ninth Circuit’s opinion carries limited force 1 Available at http://corrections.ky.gov/depts/Probation%20and%20Parole/Pages/InformationforOffenders.aspx -8- No. 16-6085, United States v. Saylor here because it relies on a four-factor test to distinguish custodial from non-custodial interrogations that, although cited, see e.g., Panak, 552 F.3d at 466, has not been imported into the law of our circuit.2 In any event, this case can be distinguished from Craighead on its facts. The Ninth Circuit relied heavily on the number of law-enforcement officers who were dispatched to secure Craighead’s home. Id. at 1084–85. Although the execution of Saylor’s search warrant involved an even greater number of officers, Saylor lived in a halfway house alongside a dozen other convicted felons. Craighead, who lived alone, was far more likely than Saylor to “feel that his home was dominated by law enforcement agents and that they had come prepared for a confrontation.” Id. at 1085. The Ninth Circuit also noted that Craighead was physically restrained by virtue of the fact that his interview took place in a closed-door storage room, with an agent “block[ing] Craighead’s exit from the room” throughout the interview. Id. at 1086. Here, however, Saylor was interviewed in an open-door kitchen without the presence of an armed guard. Although his interviewers were seated across the table from him, they were not positioned in such a way that for Saylor “to get to the room’s only door, he ‘would have either had to have moved the police detective or asked him to move.’” Ibid. In addition, agents requested Saylor’s permission to ask him questions, and he agreed, waiting patiently in the kitchen until investigators were ready to proceed. Craighead, by contrast, was simply directed to the storage room where the interview took place. Id. at 1078. Under these circumstances, even if we apply the four-factor Craighead test, we would not find that Saylor could succeed in 2 The Ninth Circuit’s four-factor test looks at “(1) the number of law enforcement personnel and whether they were armed; (2) whether the suspect was at any point restrained, either by physical force or by threats; (3) whether the suspect was isolated from others; and (4) whether the suspect was informed that he was free to leave or terminate the interview, and the context in which the statements were made.” Id. at 1084. -9- No. 16-6085, United States v. Saylor showing that his interrogation gave rise to the kind of police-dominated atmosphere that triggers Miranda protections. C The second factor we consider is the length and manner of questioning. This factor also weighs against Saylor. It is undisputed that the agents interviewed Saylor for a period of fifteen to thirty minutes, well within the window of time that we traditionally consider to be a non- custodial interview. See Panak, 552 F.3d at 467 (less-than-an-hour interview was non- custodial); United States v. Mahan, 190 F.3d 416, 420, 422 (6th Cir. 1999) (hour-and-a-half interview was non-custodial). Nor do the facts suggest that the interviewing agents employed a hostile or threatening tone with Saylor. On the contrary, Saylor admits that the interview was relatively conversational. See Appellant’s Br. at 21. Saylor instead argues that the fact that he was confronted with incriminating evidence makes his interview custodial, again pointing to a Ninth Circuit case, United States v. Brobst, 558 F.3d 982 (9th Cir. 2009). In Brobst, the Ninth Circuit applied a five-factor test to determine whether an individual was in custody for the purposes of Miranda: Factors relevant to whether an accused is “in custody” include the following: (1) the language used to summon the individual; (2) the extent to which the defendant is confronted with evidence of guilt; (3) the physical surroundings of the interrogation; (4) the duration of the detention; and (5) the degree of pressure applied to detain the individual. Id. at 995. The Ninth Circuit concluded that, because the defendant in that case was immediately confronted with evidence that he was involved in the distribution of child pornography, he was more likely to feel that he was in police custody. With Brobst, as with Craighead, the Ninth Circuit’s approach to Miranda does not have an exact parallel in our case law. We have never held, for example, that a noncustodial conversation may be transformed into a custodial -10- No. 16-6085, United States v. Saylor interrogation simply by virtue of the fact that police confronted the defendant with evidence of guilt. On the contrary, we have found interviews to be noncustodial even when the defendant has been made aware of evidence suggesting his guilt. See Salvo, 133 F.3d at 952 (holding the interview to be noncustodial even though “the agents told Salvo they knew about Brandon, the boy he wanted to seduce, and Brian, the person he communicated with via [incriminating] e- mail”). Because “[i]t is well-settled that in order to impact upon the custody determination, the communication of [incriminating evidence] must somehow relate to the suspect’s freedom of action,” ibid., “[e]ven a clear statement from the officer that the person under interrogation is the prime suspect is not in itself, dispositive of the custody issue, for some suspects are free to come and go until the police decide to make an arrest,” ibid. (quoting Stansbury, 511 U.S. at 325). D This third factor—whether the defendant possessed unrestrained freedom of movement during the interview— is also close, but on balance favors the government. It is undisputed that, unlike the other residents of the halfway house, Saylor was never placed in handcuffs or otherwise physically restrained. It is also undisputed that Saylor was never told that he could leave at any time, although he was never told that he had to stay, either. Saylor points to two instances in which he can make a plausible case that he was restrained: (1) the fifteen minutes that he spent under watch waiting in the kitchen; and (2) the thirty minutes that he spent seated across the table from investigators during his interview. Neither proves persuasive. During the roughly fifteen minutes that Saylor waited for his interview in the kitchen, he was monitored by an agent. As Special Agent Riley explained, this was to ensure that “he didn’t try to get a knife or something out of the kitchen . . . to harm himself or anybody else.” -11- No. 16-6085, United States v. Saylor Moreover, Saylor was monitored to the same or lesser extent that the agents monitored all of the other residents of the house while the search warrant was being executed: “This is not anybody’s first search warrant. It’s known that we keep eyes on our individuals that are in a house, whether it’s male, female, kids, whatever.” As the district court noted, this is a common-sense justification that finds some support in our case law. Cf., e.g., INS v. Delgado, 466 U.S. 210, 219 (1984) (holding in the Fourth Amendment seizure context that “[t]he presence of agents by the exits posed no reasonable threat of detention” to factory workers who were questioned about their immigration status while on job assignments); Michigan v. Summers, 452 U.S. 692, 705 (1981) (holding that “a warrant to search for contraband founded on probable cause implicitly carries with it the limited authority to detain the occupants of the premises while a proper search is conducted”); United States v. Malcolm, 435 F. App’x 417, 421 n.1 (6th Cir. 2011) (holding that “general security protocols within the ATF office, which required staff escort for non-ATF visitors” did not place the defendant in custody for the purposes of Miranda). During the roughly thirty minutes that Saylor was interviewed, he sat across the kitchen table from two law-enforcement officers.3 Saylor argues that they positioned themselves in this way intentionally in order to block his access to the only door leading out of the kitchen. Saylor’s argument is significantly weakened by the fact that the record seems to reflect that Saylor had chosen his seat before the officers had even entered the room. One agent testified, “I believe he was already sitting down when I entered the room.” The officers’ decision to conduct the interview across the table from Saylor—perhaps the most logical positioning for a conversation—does not render the interview custodial merely because it also happened to place them between Saylor and the only available exit. Had the officers intentionally placed Saylor 3 These were the only two officers in the room. The agent previously posted at the door to the kitchen to monitor Saylor was no longer present. -12- No. 16-6085, United States v. Saylor there or maneuvered the table in order to box Saylor in, he might have a stronger case. See Salvo, 133 F.3d at 951 (noting that because “Salvo himself selected the locations for the interviews,” it indicated that he “felt comfortable” in those places and that thus the interview was not custodial). As the facts stand, however, it does not appear that the officers restrained Saylor’s movement in any significant way while they conducted the interview. E The final factor asks whether Saylor was told that he did not need to answer the officers’ questions. It is undisputed that the officers did not do so. Although this factor cuts against the government, it cannot alone redeem Saylor’s cause. “[W]e have never held that [this instruction] is a necessary condition (as opposed to a frequently sufficient condition) before officers may question an individual in a non-custodial setting.” Panak, 552 F.3d at 467. After all, “[i]t would be strange . . . to say that a telltale sign of whether an individual must be Mirandized is whether the officer gave the individual one of the Miranda warnings.” Ibid. In light of the four factors listed above—the location of the interview, the length and manner of questioning, whether Saylor possessed unrestrained freedom of movement, and whether Saylor was told he need not answer the questions—a reasonable person in Saylor’s position would not have believed he was detained to a degree associated with formal arrest. Thus, he was not “in custody” for the purposes of Miranda, and his motion to suppress was properly denied. III For these reasons, we AFFIRM the decision of the district court to deny Saylor’s motion to suppress. -13-	{ "pile_set_name": "FreeLaw" }
228 P.3d 451 (2010) DAK PLASTICS v. 3RD JUD. DIST. No. OP 09-0664. Supreme Court of Montana. February 23, 2010. Decision Without Published Opinion Denied.	{ "pile_set_name": "FreeLaw" }
Not For Publication in West's Federal Reporter Citation Limited Pursuant to 1st Cir. Loc. R. 32.3 United States Court of Appeals For the First Circuit No. 04-1747 FRANK BRUN, JR., Plaintiff, Appellant, v. JO ANNE B. BARNHART, COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, Defendant, Appellee. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE [Hon. John A. Woodcock, Jr., U.S. District Judge] Before Selya, Lynch and Howard, Circuit Judges. Francis M. Jackson and Jackson & MacNichol on brief for appellant. Paula D. Silsby, United States Attorney and Karen B. Burzycki, Special Assistant United States Attorney, on brief for appellee. April 18, 2005 Per Curiam. Claimant Frank Brun, Jr. appeals from the judgment of the district court upholding the denial of Social Security disability benefits. After carefully reviewing the record and the parties' briefs, we affirm this judgment for essentially the reasons stated in the magistrate judge's Report and Recommended Decision which the district judge adopted. See Jones v. Barnhart, 315 F.3d 974, 979 (8th Cir. 2003) (presence of 75,000 surveillance system monitor jobs nationwide represents "substantial gainful work which exists in the national economy"). We add only that SEC v. Chenery Corp., 318 U.S. 80 (1943), does not require a remand in this case. That is, since the administrative law judge had cited the job of surveillance system monitor as an example of the kind of work that claimant could perform, we are not affirming on a ground that the agency never had considered. Affirmed. See Local Rule 27(c). -2-	{ "pile_set_name": "FreeLaw" }
150 N.J. Super. 556 (1977) 376 A.2d 214 BESTY C. MAYER, PLAINTIFF v. MARTIN C. MAYER, DEFENDANT. Superior Court of New Jersey, Chancery Division. Decided May 24, 1977. 559 Mr. Gary N. Skoloff for plaintiff (Messrs. Skoloff & Wolfe, attorneys). Mr. Gardner B. Miller for defendant (Messrs. Miller & Lawless, attorneys). DUFFY, J.S.C. Plaintiff and defendant were married on January 13, 1962 and separated on December 1, 1973. Plaintiff wife filed her complaint for divorce on June 5, 1975, alleging a cause of action based on 18 months' separation. The parties were divorced by judgment of this court on November 23, 1976. Two children were born of the marriage, Dana, 13 years of age, and William, 11. They are in the custody of the plaintiff. Defendant husband is now a practicing member of the Bar of this State, having successfully pursued various business ventures as a real estate broker and developer. At the present time he is attempting to develop several properties in the Livingston, New Jersey, area, and testified to possible ventures in Arizona and Pennsylvania. Plaintiff has recently undergone an operation for cancer and is under continuing medical and psychiatric care. She is a licensed real estate saleswoman and is affiliated with a local agency, but she has not had a significant income from those efforts. 560 Trial of this matter consumed about three days. At the conclusion of oral testimony the court ordered counsel for the parties to submit summations as to law and fact covering equitable distribution, support and alimony, custody, counsel fees and costs. This opinion will dispose of those issues. [The court here awarded plaintiff the marital residence and certain personal property by way of equitable distribution under N.J.S.A. 2A:34-23, applying the guidelines suggested in Rothman v. Rothman, 65 N.J. 219, 232 (1974), plaintiff to be solely responsible for the mortgage, taxes and upkeep of the home. The court also fixed the amounts of alimony and child support defendant is to pay plaintiff; he is to provide a policy insuring his life in an amount of at least $50,000, naming the children as irrevocable beneficiaries and to be maintained until the younger shall have become emancipated, as well as health and medical insurance for them, including major medical coverage, to be maintained until each is emancipated. In addition, he is to be responsible for any extraordinary medical expenses incurred by plaintiff for the treatment of her cancer.] The issue of custody of the minor children of the marriage is seriously contested. During settlement negotiations held at a conference in chambers the court suggested that, in view of plaintiff's continuing health problems, an order of joint custody might be appropriate in this case. Plaintiff, in her summation, requests that the court's order of joint custody, if entered, name one parent as the "primary custodian as a matter of law." Defendant "welcome[s] dual custody" in his summation. Two questions are thus presented. Can this court order joint custody, that is, does the court have the authority to do so? If so, then in what fashion can an order of joint custody, if appropriate, best be implemented? The question of joint custody has topical as well as legal significance, having been discussed recently in the New York Times Sunday Magazine (October 31, 1976) and being the subject of a pending suit naming the Chancery Division of 561 Essex County as defendant. In addition, the concept of joint custody has never been fully explored in any reported decision of our courts. The time is ripe for a full review of the legal and statutory bases for an award of custody, in general and joint custody, in particular. The Superior Court of New Jersey has "original general jurisdiction throughout the State in all causes." N.J. Const. (1947), Art. VI, § III, par. 2. Further, the legislature has vested in this court the authority to make such order, after judgment of divorce or maintenance, "as to the care, custody, education and maintenance of the children, or any of them, as the circumstances of the parties and the nature of the case shall render fit, reasonable and just * ." N.J.S.A. 2A:34-23. Clearly, this legislative grant of authority would include the authority to order "joint," "divided" or "split" custody. Assuming, therefore, that the circumstances of the parties and the nature of the case render an award of joint custody, "fit, reasonable and just," there is no reason why such an order should not be entered. New Jersey is in the majority of states which follow the traditional "best interests of the child" rule in custody determinations. The "best interests" doctrine was first announced by Judge (Later Justice) Brewer in Chapsky v. Wood, 26 Kan. 650 (1881), in which the Kansas Supreme Court repudiated the rule which held that the rights of parents were primary over those of third parties to custody of their children. The doctrine gained popularity after the decision in Finlay v. Finlay, 240 N.Y. 429, 148 N.E. 624 (1925), in which the New York Court of Appeals held that the Chancellor acted as parens patriae to do what is best for the interests of the child. The "best interests" standard is the one advocated by the Family Law Section of the American Bar Association in § 402 of the Uniform Marriage and Divorce Act. That act has undergone a proposed revision, but § 402 was left unmodified. See 7 Fam. L.Q. 135 (1973). 562 Other standards for placement of custody have been proposed, but they have not yet had as wide acceptance as the "best interests" test has had. Goldstein et als. propose the "least detrimental available alternative." Goldstein, A. Freud and Solnit, Beyond the Best Interests of the Child (1973). This choice would maximize, * * * (i)n accord with the child's sense of time, the child's opportunity for being wanted and for maintaining on a continuous, unconditional, and permanent basis a relationship with at least one adult who is or will become the child's psychological parent. [at 99] "Sense of time," "opportunity for being wanted" and "psychological parent" are terms of art coined by the authors. Another approach is that of John Batt, who approaches child custody questions "from a psychologically oriented child development standpoint." Batt, "Child Custody Disputes: A Developmental-Psychological Approach to Proof and Decisionmaking", 12 Willamette L.J. 491 (1976). He proposes that the court take into account five phases of development of the human child before making a custody placement. The phases generally follow the growth of the child from infancy to young adulthood. The "best interests" standard was authoritatively announced in New Jersey in 1944 by the Armour decision and has since been followed by our courts. Armour v. Armour, 135 N.J. Eq. 47, 52 (E. & A. 1944). See S. v. H.M., 111 N.J. Super. 553, 559 (App. Div. 1970); DiBiano v. DiBiano, 105 N.J. Super. 415, 418 (App. Div. 1969). Other formulations of the "best interests" test require the court to consider the safety, happiness and physical, mental and moral welfare of the child. Fantony v. Fantony, 21 N.J. 525, 536 (1956); Schwartz v. Schwartz, 68 N.J. Super. 223, 233 (App. Div. 1961); Sheehan v. Sheehan, 38 N.J. Super. 120, 125 (App. Div. 1955); Matflerd v. Matflerd, 10 N.J. Super. 132, 136 (App. Div. 1950). The court has broad discretion in dealing with the custody of a child, being always aware that the welfare and 563 happiness (best interests) of the child is the controlling consideration. Sobel v. Sobel, 46 N.J. Super. 284, 286 (Ch. Div. 1957). The court will consider the wishes of an infant child as to custody, if the child is of an age and capacity to form an intelligent preference as to custody. N.J.S.A. 9:2-4; Gardner v. Hall, 132 N.J. Eq. 64, 81 (Ch. Div. 1942), aff'd 133 N.J. Eq. 287 (E. & A. 1943). The preference of the young child has a place, although not a conclusive place, in determining custody. Callen v. Gill, 7 N.J. 312, 319 (1951); Sheehan v. Sheehan, infra, 51 N.J. Super. at 291.[2] Commentators have suggested that a prerequisite to an award of custody should be the appointment of independent counsel for the child so as to safeguard his or her rights. Comment, "A Child's Right to Independent Counsel in Custody Proceedings: Providing Effective `Best Interests' Determination through the Use of a Legal Advocate," 6 Seton Hall L. Rev. 303 (1975); Inker and Peretta, "A Child's Right to Counsel in Custody Cases," 5 Fam. L.Q. 108 (1971). While this court has assigned independent counsel for children in the past, such a procedure, which entails considerable expense, should be utilized only where the interests of the child are truly adverse to those of the parent(s). One example of such adverse interest would be the situation where neither parent is a fit custodian. That is not the case here. To which parent, then, should custody be awarded? Our courts have long recognized that custody of a child of tender years ordinarily is awarded to the mother if she is a fit and proper person. Esposito v. Esposito, 41 N.J. 143, 145 (1963). The theory is that the mother will take better 564 and more expert care of the small child than the father can. Matflerd v. Matflerd, supra, 10 N.J. Super. at 137; Seitz v. Seitz, 1 N.J. Super. 234, 240 (App. Div. 1949). These considerations must always be considered subordinate, however, to what is truly in the child's best interest. Vannucchi v. Vannucchi, infra, 113 N.J. Super. at 47; DiBiano v. DiBiano, supra. In the present case the question is not so much "to which parent should custody be awarded" as it is "should custody be awarded to both parents?" Nelson states that Where both parents are suitable persons to have the custody of their children and are devoted to them, they should be given as nearly equal rights to the custody of the children as is practical and compatible with the convenience, education and welfare of the children, since it is against public policy to destroy or limit the relation of parent and child and the child is entitled to the love and training of both parents. [2 Nelson, Divorce and Annulment (2 ed. 1961) §§ 15, 17, at 256-57] N.J.S.A. 9:2-4 makes it clear that, with regard to an order or judgment of custody, * * * the rights of both parents, in the absence of misconduct, shall be held to be equal, and they shall be equally charged with their care, nurture, education and welfare, and the happiness and welfare of the children shall determine the custody or possession. This statutory grant of equal rights in both parents to custody effectively reversed the holding of the common law wherein the father had the preferred right to custody of his minor child, unless disqualified for same reason. See Gardner v. Hall, supra, 132 N.J. Eq. at 77; Morris v. Wardell, N.J., 67 A. 850 (1907). Our case law is replete with decisions reaffirming the existence of equal rights to custody in both parents. See, e.g., Vannucchi v. Vannucchi, 113 N.J. Super. 40 (App. Div. 1971); Sheehan v. Sheehan, 51 N.J. Super. 276 (App. Div. 1958), certif. den. 28 N.J. 147 (1958); Fantony v. Fantony, 31 N.J. Super. 14 (App. Div. 1954), aff'd as 565 modified, 21 N.J. 525 (1956). One of our later cases holds that the parental right to the care of his or her child is a fundamental right subject to constitutional protection. In re J.S. & C., 129 N.J. Super. 486 (Ch. Div. 1974). Notwithstanding the enlightened views of the Legislature and the courts of this State, no authoritative decision has ever been rendered by our courts on the subject of joint custody. It cannot be said, however, that joint ("dual," "alternating," "divided," "split") custody enjoys great popularity across the country. Decisions on joint custody in other jurisdictions demonstrate either a guarded acceptance or a clear dislike for the concept. See Annotation, 92 A.L.R.2d 691 (1963). Courts approving joint custody generally agree that a child is entitled to the love, nurture, advice and training of both mother and father. The experience is said to give the child the experience of two separate homes. Brock v. Brock, 123 Wash. 450, 212 P. 550 (Sup. Ct. 1923); Mullen v. Mullen, 188 Va. 259, 49 S.E.2d 349 (Sup. Ct. App. 1948). Courts disapproving the concept point to the possibility of resentment against the parents who shuffle the child back and forth, State ex rel. Larson v. Larson, 190 Minn. 489, 252 N.W. 329 (Sup. Ct. 1934), the development of a sense of insecurity, Heltsley v. Heltsley, 254 S.W.2d 973 (Ky. Ct. App. 1951), and the destructive effect of instability in the human factors affecting a child's emotional life. Kaehler v. Kaehler, 219 Minn. 536, 18 N.W.2d 312 (Sup. Ct. 1945). Two principles can be distilled from the reported cases. The first is that the primary consideration in an award of joint custody is the welfare and best interest of the child. Bergerac v. Maloney, 478 S.W.2d 111 (Tex. Civ. App., 1972); Brocato v. Walker, 220 So.2d 340 (Miss. Sup. Ct. 1969); Davis v. Davis, 354 S.W.2d 526 (Mo. App. 1962). The second principle is that decision must depend upon the facts of the particular case. Merrill v. Merrill, 83 Idaho 306, 362 P.2d 887 (Sup. Ct. 1961); Andrews v. Geyer, 200 Va. 107, 104 S.E.2d 747 (Sup. Ct. 566 App. 1958); Stillmunkes v. Stillmunkes, 245 Iowa 1082, 65 N.W.2d 366 (Sup. Ct. 1954). Several factors are said to affect the decision to award joint custody. Among these are the wishes of the parents, as in Ward v. Ward, 88 Ariz. 130, 353 P.2d 895 (Sup. Ct. 1960), where the court stated that a sincere desire on the part of the parent to share his child's companionship should not be lightly dismissed. Another important factor is the age of the child, the general rule being that the courts should not divide the custody of a child of tender years. Even this rule is not absolute, as in Lutker v. Lutker, 230 S.W.2d 177 (Mo. App. 1950), where joint custody of a 2 1/2-year-old was approved, largely because of the devotion of the parents to the child and the short distance between their respective homes. The distance between the homes of the parents becomes an important factor if the distance is such as to prevent visitation by the noncustodial parent. In that case an award of joint custody may be appropriate. Maxwell v. Maxwell, 351 S.W.2d 192 (Ky. Ct. App. 1961). Assuming that an order of joint custody is appropriate, most courts hold that a frequent shifting from home to home is unnecessarily harmful to the child and should not be permitted. Thus, in Mason v. Mason, 163 Wash. 539, 1 P.2d 885 (Sup. Ct. 1931), the court condemned an order of joint custody which gave custody of a two-year-old to the mother from noon on Sunday to noon on Thursday, and to the father from Thursday noon to Sunday noon. The Court said, "Thus the child becomes a perpetual traveler. This constant change in environment, discipline and control undoubtedly would prove to be harmful to the child." Id. at 886. An award giving primary custody to one parent and giving the other parent custody on alternate weekends has been upheld. Murnane v. Murnane, 14 A.D.2d 943, 221 N.Y.S.2d 28 (App. Div. 1961); Robertson v. Robertson, 140 Cal. App.2d 784, 295 P.2d 922 (D. Ct. App. 1956). 567 Courts sometimes disapprove custody arrangements which alternate custody between the parents for equal periods of time, especially where such shifts interfere with schooling. In McLemore v. McLemore, 346 S.W.2d 722, 92 A.L.R.2d 691 (Ky. Ct. App. 1961), an award of joint custody which shifted three young children every week was terminated because of the intolerable burden such frequent, though equal, shifts placed on the children. Periods of time of 6 months and 12 months have been approved for pre-school children. Travis v. Travis, 163 Kan. 54, 180 P.2d 310 (Sup. Ct. 1947); Ramsden v. Ramsden, 32 Wash.2d 603, 202 P.2d 920 (Sup. Ct. 1949). The most widely accepted form of joint custody award is the one wherein one parent has custody during school months and the other custody during the summer. Annotation, 92 A.L.R.2d 691, § 11(a), at 726 (1963). This form of award solves the problem of distance between the homes of the parents and generally avoids frequent shifts in custody. The attitude of courts granting this form of custody is well illustrated by Fago v. Fago, 250 S.W.2d 837 (Mo. App. 1952), where it was said The pleasure and benefit of friendly association with both parents should be accorded to a child ... She needs to have the benefit of her father's guidance, love and affection as well as that of her mother and grandmother ... It will be a broadening and valuable experience for (the child) to spend a part of each summer in the State of New York with her father, leaving ten months of the year for the exertion on (the child) of the beneficent influence of mother, grandmother and aunt in her customary home surroundings in St. Louis. [at 842-43] There is no doubt that the distance between the homes of the parents was an important factor in that case. Accord, Stockton v. Stockton, 459 S.W.2d 532 (Mo. App. 1970); Stanfield v. Stanfield, 350 P.2d 261 (Okl. Sup. Ct. 1960); Barrier v. Brewster, 349 S.W.2d 823 (Ky. Ct. App. 1961); Dworkis v. Dworkis, 111 So.2d. 70 (Fla. App. 1959). 568 In the present case, the minor children are 13 and 11 years of age and attend school in this State. Plaintiff has requested permission to move to Pittsburgh, Pennsylvania, to be near her parents. Under these circumstances, if plaintiff were given sole custody, visitation by defendant would be both difficult and expensive. The children are not of such tender years that an award of joint custody would be detrimental to them. They are entitled to know, love and respect their father just as much as they know, love and respect their mother. No order of sole custody in the mother, even with unlimited visitation by the father, could possibly give these children the contact with their father that they need and have a right to. For that reason, the court orders that the parties shall have joint custody of the children. Plaintiff will have physical custody from September to June, and defendant will have physical custody during July and August. Plaintiff's request to move to Pittsburgh is granted. Defendant shall be permitted visitation one weekend a month in the Pittsburgh area during the school year. In addition, defendant shall have free access to the children via telephone at a reasonable hour and for reasonable lengths of time. Defendant's visitation shall also include a four-day period of visitation during the Christmas and Easter vacations at either location. The parties are, of course, free to supplement this minimum visitation schedule as they may wish and are able to agree upon. Costs of transportation of the children between New Jersey and Pennsylvania will be borne equally by the parties. The last issue to be considered concerns counsel fees and costs. Plaintiff requests that defendant be ordered to pay the fees of her attorney, her accountant and her appraiser. In support of her application plaintiff submits statements of fees due to Skoloff & Wolfe, Esqs. $12,317.50, to J.H. Cohn & Company, $6,589, and to Bertram R. Brown, $2,000. 569 Plaintiff's attorney's client service record documents an expenditure of 119.7 hours. Defendant filed no response or objection as to fees and costs. There can be no question that the award of counsel fees to be paid by any party to the matrimonial action is "within the broad limits of the trial court's discretion." Schlemm v. Schlemm, 31 N.J. 557, 585 (1960); In re J.S. & C., 142 N.J. Super. 499, 501 (App. Div. 1976); R. 4:42-9(a); R. 4:75. Several factors deserve careful and realistic consideration when the court assesses reasonable counsel fees. Among these are the economic conditions of the parties, the complexity and difficulty of the issues determined, time spent in preparation of the case, the number of court appearances, pendente lite allowances and the standing and experience of counsel. See Salvatore v. Salvatore, 73 N.J. Super. 373, 382 (App. Div. 1962). In addition to the above, when it is the wife who makes an application for counsel fees to be assessed against the husband the court looks to the wife's need, the husband's financial ability to pay and the wife's good faith in instituting or defending the action. In Williams v. Williams, 59 N.J. 229, 233 (1971), it was stated that where those factors are met, "it is the policy of our law that counsel fees are properly the obligation of the husband and he should be compelled to furnish them to the wife." The record amply demonstrates the comfortable standard of living enjoyed by the parties during the marriage and the wife's lack of earning power at present. An award of counsel fees which requires plaintiff to bear her own fees would only deplete the amounts available to her for necessities for herself and the children. It is also clear that defendant is in a much better position to bear the costs of counsel and experts' fees. His business acumen and ability to earn have been set forth at length above. Further, there is no question of plaintiff's good faith in instituting and prosecuting her suit, 570 Plaintiff's attorney is a highly respected member of the Bar of this State for many years. He is the author of the authoritative work on family law practice in New Jersey. Associate counsel are also well-known to the court and Bar for their expertise and experience. The court finds that the fees requested by plaintiff's counsel are reasonable. Defendant is ordered to bear plaintiff's counsel fees. Fees for plaintiff's accountant and real estate appraiser are also assessed against defendant. NOTES [2] In the present case the court did not interview the infant children of the marriage. No evidence was adduced that either child preferred one parent over the other. The court is convinced that the parties have been careful to refrain from making the minds of the children their battleground. They have thus avoided creating the discord, mistrust and misery which forces a child to make a choice between his or her parents.	{ "pile_set_name": "FreeLaw" }
[Cite as State v. Fogel, 2012-Ohio-1960.] COURT OF APPEALS LICKING COUNTY, OHIO FIFTH APPELLATE DISTRICT STATE OF OHIO JUDGES: Hon. W. Scott Gwin, P.J. Plaintiff-Appellee Hon. William B. Hoffman, J. Hon. Sheila G. Farmer, J. -vs- Case No. 11-CA-97 ADEN FOGEL Defendant-Appellant OPINION CHARACTER OF PROCEEDING: Appeal from the Licking County Municipal Court, Case No. 10CRB02691 JUDGMENT: Affirmed DATE OF JUDGMENT ENTRY: April 19, 2012 APPEARANCES: For Plaintiff-Appellee For Defendant-Appellant JONATHAN C. DIERNABCH DANIEL G. WIGHTMAN Assistant Law Director Daniel G. Wightman Co. LPA 40 W. Main St. 158 Lear Rd., Suite A Newark, Ohio 43055 Avon Lake, Ohio 44012 Licking County, Case No. 11-CA-97 2 Hoffman, J. {¶1} Defendant-appellant Aden Fogel appeals the June 17, 2011 Judgment Entry entered by the Licking County Municipal Court denying his motion to suppress evidence. Plaintiff-appellee is the state of Ohio. STATEMENT OF THE FACTS AND CASE {¶2} On August 23, 2010, Ohio State Highway Patrol Trooper Aaron J. Reimer observed Appellant travelling in a vehicle at a high rate of speed, approximately 77 miles per hour in a posted 55 mile per hour zone. Trooper Reimer proceeded to initiate a traffic stop. Trooper Reimer asked Appellant to exit his vehicle. Trooper Reimer placed Appellant in the back of his patrol car in order to be better able to hear Appellant’s responses and conduct the business of writing a traffic citation. While Appellant was in the patrol car, Trooper Reimer detected an odor of raw marijuana coming from Appellant. Upon inquiry, Appellant admitted to smoking marijuana earlier in the day. {¶3} Trooper Reimer then approached the passenger side of Appellant’s vehicle and inquired of Appellant’s passenger to confirm Appellant’s version of events. Trooper Reimer noticed an odor of marijuana coming from inside the vehicle also. The passenger gave a conflicting story to the events of the day, and the officer proceeded in conducting a search of the vehicle, beginning with the driver’s compartment. On the floor boards of the vehicle a small amount of green leafy material consistent with raw marijuana was found. A large amount of cash was also found in center glove box. Trooper Reimer testified at the suppression hearing the “little bit” of marijuana on the floorboards was not enough to explain the definite odor of marijuana he detected in the Licking County, Case No. 11-CA-97 3 vehicle. Tr. At 9. The officer then proceed to search the trunk of the vehicle, finding 4 Sony DVD players; 2 boxes having their UPC’s scratched out. The DVDs were later confirmed stolen from local retailers. {¶4} Thereafter, Appellant was charged with theft by deception, in violation of R.C. 2913.02(A)(3); possessing criminal tools, in violation of R.C. 2923.24; and tampering with evidence, in violation of R.C. 2921.12. {¶5} On March 10, 2011, Appellant filed a motion to suppress the evidence seized incident to the warrantless search of the vehicle, including the passenger compartment and trunk area. On March 18, 2011, the state of Ohio filed a response to Appellant’s motion. {¶6} Via Judgment Entry of June 17, 2011, the trial court denied Appellant’s motion to suppress. {¶7} On September 20, 2011, Appellant entered a plea of no contest to the charges, and the trial court proceeded in sentencing Appellant. {¶8} Appellant now appeals assigning as error: {¶9} “I. THE TRIAL COURT ERRED IN OVERRULING APPELLANT’S MOTION TO SUPPRESS EVIDENCE RESULTING FROM THE UNCONSTITUTIONAL SEARCH OF APPELLANT’S VEHICLE.” {¶10} Appellate review of a motion to suppress presents a mixed question of law and fact. State v. Burnside, 100 Ohio St.3d 152, 154–155, 2003–Ohio–5372, 797 N.E.2d 71, ¶ 8. When ruling on a motion to suppress, the trial court assumes the role of trier of fact and is in the best position to resolve questions of fact and to evaluate witness credibility. See State v. Dunlap, 73 Ohio St.3d 308,314, 1995–Ohio–243, 652 Licking County, Case No. 11-CA-97 4 N.E.2d 988; State v. Fanning, 1 Ohio St.3d 19, 20, 437 N.E.2d 583 (1982). Accordingly, a reviewing court must defer to the trial court's factual findings if competent, credible evidence exists to support those findings. See Burnside, supra; Dunlap, supra; State v. Long, 127 Ohio App.3d 328, 332, 713 N.E.2d 1 (4th Dist.1998); State v. Medcalf, 111 Ohio App.3d 142, 675 N.E.2d 1268 (4th Dist.1996). However, once this Court has accepted those facts as true, it must independently determine as a matter of law whether the trial court met the applicable legal standard. See Burnside, supra, citing State v. McNamara, 124 Ohio App.3d 706, 707 N.E.2d 539 (4th Dist 1997); See, generally, United States v. Arvizu, 534 U.S. 266, 122 S.Ct. 744, 151 L.Ed.2d 740 (2002); Ornelas v. United States, 517 U.S. 690, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996). That is, the application of the law to the trial court's findings of fact is subject to a de novo standard of review Ornelas, supra. Moreover, due weight should be given “to inferences drawn from those facts by resident judges and local law enforcement officers.” Ornelas, supra at 698, 116 S.Ct. at 1663. {¶11} Appellant argues the trial court erred in allowing the evidence of an unconstitutional search of his vehicle. Appellant relies on the Ohio Supreme Court holding in State v. Farris, 109 Ohio St.3d 519, 2006-Ohio-3255, {¶12} In Farris, the Supreme Court held: {¶13} “A trunk and a passenger compartment of an automobile are subject to different standards of probable cause to conduct searches. In State v. Murrell (2002), 94 Ohio St.3d 489, 764 N.E.2d 986, syllabus, this court held that ‘[w]hen a police officer has made a lawful custodial arrest of the occupant of an automobile, the officer may, as a contemporaneous incident of that arrest, search the passenger compartment of that Licking County, Case No. 11-CA-97 5 automobile.’ (Emphasis added in original) The court was conspicuous in limiting the search to the passenger compartment. {¶14} “The odor of burnt marijuana in the passenger compartment of a vehicle does not, standing alone, establish probable cause for a warrantless search of the trunk of the vehicle. United States v. Nielsen (C.A.10, 1993), 9 F.3d 1487. No other factors justifying a search beyond the passenger compartment were present in this case. The officer detected only a light odor of marijuana, and the troopers found no other contraband within the passenger compartment. The troopers thus lacked probable cause to search the trunk of Farris's vehicle. Therefore, the automobile exception does not apply in this case.” {¶15} In State v. Whatley, 2011-Ohio-2297, this Court held: {¶16} “We find this case to be distinguishable from Farris. In this case, the officer testified that he has participated in numerous arrests involving marijuana and he is familiar with the appearance and characteristics of marijuana. Based on his training and experience, it was immediately apparent to the trooper that it was marijuana in the door handle of the car. {¶17} “The Ohio Supreme Court has recognized that ‘[o]nce a law enforcement officer has probable cause to believe that a vehicle contains contraband, he or she may search a validly stopped motor vehicle based upon the well-established automobile exception to the warrant requirement.’ State v. Moore, 90 Ohio St.3d 47, 51, 2000– Ohio–10 (holding that the odor of marijuana justified an automobile search). Additionally, in State v. Greenwood, 2nd Dist. No. 19820, 2004–Ohio–2737, the court noted that an officer's observation of marijuana on the passenger seat and floorboard Licking County, Case No. 11-CA-97 6 gave him probable cause to believe that the vehicle contained contraband. Therefore, he was entitled to search the entire vehicle, including the trunk and its contents. Greenwood, supra, at ¶ 11, citing United States v. Ross (1982), 456 U.S. 798, 102 S.Ct. 2157, 72 L .Ed.2d 572. {¶18} “Similarly, we find that in the present case, Trooper Wilson had sufficient probable cause to search the trunk of the vehicle. He smelled burnt marijuana and found marijuana in the passenger compartment of the car in plain view. In addition, Appellant gave him a false name, and the driver of the vehicle made an attempt to get into the trunk as she was walking towards Trooper Wilson's cruiser.” {¶19} In State v. Gonzales, 2009-Ohio-168, the Sixth District held: {¶20} “In contrast, the odor of raw marijuana provides different probable cause than the odor of burnt marijuana. In fact, Nielsen, upon which Farris relied, examined cases where officers had probable cause to search a vehicle's trunk after the officer smelled raw marijuana. The odor of raw marijuana-especially an overwhelming odor of raw marijuana-creates probable cause to believe that a large quantity of raw marijuana will be found. An officer may rationally conclude that a large quantity of raw marijuana would be located in a vehicle's trunk. United States v. Ashby (C.A.10, 1988), 864 F.2d 690; United States v. Bowman (C.A.10, 1973), 487 F.2d 1229. Following Nielsen, the Tenth Circuit again specifically held that the odor of raw marijuana created probable cause to search the trunk of a vehicle. United States v. Frain (C.A.10, 1994), 42 F.3d 1407 (table). {¶21} “Contrary to Gonzales' argument, there is no ‘trunk exception’ in Ohio. If, during a valid stop, an officer qualified to recognize the smell of raw marijuana detects Licking County, Case No. 11-CA-97 7 an overwhelming odor of raw marijuana, the officer is justified in believing that the vehicle contains a large amount of raw marijuana. If no large amount of raw marijuana is seen in the passenger compartment, the officer is justified in believing that a large amount of raw marijuana may be found in a container or compartment-including the trunk. Farris explicitly limited the ‘trunk exception’ to cases where an officer smells burning marijuana-and no other indicators exist which would constitute probable cause to suspect the trunk contained contraband. {¶22} “Therefore, the state's and Gonzales' argument over whether the cargo area of the Jeep constitutes a trunk is beside the point. We need not decide whether the Jeep's cargo compartment constitutes a ‘trunk’ pursuant to a Farris analysis. Farris and the cases upon which it relies are based on the rule that probable cause to search an automobile is ‘defined by the object of the search and the places in which there is probable cause to believe it may be found.’ United States v. Ross, 456 U.S. at 824. True, the cargo area of the Jeep was covered by a factory-installed tarp, which indicates a desire for privacy. However, given the description of the cargo area, the smell of a large amount of raw marijuana, concealed in the cargo area, may well have easily emanated into the passenger compartment. {¶23} “Gazarek testified that he smelled an overwhelming odor of raw marijuana. He also smelled fabric softener, which, in his experience, narcotics traffickers use to mask the smell of large amounts of marijuana. He testified that marijuana is an ‘odiferous plant.’ The trial court found him qualified and experienced in identifying the odor of raw marijuana. We will not disturb this factual finding on appeal. State v. Fanning (1982), 1 Ohio St.3d 19, 437 N.E.2d 583. Under the totality of the Licking County, Case No. 11-CA-97 8 circumstances, the strong smell of raw marijuana in the passenger compartment gave Gazarek probable cause to believe that the vehicle contained a large amount of marijuana and that it must have been concealed in the Jeep's cargo area. The seizure of the marijuana inside the duffel bags, located inside the Jeep's cargo area, was not improper.” {¶24} In line with this Court’s decision in Whatley, supra, and the Sixth District’s holding in Gonzales, supra, we find the odor of raw marijuana on Appellant’s person while sitting in the Trooper’s vehicle, coupled with his admission to smoking marijuana earlier in the day, together with the odor of raw marijuana emanating from the passenger side of the vehicle, while only a small amount was discovered, provided probable cause in accordance with the Trooper’s experience for the search of the driver’s compartment as well as the trunk area of the vehicle. The trooper’s testimony the small amount of marijuana discovered on the floorboards was insufficient to explain the detected odor of raw marijuana emanating from the vehicle is crucial to our decision the officers were justified in searching the trunk of the vehicle in addition to the driver’s compartment. The trial court did not err in overruling Appellant’s motion to suppress the evidence. Licking County, Case No. 11-CA-97 9 {¶25} Appellant’s sole assignment of error is overruled. The June 17, 2011 Judgment Entry of the Licking County Municipal Court is affirmed. By: Hoffman, J. Gwin, P.J. and Farmer, J. concur s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN s/ W. Scott Gwin _____________________ HON. W. SCOTT GWIN s/ Sheila G. Farmer___________________ HON. SHEILA G. FARMER Licking County, Case No. 11-CA-97 10 IN THE COURT OF APPEALS FOR LICKING COUNTY, OHIO FIFTH APPELLATE DISTRICT STATE OF OHIO : : Plaintiff-Appellee : : -vs- : JUDGMENT ENTRY : ADEN FOGEL : : Defendant-Appellant : Case No. 11-CA-97 For the reason stated in our accompanying Opinion, the June 17, 2011 Judgment Entry of the Licking County Municipal Court is affirmed. Costs to Appellant. s/ William B. Hoffman _________________ HON. WILLIAM B. HOFFMAN s/ W. Scott Gwin _____________________ HON. W. SCOTT GWIN s/ Sheila G. Farmer___________________ HON. SHEILA G. FARMER	{ "pile_set_name": "FreeLaw" }
407 Mass. 108 (1990) 551 N.E.2d 1193 COMMONWEALTH vs. RALPH M. DURLING. Supreme Judicial Court of Massachusetts, Norfolk. January 10, 1990. March 26, 1990. Present: LIACOS, C.J., ABRAMS, NOLAN, LYNCH, & O'CONNOR, JJ. 109 Anthony M. Traini for the defendant. James F. Lang, Assistant District Attorney, for the Commonwealth. NOLAN, J. Ralph M. Durling (defendant) appeals from an order of a District Court judge revoking the defendant's probation and committing him to a house of correction. The defendant contends that the procedure utilized at the revocation hearing failed to comport with the minimum requirements of the due process clause of the Fourteenth Amendment to the United States Constitution. We affirm. The defendant's story begins on September 16, 1986, when he was arrested in Stoughton. The defendant was arraigned the following day on charges of operating a motor vehicle while under the influence of alcohol (OUI) and leaving the scene of an accident after causing property damage. Before the trial date on those charges, the defendant again was arrested for combining alcohol consumption and operating a motor vehicle. On October 27, 1986, the defendant was arraigned on charges of, among other things, OUI and leaving the scene of an accident after causing personal injury. On June 30, 1987, a District Court judge consolidated the defendant's cases. Findings of guilty were entered against the defendant on the four charges above mentioned. On each charge, the defendant was sentenced to two years in the house of correction with all the sentences to run concurrently. The court, however, suspended all but the first ninety days of the sentences. The defendant was placed on probation until June 29, 1989. The defendant signed a form which listed the conditions of his probation and these included the condition that the defendant obey local, State and Federal laws and court orders.[1] 110 In May of 1988, while he was still on probation, the defendant was given a "Notice of Surrender and Hearing(s) For Alleged Violation(s) of Probation." According to the Commonwealth, the defendant was arrested on April 8, 1988, and again on May 12, 1988. Both times he was charged with operating a motor vehicle while under the influence of alcohol, among other violations. A probation revocation hearing was held on October 5, 1988. At that hearing, the defendant's probation officer read to the court the two police reports relating to the arrests of April 8 and May 12. Counsel for the defendant attempted to cross-examine the probation officer, but abandoned his effort when he established that the probation officer had no personal knowledge of the events recounted in the two police reports. The judge, on the strength of the probation officer's testimony, determined that the defendant had violated the conditions of his probation by violating State laws. The judge revoked the defendant's probation, and ordered that the defendant be committed to the house of correction for nine months, with the balance of the sentence (one year) to remain suspended. The judge stayed execution of the sentence, giving the defendant an opportunity to appeal. Rather than filing a notice of appeal, the defendant sought extraordinary relief from a single justice of this court pursuant to G.L.c. 211, § 3. The single justice denied relief on the ground that the defendant could appeal from the revocation order and thus had an adequate remedy available to him. In denying relief, the single justice commented that absent a finding of "good cause to deny the defendant his right to confront and cross-examine the arresting 111 officer[,] [c]ross-examination of the probation officer was not adequate to meet due process requirements." The single justice added that the District Court judge might wish to reconsider his ruling. Accordingly, the defendant filed a motion to reconsider the revocation ruling in the District Court. The District Court judge denied the motion to reconsider but stayed execution of the defendant's sentence until the legal issues were resolved on appeal. The defendant then appealed from the order revoking probation and the denial of the motion to reconsider. We transferred the appeal to this court on our own motion. The practice of placing defendants on probation can be traced to early Massachusetts common law. See Buckley v. Quincy Div. of the Dist. Court Dep't, 395 Mass. 815, 817 n. 2 (1985). Today, both probation and the suspension of sentences are governed by statute. See G.L.c. 279, § 1-2 (power to suspend sentences and place defendants on probation); G.L.c. 276, § 87 (power of District Courts to place defendants on probation). Probation, whether "straight" or coupled with a suspended sentence, is a legal disposition which allows a criminal offender to remain in the community subject to certain conditions and under the supervision of the court. See Diana, What Is Probation, 51 J. Crim. L. & Criminology 189 (1960) (discussing various aspects of probation, including rehabilitative, administrative, punitive, and legal aspects). A defendant on probation is subject to a number of conditions, the breach of any one of which constitutes a violation of his probation. When a violation is alleged, the probation officer "surrenders" the defendant to the court, subjecting the defendant to possible revocation of his probation. At the revocation hearing, the judge must determine, as a factual matter, whether the defendant has violated the conditions of his probation. If the judge determines that the defendant is in violation, he can either revoke the probation and sentence the defendant or, if appropriate, modify the terms of his probation. How best to deal with the probationer is within the judge's discretion. McHoul v. Commonwealth, 365 Mass. 112 465, 469-470 (1974). Commonwealth v. McGovern, 183 Mass. 238, 240-241 (1903). "Any conduct by a person on probation which constitutes a violation of any of the conditions of his probation may form the basis for the revocation of that probation. Such conduct may involve the violation of criminal laws, but there is no prerequisite that the probationer be convicted thereof to permit the violation to be used as the basis for the revocation." Rubera v. Commonwealth, 371 Mass. 177, 180-181 (1976). In this case, the Commonwealth alleges that the defendant violated the conditions of his probation by twice violating State laws. The defendant has not been convicted of the crimes alleged. The District Court judge, therefore, had to determine, as a factual matter, that the defendant indeed violated the law. The issue is whether the District Court judge, in making that determination, could constitutionally rely upon the evidence presented by the Commonwealth. Revocation hearings are not part of a criminal prosecution. Gagnon v. Scarpelli, 411 U.S. 778, 782 (1973). Thus, a probationer need not be provided with the full panoply of constitutional protections applicable at a criminal trial. Id. The revocation of probation does, however, result in a deprivation of liberty within the meaning of the due process clause of the Fourteenth Amendment to the United States Constitution. Id. The due process clause, therefore, requires that the Commonwealth provide probationers with certain protections at surrender hearings. Id.[2] In Gagnon, supra, the Supreme Court relied heavily on Morrissey v. Brewer, 408 U.S. 471 (1972). In Morrissey, the Court determined that due process principles applied to parole 113 revocation hearings. Morrissey and Gagnon establish that the minimum requirements of due process include "`(a) written notice of the claimed violations of [probation or] parole; (b) disclosure to the [probationer or] parolee of the evidence against him; (c) opportunity to be heard in person and to present witnesses and documentary evidence; (d) the right to confront and cross-examine adverse witnesses (unless the hearing officer specifically finds good cause for not allowing confrontation); (e) a `neutral and detached' hearing body such as a traditional parole board, members of which need not be judicial officers or lawyers; and (f) a written statement by the factfinders as to the evidence relied on and reasons for revoking [probation or] parole.' Morrissey v. Brewer, supra at 489." Gagnon v. Scarpelli, supra at 786. Due process, by its nature, is a flexible concept. The requirements of due process in a particular case are determined by reference to the definition and weight of the competing interests involved in that case. Lotto v. Commonwealth, 369 Mass. 775, 780 (1976). "[D]ue process is not so rigid as to require that the significant interests in informality, flexibility, and economy must always be sacrificed." Gagnon v. Scarpelli, supra at 788. It is in keeping with these fundamental properties of due process that the Morrissey Court, and by extension the Gagnon Court, emphasized that it did not intend to "write a code of procedure." Morrissey v. Brewer, supra at 488. Our cases have recognized the flexibility of the Morrissey-Gagnon guidelines. See, e.g., Commonwealth v Odoardi, 397 Mass. 28, 34 (1986) (within judge's discretion to curtail cross-examination when probationer's subsequent conviction is a matter of record); Fay v. Commonwealth, 379 Mass. 498, 504-505 (1980) (judge's oral recitation of reasons for revocation, when transcribed, satisfies requirement of written statement by fact finder); Stefanik v. State Board of Parole, 372 Mass. 726 (1977) (no requirement of a preliminary hearing where defendant already received probable cause hearing and had been bound over to grand jury). We adhere to the principle that the requirements of due process are flexible. While Morrissey and 114 Gagnon identify the components which make up a scheme satisfying due process, the requirements of due process depend on the circumstances of each case and an analysis of the various interests at stake. The defendant relies on requirement (d) in the Morrissey-Gagnon enumeration of due process protections. In (d), the Court identified "the right to confront and cross-examine adverse witnesses (unless the hearing officer specifically finds good cause for not allowing confrontation)." Morrissey v. Brewer, supra at 489. The defendant argues that the procedure utilized in this case of having the probation officer read the police reports violates that right. The probation officer, although subject to cross-examination, had no personal knowledge of the events upon which the revocation was based. The police reports were mere hearsay and their content could not be subject to cross-examination. In this case we are squarely presented with the questions (1) whether hearsay may be utilized in probation revocation hearings; and (2) if so, when and to what extent. The first question, in our view, is easily resolved. The second requires careful consideration. This court has always allowed the use of hearsay at probation revocation hearings. See Brown, petitioner, 395 Mass. 1006, 1007 (1985) (although bulk of hearsay was insufficient, no contention that it was improper). Two overriding principles identified by this court are that revocation proceedings must be flexible in nature, see Buckley v. Quincy Div. of the Dist. Court Dep't, 395 Mass. 815, 818 and n. 3 (1985), and that all reliable evidence should be considered, see Commonwealth v. Vincente, 405 Mass. 278, 280 (1989). Both of these principles are furthered by not imposing strict evidentiary rules on probation revocation hearings and by allowing the use of reliable hearsay. In Morrissey v. Brewer, supra at 489, the Supreme Court stated that the revocation "process should be flexible enough to consider evidence including letters, affidavits, and other material that would not be admissible in an adversary criminal trial." To clarify, in Gagnon v. Scarpelli, supra at 783 115 n. 5, the Court stated that "we did not in Morrissey intend to prohibit use where appropriate of the conventional substitutes for live testimony, including affidavits, depositions, and documentary evidence." In view of the established practice in this Commonwealth and these express pronouncements by the United States Supreme Court, we think that the due process clause does not place a per se prohibition on the use of hearsay evidence at probation revocation hearings. The more difficult issue, and in this case the decisive issue, is when and to what extent a court may rely on hearsay in revoking probation. The judge in this case relied solely on hearsay in revoking the defendant's probation. The judge did not make any express determination that there was good cause for denying the defendant the right to confront a witness with personal knowledge. Nor did the judge make any determination whether the proffered hearsay was reliable. The Gagnon Court expressly conditioned the probationer's right to confrontation by adding that the right could be denied if the "hearing officer specifically finds good cause for not allowing confrontation." Gagnon v. Scarpelli, supra at 786. In doing so, the Supreme Court established that the probationer's right of confrontation is far from absolute. In determining when "good cause" exists, such that the right to confrontation may be denied, we focus on the principles that pervade all due process questions. We must carefully define the various interests involved and balance those interests according to the weight society places on them. The probationer has a liberty interest at stake in the revocation proceeding. He has been given the opportunity to rehabilitate himself and he has an interest in not being deprived of that opportunity arbitrarily. But the probationer's liberty interest is conditional. It was given to him as a matter of grace when the State had the right to imprison him. If the probationer has violated the conditions imposed upon him, his liberty can be taken away. The Commonwealth's interests are several. A convicted criminal who is not complying with the conditions of his probation poses an obvious threat to the public welfare. The 116 Commonwealth has an interest in expeditiously dealing with such a threat. One of the primary purposes of probation is to rehabilitate the offender. An offender who continues to violate the law is obviously not being rehabilitated. The Commonwealth has an interest in imposing effective punishment on a convicted criminal when rehabilitation is not possible. When an individual is on probation, the Commonwealth has already gone through the expense and effort of convicting him. The Commonwealth has a strong interest in being able to revoke probation in appropriate cases without having to repeat its effort. We recently had the opportunity to note that the Commonwealth also has an "overwhelming" interest in using all reliable evidence in revocation proceedings. See Commonwealth v. Olsen, 405 Mass. 491, 496 (1989); Commonwealth v. Vincente, 405 Mass. 278, 280 (1989). Finally, we are well aware of the crowded dockets and the limited resources of the trial courts. The burden of requiring extensive, fact-intensive hearings is a heavy one. Thus, the Commonwealth has an interest in maintaining administrative efficiency and reducing costs. The interests of the probationer and the Commonwealth cross at one point: both have an interest in a reliable, accurate evaluation of whether the probationer indeed violated the conditions of his probation. The Supreme Court recognized this when it noted that "fair treatment in [probation] revocations will enhance the chance of rehabilitation by avoiding reactions to arbitrariness." Morrissey v. Brewer, supra at 484. Both society and the probationer benefit when the probationer is rehabilitated. Society only benefits from a revocation when there is an accurate and reliable ground upon which that revocation is based. Balancing the various interests involved, we arrive at the conclusion that the requirements of the due process clause have, at their base, the goal of providing an accurate determination whether revocation is proper. Normally, the best source of information for such a determination is the testimony of one or more persons who have personal knowledge of the facts which the Commonwealth alleges constitute a violation. 117 Such testimony can be tested by cross-examination. This is what the Morrissey and Gagnon Courts intended when they recognized the conditional right of confrontation.[3] But presenting a witness with personal knowledge is not always possible. Indeed, it is often unrealistic. In this case the defendant's revocation hearing was before a District Court in Norfolk County. The defendant's subsequent arrests were in Taunton and Easton, both in Bristol County. The burden of requiring police officers to travel to other parts of the State for revocation hearings would fall heavily not only on the officers but also on their local communities which would lose their services for a significant period of time.[4] In addition, the burden of scheduling the hearing at a time convenient to the witnesses, the defendant, the court, and the attorneys would fall on the individual probation officers.[5] Thus, there are often valid reasons for not presenting live witnesses. This is what the Morrissey and Gagnon Courts recognized when they noted that the hearing officer could deny confrontation rights for "good cause." Gagnon v. Scarpelli, supra at 786. In situations where the Commonwealth seeks to rely on evidence not subject to cross-examination, the due process touchstone of an accurate and reliable determination still remains. The proper focus of inquiry in such situations is the reliability of the evidence presented. Even though standard evidentiary rules do not apply to probation revocation hearings, the first step is to determine whether the evidence 118 would be admissible under those rules, including the exceptions to the hearsay rule. Evidence which would be admissible under standard evidentiary rules is presumptively reliable. Cf. Ohio v. Roberts, 448 U.S. 56, 66 (1980) (reliability can be inferred without more in a case where the evidence falls within a firmly rooted hearsay exception). If the proffered evidence is not admissible under standard evidentiary rules, then a court must Unsubstantiated and unreliable hearsay cannot, consistent with due process, be the entire basis of a probation revocation. When hearsay evidence is reliable, however, then it can be the basis of a revocation. In our view, a showing that the proffered evidence bears substantial indicia of reliability and is substantially trustworthy is a showing of good cause obviating the need for confrontation. We agree with the observation of the United States Court of Appeals for the Seventh Circuit on this point that "if the proffered evidence itself bears substantial guarantees of trustworthiness, then the need to show good cause vanishes." Egerstaffer v. Israel, 726 F.2d 1231, 1234 (7th Cir.1984).[6] We caution, however, that when hearsay is offered as the only evidence of the alleged violation, the indicia of reliability must be substantial (see Brown v. State, 317 Md. 417, 425-426 [1989]) because the probationer's interest in cross-examining the actual source (and hence testing its reliability) is greater when the hearsay is the only evidence offered. Thus, the hearsay must be substantially reliable to overcome that interest. On the whole, the resolution of the confrontation issue depends on the totality of the circumstances in each case. The court must balance the defendant's due process right to confront and cross-examine witnesses against the Commonwealth's reasons for not presenting witnesses. If the Commonwealth has "good cause" for not using a witness with personal knowledge, and instead offers reliable hearsay or 119 other evidence, then the requirements of due process are satisfied. The Supreme Court noted in Gagnon, supra at 783 n. 5, that "in some cases there is simply no adequate alternative to live testimony." But in other cases, there clearly will be adequate alternatives, and those alternatives are not prohibited by the due process clause. Other courts addressing this issue have approached it in a similar fashion. The Supreme Court of Washington has emphasized that the Morrissey-Gagnon right to confrontation depends on the circumstances of each case. State v. Nelson, 103 Wash.2d 760 (1985). In Nelson, the State presented only written reports from the personnel of a hospital where the probationer was undergoing treatment. Id. at 762. The Supreme Court affirmed the revocation, ruling that the hearsay was reliable because it was corroborated, in part, by some of the evidence presented by the probationer in opposition to the motion for revocation. Id. at 765. The court also noted the "expense and difficulty in requiring a mental health therapist to testify in person at every probation hearing." Id. Resting on the reliability of the hearsay involved, the California Supreme Court affirmed a revocation of probation where the substantive evidence was pure hearsay. People v. Maki, 39 Cal.3d 707 (1985). The California court determined that the hearsay was clearly reliable and that, in the circumstances, the defendant's Morrissey-Gagnon rights were not infringed. Id. at 714-717. Accord State v. Belcher, 111 Ariz. 580, 581-582 (1975) (probation revoked where hearsay was clearly reliable); State v. Reyes, 207 N.J. Super. 126, 138-140 (1986) (no constitutional bar to admission and consideration of demonstrably reliable hearsay). What these and other courts have relied upon is the concept we have announced today: that the extent of the probationer's due process right to confrontation is determined by the totality of the circumstances present in each case. The Washington Supreme Court expressly noted the nature of the applicable test. State v. Nelson, supra at 765. The court said that "[t]he current test is a balancing one in which the probationer's 120 right to confront and cross-examine witnesses is balanced against any good cause for not allowing confrontation. Good cause has thus far been defined in terms of difficulty and expense of procuring witnesses in combination with `demonstrably reliable' or `clearly reliable' evidence." Id. A number of courts addressing the issue agree that the defendant's right to confront witnesses depends on a balancing of the various interests involved. See, e.g., Goforth v. State, 27 Ark. App. 150 (1989); Brown v. State, 317 Md. 417 (1989); Anaya v. State, 96 Nev. 119 (1980); State v. Reyes, 207 N.J. Super. 126 (1986). The Federal courts which have addressed the due process rights of probationers in the wake of Morrissey and Gagnon are generally in accord with our reasoning today. Indeed, many of the Federal cases support the proposition that clearly reliable hearsay alone is a sufficient basis upon which to revoke probation. See United States v. Simmons, 812 F.2d 561, 564-565 (9th Cir.1987); Egerstaffer v. Israel, 726 F.2d 1231, 1234 (7th Cir.1984); United States v. Penn, 721 F.2d 762, 764-766 (11th Cir.1983); United States v. McCallum, 677 F.2d 1024, 1026 (4th Cir.), cert. denied, 459 U.S. 1010 (1982); United States v. Burkhalter, 588 F.2d 604, 607 (8th Cir.1978). We turn now to the case before us. The evidence presented by the probation officer consisted of out-of-court declarations by police officers. The declarations were offered for the truth of what they asserted and, quite clearly, were hearsay. Nevertheless, we are convinced that the proffered evidence was imbued with sufficient indicia of reliability to warrant a denial of the defendant's limited right to cross-examination. The first police report read by the probation officer in this case involved the defendant's arrest on April 8, 1988. The officer related that he observed a vehicle driving slowly in the middle of the road. He saw the vehicle make a right turn and cross into the opposite lane of travel. After pulling the vehicle over, the officer observed a bottle of beer on the floor of the vehicle and "beer all over the floor." The officer detected a strong odor of alcohol on the operator's breath. The operator 121 slurred his speech and dropped many papers while looking through his wallet. The officer's report explains in detail three field sobriety tests, all of which the operator failed. The operator was Ralph Durling, the defendant. The second police report is equally as detailed as the first. The officer stated that, after receiving a complaint, he and his partner approached the defendant's vehicle. The officer observed the defendant sitting in the driver's seat, "holding the steering wheel of the vehicle." The keys were in the ignition. The officer asked the defendant for his license and registration. The defendant did not reply.[7] At that point the officer noted a strong odor of alcohol coming from the defendant. The officer asked the defendant if he had been drinking and the defendant replied with an obscenity. The officer then conducted three field sobriety tests, each of which he describes in his report, and each of which the defendant failed. Both of the police reports relate facts observed by the police officers personally. Both reports are factually detailed rather than general statements or conclusions. We think the factual detail is indicative of reliability. See Egerstaffer v. Israel, 726 F.2d 1231, 1235 (7th Cir.1984) (relying on detail of a report as an indication of its reliability). Moreover, the fact that two different police officers from different police departments each reported finding the defendant in similar circumstances indicates that neither report is without a basis in fact. The similarity of the reports is indicative of their reliability. It should also be noted that it is a crime for police officers to file false reports. G.L.c. 268, § 6A. In our view, this significantly bolsters the reliability of the reports.[8] We note that both of the police reports relate primary facts, not mere conclusions or opinions. We need not reach the Commonwealth's claim that the reports may fall within the public 122 records exception to the hearsay rule. See Commonwealth v. Slavski, 245 Mass. 405, 415-417 (1923). In the absence of findings and rulings on this issue by the trial judge, we prefer to rely solely upon the inherent reliability of the reports. The substantial reliability of the police reports in this case, coupled with the practical difficulty of presenting live testimony, discussed earlier, convinces us that the District Court judge could properly base his order of revocation on the evidence presented. Since the judge determined that the evidence carried sufficient weight to justify revocation, we need not remand the case despite the judge's failure to identify "good cause" for denying confrontation. Judgment affirmed. NOTES [1] The complete list of conditions imposed on the defendant is as follows: "(1) You must obey local, state or federal laws or court orders. "(2) You must report to your assigned probation officer at such time and place as he/she requires. "(3) You must notify the probation officer immediately of a change of residence or employment. "(4) You must not leave the Commonwealth without the express permission of the probation officer. Such permission may be conditioned upon your agreement to waive extradition. "(5) Recommend alcohol treatment at MCI Braintree or Longwood plus follow up. "(6) Stay execution of sentence 7-6-87 VWF waived. "(7) Report to Stoughton Dist. Ct. probation within one week of release from jail." [2] The Supreme Court's early cases are ambivalent on whether a probationer's liberty interest rises to the level of a constitutionally protected interest. In Escoe v. Zerbst, 295 U.S. 490, 492-493 (1935), the Court held that a probationer had the "privilege" of a hearing before his probation was revoked, but added that it did "not accept the petitioner's contention that the privilege has a basis in the Constitution, apart from any statute." See Burns v. United States, 287 U.S. 216, 223 (1932) (probation is a "matter of grace," but probationer entitled to "fair treatment"). [3] A probation revocation hearing should not be a miniature trial. "It is a narrow inquiry." Morrissey, supra at 489. Thus, even where a witness is present and cross-examination is permitted, the scope of the permissible inquiry is limited to the factors which would justify a revocation. [4] A more compelling example is in a rape case. Often the only witness with personal knowledge of the crime is the victim. The trauma of testifying at probable cause hearings, before the grand jury, and at trial is onerous enough for such a victim. Society has an interest in not adding probation revocation hearings to that list. [5] Apparently, the common practice is for the probation officer to present personally the case for revocation. Generally, the district attorney is not involved. That practice was followed in this case. [6] We do not mean to suggest that any of the evidence which we conclude the court may rely on is conclusive. As always, the court must weigh all the evidence and make a principled decision. [7] It should be noted that both police reports indicate that upon further investigation by the officers it was determined that Durling's license to operate a motor vehicle had been revoked. [8] We do not consider it significant that the police reports were read to the judge rather than presented to him. The probation officer was under oath when she read the reports.	{ "pile_set_name": "FreeLaw" }
In The Court of Appeals Ninth District of Texas at Beaumont ____________________ NO. 09-16-00296-CR NO. 09-16-00297-CR ____________________ THE STATE OF TEXAS, Appellant V. TIMOTHY WAYNE SMITH, Appellee _________________________________ ______________________ On Appeal from the 252nd District Court Jefferson County, Texas Trial Cause Nos. 16-24980, 16-24981 ____________________________________________ ____________ MEMORANDUM OPINION In two separate cases, the State of Texas appeals the trial court’s order granting appellee Timothy Wayne Smith’s motion to quash and dismiss the indictments. See Tex. Code Crim. Proc. Ann. art. 44.01(a)(1) (West Supp. 2016).1 In each case, the State argued that the trial court erred in granting Smith’s motion to 1 Because the subsequent amendment does not affect the outcome of this appeal, we cite to the current version of the Texas Code of Criminal Procedure. 1 quash and in refusing to make findings of fact and conclusions of law. We affirm the trial court’s orders. BACKGROUND In July 2015, the Jefferson County District Attorney, Bob Wortham, filed a motion to appoint a Criminal District Attorney Pro Tem to review, and if necessary, present and prosecute allegations of tampering with physical evidence and tampering with a governmental record alleged to have been committed by Sergeant S. Broussard and John Chad Kolander on or about June 5, 2013. Judge John Stevens signed the order appointing Josh Schaffer as the District Attorney Pro Tem on July 29, 2015, and that same day, Schaffer took the oath of office. In April 2016, Schaffer filed a motion requesting that Judge Stevens expand the scope of the grand jury investigation and amend his order of appointment to allow Schaffer to investigate whether Smith had committed the offenses of tampering with physical evidence and tampering with a governmental record, and to determine whether to file and present the allegations to the grand jury for potential prosecution. Judge Stevens signed an amended order expanding the scope of the grand jury investigation to include the allegations against Smith. On May 11, 2016, a grand jury indicted Smith for the offense of tampering with physical evidence in cause number 16-24980 and for tampering with a 2 governmental record in cause number 16-24981. See Tex. Penal Code Ann. §§ 37.09, 37.10 (West Supp. 2016).2 The indictment for the offense of tampering with physical evidence alleged that on or about June 5, 2013, Smith did then and there, knowing that an investigation was in progress, make, present, and use, a document, namely: a probable cause affidavit for a search warrant, attached hereto as Exhibit A, with knowledge of its falsity and with intent to affect the course and outcome of the investigation. The indictment for tampering with a governmental record alleged that on or about June 5, 2013, Smith did then and there, intentionally and knowingly make, present, and use a governmental record, namely: a probable cause affidavit for a search warrant, attached hereto as Exhibit A, with knowledge of its falsity, and the actions of the Defendant were done with the intent to defraud and harm another, namely: Judge Bob Wortham. Exhibit A, which is attached to both indictments, is an evidentiary search warrant in which John Chad Kolander is the affiant. In the search warrant, Kolander, upon his oath deposed and stated: Affiant JOHN CHAD KOLANDER is a certified peace officer with the State of Texas and has been an officer for the past 22 years. Affiant is currently employed with the Jefferson County Sheriff’s department and is currently assigned to the Criminal Investigation division. 2 Because the subsequent amendments do not affect the outcome of this appeal, we cite to the current version of section 37.10 of the Texas Penal Code. 3 On or [about] the 28th day of May, 2013, Jefferson County Sheriff Sgt. S. Broussard, Bailiff for the 252nd, arrested a man named STEPHEN HARTMAN, for the offense of disrupting a meeting and interference with the duties of a public servant. This offense occurred in the 252nd courtroom, in Beaumont, Jefferson County, Texas. District Judge Layne Walker was presiding in a criminal case. In a search subsequent to the arrest, Sgt. Broussard discovered in the pocket of HARTMAN a black fountain pen. This pen appeared to be a normal fountain pen but upon closer inspection Sgt. Broussard noticed that this pen was flashing a continuous blue light. Broussard then notices that this pen is actually a digital audio and video recorder. It also appears that this pen was activated and could have captured the events leading up to this arrest. It is Affiant’s belief that recorded on this pen camera could be actual footage of what occurred prior to HARTMAN’S arrest. Affiant requests that this warrant be issued so that investigators can download and record these audio and visual images if they are available. Affiant further believes that these recordings will depict the defendant’s conduct to support the offense of disrupting a meeting. The clerk’s record shows that Smith, who was employed as the Chief Investigator of the Jefferson County District Attorney’s Office, assisted in preparing the search warrant affidavit by serving as the typist while Kolander related the facts then known to Kolander as the criminal investigator. In May 2016, the presiding judge of the 252nd District Court, Judge Raquel West, voluntarily recused herself, and that same month, a visiting judge was assigned to Smith’s cases. In June 2016, Smith filed a pretrial application for writ of habeas corpus seeking dismissal of his indictments and challenging Judge Stevens’s 4 authority to act as the judge and Josh Schaffer’s authority to act as the criminal district attorney pro tem. See Tex. Code Crim. Proc. Ann. arts. 2.07 (West 2005), 11.01 (West 2015). According to Smith, Judge Stevens’s act of appointing Schaffer as the criminal district attorney pro tem is a nullity because Judge Stevens was disqualified from acting in this matter. Smith also complained that Schaffer was not duly sworn as an attorney pro tem and concluded that the indictments brought by Schaffer are a nullity since the State of Texas was not properly represented before the grand jury. Smith filed a motion to quash and dismiss the indictments and a motion to adopt the writs of habeas corpus and other motions filed by similarly- situated defendants. The Jefferson County District Attorney’s office (Jefferson County) filed an Amicus Curiae Brief in Smith’s case, arguing that the District Attorney did not voluntarily recuse himself from Smith’s case and was not disqualified from any matters related to the investigation and prosecution of Smith. Jefferson County argued that the trial court may not expand the authority of a district attorney pro tem to investigate and prosecute matters from which the district attorney has not been disqualified or recused. Jefferson County concluded that it retained the exclusive authority to prosecute Smith, Schaffer never requested the authority to investigate 5 and prosecute Smith, and Judge Stevens did not have the authority to expand Schaffer’s authority to include the allegations regarding Smith. The trial court conducted a hearing on Smith’s habeas corpus applications. The trial court heard arguments challenging Schaffer’s authority to act as the criminal district attorney pro tem. Schaffer argued that because a pretrial habeas corpus application was not a proper method to challenge an order appointing an attorney pro tem or the authority of the judge who made the appointment, the trial court should refuse to issue the writs without conducting an evidentiary hearing on the merits of the applications. Smith’s counsel argued that a writ of habeas corpus should be issued, because Schaffer had no authority to act since Wortham was not recused or disqualified from investigating and prosecuting Smith. After hearing arguments concerning whether the writs should issue, the trial court refused to issue writs of habeas corpus. The trial court also found that there were no grounds to dismiss Schaffer as the criminal district attorney pro tem. The trial court then considered Smith’s motions to quash. The reporter’s record from the hearing indicates that Smith’s counsel adopted all of Kolander’s counsel’s arguments concerning the motions to quash because Smith’s and Kolander’s indictments are exactly the same other than their names. Kolander’s counsel explained that Schaffer attached a search warrant affidavit, 6 which had been prepared by Kolander, to the indictments. According to Kolander’s counsel, Schaffer has “somehow alleged that that affidavit was false and that by Kolander presenting that false affidavit, Judge Wortham was defrauded or harmed in some way.” Kolander’s counsel argued that Kolander has an absolute right to know what Schaffer claims is false within the four corners of the indictment; otherwise, the indictments fail to allege a crime against which Kolander can defend. Kolander’s counsel further argued that Schaffer’s act of attaching the affidavit to the indictments is insufficient to allege what Kolander supposedly did to tamper with evidence or a governmental document. According to Kolander’s counsel, the indictment also fails to allege how Judge Wortham was harmed by Kolander signing the probable cause affidavit; Kolander has a constitutional right to know with what he is being charged; and, if the prosecutor alleges that a falsity exists, the defendant is entitled to notice of what the claimed falsity is. Kolander’s counsel maintains that even if Schaffer amended the indictments to include a known fact that Kolander and Smith omitted from the affidavit—that fact being that another officer had taken home and viewed the evidence that was the subject of the search warrant—the additional fact would not negate the probable cause to issue the search warrant. Schaffer argued that the indictments provided adequate notice because they tracked the statutory language and identified the governmental record that allegedly 7 was falsified and tampered with. According to Schaffer, based on Kolander’s counsel’s argument, it was evident that Kolander knew that it was the material omission of the statement that his counsel identified that rendered the affidavit false in its entirety. In his response to Smith’s pretrial habeas corpus applications, Schaffer argued that Kolander learned during his investigation that Broussard had removed the pen from the chain-of-custody, took it home, viewed it, and then returned it to evidence. According to Schaffer, Kolander then met with Smith and others concerning the pen, and a decision was made to apply for a warrant to search the pen. Schaffer contends that Smith wrote the affidavit in support of the search warrant with Kolander’s assistance, and Smith and Kolander omitted material information from the affidavit. According to Schaffer, it was the omission of information from the affidavit that caused Judge Wortham to issue a search warrant, and had Judge Wortham known of Broussard’s actions, he would not have issued the search warrant. Schaffer concluded that Smith’s conduct in making a false affidavit forms the basis of both indictments. The record shows Schaffer also requested that, in the event the trial court found that the indictments failed to provide adequate notice, the trial court grant him leave to consider amending the indictments. Schaffer further explained that Wortham, who is now the elected Criminal District Attorney, had requested the appointment of an attorney pro tem to 8 investigate, and if necessary, present Kolander’s alleged offenses to a grand jury. While the motion requesting the appointment of an attorney pro tem did not assert the factual basis for Wortham’s request, Schaffer maintained that it is undisputed that Wortham was conflicted from presiding over the investigation and prosecution of any offense arising out of the Hartman incident because Wortham was a potential witness. In April 2016, Schaffer and the grand jury discovered information that caused the grand jury to conclude that good cause existed to expand the scope of its investigation, and Schaffer presented a motion to Judge Stevens requesting the expansion of the grand jury’s investigation to include investigating whether Smith had tampered with physical evidence, tampered with a governmental record, and had committed aggravated perjury. Schaffer presented the motion to Judge Stevens because he had appointed Schaffer and because Judge Stevens was the presiding judge over the grand jury that was investigating the case. Schaffer explained that he did not give Wortham notice of his request to expand the scope of the grand jury investigation, because Schaffer was not authorized to disclose publicly the primary reason for not notifying Wortham and because the proceedings of the grand jury should be secret. Schaffer argued that if Wortham were to assert his constitutional right to represent the State in Smith’s case, the trial court should determine why Wortham is conflicted from prosecuting 9 Kolander but not Smith, because Wortham is the named complainant in both of their indictments for tampering with a governmental record. However, during the hearing, an assistant district attorney informed the trial court that Wortham did not want to represent the State in Smith’s case, and that Wortham believed a special prosecutor was necessary on all the cases. After hearing arguments concerning the motions to quash, the trial court granted Smith’s motions to quash the indictments and granted the State leave to amend the indictments to “make a specific allegation of what the State will rely upon to convict.” The trial court entered a written order granting Smith’s motions to quash, subject to the State’s right to amend the indictments within ten days of the entry of the order. Rather than moving to amend the indictments, the State filed notices of appeal. In each case, the State filed a motion requesting that the trial court issue findings of fact and conclusions of law, but the trial court denied the State’s requests. ANALYSIS In issue one, the State argues that the trial court erred in refusing to make findings of fact and conclusions of law. According to the State, Smith raised multiple grounds to quash the indictments, but the trial court refused to identify on which ground it based its decision. In its motion requesting findings of fact and conclusions 10 of law, the State mentions that the trial court gave it time to amend the indictments and instructed the State to “make a specific allegation of what the State will rely upon to convict.” The State admits that the trial court’s statement suggests that the court granted the motion on the theory that the indictments were impermissibly vague because they failed to identify what Smith falsified in the search warrant affidavit. However, on appeal, the State contends that without findings and conclusions, this Court cannot know with certainty the basis of the trial court’s decision. The State has not pointed this Court to any authority requiring a trial court to make findings of fact and conclusions of law regarding its ruling on a motion to quash an indictment. While the trial court is not required to specify the reasons for its ruling when dismissing an indictment, it is a good practice for trial courts to specifically overrule those grounds not granted; otherwise, the State must challenge every ground raised in the motion. State v. Sandoval, 842 S.W.2d 782, 785 (Tex. App.—Corpus Christi 1992, pet. ref’d) (stating that when trial court granted motion to dismiss indictment without specifying which of defendant’s legal theories were meritorious, the State was required to challenge all of defendant’s legal theories); see Sovey v. State, 628 S.W.2d 163, 165 (Tex. App.—Houston [14th Dist.] 1982, no pet.). We conclude that the trial court did not err by refusing to make findings of fact 11 and conclusions of law. We further conclude that under the circumstances presented here, the State could have reasonably concluded that the trial court’s order granting the motion to quash was based on the State’s failure to make a specific allegation of what the State would rely upon to convict, namely what Smith allegedly falsified in the search warrant affidavit. In both cases, we overrule issue one. In issue two, the State complains that the trial court erred in granting Smith’s motions to quash. The State argues that the indictments are legally sufficient because they provide adequate notice of the conduct that allegedly constitutes crimes because the language in the indictments tracks the statutory text of the applicable offenses. The State identified the probable cause affidavit that Smith made, presented, and used as the false document/governmental record, and the State attached the affidavit to the indictments as an exhibit. According to the State, it is not required to allege what about the affidavit is false because those facts are evidentiary. The State contends that its response to Smith’s motions to quash put Smith on notice that it was Smith’s omission of material information that rendered the affidavit false. Whether an indictment sufficiently alleges an offense is a question of law subject to de novo review. State v. Moff, 154 S.W.3d 599, 601 (Tex. Crim. App. 2004). To meet the accused’s right to notice under both the United States and Texas Constitutions, the indictment “must be specific enough to inform the accused of the 12 nature of the accusation against him so that he may prepare a defense.” Id. Article 21.02 of the Texas Code of Criminal Procedure sets forth requirements for an indictment and specifically provides that the “offense must be set forth in plain and intelligible words.” Tex. Code Crim. Proc. Ann. art. 21.02(7) (West 2009). Article 21.03 provides that “[e]verything should be stated in an indictment which is necessary to be proved.” Id. art. 21.03 (West 2009). Article 21.04 provides that “[t]he certainty required in an indictment is such as will enable the accused to plead the judgment that may be given upon it in bar of any prosecution for the same offense.” Id. art. 21.04 (West 2009). An indictment that tracks the statutory language generally satisfies constitutional and statutory requirements, and the State need not allege facts that are merely evidentiary in nature. State v. Mays, 967 S.W.2d 404, 406 (Tex. Crim. App. 1998). The trial court should grant a motion to quash “only where the language concerning the defendant’s conduct is so vague or indefinite as to deny the defendant effective notice of the acts he allegedly committed.” DeVaughn v. State, 749 S.W.2d 62, 67 (Tex. Crim. App. 1988). Here, both indictments track the language of the statute, but they do not include the false statement the State would rely upon for conviction. When a charging instrument fails to allege in what manner a defendant violated a criminal statute, the omission is a defect in form. See Amaya v. State, 551 S.W.2d 385, 387 13 (Tex. Crim. App. 1977) (holding that the indictment was deficient because it failed to identify the specific false statement the State alleged the defendant made). A pre- trial motion to quash is the proper means of bringing a defect in form to the court’s attention. See Amaya, 551 S.W.2d at 387; State v. Borden, 787 S.W.2d 109, 110 (Tex. App.—Houston [14th Dist.] 1990, pet. ref’d). When a defect in form is brought to the trial court’s attention, the State must respond by amending the indictment to include a specific allegation of what the State will rely upon for conviction. Cook v. State, 824 S.W.2d 334, 337 (Tex. App.—Houston [1st Dist.] 1992, pet. ref’d). “To afford a defendant sufficient notice of an offense under section 37.10, the charging instrument should allege the essential elements of the offense and identify the false entry.” Id. at 338. Thus, to provide adequate notice of an offense under section 37.10, the State was required to inform Smith of the precise facts in the affidavit that it alleged were false. See id. We conclude that Smith’s indictments are deficient because they fail to identify the specific false statement that Smith made in the search warrant affidavit. See Amaya, 551 S.W.2d at 387; Cook, 824 S.W.2d at 337. We further conclude that the trial court did not err by granting Smith’s motions to quash because the indictments did not provide Smith with adequate notice to prepare his defense. See Cook, 824 S.W.2d at 338-39. In both cases, we overrule the State’s second issue. We 14 note that in his brief, Smith asserted three cross-issues requesting alternative relief “in the event this Court believes it has jurisdiction to determine the merits of this appeal and finds the trial court’s order quashing the indictments in error[.]” Having concluded that the trial court did not err by granting Smith’s motions to quash, we need not address Smith’s cross-issues, since they would not result in greater relief. See Tex. R. App. P. 47.1. Having overruled both of the State’s issues and having concluded that we need not address Smith’s conditional cross-issues in each case, we affirm the trial court’s orders. AFFIRMED. PER CURIAM Submitted on February 16, 2017 Opinion Delivered February 22, 2017 Do Not Publish Before McKeithen, C.J., Kreger and Horton, JJ. 15	{ "pile_set_name": "FreeLaw" }
25 B.R. 484 (1982) ALLIED TECHNOLOGY, INC., Unsecured Creditors' Committee on Behalf of Allied Technology, Inc., 1200 Talbott Tower, Dayton, Ohio 45402, Plaintiff, v. R.B. BRUNEMANN & SONS, INC., Successor in interest to Brunemann Realty Co., Inc., 11120 Kenwood Road, Cincinnati, Ohio 45242, Defendant. In the Matter of ALLIED TECHNOLOGY, INC. an Ohio Corporation, Debtor. Adv. No. 3-82-0522, Bankruptcy No. 3-80-00669. United States Bankruptcy Court, S.D. Ohio, W.D. December 7, 1982. 485 486 487 Peter J. Donahue, Dayton, Ohio, for debtor. Dennis J. Patterson, Dayton, Ohio, for Creditors' Committee. William A. Rogers, Jr. and Daniel T. Harman, Dayton, Ohio, for P.O.B., Inc. Katherine Butts Warwick, Dayton, Ohio, for Allied Technology, Inc. C. Francis Barrett, Cincinnati, Ohio, Attorneys for R.B. Brunemann & Sons, Inc. DECISION AND ORDER CHARLES A. ANDERSON, Bankruptcy Judge. PRELIMINARY PROCEDURE This matter is before the Court for consolidated consideration of Debtor-Lessee's Application for Assumption of Lease, the Unsecured Creditors' Committee's Application to subordinate any assumed obligations to the claims of unsecured creditors, and Defendant-Lessor's Motion to Dismiss a Complaint filed by Debtor alleging that Lessor violated the automatic stay of 11 U.S.C. § 362. Debtor's instant Application for Assumption of Lease was filed on 17 February 1982. The Court heard the Application on 1 March 1982, at which time the parties indicated that the then anticipated Application of the Unsecured Creditors' Committee (filed on 3 March 1982), could be decided based upon the record then before the Court without the necessity of a separate hearing. The parties have submitted a series of memoranda debating the legal issues raised within the Applications. On 12 August 1982, Debtor filed a Complaint alleging violation of the automatic stay by an eviction action instituted on 22 July 1982, despite the pendency of this Court's decision on the aforementioned Applications. The eviction action, commenced in the Hamilton County (Ohio) Municipal Court, is presently pending and seeks to evict the assignee of the subject lease, and also requests money damages against both Debtor (as Lessee-Assignor) and the assignee, the party presently in possession. Defendant-Lessor filed the instant Motion to Dismiss on 2 September 1982, and all interested parties have submitted legal memoranda regarding the issues raised therein. The Court held a pretrial conference on 20 September 1982. At the pretrial, the parties agreed that the Motion to Dismiss could be consolidated with the Applications to enable joint decision based upon consolidation of the records, reserving for later resolution only the allegation of fraudulent conduct alleged in the Complaint and, within the discretion of the Court, any other matters within the Complaint deemed not yet ripe for decision. The following decision is therefore based upon the respective records and memoranda of the parties, and the evidence adduced at the hearing. FINDINGS OF FACT This case basically concerns the assumption of a lease by a debtor-lessee-assignor. The controversy stems from the facts that the lease provides for monthly payments considerably below fair market value and that prior to the Petition filing Debtor assigned 488 the leasehold without specific reservation of any reversionary interest. The pertinent facts are not in dispute, and the case is essentially presented to the Court for resolution of legal issues. Debtor-Lessee entered into the subject lease agreement with Brunemann Realty Co., Inc. on 18 July 1968. R.B. Brunemann & Sons, Inc. (hereinafter Lessor) is the successor in interest to Brunemann Realty Co., Inc. Relevant to the case at bar, the lease contains the following "express conditions": . . . . . 2. Without prior written consent of the Landlord, which consent shall not be unreasonably withheld, the term hereby demised shall not be assigned or underlet, nor shall any right or interest thereto or therein be conferred on or vested in any one other than the Tenant.... Tenant reserves the right to occupy said premises and sublet to any of its subsidiaries.... Tenant shall remain liable for all obligations of Tenant hereunder notwithstanding any such assignment or subletting. . . . . . 7. Tenant shall upon termination of this lease for any reason whatsoever surrender [the premises] ... to the Landlord .... The Tenant shall pay to the Landlord the cost to the Landlord of repairing any damage to the building caused by the Tenant.... . . . . . 17. The Tenant further agrees that his covenants and agreements herein contained shall be deemed conditions as well as covenants, and that if default be made in the payment of the rent herein reserved as the same shall come due, or if the Tenant shall fail to observe any of the other covenants and agreements herein contained on the Tenant's part to be performed, and the Tenant shall fail to cure such default or breach within 20 days after notice thereof is given by the Landlord to the Tenant, then it shall be lawful for the Landlord, at its option, either: (first) to enter and repossess said premises and to remove all persons and property therefrom; and for the purpose of such entry and repossession the Tenant hereby waives any notice required by law or otherwise to vacate the premises, and thereupon this lease and everything herein contained on the Landlord's behalf to be done and performed shall cease, determine and be void; or (second) as agent of the Tenant to enter and repossess said premises and to remove all persons and property therefrom and to re-rent said premises and apply all rentals received to the amounts due from the Tenant under this lease, and to expenses incurred in connection with such re-renting, the Tenant in such event to be liable for such expense when incurred, and the installments of rent and other charges as they become due, less the amount of any rents so collected by the Landlord. The Landlord shall be under no obligation in re-renting the premises to give priority to the rental of said space over other vacant space in the building. The Tenant further agrees that for the more effectual securing to the Landlord of the rent herein reserved, the filing of any petition under the bankruptcy laws or insolvency laws, or in any reorganization proceedings, by or against the Tenant, the making of an assignment for the benefit of creditors, or the appointment of a receiver for the property of the Tenant, shall be deemed to constitute a breach of this lease, and thereupon, ipso facto, and without entry or other action by the Landlord, this lease shall at the option of Landlord terminate, and notwithstanding any other provisions of this lease, the Landlord shall forthwith, upon such termination, be entitled to recover damages for such breach in an amount equal to the amount of the rent reserved in this lease for the balance of the term hereof, less the fair rental value of the premises for the residue of said term. The Landlord may also restrain any threatened breach of the covenant to observe the conditions of this lease, or of any covenant therein contained, but the mention herein of any particular remedy shall not preclude the Landlord from any 489 remedy it might have either at Law or in equity; nor shall consent to one act, which would otherwise be a violation, nor shall waiver of, or redress for, one violation, either of covenant or condition, prevent a subsequent act which would originally have constituted a violation from having all the force and effect of an original violation. . . . . . 19a Tenant shall have the option to extend this lease under the same terms and conditions contained herein for an additional five (5) years, beginning at the expiration of the original term hereof, provided that the Tenant shall not then be in default herein and provided further that Tenant shall have given Landlord at least six (6) months' notice in writing prior to the expiration of the then existing term hereof of such exercise of its option. If the said first option to extend this lease is exercised then Tenant shall have a second option to extend this lease for an additional five (5) years under the same terms and conditions, except that there shall be no further option to extend beyond said second five (5) year term. 20. It is agreed that the provisions hereof shall bind and inure to the legal representatives, successors and assigns, of the parties hereto .... As permitted in Condition # 2, the leasehold was subsequently occupied by the "P.O.B. Sealants Division" of Debtor. In early 1980, Debtor contemplated selling its P.O.B. Sealants Division to P.O.B., Inc. (hereinafter Assignee). Assignee's offer to purchase Debtor's P.O.B. Sealant Division, however, was contingent upon successful assignment of the lease to Assignee, and the assignment itself constituted part of Debtor's consideration in the proposed sales contract. On 25 February 1980, Debtor-Lessee-Assignor and Assignee entered into an Assignment of Lease as part of the arrangements consummating Debtor's simultaneous sale of its P.O.B. Sealant Division. The Lessor consented in writing on 22 February 1980 to the assignment of the lease to the Assignee, and the assignment is valid and enforceable in accordance with terms of the lease. Lessor's consent was specifically conditioned upon Lessee's continued liability under the lease, as required by Condition 2 of the Lease. It is further undisputed that the instant assignment is a true assignment (as distinguished from a sublease) without any reversionary interest or right of reentry retained by Debtor-Assignor. (See generally, 49 Am.Jur.2d Landlord and Tenant §§ 391 et seq.; and 33 O.Jur.2d Landlord and Tenant §§ 239 et seq.) Relevant to the instant proceeding, the Assignment of Lease contains the following "covenants": 1. Seller-[Debtor-Assignor] does hereby assign, transfer and set over unto [Assignee] all of its rights, title and interest in and to said lease.... . . . . . 3. [Assignor] covenants and agrees that said lease is in full force and effect and that Seller exercised its option to renew said lease for a five (5) year term in 1978 and that there remains the right to further renew said lease for an additional term of five (5) years after the expiration of the initial term of five (5) years provided that the tenant is not in default thereunder all as set forth in Paragraph 19a [of the lease]; ... that the [Assignor] has performed all the covenants and conditions and obligations on its part to be performed pursuant to said lease up to the date of closing [25 February 1980] ...; and that [Assignor] is not in violation of any of the covenants or terms of said lease at the date of closing. In the event that any sums are due and payable arising out of the failure of the Seller to perform the covenants under said lease prior to the date of closing regardless of whether or not demand has been made therefor by [Lessor] to [Assignor], the [Assignor] shall promptly remit any said sums to the [Assignee] on demand therefor. . . . . . 490 5. Buyer by the execution of this assignment, hereby excuses and releases Seller from any further liability under the lease for obligations arising after the 25 day of February, 1980. Assignor has been in possession of the leasehold since the date of the assignment; and it is undisputed that Assignor has, to date, fully performed. Debtor filed its Chapter 11 Petition in this Court on 18 March 1980. Debtor scheduled Lessor as an unsecured creditor in the amount of $2,083.32, based upon an anticipated rent arrearage as discussed below. Lessor subsequently filed a Proof of Claim with the Court on 11 August 1981 listing Lessor's claim as an "unliquidated" claim based upon a "breach" of the subject lease. Prior to the Petition filing, Debtor made rent payments by two checks which Lessor had not presented for payment as of the date of the Petition filing. The drawee-payor bank subsequently dishonored these checks because of the intervening Petition filing. Note 11 U.S.C. §§ 542(a) and 544(a). The Court notes that the date of presentment is not of record. In July 1980, however, Assignee (presumably promptly) reimbursed Lessor for the dishonored checks. Assignee was subsequently reimbursed for this payment by Debtor in Possession pursuant to this Court's approval of Assignee's Proof of Claim for reimbursement. The Court also notes that, to date, rent payments have never again been in arrears, though Lessor has refused Assignee's tender of rent payments (apparently, though the record is not clear) subsequent to the Notice to Leave Premises, discussed below. These payments have instead been escrowed "to preserve Lessor's eviction rights." Debtor filed an Application to assume the lease on 27 August 1980. A ruling on this Application, however, was reserved by Court order dated 4 November 1980 to permit the Court to entertain the Application jointly with two adversarial proceedings involving common questions of fact. The first of these adversarial proceedings, commenced on 7 October 1980 and numbered X-XX-XXXX, essentially concerned an attempt by the Unsecured Creditors' Committee to set aside the sale of Debtor's P.O.B. Sealant Division, inclusive of the instant assignment. The Court notes that this matter has subsequently been resolved within Debtor's Plan of Reorganization, as discussed below, and has accordingly been dismissed. See this Court's Order of 18 November 1982. The other adversarial proceeding, commenced on 28 October 1980 and numbered X-XX-XXXX, involved a request by Debtor-Lessee-Assignor that the Court stay any action by Lessor to evict Assignee. This adversarial proceeding was filed in response to Lessor's dissatisfaction with the unfavorable terms of the lease, manifested throughout Lessor's involvement with Assignee. For example, when Debtor requested Lessor's consent to the Assignment, Lessor's initial response (later retracted by Lessor's written request as discussed above) was to withhold consent, as follows: On behalf of our client, R.B. Brunemann & Sons, Inc., the successor in interest to Brunemann Realty Co., Inc., by merger, we are herewith responding to your letter dated February 1, 1980 which requested our client's consent to your company's assignment of the subject lease to Mr. Michael J. Dooley. Our client respectfully declines to consent to this assignment. The payments of the monthly installments of rent have typically been late. Your company has periodically been in default throughout the term and is presently in default. During the original ten year term of the lease, only 119 of these 120 monthly payments were made. The rent for June, 1979 has never been received. The September, 1979 rent was received one month late. The rent for November and December, 1979 and for January, 1980 was not received until February, 1980. The rent checks for August, 1979 and February, 1980 were just tendered last week, and our client is refusing to accept these checks and is returning these checks to your company. Furthermore, 491 the contract rent under this lease is substantially below the market rent. As stated above, even this below market rent has been paid late or not paid at all. Therefore, in view of the foregoing, our client is fully justified in refusing to consent to the assignment of this lease. Lessor's point of view was made more explicit by a letter to Assignee dated 28 July 1980 (which prompted Adversary Proceeding No. 3-80-0626) intimating that Lessor anticipated an eviction action against Assignee, as follows: This letter is to set forth the position of my client, R.B. Brunemann & Sons, Inc. [Lessor], with regard to the above-captioned matter. R.B. Brunnemann & Sons, Inc. had entered into a written lease with Allied Technology, Inc. [Debtor] which provided for monthly installments of rent of $1,041.67, which is equivalent to $12,500.04 a year. Based upon the 13,103 square feet of space in the subject building at 1100 Kenwood Road, the rent per square foot is less than $1.00 per year. The current market rent for comparable space is $3.50 to $4.00 a square foot. From the foregoing, it is obvious that Brunemann has a very unfavorable lease and certainly did not like the idea of having to consent to the assignment to P.O.B., Inc. If Brunemann could have avoided consent to the assignment, it would have done so. However, the assignment was made subject to the continuing liabilities of Allied Technology, Inc. under the lease, and the only basis for P.O.B., Inc.'s occupancy of this real estate is by virtue of the lease agreement. Since the lease has an unequivocal provision concerning automatic termination for a bankruptcy proceeding, it is our position that the lease has been terminated. If your client, P.O.B., Inc., wishes to maintain the position ... that only a default by P.O.B., Inc. can give rise to a basis for evicting P.O.B., Inc., then it would be our position that P.O.B., Inc. is a tenant on a month-to-month basis which can be evicted on 30 day's notice. (How can it be said that Allied Technology, Inc. has no further obligations to the lessor under the lease agreement without saying that P.O.B., Inc. is not claiming any interest in the subject real estate under the Allied Technology, Inc. lease?) However, in accordance with [Assignee's] apparent desire to settle the matter, we would be willing to avoid litigation and reach a compromise agreement. Under such an agreement, Brunemann would be willing to accept a rental rate at the low end of the current market rental rate (that is, $3.50 per square foot per year), with a provision for increase based upon the consumer price index, would be willing to enter into a written lease with a 5 year term, would pay the insurance, and would expect the tenant to be responsible for the real estate taxes, utilities, and repairs. If [Assignee] is willing to settle on these terms, please let me know. The Court notes that the above-quoted letter indicates that Lessor was not dissatisfied with Assignee as a tenant nor with Assignee's performance as of the date of the letter, but instead was only dissatisfied with the unfavorable lease terms. This indication is further evidenced by Lessor's earlier "Notice to Leave the Premises," dated 11 June 1980, which requested "surrender" of the premises on the single ground of a "breach of Lease ... by Lessee's filing Bankruptcy Petition in violation of paragraph 17 [effecting a forfeiture of the leasehold upon the filing in Bankruptcy Court]...." The Court also notes that both Lessor's letter and Notice to Leave Premises do not allege any irregularities in rent payments as a basis for eviction, notice of which, along with an opportunity to cure, would have been required by Condition # 17 of the lease prior to an eviction on the basis of rent arrearage. The resulting adversarial proceeding requesting that the Court stay any attempts by Lessor to evict Assignee is no longer pending before the Court pursuant to the parties' arrangements within Debtor's Plan of Reorganization to dismiss the adversary "with prejudice," as discussed below. See also this 492 Court's order dated 3 March 1982 within Adversary X-XX-XXXX. As alluded, all matters regarding the subject lease remained dormant pending the parties' negotiations leading to Debtor's Plan of Reorganization, confirmed by Order of the Court dated 17 August 1981.[1] Relevant to the instant proceeding, the Plan contains the following "Articles": . . . . . ARTICLE V Rejection of Executory Contracts All executory contracts, stock options, warranty obligations, and unexpired leases of Allied entered into prior to March 18, 1980 and not assumed in writing prior to confirmation of the Plan shall be deemed rejected upon confirmation of the Plan, except that Allied will renew its Motion to affirm its obligations, if any, under a lease previously assigned to P.O.B., Inc. Allied shall have the right to file motions for the rejection of such executory contracts, warranty obligations or unexpired leases at any time prior to confirmation of the Plan. Any person or entity claiming rights under a rejected executory contract, warranty obligations or unexpired lease shall have until August 10, 1981 to file a proof of claim in this case or such additional time as the court, before that date may allow. ARTICLE VI Provisions for the Retention, Enforcement, Settlement or Adjustment of Claims Except as noted below, confirmation of the Plan shall constitute settlement of all litigation commenced in connection with this Chapter 11 action, which litigation shall be dismissed with prejudice by the Reorganization Court. The adversary proceeding concerning the lease which had been previously assigned by Allied to P.O.B., Inc. shall be heard after confirmation among Allied, the lessor and P.O.B., Inc. All rights other than those granted under this Plan shall be waived by acceptance and confirmation of the Plan. All claims, causes of action, demands and rights shall merge in Allied upon confirmation and any exercise of rights shall be Allied's decision and Allied will assume the defense of any claim by P.O.B., Inc. and idemnify and hold harmless the Unsecured Creditors' Committee with respect thereto. Confirmation of the Plan shall constitute the release of any right of Allied or other interested parties to pursue preference actions under Section 547 of the Code. ARTICLE VIII Retention of Jurisdiction The Reorganization Court shall retain jurisdiction to require the performance of any act that is necessary for the consummation of the Plan including, without limitation, the jurisdiction to hear and determine all claims against Allied and to enforce all causes of action which may exist in its favor and to modify the Plan pursuant to the provisions of Section 1127 of the Code. The jurisdiction of the Reorganization Court shall continue until all of the approved and allowed claims under Class 2, Class 3 and Class 4 are satisfied pursuant to the Plan. Conformably to Article VI of the Plan, Adversarial Proceedings No. 3-80-0578 and No. 3-80-0626 were both dismissed as aforementioned, by Orders of the Court dated 18 November 1982 and 3 March 1982, respectively. Relevant to the matter sub judice, Adversary No. 3-80-0626 (commenced by Complaint requesting that Lessor 493 "be stayed from any action to evict [Assignee], to re-enter or cause surrender of the premises...) was dismissed "with prejudice," as agreed by the parties pursuant to Lessor's Motion to Dismiss on the ground that the Adversary became moot "as the grounds for said Complaint ... no longer exist ... [in light of] the Plan confirmation." Also as provided in the Plan, on 17 February 1982 Debtor "renewed" the instant Application to Assume the subject lease. ISSUES RAISED Debtor's threshold argument is that no forfeiture of the leasehold has occurred and that, "at worst," there may have been a technical breach which has been cured, or which Debtor has a right to cure as provided in 11 U.S.C. § 365(b). Debtor contends that Lessor is essentially attempting to circumvent this Court's jurisdiction in order to enforce in a nonbankruptcy forum a contractual ipso facto clause which is argued to be invalid under 11 U.S.C. § 365(e)(1)(B). Debtor alleges that Lessor's "grounds" for forfeiture are contrived and spurious, and, even if deemed to have merit, cannot be properly utilized by Debtor to effect a forfeiture, as alleged, because of waiver and estoppel. Debtor further contends that assumption of the lease would be in Debtor's best interests in order to avoid potential liability to Assignee for any resulting forfeiture of the leasehold if assumption would not be permitted. Lessor responds that there is sufficient basis to warrant a determination of forfeiture of the leasehold vis-a-vis Assignee by either Debtor-Lessee's breach by the instant Petition filing or by Debtor's erratic rent payments prior to the lease assignment. Lessor argues that 11 U.S.C. § 365(e)(1)(B) is inapplicable to a third party assignee. Instead, Lessor contends, "The ipso facto clause is merely declared unenforceable during the pendency of the bankruptcy proceedings, once the proceedings are concluded, the ipso facto clause is applicable and may be enforced against an unrelated third party." In essence, Lessor posits that an ipso facto clause cannot be "cured" by a debtor-lessee, and may be enforced against any third party in a nonbankruptcy setting. Lessor further alleges that Assignee cannot assert liability against Debtor because of Covenant 5 of the Assignment of Lease, whereby Assignee "release[d] [Debtor] from any further liability under the lease for obligations arising after the 25th day of February 1980." Assignee reiterates Debtor's arguments that the record does not support Lessor's allegation that the leasehold has been forfeited by Debtor-Lessee's conduct, and that, despite the release clause in Covenant 5 of the Assignment, Assignee may nevertheless seek damages for any breach of "certain warranties" within the Assignment of Lease resulting in the event of a forfeiture of the leasehold due to Debtor-Lessee's conduct. Assignee and Debtor also contest Lessor's interpretation of 11 U.S.C. § 365(e)(1)(B). Both argue that such interpretation would render leases containing ipso facto clauses valueless, as "only a hapless Jack would trade a cow for such a contract." In essence, both argue that 11 U.S.C. § 365(e)(1)(B) (and (f)) would be meaningless if an ipso facto clause within an assumed lease would be enforceable, as such, upon completion the bankruptcy proceeding. (It should be noted, in this regard, that the case has not to date been closed as a matter of fact). The Unsecured Creditors' Committee essentially argues that assumption of the subject lease could have unnecessary "grave consequences" upon Debtor's estate. The Unsecured Creditors' Committee also disputes the allegation of potential liability in the event Debtor does not assume, arguing that Assignee has failed to file a proof of claim for contingent liability, and that, since time for such filing has lapsed, no such claim could be asserted against Debtor's estate. The Unsecured Creditors' Committee therefore concludes that assumption would constitute little more than a Court-approved "preference" of Lessor and Assignee over the unsecured creditors, and 494 that "equity and fairness" require that any assumed liabilities be subordinated to the claims of unsecured creditors. These matters were all presented for this Court's determination and were pending on 22 July 1982, the date Lessor filed a "Complaint for Restitution of Real Property and Money Damages" in state court. The Complaint alleges that Lessor, by virtue of this Court's Order dated 3 March 1982 dismissing Adversary Proceeding No. 3-80-0626 "with prejudice," is now entitled to maintain the state court action to evict Assignee on the basis of forfeiture of the lease by late payment for rent and/or Debtor's Petition filing. The Complaint also requests money judgment against both Debtor and Assignee for Lessor's damages, alleged to be the difference, calculated from the date of the assignment, between the fair market value of the leasehold and the rents actually collected. As aforementioned, this matter is presently pending in state court. On 12 August 1982, Debtor filed the Complaint presently before this Court requesting that Lessor be stayed from pursuing its state court action. The Complaint also alleges that Lessor's institution of the state court action was in bad faith and fraudulent by omission therein of the details of the proceedings in this Court, alleged to justify an award of compensatory damages and additional punitive damages in the amount of $10,000.00. Debtor also requests that this Court find Lessor in contempt of Court for violation of the automatic stay. See 11 U.S.C. § 362. Lessor responded with the instant Motion to Dismiss. In debating the Motion, the parties basically restated their views as earlier presented to the Court. In addition, Lessor emphasizes its beliefs that the automatic stay of 11 U.S.C. § 362 is inapplicable to Lessor because the lease is not "property of the estate," and that this Court's Order of 3 March 1982 in Adversary X-XX-XXXX is res judicata as to Debtor's request for a stay of Lessor's eviction action. The parties also dispute this Court's jurisdiction over Debtor's Complaint. Debtor argues that the lease interest constitutes "property of the estate," as that term is defined in 11 U.S.C. § 541, and that this Court therefore possesses exclusive jurisdiction over disposition of the leasehold. Debtor points out that 11 U.S.C. § 365(f), providing for assignment of assumed leases by a debtor in possession, appears to support the view that a lease may constitute property of the estate even if the leasehold is assigned. Note 11 U.S.C. § 1107(a). Lessor argues that, since Debtor has no present right to possession of the leasehold, the leasehold is not "property of the estate" within the meaning of 11 U.S.C. § 541. On this basis, Lessor argues that this Court therefore does not possess subject matter jurisdiction since it essentially concerns only the rights of Lessor and Assignee. Lessor further argues that a forfeiture, as alleged, could not have even an attenuated effect on Debtor's estate because of Assignee's release of Debtor in Covenant 5 of the Assignment of Lease, and that this Court therefore should properly defer for determination of Assignee's interest in a nonbankruptcy forum. DECISION AND ORDER I The initial question before the Court is whether a debtor's right to assume a lease under 11 U.S.C. § 365 is applicable to a lease in which the debtor, prior to the Petition filing, had assigned possessory interest in the leasehold. It is the determination of the Court that a possessory interest (i.e. privity of estate with the lessor) is not a requisite to the exercise of a debtor's right to assume the lease under 11 U.S.C. § 365. A lease of real property is a hybrid legal arrangement creating both privity of estate and privity of contract between the lessor and lessee. See generally, 33 O.Jur.2d Landlord and Tenant § 4, and 49 Am.Jur.2d Landlord and Tenant § 1. The "leasehold" is the interest in real property involved, typically the res minus the lessor's reversionary interest. 33 O.Jur.2d Landlord and Tenant § 4. An assignment of the 495 leasehold, without reservation of a right of reentry, may divest the lessee-assignor of the estate. See generally, 33A O.Jur.2d Landlord and Tenant §§ 242, and 258-265, 49 Am.Jur.2d Landlord and Tenant § 395; Note also, O.R.C. §§ 5321.01(B) and 5321.03, which limit eviction actions to lessors and sublessors. The lessee-assignor, however, remains in privity of contract, and continues to be liable, as a surety, for covenants designed for protection of the lessor's reversion. Gholson v. Savin, 137 Ohio St. 551, 19 O.Ops. 309, 31 N.E.2d 858 (1941); 33A O.Jur.2d Landlord and Tenant § 262. The lessee-assignor, nevertheless, ceases to have any direct interest in the leasehold and thus has no cause of action against an assignee on the basis of a successful eviction of the assignee. 49 Am.Jur.2d Landlord and Tenant § 436. Significant to the instant matter, the lessee-assignor does, of course, become liable to the assignee for any express covenants within the assignment itself. 33A O.Jur.2d Landlord and Tenant §§ 242, and 258-265; 49 Am.Jur.2d Landlord and Tenant § 434. In the case at bar, the parties do not dispute that Debtor has validly assigned its interest in the subject lease without reservation of a right of reentry, and consequently has no possessory interest in the leasehold. 11 U.S.C. § 365, however, only requires that the lease be "of the debtor" in order to be assumable. 11 U.S.C. § 365(a). It is the opinion of the Court that a "lease of the debtor," as that term is used in 11 U.S.C. § 365, may be solely contractual in nature, and that there is no direct limitation upon a debtor's rights under 11 U.S.C. § 365 by the concept of "property of the estate" as elaborated in 11 U.S.C. § 541. The decision of a debtor in possession to assume or reject an unexpired lease is within the "business judgment" of the debtor in possession, subject to court approval, and is in no way conditioned upon a possessory interest in the leasehold. 11 U.S.C. §§ 365, 1107 and 1108; Group of Institutional Investors v. Chicago, Milwaukee, St. Paul & Pacific Railroad Co., 318 U.S. 523, 550, 63 S.Ct. 727, 742, 87 L.Ed. 959 (1943). A debtor in possession, by definition, "operates the business." 11 U.S.C. §§ 1107(a) and 1108. Such operation implicitly requires the exercise of reasonable judgment in ordinary business matters, including assumption or rejection under 11 U.S.C. § 365. This business judgment is controlling throughout the reorganization of a debtor in possession, though often, as in the case of the assumption or rejection of unexpired leases, subject to Court approval. 11 U.S.C. §§ 365(a), 1107(a) and 1108. Court approval of a debtor in possession's judgment that assumption of a lease is in the best interest of the debtor's business should not be withheld on the basis of a second-guessing of the debtor's judgment, unless the matter is presented in the context of 11 U.S.C. § 1104(a)(1) for determination of the larger question of the competency of debtor in possession's business judgment. It is not the function of the Court to operate the debtor, 11 U.S.C. §§ 364(a), 1104(a), 1107(a) and 1108. As long as assumption of a lease appears to enhance a debtor's estate, Court approval of a debtor in possession's decision to assume the lease should only be withheld if the debtor's judgment is clearly erroneous, too speculative, or contrary to the provisions of the Bankruptcy Code, and particularly of 11 U.S.C. § 365. II The threshold question under 11 U.S.C. § 365 is whether the subject lease existed at the time of the Petition filing. If the lease terminated by a prepetition forfeiture, 11 U.S.C. § 365 would be inapplicable, even if the leasehold were essential to reorganization, because a "lease of the debtor" would have ceased to exist. See Executive Square Office Building v. O'Connor and Associates Inc., 19 B.R. 143, 9 B.C.D. 35 (Bkrtcy.N.D.Fla.1981), and extensive citation therein. Lessor contends that the subject lease ceased to exist because of (1) the assignment itself, (2) erratic rent payments, and (3) the lessee's filing in this Court, each 496 alleged to constitute independent material breaches of the lease.[2] In essence, Lessor argues that prepetition conduct of Debtor-Assignor and/or Debtor's act of filing a bankruptcy petition should effect a forfeiture of the leasehold of a performing assignee, and that the Debtor-Lessee-Assignor has no right to dispute the alleged forfeiture in a bankruptcy forum for purposes of either assumption or handling any handling any resulting liability within the bankruptcy proceeding. Having determined, however, that Debtor has properly applied for assumption of the instant lease, the resolution of an allegation of a prepetition forfeiture of that lease is impliedly necessary for this Court's determination both of the lease's existence and the reasonableness of Debtor's business judgment to assume. It is the determination of the Court that Debtor's conduct has not effected a forfeiture of the subject lease. As a general rule, "the law abhors a forfeiture." See this Court's opinion in, Acme Precision Building Limited v. Dayton Forging & Heat Treating, Inc., 23 B.R. 79 (Bkrtcy.1982), and citation therein; see also 2 Collier on Bankruptcy, 15th Ed., ¶ 365.04. In the case at bar, Lessor's allegations of forfeiture appear to be little more than a specious legal technicality asserted to rewrite or rescind the lease, rather than to rectify any bona fide damages. The subject assignment, though initially contested, was entered only subsequent to Lessor's valid written consent. The only rent payment "default" of record, (the dishonoring of two rent checks because of Debtor's intervening Petition filing), was promptly cured by Assignee.[3] The Court also notes that there is no evidence in record that Lessor ever offered notice of default as required in Condition 17 of the lease. To the contrary, Lessor's correspondence to Assignee in 1980 indicates that Debtor's alleged erratic rent payments were not the then perceived basis for a possible eviction action, which instead was argued to be exclusively based upon the ipso facto clause. Since it is undisputed, however, that an ipso facto clause is unenforceable directly against a debtor assuming a lease containing such a clause, (see 11 U.S.C. § 365(b)(2)(B) and (e)(1)(B)), the Debtor's act of assumption of the lease acts to cure this "default," a curing which is preemptive of any relevant state law. U.S.Const., Art. 1, § 8. Any conclusion to the contrary would render a debtor's right to assign (or to preserve an assignment prior to assumption) meaningless, and would obviously be contrary to 11 U.S.C. § 365. In essence, to permit forfeiture of an assumed lease on the basis of enforcement of an ipso facto clause against a performing nondebtor assignee would render any assumed lease containing an ipso facto clause valueless for purposes of assignment, and would be wholly inconsistent with the concept implicit in 11 U.S.C. § 365 that assumption of a lease rectifies the lease, and otherwise places the parties in their prepetition postures. Thus, although it is perhaps unclear what result would occur under Ohio law if an ipso facto clause were directly asserted against a performing assignee on the basis of a rejecting debtor's petition filing, this question is not before the Court because of Debtor's assumption of the lease, thereby "curing" any arguable breach of the ipso facto clause. Note 33A O.Jur.2d Landlord and Tenant § 540. In this regard, the Court also notes that any arguable forfeiture has been waived by Lessor's consent to the assignment and acceptance of rent payments from both Lessee and Assignee during and since the time period of the alleged forfeiture. 497 III Having determined that the lease existed at the time of the Petition filing, the basic question now before the Court is whether Debtor's business judgment that the lease should be assumed is reasonable. Debtor argues that it is in Debtor's best interests to assume the subject lease in order to avoid potential liabilities which may arguably occur if assumption is not approved. It is the determination of the Court that this business judgment should not be judicially reversed inasmuch as the facts do not discredit such a conclusion. A basic requisite for assumption of a lease by a Chapter 11 debtor is the debtor's financial entanglement, i.e. the enhancement of the debtor's estate by the assumption of the liability. It is the opinion of the Court, however, that assumption of liability to avoid arguably greater liability is a valid consideration in a debtor in possession's exercise of its business discretion.[4] In this case, the assumption of the subject lease does not appear to involve a substantial risk, (as discussed in Part IV below). On the other hand, the potential liabilities in the event of rejection appear to be significant. By Covenant 3 of the Assignment of Lease, Debtor-Assignor specifically covenanted that Assignee would have "... the right to further renew said lease for an additional term of five (5) years after the expiration of the initial term of five (5) years, provided [Assignee] is not [itself] in default [under the lease]." As intimated in Lessor's state court eviction action, in the event of a lease forfeiture, Debtor could arguably be liable to Assignee for considerable damages, including the amount of Assignee's increased rent expenses for the remainder of the lease term(s), and for other damages, such as associated moving costs. Furthermore, in a situation in which the assumption of an assigned lease appears to involve minimal liability, the desire to avoid anticipated litigation expenses which may result from rejection may itself constitute a valid ground for assumption, even if the alleged grounds for liability appear attenuated or unlikely to result in an actual finding of liability. In this regard, the Court particularly notes that Article VI of Debtor's Plan of Reorganization specifically provides that Debtor "will assume the defense of any claim by P.O.B., Inc. [the Assignee]." The Court also finds that the record does not sustain allegations that liabilities to Assignee incurred by a hypothetical rejection/breach of the lease by Debtor could not be asserted by Assignee. Assignee's "release" of Debtor in Covenant 5 of the Assignment of Lease "from any further liability under the lease for obligations arising after the 25th day of February, 1980" appears to release Debtor-Assignor from liability to Assignee under the terms of the lease agreement. It does not release Debtor from liability to Assignee for a breach of a covenant within the Assignment itself, nor does it release Debtor from liability to Lessor for any breaches of the original lease agreement, as is specifically provided in both the lease and in Lessor's consent to assignment. This is further evidenced and emphasized by Lessor's state court action seeking damages against Debtor based upon the lease. In addition, the argument that any claim Assignee may have against Debtor has "lapsed" because of Assignee's "failure" to file a proof of claim lacks merit. A claim based upon rejection of a lease arises at the moment of rejection, and is essentially a postpetition claim which is constructively handled as prepetition under the administration of the bankruptcy proceeding. 11 U.S.C. §§ 365(g) and 502(g); See also 498 this Court's opinion in Solon Automated Services, Inc. v. Georgetown of Kettering, Ltd., 22 B.R. 312, 9 B.C.D. 552, 6 C.B.C.2d 1484 (Bkrtcy.1982). There is no requirement that a "claim arising from the rejection" of a lease be asserted based upon the lease itself, and it is the opinion of the Court that Assignee's potential claim based upon the Assignment of Lease constitutes a "claim arising from the rejection" of the subject lease. Since Assignee's claim for damages would not arise until the act of rejection, the deadline for proofs of claims for prepetition debt (i.e. a claim as defined in 11 U.S.C. § 101(9)(A)) cannot bar Assignee's assertion of an alleged claim for postpetition debt (i.e. a claim as defined in 11 U.S.C. § 101(9)(B)), since such claim will be assertable only in the event of rejection which may or may not occur (if at all) by the time of the deadline for prepetition claims. 11 U.S.C. § 501(d). As indicated in the legislative history of the Code. [11 U.S.C. § 501(d)] governs the filing of claims [based upon the rejection of a lease of the debtor]. The separation of this provision from the other claim filing provisions in this section is intended to indicate that claims of the kind specified, which do not become fixed or do not arise until after the commencement of the case, must be treated differently for filing purposes such as the bar date for filing claims. The Rules will provide for later filing of claims of these kinds. H.R.No. 95-595, 95th Cong., 1st Sess. 351 (1977); S.R.No. 95-989, 95th Cong., 2d Sess. 61 (1978), as quoted in Part 3 of the Collier Pamphlet Edition of the Bankruptcy Code, Legislative History of 11 U.S.C. § 501. Instead, the deadline for the filing of proofs of claims arising under 11 U.S.C. § 502(g) is "within such time as the Court may direct," presumably not prior to the existence of the claim. B.R.P. 11-33(b)(2)(B); Solon Automated Services, Inc. v. Georgetown of Kettering, Ltd., supra; In re Hall, 8 B.R. 237, 239 (Bkrtcy.W.D.Okla.1982). IV 11 U.S.C. § 365(b)(1) provides that, "if there has been a default," a debtor in possession may not assume a lease under 11 U.S.C. § 365 unless the debtor in possession: (A) cures, or provides adequate assurance that the trustee will promptly cure, such default; (B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and (C) provides adequate assurance of future performance under such contract or lease. As aforementioned, 11 U.S.C. § 365(b)(2) excepts a "breach" of an ipso facto clause from the duty to "cure" under 11 U.S.C. § 365(b)(1)(A). In this case, it is undisputed that, if assumption is approved, any "breach" of the subject lease which may arguably have occurred has been cured, and Assignee has been fully reimbursed for "losses" resulting from such "breach." If assumption is approved, 11 U.S.C. § 365(b)(1)(A) and (B) consequently are not at issue instanter. The question arises, therefore, whether Debtor has provided "adequate assurance of future performance," 11 U.S.C. § 365(b)(1)(C). Although 11 U.S.C. § 365(b) is only triggered in the event of a default (and even a technical default is not definitively established by the record) it is, nevertheless, the specific finding of the Court that Debtor in Possession has provided adequate assurance of future performance. As earlier stated by this Court, "Adequate assurance does not require an absolute guarantee of repayment, and is largely a factual determination." Hennen v. Dayton Power and Light Co., 17 B.R. 720, 725, 8 B.C.D. 1102, B.L.D. ¶ 68,631 (Bkrtcy.1982), and citation therein. In this case it appears reasonably certain that Lessor will receive complete performance of the terms of the lease. Relevant to this finding are the facts that Assignee has 499 fully performed to date and appears capable of continued full performance, and also the apparent marginal risk of liability because of the marketability of the lease to subsequent assignees in the event Assignee were to prove incapable of performing due to unforeseen circumstances. V The Unsecured Creditors' Committee requests that the Court subordinate any claims resulting from the assumption of the subject lease to the claims of unsecured creditors pursuant to 11 U.S.C. § 510(c)(1), which provides that the Court may: under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed claim to all or part of another allowed claim or all or part of an allowed interest to all or part of another allowed interest.... Subordination is argued as appropriate under the instant facts on the general grounds of "fairness" and "equity." It is the determination of the Court that subordination, as requested is unwarranted in the case at bar. Subordination is essentially a discretionary exercise of the Court's equitable powers, and should only be used sparingly to rectify obvious inequities. See generally, 3 Collier on Bankruptcy, 15th Ed., ¶ 510.04. "[G]enerally, ... a claim may normally be subordinated only if its holder is guilty of misconduct." S.R. No. 989, 95th Cong., 2d Sess. 74 (1978), cited in Part 3 of the Collier Pamphlet Edition of the Bankruptcy Code, Legislative History of 11 U.S.C. § 510, and in 3 Collier on Bankruptcy, 15th Ed., ¶ 510.04. It is the opinion of the Court that subordination should not be used to frustrate legitimate business dealings of a debtor in possession undertaken for valid purposes within the reorganization. This is particularly true in the instant case since the subject lease appears to be in the best interests of Debtor's estate, and thus itself serves to benefit the unsecured creditors. Without specific facts of record demonstrating an inequitable result, this Court should not subordinate liabilities assumed in apparent good faith, though the question could later be presented to the Court (in more timely fashion) upon elaborated facts when and if such claims are actually asserted. VI The final matter before the Court is Debtor's request for sanctions against Lessor for institution of the questioned postconfirmation state court eviction action against Debtor and Assignee. The Court notes that Lessor's "eviction action" requests, inter alia, money "damages" against Debtor and Assignee, jointly and severally, for what is essentially an "unliquidated" scheduled debt for which Lessor has duly filed a Proof of Claim in this Court. This Court's postconfirmation jurisdiction extends over "any necessary party ... to perform any ... act ... necessary for the consummation of the plan." 11 U.S.C. § 1142(b); Solon Automated Services, Inc. v. Georgetown of Kettering, Ltd., supra. The key document for determination of this Court's postconfirmation jurisdiction is thus the Plan itself, which is binding on all creditors, including Lessor. 11 U.S.C. § 1141(a). In this case, Debtor's Plan of Reorganization unequivocally retains postconfirmation jurisdiction in this Court for resolution of any claim Lessor may have against Debtor based on either a prepetition breach or postpetition rejection (which is constructively a breach, 11 U.S.C. § 365(g)) of the subject lease. Specifically, Article VII of Debtor's Plan of Reorganization provides that the Court "shall retain jurisdiction ... to ... determine all claims against [Debtor] ...," and Articles V and VI explicitly provide that the Court will retain postconfirmation jurisdiction over the questions raised within Debtor's Application to assume the subject lease. As a general rule, any claim based upon a lease involving a debtor and which arose prior to a debtor's decision to assume or reject, should be properly resolved within the bankruptcy administration, unless specific provision is made otherwise. 500 U.S.Const., Art. 1, § 8; 11 U.S.C. § 365; 28 U.S.C. § 1471. In this regard, the Court specifically notes that the right to cure a breach of an unexpired lease under 11 U.S.C. § 365(b) extends to "a default," a term which is not qualified and presumably includes any default which occurred prior to the time of assumption. 11 U.S.C. § 365(b). A lessor of real property may assert any combination of three types of claims against a debtor's estate (1) a prepetition claim (as defined in 11 U.S.C. § 101(9)(A)) based upon a prepetition breach or forfeiture of the lease, (2) a postpetition claim for a breach of the lease prior to a debtor's assumption or rejection under 11 U.S.C. § 365, and/or (3) a post-petition claim (as defined in 11 U.S.C. § 101(9)(B)) based upon a breach of the lease which occurs, by statute, upon rejection of the lease within the bankruptcy proceeding, 11 U.S.C. §§ 365(g) and 502(g). Regardless of which type of claim is asserted, the Code contemplates that such claim(s) be resolved exclusively within the bankruptcy proceeding, to avoid needless postconfirmation litigation in a nonbankruptcy forum, such as the type in question instanter. For example, if a debtor failed to pay rent both before and after the petition filing and then rejected the lease under 11 U.S.C. § 365, the lessor would assert the resulting claims against the estate as follows: (1) The prepetition claim would be asserted as such, subject to usual prepetition avoidance powers. Priority for such claim would be determined by 11 U.S.C. § 726 in Chapter 7, or pursuant to the terms of the plan under Chapters 11 or 13. 11 U.S.C. §§ 101(9)(A), 501, 502, and 506. (2) The post-petition claim for breach prior to the act of rejection would be asserted as an administrative expense. 11 U.S.C. § 503(b)(1); Matter of Chase Commissary Corp., 11 F.Supp. 288 (S.D.N.Y.1935); and see generally, 2 Collier on Bankruptcy, 15th Ed., ¶ 365.03[2], and citation therein. (3) The claim for damages "arising from the rejection" of the lease would be asserted as a prepetition claim by filing of a proof of claim after the rejection "within such time as the Court provides," again subject to usual prepetition avoidance powers. 11 U.S.C. §§ 365(g) and 502(g); B.R.P. 11-33(b)(2)(B). Priority of the claim would be determined as would be determined for prepetition claims. On the other hand, if the debtor had assumed the lease under 11 U.S.C. § 365, both the prepetition claim and the postpetition claim for any breach prior to assumption would, of necessity, be promptly cured pursuant to 11 U.S.C. § 365(b)(1)(A), and the parties would otherwise return to their prepetition stance with no further lessor remedies for conduct prior to the date of assumption. This scheme in no manner either contemplates resolution of such questions or liquidation of any alleged damages by a nonbankruptcy forum. 11 U.S.C. §§ 362 and 365, and 28 U.S.C. § 1471. In the case at bar, Lessor argues that this Court has no jurisdiction over Debtor's Complaint because the subject matter of Lessor's eviction action is the leasehold, which is not property of the estate, and therefore is not within this court's subject matter jurisdiction. It is the determination of the Court, however, that the vesting of the lease within the concepts of "property of the estate" is irrelevant to the question of jurisdiction in the matter sub judice. Lessor's action is, in essence, an attempt to liquidate and collect a scheduled debt in a nonbankruptcy forum during the pendency of Debtor's bankruptcy proceeding. Although Debtor has pleaded jurisdiction under 28 U.S.C. § 1471(e), it is self-evident that this Court's jurisdiction to resolve scheduled claims against an estate lies within the broad jurisdictional grant of 28 U.S.C. § 1471(a), (b), and (c), (and, if collection is attempted directly from estate assets, also (e)); and that this Court may act accordingly. See this Court's opinion in Matter of Century Entertainment Corp., 21 B.R. 160, 162 (Bkrtcy.1982). 501 In this case, Lessor has asserted in state court what is essentially a prepetition claim for damages arising by an alleged forfeiture of the subject lease by Debtor's conduct.[5] This "claim" was duly scheduled. 11 U.S.C. § 362(a)(1) stays "commencement ... of a proceeding ... against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title...." In a Chapter 11 proceeding, the stay of 11 U.S.C. § 362(a)(1) continues until "the time the case is closed" or "the time a discharge is granted or denied," 11 U.S.C. § 362(c)(2)(A) and (C), which ordinarily is the moment of confirmation of the Chapter 11 Plan of Reorganization, 11 U.S.C. § 1141(d)(1). A Chapter 11 Plan, however, may except this general rule for the timing of the discharge. 11 U.S.C. § 1141(d)(1). In this case, Debtor's Plan of Reorganization provides such exception by specifying that this Court will retain jurisdiction "to hear and determine all claims against Allied." The Plan provides further exception by reserving the questions within Debtor's Application to assume the subject lease for this Court's postconfirmation resolution, thus holding in abeyance the discharge of those claims to be resolved within the Application. Of necessity, resolution of Debtor's Application to assume the subject lease includes determination by this Court of Lessor's allegation of prepetition forfeiture (to determine the lease's existence) and the amount of damages, if any (to determine if Debtor is capable of curing). It is the determination of this Court that Lessor's state court action is blatantly violative of both this Court's Order of Confirmation of Debtor's Plan, and of the automatic stay of 11 U.S.C. § 362(a)(1). In the state court action, Lessor essentially requests resolution of a claim pending before this Court. The claim is vested within this Court's jurisdiction pursuant to 28 U.S.C. § 1471, as retained within the Court's postconfirmation jurisdiction by specific provision within the Plan of Reorganization, which is binding upon Lessor. 11 U.S.C. § 1141(a). Furthermore, since this claim has not yet been discharged, and no request for relief from stay has been filed, the automatic stay of 11 U.S.C. § 362(a)(1) has therefore been in effect continuously since commencement of the instant bankruptcy case. 11 U.S.C. §§ 362(c)(1)(C) and (d), and 1141(d)(1). The Court notes that this Court's Order of Dismissal dated 3 March 1982 within Adversary X-XX-XXXX cannot act as a bar to the above determinations. Since the Court's earlier Order was premised upon the matter then before the Court being mooted by confirmation of the Plan, and since the Plan itself calls for resolution of the matter herein, a violation of 11 U.S.C. § 362 as incorporated into the Plan of Reorganization may be remedied herein as a violation of the Court Order upon which the earlier Order of Dismissal was premised, and is in no way barred by the earlier Order. Furthermore, such a specious argument flies in the face of the exclusive and conclusive statutory effect of the confirmation order. 11 U.S.C. § 1141. It is the further determination of the Court that Lessor's action constitutes misconduct, and as such should be sanctioned as contempt of Court. 11 U.S.C. § 105. Lessor was fully cognizant of the posture of the questions being litigated before this Court. No reasonable interpretation of these proceedings, (which the Court notes are binding upon Lessor, 11 U.S.C. § 1141(a)), could justify commencement of a nonbankruptcy proceeding regarding identical issues for which this Court's determination would necessarily be res judicata. Such attempted collateral attack, though disguised by legal artifice, should be recognized as such, and should not be tolerated. IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Debtor's 502 Application to assume the subject lease is APPROVED. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Unsecured Creditors' Committee's Application to subordinate any assumed claim is DENIED. The Court further finds that Lessor has acted in contempt of this Court's jurisdiction, and IT IS THEREFORE FURTHER ORDERED that Lessor reimburse Debtor for all attorney fees and litigation expenses incurred in connection with both the defense of the state court action and the protection of Debtor's rights before this Court in Adversary No. 3-82-0522. It is the further finding of the Court that the subject lease has been cured in satisfaction of 11 U.S.C. § 365(b), and that Lessor is, therefore, enjoined from any further action to collect any claim based upon the subject lease arising prior to assumption of the lease. NOTES [1] The Plan essentially calls for merger of Debtor in Possession with TSC, Inc., a former subsidiary of Debtor. The resulting corporation assumed the name, TSC, Inc. The Adversarial Proceeding No. 3-82-0522, presently before the Court, was accordingly captioned with "TSC, Inc. formerly Allied Technology" as Plaintiff. For convenience, the Court will use the single nomenclature, "Debtor," throughout this opinion, since distinguishing the legal entities asserting Debtor's interest is unnecessary for determination of the questions before the Court. [2] The Court notes that in the state court eviction action Lessor has asserted only the latter two grounds as bases for the eviction. [3] Although Lessor refers to Debtor's previous "poor" payment record, nothing in record substantiates Lessor's allegation. The only reference in record to Debtor's payment history is allusion to Debtor's delinquent payments by hearsay contained in correspondence itself of little probative value. The Court also notes that it is undisputed that there is presently no rent arrearage. [4] In this regard, the Court notes that 11 U.S.C. § 365(f), regarding postpetition assignments, is inapplicable to the instant facts, although the provision does indicate that the assumption of a lease may be validly premised upon the business judgment of anticipated profit in a subsequent assignment, which does appear consistent with the instant holding. The Court also notes that 11 U.S.C. § 365(k), which absolves a debtor from continuing liability under an assigned assumed lease, is also inapplicable to pre petition assignments by the debtor, and thus also inapplicable to the case at bar. [5] This ratio decidendi is not changed by allegation that the alleged breach of the ipso facto clause is a "postpetition" claim, since such claim is not cognizable for purposes of distribution of a debtor's estate. 11 U.S.C. § 365(e)(1)(B).	{ "pile_set_name": "FreeLaw" }
30 F.3d 1492 Stringerv.Campbell NO. 93-07650 United States Court of Appeals,Fifth Circuit. July 19, 1994 1 Appeal From: S.D.Miss. 2 AFFIRMED. Conference Calendar	{ "pile_set_name": "FreeLaw" }
[Cite as Sanders v. Clark, 2016-Ohio-7267.] IN THE COURT OF APPEALS ELEVENTH APPELLATE DISTRICT TRUMBULL COUNTY, OHIO JODI SANDERS, : OPINION Plaintiff-Appellant, : CASE NO. 2016-T-0041 - vs - : MONICA CLARK, : Defendant-Appellee. : Civil Appeal from the Trumbull County Court of Common Pleas. Case No. 2015 CV 00961. Judgment: Reversed and remanded. Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270, Warren, OH 44482 (For Plaintiff-Appellant). Anne C. Fantelli, Meyers, Roman, Friedberg & Lewis, Eton Tower, 28601 Chagrin Boulevard, Suite 500, Cleveland, OH 44122 (For Defendant-Appellee). TIMOTHY P. CANNON, J. {¶1} Appellant, Jodi Sanders, appeals the judgment of the Trumbull County Court of Common Pleas granting actual damages in the amount of $127.50 and punitive damages in the amount of $5,000.00 in her favor. {¶2} On May 15, 2015, appellant filed a complaint against appellee, Monica Clark, in the Trumbull County Court of Common Pleas, alleging invasion of privacy for the publication of appellant’s private affairs. On August 19, 2015, after appellee failed to move or plead, appellant filed a motion for default judgment. On September 29, 2015, the court granted appellant’s motion for default judgment and awarded judgment in her favor, reserving the issue of damages. The matter was set for a hearing before a magistrate on the issue of damages. {¶3} The magistrate’s decision was filed on February 3, 2016, following the hearing. The magistrate’s decision did not include separate findings of fact and conclusions of law. In a general decision, the magistrate stated that “[t]hough this hearing regarded only damages because the Plaintiff was granted a judgment by default as Defendant failed to answer the complaint, Plaintiff established her claim.” The magistrate recommended judgment against appellee for actual damages for loss of wages in the amount of $127.50. The magistrate also found that appellee acted with a conscious disregard for the rights of appellant that amounted to actual malice and accordingly recommended punitive damages in the amount of $5,000.00. {¶4} Following the filing of the magistrate’s decision, appellant did not request that the magistrate file findings of fact and conclusions of law. {¶5} On February 17, 2016, appellant filed an objection to the magistrate’s decision of February 3, 2016. Appellant maintained that the magistrate “erred in making no award whatsoever for [appellant’s] ‘shame, humiliation, embarrassment, anger, and emotional distress’ that naturally and necessarily resulted from [appellee’s] wrongful act.” Appellant stated that, “[p]resumably, the Magistrate misapprehended ‘actual damages’ to mean damages for economic loss alone * * * without regard for damages resulting from noneconomic loss.” 2 {¶6} The trial court entered judgment on April 19, 2016, overruling appellant’s objection in full and adopting the magistrate’s decision in its entirety. The court entered judgment in favor of appellant for actual damages of $127.50 and for punitive damages in the amount of $5,000.00. The court also noted that appellant did not provide the court with a transcript of the evidence submitted to the magistrate pursuant to Civ.R. 53(D)(3)(b). {¶7} Appellant filed a timely notice of appeal from the April 19, 2016 judgment. {¶8} On appeal, appellant assigns a single assignment of error: {¶9} “The trial court erred in adopting and affirming the Magistrate’s Decision in its entirety.” {¶10} Appellant argues the trial court should not have overruled her objection to the magistrate’s decision and that she was not required to provide a transcript “where the nature of [her] objection is ‘legal,’ without regard for any factual findings.” Appellant argues the magistrate found appellant suffered emotional, noneconomic harm but failed to appropriately apply the law because, although appellant was awarded special damages for her lost wages, she was not awarded general damages for the noneconomic harm associated with her claim. {¶11} We review a trial court’s determination to adopt a magistrate’s decision for an abuse of discretion. In re Guardianship of Salaben, 11th Dist. Ashtabula No. 2008- A-0037, 2008-Ohio-6989, ¶39 (citations omitted). An abuse of discretion implies the trial court acted in a way that was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983) (citations omitted). {¶12} Pursuant to Civ.R. 53(D)(3)(b)(iii), 3 [a]n objection to a factual finding, whether or not specifically designated as a finding of fact under Civ.R. 53(D)(3)(a)(ii), shall be supported by a transcript of all the evidence submitted to the magistrate relevant to that finding or an affidavit of that evidence if a transcript is not available. “‘Without a transcript of the hearing, [a] trial court [is] required to accept all of the magistrate’s findings of fact as true and only review the magistrate’s conclusions of law based upon the accepted findings of fact. It follows that [the appellate court] must do the same.’” Stewart v. Hickory Hills Apts., 9th Dist. Medina No. 14CA0038-M, 2015-Ohio- 5046, ¶11, quoting Walker v. Lou Restoration, 9th Dist. Summit No. 26236, 2012-Ohio- 4031, ¶6 (internal citations omitted). Pursuant to Civ.R. 53(D)(3)(a)(ii), a magistrate’s decision “may be general unless findings of fact and conclusions of law are timely requested by a party or otherwise required by law.” {¶13} In the present case, although the magistrate’s decision did not include findings of fact and conclusions of law, the magistrate did analyze the applicable law and summarize some of the evidence of damages apparently presented by appellant at the hearing held before the magistrate. Appellant objected to the magistrate’s decision, but failed to file a transcript of the proceedings before the magistrate. As such, in considering appellant’s objections to the magistrate’s decision, the trial court was limited to reviewing the general decision of the magistrate and the court file. The trial court properly noted appellant’s failure to file a transcript and the requirement that it accept as fact the evidence summarized in the magistrate’s decision. This court is equally limited in our review. {¶14} Appellant is appealing an order pertaining to the damages awarded to her following a default judgment in her favor. The standard of review as to a challenge to 4 an award of damages is whether the trial court abused its discretion in its determination of damages. Reitz v. Giltz & Assocs., 11th Dist. Trumbull No. 2005-T-0126, 2006-Ohio- 4175, ¶28 (citations omitted). {¶15} The tort of invasion of privacy protects a mental interest, rather than an economic or pecuniary one. LeCrone v. Ohio Bell Tel. Co., 120 Ohio App. 129, 131 (10th Dist.1963). To recover for invasion of privacy, “[a]ctual damage is not necessary. Proof of the unjustified invasion entitles the plaintiff to at least nominal damages, and the [trier of fact] may award substantial damages. Special pecuniary loss as well as punitive damages may be recovered if pleaded and proved.” Id. at 131-132; see also Filotei v. Booth Broadcasting, Co., 8th Dist. Cuyahoga No. 43454, 1981 Ohio App. LEXIS 10461, 5 (Dec. 10, 1981) (“[I]t is not necessary to prove actual damages, and * * proof of the unjustified invasion of privacy entitles the plaintiff to at least nominal damages.”). “In an action for invasion of privacy, it is not essential to recovery to allege and prove special damages; if a wrongful invasion of such right is shown, substantial damages for injured feelings and mental anguish alone may be recovered.” Montgomery v. Wiland, 11th Dist. Portage No. 1534, 1985 Ohio App. LEXIS 7304, 6 (Sept. 27, 1985) (citation omitted). {¶16} Upon review of the record and accepting as fact the evidence summarized in the magistrate’s decision, we find the magistrate’s decision reveals a fundamentally flawed legal conclusion. The magistrate found that appellant’s “testimony further revealed damages in the form of shame, humiliation, embarrassment, anger, and other mental and emotional distress.” The magistrate noted appellee attempted to minimize these damages but concluded that “the damages were not as limited as the Defendant 5 argues as the photo was substantially certain to become public knowledge.” As a result, as a matter of law, appellant was entitled to an award of at least some compensatory damage for those enumerated types of harm. {¶17} It appears the magistrate may have intended to incorporate the award for these items into the punitive damage award. However, that is not the purpose of punitive damages. If punitive damages are appropriate, as they were found to be here, the award for punitive damage is to be considered separate from the award for compensatory damage. Punitive damages are intended to punish and deter conduct. See Preston v. Murty, 32 Ohio St.3d 334, 335 (1987). Compensatory damages are intended to compensate and make whole the victim. See Columbus Finance, Inc. v. Howard, 42 Ohio St.2d 178, 184 (1975). {¶18} We also note that, pursuant to R.C. 2315.21(C)(2), “punitive * * damages are not recoverable from a defendant in question in a tort action unless * * * [t]he trier of fact has returned a verdict or has made a determination * * * of the total compensatory damages recoverable by the plaintiff from the defendant.” Additionally, R.C. 2315.21(D)(2)(a) states, in pertinent part, “the court shall not enter judgment for punitive * * * damages in excess of two times the amount of the compensatory damages awarded to the plaintiff from that defendant[.]” Here, the total compensatory damages totaled $127.50 and the punitive damages totaled $5,000.00, well over the limitation contained in the statute. Therefore, as it stands, appellant’s award of punitive damages exceeds the amount permitted by law. {¶19} The trial court erred in adopting the magistrate’s decision where the decision made a finding that appellant was damaged but did not award any general 6 compensatory, or even nominal, damages. Appellant’s sole assignment of error is with merit. {¶20} The decision of the Trumbull County Court of Common Pleas is reversed, and this matter is remanded to the trial court or, in the discretion of the trial court to the magistrate for an assessment of compensatory damages for those items of harm identified by the magistrate for which no compensatory damage award was made. Based on the total amount of compensatory damages awarded on remand, appellant’s punitive damage award may also require adjustment to comply with R.C. 2315.21(C)(2). CYNTHIA WESTCOTT RICE, P.J., COLLEEN MARY O’TOOLE, J., concur. 7	{ "pile_set_name": "FreeLaw" }
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-01-00660-CR Stephens Stratton Sheldon, Appellant v. The State of Texas, Appellee FROM THE DISTRICT COURT OF TRAVIS COUNTY, 299TH JUDICIAL DISTRICT NO. 9014100, HONORABLE JON N. WISSER, JUDGE PRESIDING OPINION Appellant Stephens Stratton Sheldon, the operator of a vehicle involved in an accident resulting in the injury and death of a person, was convicted of failing to stop and of failing to render reasonable assistance to the injured person. See Tex. Transp. Code Ann. '' 550.021, .023 (West 1999).1 The trial court assessed appellant=s punishment, enhanced by a prior felony 1 ' 550.021. Accident Involving Personal Injury or Death (a) The operator of a vehicle involved in an accident resulting in injury to or death of a person shall: (1) immediately stop the vehicle at the scene of the accident or as close to the scene as possible; (2) immediately return to the scene of the accident if the vehicle is not stopped at the scene of the accident; and (3) remain at the scene of the accident until the operator complies with the requirements of Section 550.023. (b) An operator of a vehicle required to stop the vehicle by Subsection (a) shall do so without obstructing traffic more than is necessary. 2 (c) A person commits an offense if the person does not stop or does not comply with the requirements of this section. Tex. Transp. Code Ann. ' 550.021 (West 1999). ' 550.023. Duty to Give Information and Render Aid The operator of a vehicle involved in an accident resulting in the injury or death of a person or damage to a vehicle that is driven or attended by a person shall: (1) give the operator=s name and address, the registration number of the vehicle the operator was driving, and the name of the operator=s motor 3 conviction, at imprisonment for fourteen years. On appeal, appellant asserts that the statute under which he was convicted is unconstitutional, the evidence is factually insufficient to support his conviction, and the trial court erred in assessing punishment. We will affirm the judgment. vehicle liability insurer to any person injured or the operator or occupant of or person attending a vehicle involved in the collision; (2) if requested and available, show the operator=s driver=s license to a person described by Subdivision (1); and (3) provide any person injured in the accident reasonable assistance, including transporting or making arrangements for transporting the person to a physician or hospital for medical treatment if it is apparent that treatment is necessary, or if the injured person requests the transportation. Id. ' 550.023. 4 In points of error two, three, and four, appellant urges that section 550.021 of the transportation code is unconstitutional on its face and as applied because the phrases Ainvolved in an accident,@ Aimmediately,@ and Aat the scene of the accident@ are impermissibly vague. Questions involving constitutionality of a statute upon which a defendant=s conviction is based should be addressed by appellate courts, even when such issues are raised for the first time on appeal. Holberg v. State, 38 S.W.3d 137, 139 n.7 (Tex. Crim. App. 2000); Rabb v. State, 730 S.W.2d 751, 752 (Tex. Crim. App. 1987). However, a contention that a statute is unconstitutional as applied to an accused because of vagueness and uncertainty must be asserted in the trial court or it is waived. See Curry v. State, 910 S.W.2d 490, 496 (Tex. Crim. App. 1995); Bader v. State, 15 S.W.3d 599, 603 (Tex. App.CAustin 2000, pet. ref=d); State v. West, 20 S.W.3d 867, 873 (Tex. App.CDallas 2000, pet. ref=d). Here, appellant concedes that his claim that the statute is unconstitutional is raised for the first time on appeal. Therefore, we will consider only the facial constitutionality of the statute. See Battles v. State, 45 S.W.3d 694, 702-03 (Tex. App.CTyler 2001, no pet.). 5 When as in this case First Amendment rights are not implicated, a criminal statute is unconstitutionally vague unless it gives a person of ordinary intelligence reasonable notice of what is prohibited or required and establishes determinate guidelines for law enforcement officers. See Grayned v. Rockford, 408 U.S. 104, 108-09 (1972); Papachristou v. City of Jacksonville, 405 U.S. 156, 168 (1972); Sanchez v. State, 995 S.W.2d 677, 689 (Tex. Crim. App. 1999); Long v. State, 931 S.W.2d 285, 287 (Tex. Crim. App. 1996); State v. Markovich, 34 S.W.3d 21, 25 (Tex. App.CAustin 2000), aff=d, 77 S.W.3d 274 (Tex. Crim. App. 2000); State v. Wofford, 34 S.W.3d 671, 678-79 (Tex. App.CAustin 2000, no pet.). We will uphold a statute if we can determine a reasonable construction that will render it constitutional and carry out legislative intent. See Ely v. State, 582 S.W.2d 416, 419 (Tex. Crim. App. 1979). A statute is not vague because the words used in the statute are not specifically defined. See Ahearn v. State, 588 S.W.2d 327, 338 (Tex. Crim. App. 1979); Floyd v. State, 575 S.W.2d 21, 23 (Tex. Crim. App. 1978). The terms Aaccident,@ Aimmediately,@ and Ascene@ are not defined by the transportation code or the penal code. Terms not defined in a statute are to be given their plain and ordinary meaning. Floyd, 575 S.W.2d at 23. Words defined in dictionaries and with meanings so well known as to be understood by a person of ordinary intelligence are not considered vague and indefinite. Id.; Powell v. State, 538 S.W.2d 617, 619 (Tex. Crim. App. 1976). 6 The definitions and common usage of the words Aaccident,@ Aimmediately,@ and Ascene@ are found in the Merriam Webster and the Random House dictionaries. AAccident@ may be defined as an unforeseen, unplanned event or condition. Webster=s Third New International Dictionary 11 (Philip B. Gove ed., 1961). AAccident@ is also defined as an undesirable or unfortunate happening, unintentionally caused and usually resulting in harm, injury, damage, or loss; a casualty; a mishap. The Random House Dictionary of the English Language 9 (unabridged, Jess Stein ed., 1979). AImmediately@ may be defined as without interval of time, without delay. Webster=s at 1129. AImmediately@ is also defined as without lapse of time; without delay; instantly; at once. Random House at 712. AScene@ may be defined as the place of occurrence or event. Webster=s at 2020. AScene@ is also defined as the place where some action or event occurs. Random House at 1276. The terms Aaccident,@ Aimmediately,@2 and Ascene@Cas used in the statuteC have plain ordinary meanings that may be understood by a person of ordinary intelligence and cannot be considered vague and indefinite. In this case, First Amendment rights are not implicated. Section 550.021 of the transportation code gives a person of ordinary intelligence reasonable notice of what is required and prohibited, and it establishes determinate guidelines for law enforcement officers. We hold that appellant=s contention that the statute is unconstitutionally vague is without merit. 3 Points of error two, three, and four are overruled. 2 Appellant cites Guerra v. State, 234 S.W.2d 866 (Tex. Crim. App. 1950), in support of his argument that the term Aimmediately@ is vague and indefinite. The court there held: We are therefore constrained to hold that Art. 226, P.C., construed in connection with Art. 3028, R.C.S., as amended, offends against Art. 7, P.C., wherein it is provided that Ano person shall be punished for an offense which is not made penal by the plain import of the words of a law.@ 7 In his first point of error, appellant asserts that the evidence is factually insufficient to prove that he was Ainvolved in an accident.@ Appellant argues that the Aoverwhelming weight of the And if valid, delivery of the box within 5 days, the time provided for delivery of the returns, would not constitute a violation of the criminal statute requiring the ballots to be securely boxed Aimmediately,@ and the boxes, with the contents and accompanying Acopy of the report of the returns@ delivered to the county clerk Aimmediately.@ Id. at 869. We note that in the present case appellant never returned to the scene of the accident. 3 Examples of terms held not vague and indefinite: AProstitution enterprise,@ Floyd v. State, 575 S.W.2d 21, 23 (Tex. Crim. App. 1978); Aprobability,@ Granviel v. State, 552 S.W.2d 107, 117 (Tex. Crim. App. 1976); Aan act of violence or threatened violence to a person or property,@ Powell v. State, 538 S.W.2d 617, 619 (Tex. Crim. App. 1976); Asignal to stop,@ Stein v. State, 515 S.W.2d 104, 108 (Tex. Crim. App. 1974); Amoderate restraint or correction,@ Nabors v. State, 508 S.W.2d 650, 651 (Tex. Crim. App. 1974); Aedible meat,@ Sanford v. State, 492 S.W.2d 581, 582 (Tex. Crim. App. 1973); Asolicitation,@ Page v. State, 492 S.W.2d 573, 575 (Tex. Crim. App. 1973); Aserious physical deficiency,@ Ahearn v. State, 588 S.W.2d 327, 338 (Tex. Crim. App. 1979). 8 evidence shows that [he], as the operator of a motor vehicle, was not involved in an accident as contemplated by ' 550.021 of the transportation code.@ Specifically, appellant argues that L.L.=s death was caused by her own intentional act of jumping out of the moving vehicle and that because her death was not caused by a collision, the State failed to show appellant was involved in an Aaccident@ that required him to stop and render assistance to L.L. as provided by the transportation code. Section 550.021 of the transportation code provides in relevant part that the operator of a vehicle involved in an accident resulting in injury to or death of a person shall: (1) immediately stop the vehicle at the scene of the accident or as close to the scene as possible; (2) immediately return to the scene of the accident if the vehicle is not stopped at the scene of the accident; and (3) remain at the scene of the accident until the operator complies with the requirements of section 550.023. Section 550.023, in relevant part, provides that the operator of a vehicle involved in an accident resulting in the injury or death of a person shall provide any person injured in the accident reasonable assistance, including transporting or making arrangements for transporting the person to a physician or hospital for medical treatment if it is apparent that treatment is necessary, or if the injured person requests transportation. It was alleged that appellant, while driving a motor vehicle on a public road, was involved in an accident resulting in the injury and death of L.L., and that appellant intentionally failed to stop and failed to render reasonable assistance to L.L. when it was apparent that her injuries required medical treatment. In determining factual sufficiency of the evidence, the reviewing court must consider and take a neutral view of all of the evidence, reversing the judgment if (1) the evidence 9 demonstrates that the proof of guilt is so obviously weak as to undermine confidence in the fact finder=s determination, or (2) the proof of guilt, although adequate if taken alone, is greatly outweighed by contrary proof. See Johnson v. State, 23 S.W.3d 1, 11 (Tex. Crim. App. 2000). Appellant has framed his first point of error as one of sufficiency of the evidence; however, appellant=s argument has narrowed the issue presented to his claim that no Aaccident@ occurred; therefore, he contends the evidence could not be factually sufficient to prove his guilt of the charged offense. We have already held that the term Aaccident@ as used in the statute is not unconstitutionally vague. We must now decide whether appellant was Ainvolved in an accident@ within the meaning of the transportation code provisions. The evidence shows that appellant was having an affair with L.L., who was a dancer at Agentlemen=s clubs@ in Austin. Just before midnight on July 16, 2000, appellant was driving L.L. to her apartment. They became embroiled in an argument about an incident between L.L. and a man at the club where she was then working. Appellant told L.L. that he was going to stop seeing her because she worked at that club. L.L. told appellant that she was going to jump out of the vehicle and kill herself. L.L. then jumped from the moving vehicle, suffering a brain injury that caused her death. Appellant stopped and backed up; when he saw another motorist stop and approach L.L., appellant drove away from the scene. Appellant drove to a gasoline station one-half of a block away where he watched police and emergency personnel investigating and attempting to aid L.L. During this time, appellant who was in possession of L.L.=s cell phone, received a call from her friend, L.M. Appellant told L.M. what had happened. L.M. then came to the scene of the accident. She assisted one of the police officers in placing a call to appellant. Appellant told the officer what had happened. 10 The officer tried to persuade appellant to return to the scene, but appellant would not do so. Appellant was later arrested and charged with the offense of which he has been convicted. Our attention has been directed to only one reported decision in this state in which the facts are somewhat similar to those in this case. See Rivas v. State, 787 S.W.2d 113 (Tex. App.CDallas 1990, no pet.). Rivas was driving an automobile containing both a front and back seat passenger. Id. at 114. Rivas= car was approaching a railroad crossing when warning lights and bells were activated. Rivas decided that he could beat the approaching train across the tracks. Id. As the car approached the crossing, the front seat passenger, apparently out of fear of a collision, jumped out of the car. Id. Rivas= car passed through the crossing unscathed. Id. However, either as a result of hitting the train tracks or the train, the front seat passenger died. Id. Rivas stopped the car, examined the body, and left the scene. Id. The Dallas Court found that Rivas was Ainvolved in an accident@ and affirmed his conviction for failing to stop and render aid to his passenger. A number of states have statutes that are almost identical to the Texas statutes here in question. The courts in those states have reviewed appeals where the facts were very similar to the facts in this case. Those courts have held that an Aaccident@ has occurred in circumstances other than a collision between the driver=s vehicle and another vehicle or person. Also, they have held that an Aaccident@ may result from the intentional conduct of either or both the driver and the injured person. While not controlling, these cases from other jurisdictions provide instruction and guidance. In an Iowa case, the defendant=s inebriated girlfriend jumped from the moving vehicle that the defendant was driving; the defendant failed to seek medical assistance for her and she died from the head injury she had sustained. See State v. Carpenter, 334 N.W.2d 137, 138-39 (Iowa 1983). 11 The Iowa Supreme Court, in construing the Iowa statute similar to the Texas statute, held the words Ainvolved@ and Aaccident@ were not unconstitutionally vague. Further, it held that an Aaccident@ within the meaning of the statute did not require a collision between the driver=s vehicle and another vehicle or person. Id. at 140. The court stated that the driver of a moving vehicle from which a person jumps and is injured should have no doubt that he is the driver of a vehicle involved in an Aaccident@ within the meaning of the statutes. Id. at 140. In an Arizona case, the defendant was charged with leaving the scene of an accident involving death or serious physical injury. Arizona v. Rodgers, 909 P.2d 445 (Ariz. App. 1995). The passenger in a moving vehicle opened the door and jumped out following an argument with the defendant. She suffered a head injury upon impact with the roadway and, while lying prone in the middle of the road, was run over by a second vehicle. Although the defendant was aware his passenger had jumped from the vehicle, he did not stop at or near the scene and failed to render assistance. Soon thereafter, he picked up an acquaintance and drove past the scene, but did not stop. The passenger died of injuries sustained either in the fall or as a result of impact with the second vehicle. The reviewing court held the defendant was involved in a vehicular Aaccident@ when his passenger leapt from his car, and that he violated the law by failing to remain at, or return to, the scene to identify himself and render any necessary assistance. Id. at 449. The court pointed out that the word Aaccident@ was not defined in the statute and that no court had defined the word within the meaning of the statute. Consequently, Aaccident@ was construed according to its common usage. Id. at 447. 12 The Alaska Court of Appeals rejected a defendant=s claim that he had not committed an offense because he was not involved in an accident when his wife died from injuries that she sustained after she had intentionally jumped from a vehicle that the defendant was driving. See Wylie v. Alaska, 797 P.2d 651, 655 (Alaska App. 1990). The Washington Court of Appeals held that incidents arising out of the intentional conduct of either the driver or the injured party or both was included within the meaning of Aaccident@ as used in the Washington statute. See Washington v. Silva, 24 P.3d 477, 480 (Wash. App. 2001). Where hitch-hikers were injured in a fall from a truck bumper, the Virginia Court of Appeals held that the truck driver had a statutory duty to stop and render reasonable assistance to those injured because the incident was an Aaccident,@ even though no collision occurred and the injured parties were not struck by the truck. Smith v. Virginia, 379 S.W.2d 374, 375-77 (Va. App. 1989). A New York woman intentionally jumped from a moving vehile and fractured her skull; the reviewing court held that her death resulted from an Aaccident@ within the meaning of that term as used by the New York Vehicle and Traffic Law. See People v. Slocum, 492 N.Y.S.2d 159, 160 (N.Y. 1985). A defendant was convicted of failing to stop and report an accident as required by the California Vehicle Code; the passenger suddenly jumped from the defendant=s moving vehicle. See People v. Kroncke, 83 Cal. Rptr. 2d 493, 495-96 (Cal. App. 1999). The reviewing court rejected the defendant=s contention that no Aaccident@ had occurred. Id. at 501. 13 Although L.L. intentionally jumped from the moving vehicle appellant was driving, we conclude that appellant was involved in an Aaccident@ within the meaning of that word as used in the applicable provisions of the Texas Transportation Code. The evidence, which we have summarized, shows that while driving a motor vehicle, appellant was involved in an accident resulting in L.L.=s injury and death, and appellant intentionally failed to stop and failed to render reasonable assistance to L.L. when it was apparent that her injuries required medical treatment. Applying the factual sufficiency standard, we conclude that the evidence is not so obviously weak as to undermine confidence in the jury=s verdict and that the proof of guilt is not greatly outweighed by contrary proof. Appellant=s first point of error is overruled. In his fifth point of error, appellant urges that the transportation code did not Aplace a duty on [him] to render aid under the facts of this case.@ Appellant argues that the Texas Court of Criminal Appeals has held that a person should not be prosecuted for failing to do for the injured party what others have done. Appellant cites Bowden v. State, 361 S.W.2d 207, 208 (Tex. Crim. App. 1962). Bowden is factually distinguishable from this case.4 We do not believe that the provisions of sections 550.021 and 550.023 of the transportation code were meant to relieve a defendant of his duties under those statutes when a stranger may voluntarily render assistance to the injured person. Certainly, the legislature could not have intended such a defense for a person who as here, flees from the scene leaving the injured person on the highway at night. Moreover, here 4 In Bowden, the accident occurred at the driveway of the injured person=s home. The victim=s husband was at the scene of the accident and told Bowden to stay there until the officers arrived. The husband immediately placed his wife in his car to take her to the hospital. Bowden v. State, 361 S.W.2d 207, 208 (Tex. Crim. App. 1962). 14 appellant was charged with violating the statute in two separate ways. See Morris v. State, 786 S.W.2d 451, 457 (Tex. App.CDallas 1990, pet. ref=d). Appellant was charged with not stopping and leaving the scene of the accident and also with failing to render reasonable assistance to L.L. Proof of either would support appellant=s conviction. When alternative means of violating a statute are alleged, the conviction will stand if the evidence supports any of the theories alleged. See Rosales v. State, 4 S.W.3d 228, 231 (Tex. Crim. App. 1999); Kitchens v. State, 823 S.W.2d 256, 259 (Tex. Crim. App. 1991); Brandon v. State, 599 S.W.2d 567, 577 (Tex. Crim. App. 1979); St. Clair v. State, 26 S.W.3d 89, 99 (Tex. App.CWaco 2000, pet. ref=d). Appellant=s fifth point of error is overruled. In his sixth point of error, appellant contends that in assessing punishment the trial court erroneously considered and faulted him for exercising his Sixth Amendment rights. At the punishment hearing, the trial court found that appellant had previously been convicted of the felony offense alleged for enhancement of punishment. The State asked the court to assess the maximum punishment of imprisonment for twenty years. The court assessed punishment of imprisonment for fourteen years. In the punishment hearing, the State offered the testimony of nine witnesses. Appellant testified in his own behalf and offered the testimony of his mother and his wife. After hearing the testimony of the twelve witnesses, considering documentary evidence, and hearing argument of counsel, the court made an exhaustive analysis of the evidence and stated reasons for the assessment of punishment. The court first noted that appellant made the Acourt=s attempts to view him with empathy exceedingly difficult . . . the case is replete with [appellant] not telling the truth, lying, leading . . . a double life . . . every opportunity he has had to express contrition or remorse he 15 never does.@ Appellant=s probation in the prior felony case and in a misdemeanor case had been revoked. Appellant had three prior misdemeanor convictions for assault and two for theft. Appellant had fathered a son out of wedlock for whom he had not been ordered to pay child support. Appellant had stolen from his former employer the vehicle he was driving when L.L. jumped to her death. The court commented, A[T]his is pretty close to a decade of continuing to violate the law.@5 The trial court=s language noting appellant not pleading guilty to the charged offense and not pleading true to the enhancement paragraph of the indictment is bothersome and should not have been used. However, from our review of the whole record, we do not believe that the trial court=s assessment of punishment was in any way influenced by appellant=s exercise of his constitutional rights. Appellant=s sixth point of error is overruled. The judgment is affirmed. __________________________________________ Carl E. F. Dally, Justice Before Justices Puryear, Dally* and Aboussie * Affirmed 5 One of the State=s witnesses testified that she had taken appellant into her home when he was having great difficulty with his family. She came to like and trust appellant. Later, when she had to be away from her home for two weeks, she left appellant to care for her property. Appellant stole and used her ATM card and systematically depleted her bank account obtaining more than $4,000. Appellant was convicted of that offense and granted probation. 16 Filed: January 30, 2003 Publish * Before Carl E. F. Dally, Judge (retired), Court of Criminal Appeals, sitting by assignment. See Tex. Gov=t Code Ann. ' 74.003(b) (West 1998). * Before Marilyn Aboussie, Chief Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov=t Code Ann. ' 74.003(b) (West 1998). 17	{ "pile_set_name": "FreeLaw" }
GLD-413 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ___________ No. 13-3348 ___________ In re: JOHN T. PICKERING-GEORGE, Petitioner ____________________________________ Petition for Writ of Mandamus from the District Court of the Virgin Islands (Related to D.V.I. Civil No. 10-cv-00079) ____________________________________ Submitted Pursuant to Rule 21, Fed. R. App. P. August 29, 2013 Before: FUENTES, FISHER and VANASKIE, Circuit Judges (Opinion filed: September 10, 2013) _________ OPINION _________ PER CURIAM John Pickering-George has filed a petition for a writ of mandamus. It is difficult to discern what he is requesting, but it appears that he is complaining about the failure of the District Court of the Virgin Islands to respond to his motion for subpoenas. For the following reasons, we will deny the petition. In July 2010, Pickering-George initiated an action in the District Court of the Virgin Islands. See Pickering-George v. Dowdye, et al., No. 10-cv-00079. The nature of Pickering-George’s action was unclear, but the District Court construed it as seeking a certificate of adoption from the Virgin Islands Office of Vital Statistics. By order entered September 17, 2012, the District Court dismissed Pickering-George’s claims as to certain defendants and on December 6, 2012, the District Court dismissed the remainder of the claims for lack of subject matter jurisdiction. Thereafter, Pickering-George filed several motions, which the District Court interpreted as motions for reconsideration. One of the motions was captioned “Ex Parte Motion for Service of Subpoenas . . .” It sought the issuance of subpoenas of unidentified documents. The District Court concluded that any request for subpoenas was moot in light of its dismissal of all of the claims and denied the motion to the extent that it sought reconsideration of the September 17, 2012 and December 6, 2012 orders. Thus, by order entered July 1, 2013, the District Court responded to Pickering-George’s motion for subpoenas. Accordingly, to the extent Pickering-George seeks an order directing the District Court to rule on his motion for subpoenas, we will deny the mandamus petition as moot. To the extent he seeks additional relief via mandamus, we will deny the petition. Pickering-George has filed several motions in this Court, including an “emergency motion” for stay or injunction pending appeal. These motions refer to Pickering- George’s action in the District Court of Delaware, Pickering-George v. United States Attorneys’ Offices, et al., No. 13-cv-00126, which was dismissed as malicious by order entered May 7, 2013.1 There being no basis for relief here, Pickering-George’s 1 The District Court denied the motion for reconsideration and Pickering-George filed a notice of appeal. That appeal is not at issue here. 2 outstanding motions are denied. 3	{ "pile_set_name": "FreeLaw" }
89 F.3d 1510 FEDERAL DEPOSIT INSURANCE CORPORATION, as manager of theFederal Savings and Loan Insurance CorporationResolution Fund, Plaintiff-Appellant,Cross-Appellee,v.Angelique O. STAHL, Ralph F. Cheplak, Defendants-Appellees,Cross-Appellants,Ross P. Beckerman, W. George Allen, Defendants-Appellees,Ira C. Hatch, Jr., Allen E. Baer, Ronald M. Bergeron, Sr., Defendants. No. 94-4684. United States Court of Appeals,Eleventh Circuit. Aug. 2, 1996. Kathleen V. Gunning, Washington, DC, Jorge L. Guerra, Miami, FL, for appellant. Michael Hursey, Ft. Lauderdale, FL, Joseph De Maria, Miami, FL, for appellees. Laura K. Wendell, Miami, FL, W. George Allen, Virginia Stow, Ft. Lauderdale, FL, for Stahl and Cheplak. Appeals from the United States District Court for the Southern District of Florida. Before HATCHETT and BLACK, Circuit Judges, and CLARK, Senior Circuit Judge. BLACK, Circuit Judge: 1 The Federal Deposit Insurance Corporation (FDIC) filed this action against former officers and directors of Broward Federal Savings and Loan Association (Broward), alleging, inter alia, negligence in relation to seven target loans approved by the directors. Defendants filed a motion to dismiss, and also moved for summary judgment contending that the FDIC's claims with respect to all seven, or alternatively, two, of the target loans were time-barred. These motions were denied. 2 The case proceeded to trial against four directors: Angelique Stahl, Ralph Cheplak, Ross Beckerman and W. George Allen.1 Following trial, the jury entered a general verdict in the amount of $18.6 million in favor of the FDIC against Stahl and Cheplak, and returned no liability verdicts for Beckerman and Allen. Thereafter, the district court entered an order setting aside the jury verdict as to Stahl and Cheplak and, in the alternative, conditionally granting them a new trial on the grounds that the FDIC presented incompetent evidence and made a prejudicial closing argument at trial. 3 The district court subsequently entered a "take-nothing" judgment in favor of all four directors from which the FDIC now appeals.2 Stahl and Cheplak cross-appeal on the bases that the district court both improperly instructed the jury that an ordinary negligence standard of care governed the actions of the directors, and erred in denying summary judgment when claims relating to two of the target loans were time-barred. We affirm the district court's judgment as to all claims except those of the FDIC contending that the district court erred in setting aside the jury verdict as to Stahl and Cheplak and, in the alternative, conditionally granting them a new trial. We reverse the judgment as to those claims and remand the case for further proceedings. I. BACKGROUND3 4 Broward was a savings and loan association which opened in 1978. Stahl, who had no banking experience, served as chairman of the board, and Allen and Beckerman served as directors. Later, Broward promoted Stahl to the position of chief executive officer and hired Cheplak, who had limited lending experience, as its president. Stahl and Cheplak approved, and the board ratified, the seven loans at issue in this case. 5 Federal regulators warned Broward in 1983 of the risks associated with the rapid growth strategy it had adopted. Broward was paying high interest rates in order to attract depositors, but such growth placed pressure on the institution to reinvest these funds in high-yield assets such as commercial real estate loans in order to cover costs. In rapidly expanding its real estate loan portfolio, Broward made a large volume of risky loans. 6 The Federal Home Loan Bank Board (FHLBB), the federal agency which regulated thrifts, periodically reviewed Broward's financial condition to ensure compliance with FHLBB regulations and policies. Roslyn Hess, an examiner with over 13 years' experience, and Debra Paradice, an agent with 19 years' experience, began their regulatory oversight of Broward in 1983. Based on 1982 and 1983 reviews of a number of Broward's major loans, federal regulators found deficiencies in its loan underwriting and appraisal procedures. 7 In 1984, these deficiencies worsened. Consequently, the federal regulators required Broward's board to execute a Supervisory Agreement promising to take action to eliminate the weaknesses. The Supervisory Agreement provided that before extending credit, Broward would take certain precautions.4 Thereafter, the Broward board adopted new lending guidelines and policies as set out in the Supervisory Agreement. 8 In addition to the regulatory problems, internal audit reports also revealed deficiencies in Broward's lending practices. Even Beckerman acknowledged these underwriting deficiencies in a letter to Stahl dated July 1985. In October 1985, MCS Associates, a thrift consulting firm, reviewed the lending policies Broward adopted with the execution of the Supervisory Agreement. MCS noted that Broward's policies would be successful if implemented, but did not review Broward's actual lending practices. The managing director of MCS, D. James Croft, discovered that Broward had made several loans after the Supervisory Agreement had been executed but before the new policies were actually implemented which violated both the agreement and the new loan procedures. Croft concluded Broward was not prepared to make those loans at that time, and exposed itself to a high degree of risk by doing so. 9 Six of the loans at issue in this case were made after the Supervisory Agreement was executed. Hess reviewed these loans and found numerous violations of prudent loan practices, the Supervisory Agreement and Broward's new lending policies.5 Hess did not review one of the seven loans in this lawsuit, but as approved it was not expected to produce positive cash flow for five years and required a $1.6 million interest/loss reserve. On November 15, 1985, the FHLBB concluded that Broward was insolvent, in part due to loan losses. Broward lost approximately $34 million on the seven loans which the FDIC sought to recover in this action.6 II. ISSUES PRESENTED 10 There are four issues raised by the parties in this appeal/cross-appeal which merit our consideration: (1) whether the district court erred in determining that an ordinary care standard governed the actions of the directors; (2) whether the district court erred in entering judgment for Stahl and Cheplak notwithstanding the verdict; (3) whether the district court erred in conditionally granting Stahl and Cheplak a new trial on the bases of the FDIC's use of incompetent evidence and prejudicial closing argument; and (4) whether Stahl and Cheplak are entitled to a new trial on the ground that claims relating to two of the target loans were barred by the statute of limitations.III. STANDARD OF REVIEW 11 In reviewing a judgment as a matter of law, we apply the same standard as the district court in deciding the motion. Miles v. Tennessee River Pulp and Paper Co., 862 F.2d 1525, 1528 (11th Cir.1989). A judgment notwithstanding the verdict (JNOV) should only be entered if, in viewing all the evidence and construing all inferences in a light most favorable to the nonmoving party, the court finds no reasonable juror could have reached the verdict returned. Id.; Rosenfield v. Wellington Leisure Prods., Inc., 827 F.2d 1493, 1494-95 (11th Cir.1987) (quoting Reynolds v. CLP Corp., 812 F.2d 671, 674 (11th Cir.1987)). 12 A ruling on a motion for a new trial is generally reviewable for abuse of discretion. Rosenfield, 827 F.2d at 1498 (citing Conway v. Chemical Leaman Tank Lines, Inc., 610 F.2d 360, 362 (5th Cir.1980)). When a new trial is granted, however, we employ a more stringent application of the same standard. Jackson v. Pleasant Grove Health Care Ctr., 980 F.2d 692, 695 (11th Cir.1993) (citing Hewitt v. B.F. Goodrich Co., 732 F.2d 1554, 1556 (11th Cir.1984)). IV. DISCUSSION A. Standard of care7 13 The threshold question in this case is what standard of care governed the actions of the directors. The FDIC argues the district court properly instructed the jury that the applicable standard of care under Florida law at the time of the alleged misconduct was ordinary or reasonable care, but mischaracterized the requirements of the due care standard in setting aside the jury verdict. Stahl and Cheplak counter that only federal law should have dictated the standard of liability for the directors, which, they argue, would have imposed a gross negligence burden of proof upon the FDIC. On this basis, Stahl and Cheplak contend a new trial is warranted. Stahl and Cheplak argue in the alternative that even if it was proper to utilize Florida law establishing a simple negligence standard of liability, Florida's business judgment rule (BJR) still elevates the standard to the level of gross negligence. In this scenario, Stahl and Cheplak maintain the FDIC failed to overcome the protection afforded to directors under the BJR, and contend the district court's judgment as a matter of law should therefore be affirmed. In our analysis, we will first determine whether federal or state law governs the standard of care for director liability. Then we will examine what interplay the BJR has, if any, in relation to the appropriate standard. 14 Stahl and Cheplak contend the FDIC's claims against the directors in this case are governed by federal law dictating a gross negligence standard of director liability. Their argument is best viewed in a streamlined, step-by-step fashion. First, Stahl and Cheplak note that Broward was a federally chartered, regulated, and insured savings and loan association. Second, they contend that the Home Owners' Loan Act (HOLA)8 dictates that all federal banking law preempts state law with respect to federal institutions. Finally, they argue § 212(k) of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), 12 U.S.C. § 1821(k) (1994), established a gross negligence standard governing the actions of directors. Combining these three elements, Stahl and Cheplak reason that federal banking law preempts state law under HOLA, and therefore a gross negligence standard should be used to establish the FDIC's burden of proof pursuant to § 1821(k).9 15 Stahl and Cheplak cite Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982), in support of their argument that pursuant to HOLA, only federal law governs the standard of care for the directors in this case. In de la Cuesta, the Supreme Court held that a state statute directly in conflict with an FHLBB regulation was preempted, finding the federal regulation "was meant to pre-empt conflicting state limitations...." 458 U.S. at 159, 102 S.Ct. at 3025. Against this background, we examine § 1821(k), which states in relevant part: 16 A director or officer of an insured depository institution may be held personally liable ... for gross negligence ... as such terms are defined and determined under applicable State law. Nothing in this paragraph shall impair or affect any right of the Corporation under other applicable law. 17 12 U.S.C. § 1821(k). 18 While § 1821(k) provides that a director may be held liable for gross negligence, the FDIC contends that Congress enacted the last sentence of the statute to permit courts to decide whether to apply state law to federally chartered financial institutions. We reach the same conclusion. That is, we find that the "saving language" in the last sentence of the statute enables claims under "other applicable law," i.e., state law for simple negligence, to survive the enactment of FIRREA. Indeed, the Supreme Court in de la Cuesta specifically declined to hold that federal regulations would preempt all state laws, de la Cuesta, 458 U.S. at 159 n. 14, 102 S.Ct. at 3025 n. 14, and Stahl and Cheplak themselves concede courts have not found that federal law occupies the entire field in the regulation of federal thrifts under HOLA.10 19 The Supreme Court has clearly held that because of federalism concerns, greater evidence of congressional intent is required to preempt state law than federal common law. City of Milwaukee v. Illinois and Michigan, 451 U.S. 304, 316, 101 S.Ct. 1784, 1792, 68 L.Ed.2d 114 (1981). While Stahl and Cheplak cite cases holding that the gross negligence standard established in § 1821(k) should be used to displace federal common law, see RTC v. Frates, 52 F.3d 295, 296 (10th Cir.1995); RTC v. Miramon, 22 F.3d 1357, 1360 (5th Cir.1994); FDIC v. Bates, 42 F.3d 369, 370 (6th Cir.1994); RTC v. Gallagher, 10 F.3d 416, 425 (7th Cir.1993), the majority of our sister circuits have either specifically declined to reach the question of whether § 1821(k) preempts state common law, see, e.g., Miramon, 22 F.3d at 1359 n. 2; Gallagher, 10 F.3d at 424, or have held it does not. See FDIC v. McSweeney, 976 F.2d 532, 537 (9th Cir.1992), cert. denied, 508 U.S. 950, 113 S.Ct. 2440, 124 L.Ed.2d 658 (1993).11 Frates is particularly illustrative of this distinction. In Frates, the Tenth Circuit held that § 1821(k) supersedes federal common law predicating liability upon simple negligence, while specifically reaffirming its holding in FDIC v. Canfield, 967 F.2d 443, 448 (10th Cir.) (en banc), cert. dismissed, 506 U.S. 993, 113 S.Ct. 516, 121 L.Ed.2d 527 (1992), in which it concluded § 1821(k) does not preempt state law simple negligence claims against directors. Frates, 52 F.3d at 296-97. 20 More specifically, the Canfield and McSweeney courts found that § 1821(k) does not preempt state law establishing a lesser standard of fault than gross negligence. Canfield, 967 F.2d at 447; McSweeney, 976 F.2d at 539. The legislative history of § 1821(k) supports this theory, stating that Congress intended § 1821(k) to preempt the applicability of state insulating statutes which effectively shielded corporate management from personal liability for grossly negligent actions. 135 Cong.Rec. S4278-79 (daily ed. Apr. 19, 1989) (statement of Senator Riegle). Further, while the Supreme Court has determined that § 1821(k) permits claims against directors for gross negligence "regardless of whether state law would require greater culpability," O'Melveny & Myers v. FDIC, --- U.S. ----, ----, 114 S.Ct. 2048, 2054, 129 L.Ed.2d 67 (1994) (emphasis supplied), it has not found Congress also intended to preempt state laws imposing liability upon directors for lesser culpability, i.e., simple negligence. If Congress had intended to establish a uniform gross negligence standard of liability in § 1821(k), it certainly could have done so more clearly. Based upon the above reasoning, we are satisfied that § 1821(k) does not preempt state laws with lesser liability standards than gross negligence. 21 We now must look to the state law that controlled at the time the negligent acts were allegedly committed in order to determine the standard of liability applicable to the directors in this case. The district court instructed the jury that the appropriate standard of care was ordinary negligence, and that due care was an element of Florida's BJR. For the reasons detailed below, we agree. 22 The alleged acts of negligence occurred between October 1984 and January 1986. Prior to 1987, the Florida standard of liability for corporate directors was governed by Fla.Stat. § 607.111(4) (1987). As set forth in International Ins. Co. v. Johns, 685 F.Supp. 1230 (S.D.Fla.1988), aff'd, 874 F.2d 1447 (11th Cir.1989), this standard provided that directors were to perform their duties "in good faith, ... in a manner ... reasonably believe[d] to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances." 685 F.Supp. at 1237 (emphasis supplied) (quoting Fla.Stat. § 607.111(4)). We find Fla.Stat. § 607.111(4), in effect at the time the alleged negligent acts were committed in this case, clearly established an ordinary negligence standard of director liability.12 23 Stahl and Cheplak argue that even if a simple negligence standard of liability prevailed in Florida under Fla.Stat. § 607.111(4) prior to 1987, Florida's BJR elevates such a standard to the level of gross negligence. The BJR has been defined to mean the following: 24 [T]he law will not hold directors liable for honest errors, for mistakes of judgment, when they act without corrupt motive and in good faith.... [I]n order to come within the ambit of the rule, directors must be diligent and careful in performing the duties they have undertaken; they must not act fraudulently, illegally, or oppressively, or in bad faith. 25 Id. at 1238 (emphasis supplied) (quoting 3A Fletcher, Cyclopedia Corporations, § 1039, at 45 (perm. ed. 1986)). 26 In support of their argument, Stahl and Cheplak cite FDIC v. Mintz, 816 F.Supp. 1541 (S.D.Fla.1993), in which the court interpreted the BJR as follows: 27 Although directors must act with diligence and due care (seemingly setting out a simple negligence standard), they are only liable when they 'act fraudulently, illegally, or oppressively, or in bad faith'.... These terms indicate that liability will attach only to acts which constitute gross negligence and intentional conduct. Because courts will not substitute their judgment in place of a corporation's directors, the simple negligence of a director cannot be reviewed.... 28 The result of the application of the [BJR] in Florida is that the standard of liability for corporate directors is 'gross negligence.' 29 816 F.Supp. at 1546 (citations omitted). 30 What the Mintz court has done is completely ignore the threshold requirement of the exercise of ordinary care under Fla.Stat. § 607.111(4) necessary "to come within the ambit of the [BJR]," see Johns, 685 F.Supp. at 1238 (quoting 3A Fletcher, Cyclopedia Corporations, § 1039, at 45 (perm. ed. 1986)), under the premise that courts must not "substitute their judgment" for that of directors. Mintz, 816 F.Supp. at 1546. We are not persuaded by the decision in Mintz. 31 "The [BJR] is a policy of judicial restraint born of the recognition that directors are, in most cases, more qualified to make business decisions than are judges." International Ins. Co. v. Johns, 874 F.2d 1447, 1458 n. 20 (11th Cir.1989). In this light, the BJR may be viewed as a method of preventing a factfinder, in hindsight, from second-guessing the decisions of directors. For directors to be entitled to the cloak of protection of the BJR on the merits of their judgments under pre-1987 Florida law, however, they still must have exercised due care in making them. See Schein v. Caesar's World, Inc., 491 F.2d 17, 18 (5th Cir.) (finding that if directors exercise due care, they then "incur no liability ... for issues ... they resolve through the mere exercise of their business judgment"), cert. denied, 419 U.S. 838, 95 S.Ct. 67, 42 L.Ed.2d 65 (1974);13 AmeriFirst Bank v. Bomar, 757 F.Supp. 1365, 1376 (S.D.Fla.1991) (same). As articulated clearly by the court in Casey v. Woodruff, 49 N.Y.S.2d 625 (N.Y.Sup.Ct.1944): 32 The question is frequently asked, how does the operation of the so-called 'business judgment rule' tie in with the concept of negligence? There is no conflict between the two. When courts say that they will not interfere in matters of business judgment, it is presupposed that judgment--reasonable diligence--has in fact been exercised. A durector [sic] cannot close his eyes to what is going on about him in the conduct of the business of the corporation and have it said that he is exercising business judgment. Courts have properly decided to give directors a wide latitude in the management of the affairs of a corporation provided always that judgment, and that means an honest, unbiased judgment, is reasonable [sic] exercised by them. 33 49 N.Y.S.2d at 643. 34 In accordance with the foregoing rationale, we conclude the district court properly instructed the jury that due care was an element of the BJR. That is, under pre-1987 Florida law, directors must have acted with ordinary care for the BJR to apply. See Johns, 874 F.2d at 1461 & n. 27 (recognizing Florida's pre-1987 ordinary care statute as the basis for applying the BJR). If due care was in fact exercised as required under Fla.Stat. § 607.111(4), directors are protected by the BJR, no matter how poor their business judgment, unless they acted fraudulently, illegally, oppressively, or in bad faith. See id. Said differently, so long as due care was exercised, the BJR protects a "good director" (one who did not act fraudulently, illegally, oppressively, or in bad faith) who made an honest error or mistake in judgment, but not a "bad director" (one who acted fraudulently, illegally, oppressively, or in bad faith) who made a bad decision. 35 Consistent with the above, we hold the application of the BJR in Florida does not require that the FDIC establish gross negligence to sustain its burden in this case. While some courts such as Mintz have held the BJR elevates the simple negligence standard under Fla.Stat. § 607.111(4) to one of gross negligence, Mintz, 816 F.Supp. at 1546; see also In re Southeast Banking Corp., 827 F.Supp. 742, 747 (S.D.Fla.1993) (holding that pre-1987 Florida law establishes a gross negligence standard), rev'd on other grounds, 69 F.3d 1539 (11th Cir.1995), we disagree.14 See FDIC v. Gonzalez-Gorrondona, 833 F.Supp. 1545, 1556 (S.D.Fla.1993) ("[P]rior to July 1, 1987, the law of Florida imposed liability on corporate directors and officers for simple negligence"); FDIC v. Haddad, 778 F.Supp. 1559, 1567 (S.D.Fla.1991) ("Defendants' position that in general there is no cause of action against corporate directors under Florida law for 'simple negligence' is unfounded.") 36 The court-made BJR does not change Florida's pre-1987 statutory simple negligence standard to a gross negligence standard; it merely protects directors who exercised reasonable diligence in the first instance from liability on the merits of their business judgment, unless they acted fraudulently, illegally, oppressively, or in bad faith. Thus, based upon our above conclusion that § 1821(k) does not preempt state law establishing a lesser standard of fault than gross negligence, we hold the district court properly determined that the standard of care governing the actions of the directors in this case was ordinary negligence. Only if the directors met this standard were they entitled to the protection of the BJR. B. JNOV 37 As noted above, the district court properly instructed the jury in this case that the appropriate standard of care was ordinary negligence, and that due care was an element of the BJR. Based upon the evidence presented at trial, the jury concluded Stahl and Cheplak had failed to exercise due care; therefore, they were not entitled to the protection of the BJR on the merits of their judgment. 38 In setting aside the jury verdict, however, the district court improperly characterized the standard of care and then reweighed the evidence to satisfy the standard in an attempt to bring the directors within the ambit of the BJR. Curiously pointing out that neither the Supervisory Agreement nor an FHLBB guideline, R 41b, "established a tort standard of care," the district court mischaracterized the due care standard apparently based upon its conclusion that this was "not a case where there was total indifference to standard underwriting practices." While it very well may be true that the directors did not exhibit "total indifference" in the exercise of their business judgment, they need not have done so to be found liable under the ordinary negligence standard of care applicable in this case. 39 Only if the facts and inferences point so strongly and overwhelmingly in favor of Defendants that this Court believes that reasonable persons could not arrive at a contrary conclusion may we find the district court properly set aside the jury verdict. See Reynolds v. CLP Corp., 812 F.2d 671, 674 (11th Cir.1987). On the other hand, if there is "evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions," id. (quoting Michigan Abrasive Co., Inc. v. Poole, 805 F.2d 1001, 1004 (11th Cir.1986)), this Court should find the district court erred in entering judgment as a matter of law in favor of Defendants. 40 A court is not free to reweigh the evidence and substitute its judgment for that of the jury. See id. at 674-75. This, however, is precisely what the district court did in this case. After mischaracterizing the standard, the district court concluded the standard was satisfied based upon its own view of the evidence. Specifically, the district court was persuaded by the testimony of a regulatory attorney and Croft, who both stated Broward had good policies, and Cheplak, who the court found presented a "very credible defense." Finally, after determining that Stahl and Cheplak satisfied the appropriate standard of care, the district court found they were entitled to the benefits of the BJR and set aside the jury verdict. 41 The jury in this case apparently just did not find this testimony of the regulatory attorney, Croft and Cheplak as convincing as did the district court, and there appears to be ample support in the record to justify such a conclusion. While Croft characterized the management team as above average and the new lending policies well done, he still criticized Broward's implementation of the policies. The regulatory attorney never even reviewed Broward's underwriting, and Cheplak's testimony, of course, could be viewed by a jury as self-serving. 42 As the district court itself recognized, this is "a case where persons, on different sides of a dispute, disagreed as to whether Broward[ ]'s underwriting practices were adequate...." But, "the determination of negligence is ordinarily within the province of the trier of fact," Decker v. Gibson Prods. Co. of Albany, Inc., 679 F.2d 212, 216 (11th Cir.1982), and based upon the evidence presented at trial, we are not convinced that no reasonable juror could find Stahl and Cheplak liable for failure to exercise due care. In yearly examination reports from 1982 through 1984, regulators criticized Broward's commercial loan underwriting and appraisal procedures, and ultimately required Broward to sign the Supervisory Agreement obligating it to exercise prudent lending standards. Hess, an examiner with over 13 years' experience, testified that in her examination of six of the target loans at issue in this case, she found numerous underwriting deficiencies which violated industry standards, the Supervisory Agreement, FHLBB appraisal standards (R 41b), and Broward's new lending policies. If believed, this evidence could create an inference that the directors failed to exercise due care in accelerating loan origination, approving the subject loans, and complying with the Supervisory Agreement and R 41b. 43 Viewing the facts in a light most favorable to the FDIC, we find substantial evidence of such quality and weight that fair-minded jurors exercising impartial judgment could reasonably have concluded Stahl and Cheplak failed to exercise due care with respect to the seven target loans. The basis for entering a JNOV should not be the judge's determination of which party has the better case. Reynolds, 812 F.2d at 674. We conclude the district court erred in entering judgment as a matter of law in favor of Stahl and Cheplak, and reinstate the jury verdict in favor of the FDIC. C. New trial 44 1. Evidence and closing argument. 45 In the alternative, the district court conditionally granted Stahl and Cheplak a new trial on the grounds that they were prejudiced by the FDIC's summation, and the erroneous admission of incompetent evidence. There are two portions of the FDIC's closing argument which the district court maintains "had the effect of impairing the jury's dispassionate consideration of the case, and caused unfair prejudice to the defendants." The first relevant portion is as follows: 46 What you have here is the directors were negligent and they breached their fiduciary obligation to the bank.... Send the right message to the directors around the country. They have to be accountable for their actions. 47 If they are not held accountable for their conduct we'll never get out of this mess, this banking mess that the country has found itself in. 48 Trial Transcript at R23-168-24; 169-1 (emphasis supplied). 49 The district court cited Vineyard v. County of Murray, Ga., 990 F.2d 1207, 1213 (11th Cir.), cert. denied, 510 U.S. 1024, 114 S.Ct. 636, 126 L.Ed.2d 594 (1993), as an example of a case in which a similar "send the message" closing argument was made. In Vineyard, this Court analyzed whether, in light of "the entire argument, the context of the remarks, the objection raised, and the curative instruction," the statement at issue was "such as to impair gravely the calm and dispassionate consideration of the case by the jury." 990 F.2d at 1213 (quoting Allstate Ins. Co. v. James, 845 F.2d 315, 318 (11th Cir.1988)). "[R]eluctant to set aside a jury verdict because of an argument made by counsel during closing arguments," id. at 1214, this Court in Vineyard affirmed the district court's denial of the motion for mistrial. 50 The district court in this case maintains the Vineyard court decided the case the way it did only because it was satisfied the curative instruction sufficiently eliminated any resulting prejudice from the remark. Here, by contrast, Allen was the only defendant to even object to the remark, none of the other defendants requested a curative instruction, and the district court admits it did not give one, "certain that a curative instruction would have been ineffective." While a curative instruction does not always remedy the harm of an improper closing argument, see McWhorter v. City of Birmingham, 906 F.2d 674, 678 (11th Cir.1990), it is curious how the district court could be so certain that one would have been ineffective here, given that this Court has found "the influence of the trial judge 'is necessarily and properly of great weight and his lightest word or intimation is received with deference, and may prove controlling.' " Allstate, 845 F.2d at 319 (quoting Quercia v. United States, 289 U.S. 466, 470, 53 S.Ct. 698, 699, 77 L.Ed. 1321 (1933)). 51 In light of the entire summation, the context of the remarks, the lack of objections and the district court's decision not to give a curative instruction, we conclude the "send the message" remark did not so unfairly prejudice Stahl and Cheplak as to warrant a new trial. 52 The second portion of the FDIC's summation which the district court maintains unfairly prejudiced Defendants is as follows: 53 The only way we can insure that our depository institution[s] will be responsibly run is if we insist that the directors conduct themselves reasonably and discharge their duties diligently. 54 To do otherwise will invite disaster not only for the banking system but for the insurance fund and ultimately the taxpayer. 55 Trial Transcript at R23-169-16 (emphasis supplied). 56 The district court found the FDIC's "taxpayer" reference prejudicial to Stahl and Cheplak on the grounds that it asked jurors to identify with the FDIC in the potential adverse effect of the decision, or implied the jurors had a financial stake in the outcome of the case. The court cited Allstate as an example of a case in which this Court reversed an order denying a motion for a new trial on the basis of a closing argument. In Allstate, the insurance company argued that the insured had caused or procured a fire to collect insurance proceeds, and stated in closing that the jurors were the "somebody" who could do something to prevent the higher insurance premiums which typically result from such cases. Allstate, 845 F.2d at 319. Allstate further stated in summation that the jurors should treat the case "with all the attendant personal emotional responses." Id. This Court concluded that such a closing argument implied a "basis for the verdict other than the evidence presented," impairing the jury's calm and dispassionate consideration of the case. Id. 57 In examining the summation as a whole and the context of the remarks, see Vineyard, 990 F.2d at 1213, we find that the statements made by the FDIC's counsel in closing did not unfairly prejudice Stahl and Cheplak. Further, here again, Allen was the only defendant to object to the "taxpayer" remark, none of the other defendants requested a curative instruction, and the district court did not give one. In light of the foregoing, we conclude the FDIC's "taxpayer" reference was not so prejudicial to Defendants as to warrant a new trial. 58 As its final ground for ordering a new trial, the district court contends it erroneously admitted into evidence a transcript of a telephone conversation between Cheplak and employees of Drexel Burnham in which the Drexel employees criticized Broward's underwriting practices. The transcript had been admitted into evidence pursuant to a pretrial stipulation in which the parties agreed that all exhibits identified at deposition could be used at trial. The transcript was used at trial by the FDIC both to impeach Cheplak and in summation. 59 Only when the jury requested to see the transcript during its deliberations did the district court closely examine it and determine the document to be incompetent on four grounds: (1) Defendants had not seen the transcript, (2) its authenticity had not been demonstrated, (3) recording of the conversation had not been authorized, and (4) the admission of the transcript violated the hearsay rule. The district court instructed the jury to disregard the requested document, but states in its Order that it doubts the instruction had any effect given the return of verdict shortly thereafter. 60 As to the first two grounds of incompetency, we find Stahl and Cheplak were on notice of the transcript's existence and waived any authenticity claims by agreeing to the pretrial stipulation in the first instance. This Court has affirmed the binding nature of pretrial stipulations which have been entered voluntarily and submitted to the court. Busby v. City of Orlando, 931 F.2d 764, 771 n. 4 (11th Cir.1991). Stahl and Cheplak counter that this pretrial stipulation is not binding because the district court never conducted a final pretrial conference nor approved the stipulation in a pretrial order; however, pretrial conferences are not mandatory when, as here, the district court opts to proceed by calendar call. S.D.Fla.Local Rules, Rule 16.1(E) (1994). 61 The district court effectively adopted the pretrial stipulation by conducting the trial proceedings consistent with it. Thus, after permitting the FDIC to rely upon the transcript under the pretrial stipulation, during trial and summation, we conclude it was improper for the district court to strike the document after the case had gone to the jury on the basis of alleged defects the FDIC no longer had an opportunity to cure. 62 As to the third ground of incompetency, that the transcript was inadmissible because its recordation was not authorized, this Court has found that under Florida law, all participants need not consent to the recording of a conversation if such recordation is done in the ordinary course of business. See Royal Health Care Servs., Inc. v. Jefferson-Pilot Life Ins. Co., 924 F.2d 215, 218 (11th Cir.1991). Finding no evidence to suggest that the conversation contained in the transcript was anything but a routine business discussion regarding underwriting deficiencies at Broward, we conclude consent to the recordation was not necessary. 63 Finally, we disagree with Stahl and Cheplak's contention that the district court properly excluded the transcript on hearsay grounds. Finding the transcript was offered to show Cheplak's knowledge of Broward's underwriting problems, and not to establish the intrinsic truth of the matter asserted, we conclude the document was admissible. See United States v. Parry, 649 F.2d 292, 295 (5th Cir. Unit B June 1981). 64 2. Statute of limitations. 65 Stahl and Cheplak also claim they are entitled to a new trial on the ground that claims relating to two of the target loans were barred by the statute of limitations. Pursuant to 12 U.S.C. § 1821(d)(14)(A) & (B) (1994), this Court must determine whether the claims brought by the FDIC were viable under the applicable statute of limitations at the time the FDIC acquired the claims. See RTC v. Artley, 28 F.3d 1099, 1101 (11th Cir.1994). Florida Statute § 95.11(3)(a) (1995) provides a four-year statute of limitations for actions founded on negligence. Thus, the precise issue here is whether the claims regarding two of the target loans made before December 31, 1984, known as the Cypresswood and Mason Center loans, were still viable at the time the FDIC acquired these claims more than four years later, on December 31, 1988. 66 The district court held the statute of limitations did not begin to run on the negligence claims until the date the loans went into default.15 Stahl and Cheplak counter that several courts have held the statute of limitations begins to run when a negligent loan is made, not when it fails; but in support of this proposition, they rely on authority from jurisdictions other than Florida. See, e.g., id. at 1102 (recognizing that under Georgia law, statute of limitations begins to run when loans are made). 67 State law governs the viability of the FDIC's claims, see id. at 1101; therefore, Stahl and Cheplak's reliance on non-Florida law is misplaced. In Florida, "[a] cause of action accrues when the last element constituting the cause of action occurs." Fla.Stat. § 95.031(1) (1995). Accordingly, under Florida's "last element" rule, actions for negligence do not accrue until the plaintiff suffers some type of damage. Wildenberg v. Eagle-Picher Indus., Inc., 645 F.Supp. 29, 30 (S.D.Fla.1986). Moreover, Florida courts have found that the limitations period does not begin to run until a plaintiff knew or should have known of the injury. See, e.g., Lund v. Cook, 354 So.2d 940, 941 (Fla.Dist.Ct.App.), cert. denied, 360 So.2d 1247 (Fla.1978). Indeed, in Jones v. Childers, 18 F.3d 899 (11th Cir.1994), we found: 68 Florida courts ... have broadly adopted the discovery principle, holding in a variety of legal contexts that the statute of limitations begins to run when a person has been put on notice of his right to a cause of action. Generally under Florida law, a party is held to have been put on notice when he discovers, or reasonably should have discovered, facts alerting him of the existence of his cause of action. 69 18 F.3d at 906 (footnote omitted). 70 Stahl and Cheplak respond that jurisdictions like Florida which follow the "discovery rule" have nevertheless held a cause of action accrues when the pertinent loan is made rather than when it fails. See, e.g., RTC v. Farmer, 865 F.Supp. 1143 (E.D.Pa.1994). We find any such decisions contrary to the spirit of Florida's last element and discovery rules. 71 The damage in this case did not occur until the loans at issue were not repaid, at which point the FDIC should have been alerted to the existence of a negligence cause of action. Thus, we conclude the district court correctly determined that the statute of limitations did not begin to run on these claims until the loans failed. Since Stahl and Cheplak presented no summary judgment evidence showing when the borrowers defaulted on the loans, the district court appropriately denied summary judgment.16 V. CONCLUSION 72 For the foregoing reasons, we reverse the judgment of the district court setting aside the jury verdict as to Stahl and Cheplak and, in the alternative, conditionally granting them a new trial. In all other respects, we affirm the district court's judgment. Accordingly, we remand the case for further proceedings consistent with this opinion. 73 AFFIRMED in part; REVERSED in part; and REMANDED. 74 HATCHETT, Circuit Judge, concurring in part and dissenting in part: 75 Although I agree with the law this opinion announces and the reasoning in the opinion, I respectfully dissent in part. I would grant Stahl and Cheplak a new trial because the pre-1987 Florida law on the standard of care for directors was at best confusing. This opinion announces a clear standard to govern directors in this circuit. I fully concur in this standard; but, neither the district court nor the parties had the benefit of this standard at the trial of this case. In light of the confusion in our circuit law and the split in circuits, the district court followed the law of its district. Consequently, I would order a new trial for Stahl and Cheplak with this standard to be applied. 1 On the eve of trial, the FDIC settled with three of the original seven defendants: Ira Hatch, Allen Baer and Ronald Bergeron 2 In this opinion, we address the FDIC's claims only as to Stahl and Cheplak. The FDIC's challenge to the district court's judgment in favor of Allen and Beckerman is without merit and does not require discussion. See 11th Cir.R. 36-1 3 Since the district court set aside the jury verdict and entered judgment as a matter of law in favor of the directors, we have presented the evidence and construed all inferences in a light most favorable to the FDIC. See Miles v. Tennessee River Pulp and Paper Co., 862 F.2d 1525, 1528 (11th Cir.1989) 4 These included obtaining: (1) financial reports demonstrating an ability of the borrower/guarantor to repay the loan; (2) equity of the borrower in security property; (3) specifications for real estate development projects; (4) feasibility studies showing the project securing the loan could generate enough capital to repay the loan; and (5) an appraisal meeting the requirements of R 41b, an FHLBB guideline for loans secured by real estate 5 These deficiencies included, inter alia, no proof of borrower equity, financial statements demonstrating inability to repay loans, and a lack of feasibility studies 6 Pursuant to an assistance agreement, the Federal Savings and Loan Insurance Corporation (FSLIC) reimbursed the institution that acquired Broward for losses on the seven loans. The FDIC succeeded to the FSLIC's rights and obligations under this agreement 7 In ruling on Defendants' motion to dismiss, the district court determined that a simple negligence standard governed the directors' actions in this case. In its order setting aside the jury verdict, the court considered this earlier determination to be "the law of the case." This is incorrect. Since the denial of Defendants' motion to dismiss was not a final judgment, the decision regarding the standard of care was not the law of the case. See Vintilla v. United States, 931 F.2d 1444, 1447 (11th Cir.1991). Thus, we must determine whether simple negligence is in fact the appropriate standard of care to apply in this case 8 12 U.S.C. § 1461, et seq. (1994) 9 The district court found that the alleged acts of negligence in this case occurred between October 1984 and January 1986. FIRREA was not enacted until 1989. Pub.L. No. 101-73, § 1, 103 Stat. 183 (1989). Thus, Stahl and Cheplak are really asking this Court to retroactively apply a standard of gross negligence under § 1821(k) to preempt Florida law in the area of director liability. We decline to resolve this issue, finding that even if retroactive application of FIRREA is appropriate, the question still remains as to whether the FDIC may bring a claim under Florida law utilizing a standard of simple negligence 10 Independent of HOLA preemption, Stahl and Cheplak put forth two alternative bases under which this Court could find that federal law alone governs the liability of corporate directors. First, in RTC v. Chapman, 29 F.3d 1120 (7th Cir.1994), the Seventh Circuit relied upon a choice of law principle known as the internal affairs doctrine in finding that national law must govern the internal affairs of a federally-chartered institution in order to achieve uniformity. 29 F.3d at 1122-23. Second, Stahl and Cheplak argue that a minority of courts have held that § 1821(k) preempts state law claims not just for federal institutions, but for state institutions as well. These claims are without merit and do not warrant discussion 11 See also RTC v. Cityfed Fin. Corp., 57 F.3d 1231, 1249 (3d Cir.1995) (holding § 1821(k) does not preempt either state or federal common law), cert. granted, --- U.S. ----, 116 S.Ct. 1415, 134 L.Ed.2d 541, and cert. dismissed, --- U.S. ----, 116 S.Ct. 1587, 134 L.Ed.2d 684 (1996) 12 The Florida legislature passed Fla.Stat. § 607.1645 (1987), presently codified at Fla.Stat. §§ 607.0830, 607.0831 (1989), to afford corporate officers and directors greater protection from liability; however, these heightened liability standards apply only to causes of action accruing on or after July 1, 1987. See Johns, 685 F.Supp. at 1238 n. 4 (citing Act of June 30, 1987, ch. 245, § 13, repealed by Act of 1989, ch. 154, § 166; Act of 1990, ch. 179, § 189). Thus, such legislation is inapplicable to the case at bar 13 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), this Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981 14 Stahl and Cheplak rely on Delaware and District of Columbia law applying a gross negligence standard under the BJR. See Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984); Washington Bancorporation v. Said, 812 F.Supp. 1256, 1269 (D.D.C.1993). Unlike pre-1987 Florida law, however, neither of these states had a general statute setting forth an ordinary care standard 15 In doing so, the district court distinguished Corsicana Nat'l Bank v. Johnson, 251 U.S. 68, 40 S.Ct. 82, 64 L.Ed. 141 (1919). In Corsicana, a bank director loaned money in violation of the National Bank Act, and the Supreme Court held the cause of action against the director accrued on the date the loan was made. 251 U.S. at 86, 40 S.Ct. at 90. The Court reached this conclusion because it determined the damage was complete at that time. Id. In the case at hand, however, the district court reasoned that Defendants' negligence caused cumulative damage to Broward which did not fully accrue until the loans were in default or the FDIC knew or should have known of the negligence. We agree 16 The FDIC also alleged a variety of circumstances that purported to establish claims for breach of fiduciary duty. Actions for breach of fiduciary duty, like negligence actions, do not accrue under Florida's last element rule until the plaintiff suffers some type of damage. Penthouse North Assoc., Inc. v. Lombardi, 461 So.2d 1350, 1352 (Fla.1984). Since the FDIC alleged such a wide range of fiduciary duty claims, however, the district court was unable to pinpoint when the damages in relation to each claim occurred, concluding it could have been "at the time of the default or perhaps at some time before default." Nevertheless, under Florida's discovery rule, the statute of limitations did not begin to run on the fiduciary duty claims until the FDIC knew or should have known of the alleged breaches. Since Stahl and Cheplak make no reference to the fiduciary duty claims on appeal, and presented no summary judgment evidence regarding when the FDIC knew or should have known of the alleged breaches, we conclude the district court properly denied summary judgment on this issue as well	{ "pile_set_name": "FreeLaw" }
494 F.2d 418 Geneva BROWN, Individually and as Administratrix of theEstate of Thomas J. Brown, Deceased, Plaintiff-Appellant,v.FORD MOTOR COMPANY, a corporation, Defendant-Appellee. No. 73-1604. United States Court of Appeals, Tenth Circuit. Argued and Submitted Jan. 8, 1974.Decided March 12, 1974. Charles W. Stubbs, Oklahoma City, Okl., for plaintiff-appellant. Wm. G. Smith, Oklahoma City, Okl., for defendant-appellee. Before HILL, HOLLOWAY and BARRETT, Circuit Judges. HILL, Circuit Judge. 1 In this removed action,1 based on diversity, appellant Geneva Brown brought suit against appellee Ford Motor Company for the wrongful death of her husband. The complaint alleges the deceased was attempting to step up on the tailgate of a pickup truck manufactured by appellee, that the tailgate came unlatched, and that the deceased was thrown to the ground, sustaining head injuries causing his eventual death. It is claimed that the tailgate's locking device was defectively manufactured and installed, constituting a breach of implied warranty of fitness. 2 Based upon the pleadings, depositions, affidavits and other discovery, the district court for the Western District of Oklahoma granted appellee's motion for summary judgment. We have carefully examined the record in the light most favorable to the party opposing the motion, as we must, and find that no genuine issue exists as to any material fact. Accordingly, we affirm. 3 The record discloses the following relevant facts. Appellant, her husband, and a son, Tom, were on a fishing trip in Mexico in November, 1968. They were travelling in Tom's vehicle, a 1968 Ford pickup truck, with a homemade camper shell mounted on the back. While in Mexico, and enroute to their destination, the Browns parked the vehicle on the shoulder of the highway for a moment's rest. Upon attempting to reenter the highway, the vehicle became stuck in some sand. Appellant and Tom remained in the cab while the deceased climbed on the rear of the vehicle in an effort to obtain more traction. Upon freeing the vehicle Tom, who was driving, glanced in the rear view mirror and observed his father sprawled out on the highway. Approximately four months later, the deceased died as a result of a bilateral subdural hemotoma, caused by a blow or blows to the head. 4 Although appellant claims the accident was caused when the tailgate came unlatched as the vehicle was moving onto the highway, throwing the deceased to the ground, the record does not support this allegation. Appellant candidly admitted, in her deposition, that she did not observe the accident. She does not know what part of the vehicle the deceased was riding on, what he was holding on to, how the accident happened, or if the tailgate was open or closed immediately following the accident. The deposition of the Brown's insurance agent sheds the only light on this question. Upon inquiring as to the cause of the accident in order to initiate a claim, he was informed the deceased was riding on the open tailgate and was knocked off when the vehicle hit a small bump. 5 Our search of the record also fails to reveal any evidence substantiating appellant's contention that the tailgate was defective. Appellant had no knowledge, before the accident, that the tailgate would not close properly. In fact, she had never attempted to open or close it because she did not know how. She had, however, observed her husband and son opening and closing the tailgate on several occasions, and testified that it always fastened. She concluded the tailgate was defective because her son, Tom, told her so shortly after the accident, although he had never mentioned it before. The record discloses that service and repair work was performed on the vehicle by authorized Ford dealers both before the accident and while the deceased was in the hospital, but that Tom did not complain of any problems with the tailgate on either occasion. 6 Furthermore, a physicist with a background in metallurgy conducted experiments on the tailgate two years after the accident and concluded its latching device was not defective. His uncontroverted testimony was that there was no bending or stretching of any of the material in the latch, and that the tailgate would fasten every time if properly closed. 7 Finally, the evidence does not support appellant's claim that the injuries deceased suffered in this accident caused his demise. The deceased did not complain of any injuries sustained in this accident, but only of injuries in a subsequent accident on December 24, 1968.2 An optometrist conducted an eye examination on the deceased on November 29, 1968, after the accident in question. He observed no head injuries, and the deceased did not reveal receiving any. On December 18 the deceased saw a physician for arthritis. Again, no head injuries were observed and the deceased disclosed none. The deceased consulted the physician again on December 28, complaining of headaches. However, he informed the physician only of the December 24 injury. Moreover, this physician and the neurosurgeon who operated on the deceased both testified that this latter injury was the precipitating cause of death. 8 To recover, appellant necessarily must present evidence that the tailgate was defective when manufactured, that such defect rendered the tailgate unsafe for its intended use, and that the defective tailgate proximately caused the deceased's injuries. The record before us, however, discloses that no genuine issue exists on any of the material facts. We believe summary judgment is proper here. 9 The application of Rule 56(e),3 F.R.Civ.P., also renders this case ripe for summary judgment. Appellee's motion for summary judgment was supported by depositions and affidavits. Under such circumstances the party opposing the motion may not rest upon the mere allegations of his pleading but must respond with specific facts showing the existence of a genuine issue for trial. Nevertheless, appellant failed to file any affidavits or other matter raising a factual dispute. 10 Because appellant neglected to comply with Rule 56(e), and because the record discloses no genuine issue exists as to any material fact, we affirm the district court's order granting summary judgment. 11 Affirmed. 1 Appellant originally brought suit in the Creek County District Court, in Oklahoma, individually and as the administratrix of her husband's estate. The action was dismissed for lack of jurisdiction and later refiled in the Oklahoma County District Court. On appellee's motion the suit was removed to federal district court 2 The record discloses that the deceased suffered a total of three head injuries. The first is the basis of this suit. The second injury occurred on November 25, 1968. The camper on the vehicle in question has a rear door that is hinged at the top. Apparently this door fell on the deceased's head while he was unloading the camper. He sustained a third injury on December 24, 1968. A retired automobile mechanic, the deceased was examining the engine of a vehicle belonging to another son, Leroy. It is contended that Leroy struck the horn, causing the deceased to raise his head and strike it on the hood. This accident is the basis of a second wrongful death action, against Leroy 3 Rule 56(e) provides in part: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.	{ "pile_set_name": "FreeLaw" }
224 Md. 666 (1961) 168 A.2d 348 LANDER v. WARDEN OF MARYLAND HOUSE OF CORRECTION [App. No. 52, September Term, 1960.] Court of Appeals of Maryland. Decided March 16, 1961. Before BRUNE, C.J., and HENDERSON, HAMMOND, PRESCOTT, HORNEY and MARBURY, JJ. HAMMOND, J., delivered the opinion of the Court. The applicant plead guilty to false pretenses on November 25, 1959, and was sentenced by Judge Rollins to three years in the Maryland House of Correction. The sentence was suspended on conditions of good behavior and restitution of the money obtained at a rate of $10.00 per week, and probation for five years was imposed. Because restitution was not made as ordered, the probation was stricken out on February 9, 1960. Judge Rollins, under the mistaken impression that the sentence he had imposed originally was eighteen months (rather than the three years it admittedly was), said the sentence reinstated was for eighteen months. The commitment showed the sentence to be for three years. The applicant made the following contentions below before Judge DeWeese Carter: 1. That although the commitment shows a three-year sentence, that actually imposed was but eighteen months. 2. A sentence of three years exceeds the maximum set by law. *668 3. He was denied a hearing before a magistrate. 4. He was tried under two indictments Number 367, having to do with a crime involving a weapon, on which sentence was suspended generally, and Number 368 for the false pretenses, for which he was sentenced and resentenced. The commitment erroneously showed him to have been sentenced under Number 367. 5. The trial judge was prejudiced. At the post conviction hearing, the applicant, Judge Rollins and the clerk of the court testified. Judge Carter ordered the clerk to correct the clerical error so as to make the commitment show that sentence was under indictment Number 368 and so to conform to the truth and the record. This was proper and the clerical error affords no ground for post conviction relief. Carter v. Warden, 210 Md. 657, 659; Reed v. Warden, 212 Md. 645, 646. Judge Carter found no merit in any of the other contentions. In this Court the applicant has raised only the first, the question of the disparity in the sentences, and the others are to be considered as waived and abandoned. Monroe v. Dir. of Patuxent Institution, 223 Md. 660, 663. On the matter of the sentences, Judge Carter found as facts from Judge Rollins' testimony that Judge Rollins thought the original sentence had been eighteen months but that he did not intend to reduce the original sentence and would have revoked the probation just as he did if he had realized the sentence was for three years. The original sentence of three years was less than a third of that permitted by law for the crime to which the applicant plead guilty. Judge Carter's finding that the original sentence was intended to be reinstated, supported by the court records that it was, leaves the applicant with no basis for post conviction relief. Application denied.	{ "pile_set_name": "FreeLaw" }
UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 16-7228 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. JOSIAH TIONDRA WATSON, Defendant - Appellant. Appeal from the United States District Court for the Eastern District of Virginia, at Norfolk. Rebecca Beach Smith, Senior District Judge. (2:10-cr-00200-RBS-DEM-2; 2:16-cv-00397-RBS) Submitted: August 29, 2019 Decided: September 12, 2019 Before GREGORY, Chief Judge, and MOTZ and RUSHING, Circuit Judges. Dismissed by unpublished per curiam opinion. Josiah Tiondra Watson, Appellant Pro Se. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: Josiah Tiondra Watson seeks to appeal the district court’s order denying relief on his 28 U.S.C. § 2255 (2012) motion. The order is not appealable unless a circuit justice or judge issues a certificate of appealability. 28 U.S.C. § 2253(c)(1)(B) (2012). 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) (2012). When the district court denies relief on the merits, a prisoner satisfies this standard by demonstrating that reasonable jurists would find that the district court’s assessment of the constitutional claims is debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484 (2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38 (2003). When the district court denies relief on procedural grounds, the prisoner must demonstrate both that the dispositive procedural ruling is debatable, and that the motion states a debatable claim of the denial of a constitutional right. Slack, 529 U.S. at 484-85. We have independently reviewed the record and conclude that Watson 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 this court and argument would not aid the decisional process. DISMISSED * Following our decision in United States v. Mathis, 932 F.3d 242 (4th Cir. 2019), reasonable jurists would not find debatable or wrong the district court’s rejection of Watson’s argument that Hobbs Act robbery does not qualify as a crime of violence under 18 U.S.C. § 924(c)(3)(A) (2012). 2	{ "pile_set_name": "FreeLaw" }
United States Court of Appeals FOR THE EIGHTH CIRCUIT ___________ No. 07-2033 ___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * Western District of Missouri. Michael A. Bryan, also known as * bigdog64085, also known as * [UNPUBLISHED] bandit64085, * * Appellant. * ___________ Submitted: March 7, 2008 Filed: March 26, 2008 ___________ Before MURPHY, COLLOTON, and SHEPHERD, Circuit Judges. ___________ PER CURIAM. Michael A. Bryan appeals the sentence imposed on him by the district court1 after he pleaded guilty to a child-pornography charge, in violation of 18 U.S.C. § 2252(a)(2). In a brief filed under Anders v. California, 386 U.S. 738 (1967), Bryan’s counsel seeks to withdraw and questions whether the sentence – imposed at the bottom of the applicable Guidelines range – is reasonable, and whether the district 1 The Honorable Gary A. Fenner, United States District Judge for the Western District of Missouri. court erred by not allowing Bryan to self-surrender. Bryan has filed a supplemental brief asserting that he received ineffective assistance of counsel during his criminal proceeding, including at sentencing, and he also appears to deny the truth of unobjected-to facts reported in the PSR. Bryan’s written plea agreement contains a waiver of his right to appeal his sentence, directly or collaterally. We find the appeal waiver to be valid and we therefore enforce it. The plea-hearing transcript shows that Bryan entered into the plea agreement and the appeal waiver knowingly and voluntarily, and we can perceive no injustice that would result from enforcing the waiver. See United States v. Andis, 333 F.3d 886, 889-92 (8th Cir. 2003) (en banc) (discussing enforcibility of appeal waiver; United States v. Estrada-Bahena, 201 F.3d 1070, 1071 (8th Cir. 2000) (per curiam) (enforcing appeal waiver in Anders case). Thus, we do not review the arguments raised in Bryan’s pro se supplemental brief or counsel’s argument that Bryan’s sentence is unreasonable.2 To the extent that the issue of self-surrender is not covered by the appeal waiver, we conclude that the district court did not err in ordering Bryan detained following sentencing. See 18 U.S.C. §§ 3143(b)(1), 3145(c). Finally, after conducting an independent review under Penson v. Ohio, 488 U.S. 75, 80 (1988), of any matters not covered by the appeal waiver, we find that there are no nonfrivolous issues. Accordingly, we affirm. We grant counsel leave to withdraw, subject to the condition that counsel promptly comply with the requirements of Part V of this 2 Regardless of any appeal waiver, we decline to consider the ineffective- assistance claim. See United States v. Hughes, 330 F.3d 1068, 1069 (8th Cir. 2003) (ineffective-assistance claims should ordinarily be brought in 28 U.S.C. § 2255 proceeding because they normally involve facts outside original record). -2- Court’s Plan to Implement the Criminal Justice Act by advising his client of the procedures for filing a petition for writ of certiorari pro se. ______________________________ -3-	{ "pile_set_name": "FreeLaw" }
54 N.W.2d 454 (1952) CARMICHAEL et al. v. STONE. No. 48111. Supreme Court of Iowa. July 28, 1952. Life & Davis, Oskaloosa, and H. E. DeReus, Knoxville, for appellants. Stuart & Stuart, Chariton, for appellee. MANTZ, Justice. Plaintiff brought suit against defendant to recover damages on an alleged contract for the sale of three carloads of wool, alleging that the defendant failed to perform said contract by refusing to deliver to plaintiff the wool in question. The defendant denied any such contract or sale. The court tried the case without a jury. When plaintiff rested the court directed a verdict in favor of the defendant. This appeal followed. The controlling question is: Was there such a contract between plaintiff and defendant and if so, did the defendant fail to perform it. The burden was upon the plaintiff to so show and he would be required to do so by competent evidence, and by a preponderance thereof. Plaintiff sought to establish the alleged contract of sale by testifying to telephone conversations which he had with defendant; by a personal interview wherein he claims defendant admitted the contract, and by showing that some three to four weeks following the alleged sale he sent defendant a check for $100 as down payment, which check defendant returned. Plaintiff also offered in evidence several notices which he gave to defendant requiring him to carry out said contract; to one of which the $100 check was attached, also a copy of a letter written to him by defendant on December 13, 1950. To all of such testimony and the notices and demands the defendant made objection that same were in violation of section 554.4(1), 1950 Code of Iowa, I.C.A. In most instances the court reserved ruling. In ruling on defendant's motion for a directed verdict the court sustained such objections and further held that plaintiff's evidence failed to show that there was such a contract as was alleged by plaintiff which 455 could be enforced by such proffered testimony. Under the familiar rule we must consider plaintiff's testimony in the most favorable light in his behalf. The question presented is: Was there such a contract as was alleged by plaintiff? There was no written contract between the parties. True, plaintiff alleged such a contract and he offered to show this by certain telephone conversations, a claimed admission, and certain written demands upon defendant to deliver the three carloads of wool; the $100 check tendered, a letter from defendant denying any sale dated December 13, 1950, and a wire sent him by defendant on January 6, 1951. As throwing some light on the question as to whether or not there was such a contract we call attention to the testimony of plaintiff of a conversation he claims to have had with defendant in the office of the latter in Chariton on December 2, 1950. All was objected to under section 554.4, Code of 1950, I.C.A. Plaintiff told of going to defendant's place of business in Chariton. When asked to detail the conversation he said that he spoke to Tom (defendant): "Tom, I came down to see when you were going to be ready to deliver those three carloads of lamb wool that I bought that you have here in Chariton." "`Why', he said, `that wool is down by Kansas City.'" I said: "Tom, I didn't buy any wool from you that * ." He said: `That wool is down in Kansas City and the people say they will take 76¢ a pound for it, and I would be willing to show it to you.'" Plaintiff again said that the wool he bought was to be in Chariton. He further says that as he started to leave he said to defendant: "Tom, that was three carloads of lamb wool I bought from you for 76¢" and he said: `Yes'." According to his testimony he went back to Oskaloosa and made out and mailed defendant the $100 check which the latter refused to accept. The above conversation, assuming that it was competent, shows that there was no delivery of the wool. In it the plaintiff made direct inquiry as to when defendant was going to deliver the wool which he claims he bought of defendant in Chariton. The defendant's reply was that the wool was in Kansas City and could be bought at 76¢ per pound, and offered to show it to plaintiff. Following this interview in Chariton the defendant wrote the following letter: "Dear Tom: "Pursuant to our conversation of November 10th and December 2nd, 1950 wherein on November 19th I purchased 3 carloads of bright lamb wool from you at 76¢ per pound and which sale was confirmed by you on Dec. 2nd, I am enclosing my check to you in the amount of $100.00 as down payment on said transaction. I will notify you shortly as to the time and place I will take delivery of wool. "Very truly yours, "Carmichael & Son. "By Herschel Carmichael." The $100 check enclosed had thereon "As down payment on 3 carloads of bright lamb wool at 76¢ per pound." Defendant received this letter about December 9th. On December 13, 1950, defendant wrote the following: "Dear Herschel: "You never purchased three carloads of lamb wool from me. You said you would have to see the wool before you bought. The wool that I was trying to sell, I can still sell this wool for 76¢ per pound. If you want this wool, send $15,000.00 as a down payment and I will buy the wool for your account. "Yours very truly, "Tom Stone." The entire record, including the parts of the evidence objected to, fails to show a meeting of the minds sufficient to constitute a contract. It is quite evident that there were negotiations concerning a sale of wool. These started with the phone conversation of November 10, 1950. That concerned two carloads of lamb wool. The plaintiff wanted time to consider the deal and called the day following saying he would take three carloads. There was no writing, no delivery, and no down payment. 456 In the phone talks there was no mention of "bright" lamb wool. On January 6th defendant wired plaintiff, Herschel Carmichael at Oskaloosa, Iowa, as follows: "I am going to Kansas City, Missouri in the morning of January 8th to look at the lamb wool that I offered to sell you at 76¢ per pound. If you want to try this lamb wool come down. "Tom Stone." On January 10, 1951, a notice of demand signed by plaintiff was served upon defendant by the sheriff of Lucas County, Iowa. Said notice, in effect, reiterated claim of plaintiff that he had purchased three carloads of wool from the defendant; claimed the wool sold was at Chariton, Iowa, and nowhere else; that he had sent a $100 check to bind the deal and that same had been received and held by defendant; also, that if the wool was not delivered before January 15, 1951, suit would be brought. According to plaintiff a carload of wool is 25,000 pounds, and his claim is that defendant sold him three carloads, or 75,000 pounds at the price of 76¢ per pound, and the selling price would be $57,000.00. The record shows nothing as to terms of sale; how much to bind the bargain, and the payment. It would hardly seem reasonable that a $57,000 deal for the sale of personal property could be bound by a down payment of $100the price of about 125 pounds of wool of a 75,000 pound cargo. In order for plaintiff to recover he must sustain his claim that he had a contract with the defendant whereby the latter sold plaintiff three carloads of wool at 76¢ per pound. He does not claim that there was any deliveryhe was urging it. He sent a $100 checkan earnest payment after the controversy arose. This was no sale. The trial court held that the oral evidence as given by him violated the provisions of section 554.4, 1950 Code, I.C.A. The court, in sustaining defendant's motion for directed verdict, said: "The motion will have to be sustained, gentlemen, for the reasons I have heretofore stated. That the court holds that the sending of the check, Exhibit P-2, and the letter, P-1, to the defendant, which check was returned by defendant in Exhibit P-3, did not constitute a payment by plaintiff to defendant of a part of the purchase price sufficient to make any contract between plaintiff and defendant, which has been testified to in this case, enforceable under the provisions of section 554.4 of the Code of 1950, I.C.A. The court has heretofore sustained objections to the oral testimony for that reason. The objections being sustained, the record does not now contain any contract shown by the plaintiff which has been violated by the defendant upon which any judgment in favor of plaintiff could be predicated. Therefore, the motion is sustained and judgment against plaintiff for costs." We have examined the record and hold that the ruling of the court was correct. Irrespective of section 554.4 of the Code we hold that there was no evidence showing a contract between the parties. There were some negotiations, but never was there a meeting of the minds of plaintiff and defendant. Here there was 75,000 pounds of wool, valued at $57,000no terms fixed as to down payment or delivery, and to sustain a claim that a $100 check down payment would bind the deal with defendant denying the sale and refusing the check would seem to border upon the absurd. We have examined the authorities cited by plaintiff. We have no question as to the general rules announced as to how contracts may be entered into. The facts, as set forth in the cases cited, are dissimilar to the one in question. He cites the case of Morris Furniture Company v. Braverman, 210 Iowa 946, 230 N.W. 356. In that case an order was given for furniture to be manufactured. The order was given September 17, 1923, and was sent in and the furniture was made up and was being loaded when the defendant, on September 25, 1923, wrote asking that the order be held until further notice. The defense was the statute of frauds and cited section 9933, Code of 1924, (now 554.4, 457 Code of 1950, I.C.A.). This court held that the statute did not apply on account of the nature of the transaction. Plaintiff cites the case of Seevers v. Cleveland Coal Company, 158 Iowa 574, 138 N.W. 793, 801, in support of his claim that the declaration of defendant in his office at Chariton relating to the wool was an admission and a declaration against interest, and therefore made other exhibits admissible, to witthe letter written by plaintiff detailing the transaction, the check, the notice and demand, and the telegram. We fail to see wherein the fact situation in that case is comparable to those of the instant case. There were negotiations as to the wool but nothing definite. At Chariton there was a dispute as to where the wool was located. Plaintiff claimed he bought the wool at Chariton. Defendant said the wool was in Kansas City and offered to show it to plaintiff. We see no point in further discussion. The court held that there was no contract. Whether it was bilateral or unilateral is beside the point. The plaintiff claims that he was one of the parties to the contract and defendant was the other. We hold that the court did not err in directing a verdict. In addition to holding that there was no contract of sale and purchase of the wool between plaintiff and defendant, the court held that such contract, even if shown, was not enforceable under the provisions of section 554.4 of the 1950 Code, I.C.A. The provision of such statute is a rule of evidence. Berryhill v. Jones, 35 Iowa 335; Tipton v. Miller, 8 Cir., 1935, 79 F.2d 298; Thomas v. Peoples' Gas & Electric Co., 220 Iowa 850, 263 N.W. 499; 35 I.C.A. pages 93-95. A contract to sell or a sale of goods, etc., shall not be enforceable unless the buyer accept part of the goods to be sold and actually receive the same, or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract or sale be signed by the party to be charged, or his agent in that behalf. In the case of Lockie v. McKee, 221 Iowa 95, 264 N.W. 918, this court said that an oral contract with no writing, where nothing was paid either in earnest money or part payment, and there was no delivery of the goods, was unenforceable under the statute, section 9933 (now 554.4). In the instant case the court held that there was no contract. We hold that the court was right. Even assuming that there was a contract, as charged by plaintiff, it was unenforceable in the manner urged and attempted by plaintiff. The case is affirmed. Affirmed. GARFIELD, WENNERSTRUM, SMITH, and HAYS, JJ., concur. Special concurring opinion by Justice OLIVER in which MULRONEY, C. J., and BLISS, GARFIELD, SMITH, and THOMPSON, JJ., join. OLIVER, Justice (concurring specially). This was an action for damages, tried to the court, for breach of an alleged contract of sale. Plaintiffs pleaded defendant orally agreed to sell them three car loads of lambs wool at 76¢ per pound and thereafter refused to deliver the same or any part thereof, to plaintiffs' damage. Defendant's answer denied any contract to sell wool to plaintiffs. Plaintiffs sought to prove the alleged oral contract by interrogating plaintiff Herschel Carmichael relative to certain oral negotiations or conversations between him and defendant. To such questions defendant objected on the ground the testimony called for was incompetent under section 554.4, Code of Iowa 1950, I.C.A. This section is the Statute of Frauds in the Sales Law. It provides in part: "A contract to sell or a sale of any goods * * shall not be enforceable by action unless the buyer shall * * * give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract or sale be signed by the party to be charged". 458 The court sustained the objections and like objections to questions propounded another witness concerning defendant's asserted later oral admissions of the contract. Plaintiffs predicate error upon these rulings and orders. Code section 622.34 refers to the general Statute of Frauds, section 622.32, as "regulations, relating merely to the proof of contracts * *." Code section 554.5 makes this applicable to section 554.4. Hence, section 554.4 is a rule of evidence rather than an invalidating statute. Thomas v. Peoples' Gas & Electric Co., 220 Iowa 850, 263 N.W. 499. Therefore, the orders of the court excluding the testimony were correct. Plaintiffs rely also upon a registered letter mailed by them to defendant referring to the alleged oral contract and stating, "I am enclosing my check to you in the amount of $100 as down payment of said transaction." A notation on the face of the enclosed check recited: "As down payment on three carloads of bright lamb wool at 76¢ per pound." The exact date defendant received this letter was not established because plaintiffs refused to produce the postal return receipt which showed such date. Defendant promptly returned the check with a letter in which he denied the alleged sale of the wool. Neither of these letters was sufficient to satisfy the Statute of Frauds because the first was signed by plaintiffs, not defendant, and defendant's letter denied the alleged contract. Nor did the sending of the check constitute giving "something in earnest to bind the contract, or in part payment" within the meaning of the statute. It was merely a tender which was refused. The text in 49 Am.Jur. 583, Statute of Frauds, section 265, states: "The mere tender of payment or part payment of the price of goods bargained for by the buyer, if unaccepted by the seller is not sufficient to satisfy the statute." 37 C.J.S., Frauds, Statute of, § 165, page 645; Hershey Lumber Co. v. St. Paul Sash, Door & Lumber Co., 66 Minn. 449, 69 N.W. 215; Jones v. Taylor, 1 G. Greene, Iowa, 434. There was no competent evidence in the record to sustain the allegations of plaintiff's petition. At the conclusion of plaintiffs' case defendant moved for judgment on that ground. This motion was properly sustained. I agree the judgment should be affirmed. MULRONEY, C. J., and BLISS, GARFIELD, SMITH, and THOMPSON, JJ., join in this special concurrence.	{ "pile_set_name": "FreeLaw" }
619 So.2d 1320 (1993) Frank J. SENN v. ALABAMA GAS CORPORATION a/k/a Alabama Gas Company; and Jeffrey L. Sizemore. 1911171. Supreme Court of Alabama. March 5, 1993. Rehearing Denied May 7, 1993. 1321 Roger S. Morrow and Joel H. Pearson of Morrow, Romine & Pearson, P.C., Montgomery, for appellant. Robert C. Black of Hill, Hill, Carter, Franco, Cole & Black, Montgomery, for appellees. HOUSTON, Justice. The plaintiff, Frank J. Senn, appeals from a judgment entered on a jury's verdict in favor of the defendants, Alabama Gas Corporation a/k/a Alabama Gas Company ("Alabama Gas") and its employee Jeffrey L. Sizemore. We affirm. Senn, a firefighter and paramedic with the City of Montgomery, was injured on November 22, 1989, when the fire medic truck in which he was a passenger was struck from the rear by an Alabama Gas utility truck being driven by Sizemore. The collision occurred under rainy conditions; the point of impact was on a downhill slope, in a 30-mile-per-hour maximum speed zone. Sizemore, whose truck was towing a lightly loaded utility trailer, had been following the fire medic truck for approximately two blocks. Just before the collision, Sizemore was traveling between 20 and 30 miles per hour and was "at least two car lengths" behind the fire medic truck when he noticed that the driver of the fire medic truck had applied and then released his brakes. Sizemore quickly responded by applying and then releasing his own brakes. Almost immediately thereafter the driver of the fire medic truck again applied his brakes and came to an abrupt stop in order to avoid colliding with the rear-end of a vehicle that had suddenly stopped in front of him. In the process of maneuvering out of the way of the vehicle in front of him, the driver of the fire medic truck ran onto the curb and then back into the street. Recognizing that he, too, had to stop, Sizemore "slammed" on his brakes. Sizemore was unable to stop, however, and his truck skidded into the rear of the fire medic truck. Senn, who was wearing a seat belt at the time of the collision, suffered a broken rib and a head injury. Senn sued Sizemore, alleging that he had negligently or wantonly caused the accident by driving his truck too fast and by driving too close to the fire medic truck; he sued Alabama Gas, seeking to impose liability on it under the doctrine of respondeat superior. Alabama Gas conceded that Sizemore was working within the line and scope of his employment at the time of the accident and, therefore, that it would be liable if Sizemore was found to be liable. Senn sought to recover punitive damages in connection with the wantonness claim. The trial court directed a verdict for Sizemore 1322 and Alabama Gas on Senn's wantonness claim. The negligence claim was submitted to a jury, which found for Sizemore and Alabama Gas. Senn filed a post-trial motion seeking a judgment notwithstanding the verdict on the liability aspect of his negligence claim, and a new trial on the damages aspect of his negligence claim. In the alternative, he sought a new trial on both the liability and the damages aspects of his negligence claim. The trial court denied that motion, and Senn appealed. The following issues are presented for our review: 1) Whether the trial court erred in refusing to enter a judgment for Senn as a matter of law on the liability aspect of his negligence claim; 2) Whether the trial court erred in refusing to grant Senn a new trial on the ground that the verdict was against the weight or preponderance of the evidence; 3) Whether the trial court erred in directing a verdict for Sizemore and Alabama Gas on Senn's wantonness claim; and 4) Whether the trial court erred in refusing Senn's requested jury charges on the collateral source rule. Senn argues in connection with the first two issues that the evidence presented no genuine issue of material fact with respect to Sizemore's liability, and, consequently, no such issue with respect to liability on the part of Alabama Gas. Senn maintains that Sizemore, knowing that the road was wet and slick and that he was towing a utility trailer on a downhill slope, violated two well-established rules of the road by driving too fast, in violation of Ala.Code 1975, § 32-5A-170 ("Reasonable and prudent speed"), and by driving too close to the fire medic truck, in violation of Ala.Code 1975, § 32-5A-89 ("Following too closely"). Senn also contends that Sizemore clearly violated an ordinance of the City of Montgomery, § 25-97(a), Montgomery City Code (1980), which prohibits a driver from operating his vehicle in such a careless or negligent manner as to cause or permit it to collide with another vehicle. In the alternative, Senn argues that he was at least entitled to a new trial on his negligence claim because, he says, the jury's verdict was against the weight or preponderance of the evidence. Section 32-5A-170 provides: "No person shall drive a vehicle at a speed greater than is reasonable and prudent under the conditions and having regard to the actual and potential hazards then existing. Consistent with the foregoing, every person shall drive at a safe and appropriate speed when approaching and crossing an intersection or railroad grade crossing, when approaching and going around a curve, when approaching a hill crest, when traveling upon any narrow or winding roadway, and when special hazards exist with respect to pedestrians or other traffic or by reason of weather or highway conditions." Section 32-5A-89 states in pertinent part: "(a) The driver of a motor vehicle shall not follow another more closely than is reasonable and prudent, having due regard for the speed of such vehicles and the traffic upon and the condition of the highway. Except when overtaking and passing another vehicle, the driver of a vehicle shall leave a distance of at least 20 feet for each 10 miles per hour of speed between the vehicle that he is driving and the vehicle that he is following." Both of these sections, as well as the city ordinance relied on by Senn, essentially codified the common law requiring a person to exercise reasonable care in operating a motor vehicle. Whether a person involved in an accident acted reasonably in operating his motor vehicle depends on all of the circumstances surrounding the accident; the question is ordinarily one for the jury. See Wayland Distributing Co. v. Gay, 287 Ala. 446, 252 So.2d 414 (1971); Horton v. Mobile Cab & Baggage Co., 281 Ala. 35, 198 So.2d 619 (1967) (both cases involving the construction of Title 36, § 5, Code of Ala.1940, the predecessor to § 32-5A-170); see, also, Couch v. Donahue, 259 F.2d 325 (5th Cir.1958) (construing Title 36, § 15, the predecessor to § 32-5A-89). These cases decided under prior Alabama law merely reflect the well-settled rule that 1323 questions of negligence are for the jury where reasonable people could draw different inferences from the evidence. See, e.g., Tennessee Coal, Iron & R.R. Co. v. Spicer, 206 Ala. 141, 89 So. 293 (1921). It is equally well settled that a jury verdict is presumed correct and that the presumption of correctness is strengthened where, as here, the trial court denied a motion for a new trial. We are not at liberty to vacate a jury's verdict merely because it does not conform to our personal views of the evidence. Locklear v. Nash, 275 Ala. 95, 152 So.2d 421 (1963). A decision of the trial court denying a new trial on the ground that the verdict is contrary to the weight or preponderance of the evidence will not be reversed unless, after allowing all reasonable presumptions as to the verdict's correctness, the preponderance of the evidence against the verdict is so decided as to clearly convince the appellate court that it is wrong and unjust. A ruling on a motion for a new trial is within the sound discretion of the trial court and should not be disturbed on appeal unless some legal right was abused and the record plainly and palpably shows that the trial court erred. Trans-South-Rent-A-Car, Inc. v. Wein, 378 So.2d 725 (Ala.1979). After carefully reviewing the record, we hold that the negligence claim was properly submitted to the jury. Furthermore, we cannot say that the verdict was against the weight or preponderance of the evidence. The evidence showed that Sizemore was not exceeding the speed limit at the time of the collision. The evidence also showed that the utility trailer Sizemore was towing was not heavily loaded and that Sizemore was traveling "at least two car lengths" behind the fire medic truck when it suddenly stopped. The jury heard all of the evidence pertaining to the weather conditions; the condition of the road; the relative speed at which both vehicles were traveling; and the distance between Sizemore's truck and the fire medic truck. The jury was instructed on the proof necessary to sustain a negligence claim, and it was apprised of the pertinent rules of the road. Simply put, the evidence presented a jury question as to whether Sizemore was negligently operating his truck, and the jury resolved that question in favor of Sizemore and Alabama Gas. We note Senn's reliance on Glanton v. Huff, 404 So.2d 11 (Ala.1981); and Gribble v. Cox, 349 So.2d 1141 (Ala.1977). Those cases, however, are not controlling here. The facts surrounding the collision in Gribble were not reported in detail. This Court did note in that case, however, that the defendants failed to present any evidence tending to show that Cox, the defendant driver, had an "excuse" for allowing his vehicle to strike the Gribbles' vehicle from behind as it sat motionless at an intersection. This Court was justified, therefore, in holding that the verdict for the defendants in that case was due to be set aside on the ground that it was against the weight or preponderance of the evidence. In Glanton, the defendant's vehicle also struck the plaintiff's vehicle from behind as it sat motionless at an intersection. The evidence showed that it was raining at the time of that collision and that the plaintiff, who was towing a trailer carrying a fishing boat, saw the plaintiff stopped a quarter of a mile ahead of him, but nonetheless failed to slow his vehicle sufficiently so as to prevent it from ultimately skidding into the rear of the plaintiff's vehicle. In a split decision, this Court held that the verdict for the defendant was against the weight or preponderance of the evidence and remanded the case for a new trial. Common to both Gribble and Glanton was the occurrence of a rear-end collision under circumstances exhibiting a clear lack of reasonable care on the part of a defendant while approaching an intersection at which the plaintiff's vehicle was stopped. The evidence in the present case, however, shows that the driver of the fire medic truck and, consequently, Sizemore were taken by surprise at the suddenness at which they were forced to stop their vehicles. This evidence, in conjunction with the evidence establishing that Sizemore was not exceeding the legal speed limit and that he was following "at least two car lengths" behind the fire medic truck, provided the basis for a finding that this accident occurred 1324 notwithstanding the exercise of due care. This Court has held that "[evidence] of an unfortunate result does not in and of itself raise an inference of negligence." Horton v. Mobile Cab & Baggage Co., 281 Ala. at 42, 198 So.2d at 625. In Horton, this Court noted: "A showing of an unfortunate result does not in and of itself raise an inference of negligence. Watterson v. Conwell, 258 Ala. 180, 61 So.2d 690. The burden was upon the plaintiff, if he is to recover, to establish negligence to the reasonable satisfaction of the trier of fact. Under all the evidence it was within the province of the jury to find that injury to the plaintiff, if any, was the result of an unavoidable accident, in which case there would be no liability on the part of the defendant. See Johnson v. Louisville and Nashville R.R. Co., 240 Ala. 219, 198 So. 350." See, also, National Biscuit Co. v. Wilson, 256 Ala. 241, 54 So.2d 492 (1951) (the mere skidding of an automobile on an icy street does not necessarily prove negligence on the part of the driver of the automobile). As Chief Justice Torbert suggested in his dissent in Glanton, to hold that a defendant is always negligent just because he struck the rear of the plaintiff's vehicle would require a summary judgment or a directed verdict for the plaintiff on the issue of liability where, as here, the defendant admits the incident. Such a result would surely usurp the jury's role as factfinder on the question of the defendant's due care where different inferences could be drawn from the evidence. The trial court recognized this in its order denying Senn's post-trial motion. With respect to the third issue whether the trial court erred in directing a verdict for Sizemore and Alabama Gas on Senn's wantonness claimsuffice it to say that the evidence, even viewed in a light most favorable to Senn, under our standard for reviewing directed verdicts, see Springer v. Jefferson County, 595 So.2d 1381 (Ala.1992), was not sufficient to create a fact question for the jury. The accident made the basis of this case occurred on November 22, 1989; therefore, the applicable standard for reviewing the directed verdict on Senn's claim for compensatory damages under his wantonness count is the "substantial evidence rule." See Ala.Code 1975, § 12-21-12. Therefore, the directed verdict on this aspect of Senn's wantonness claim was proper unless there was substantial evidence that Sizemore was operating his truck in a wanton manner at the time of the collision. Wanton conduct involves the conscious doing of some act or the conscious omission of some duty with knowledge of the existing conditions and while conscious that from the doing of that act or by the omission of that duty injury will likely or probably result. Before a person can be said to be guilty of wanton conduct, it must be shown that with reckless indifference to the consequences he consciously and intentionally did some wrongful act or omitted some known duty and that the act or omission produced the injury. Hamer v. Nelson, 516 So.2d 1381 (Ala.1987). The directed verdict on Senn's claim for punitive damages under his wantonness count is, however, governed by the "clear and convincing evidence" standard. Ala. Code 1975, § 6-11-20; see Berry v. Fife, 590 So.2d 884 (Ala.1991). Thus, even if there was "substantial evidence" of wantonness on the part of Sizemore, the directed verdict with respect to Senn's claim for punitive damages was nonetheless proper unless there was "clear and convincing evidence" that Sizemore had consciously or deliberately engaged in "wantonness" ("[c]onduct which is carried on with a reckless or conscious disregard of the rights or safety of others"), § 6-11-20(a). The evidence in the present case was obviously not sufficient to convince the jury that Sizemore was even negligent in the operation of his truck at the time of the accident. The undisputed evidence showed that Sizemore was not exceeding the legal speed limit or "tailgating" prior to the accident. After carefully reviewing the record, we conclude that the evidence would not support an inference by the jury that Sizemore was wantonly operating his truck at the time of the collision. 1325 Finally, we conclude that the trial court did not err in refusing Senn's requested jury charges on the collateral source rule. Senn argues that the jury should have been instructed that he could recover damages for his medical expenses even if those expenses had been paid by a collateral source. However, the collateral source rule, insofar as it allowed recovery against a tort-feasor of medical expenses paid by a collateral source, was abrogated by Ala.Code 1975, § 12-21-45. That section provides: "(a) In all civil actions where damages for any medical or hospital expenses are claimed and are legally recoverable for personal injury or death, evidence that the plaintiff's medical or hospital expenses have been or will be paid or reimbursed shall be admissible as competent evidence. In such actions upon admission of evidence respecting reimbursement or payment of medical or hospital expenses, the plaintiff shall be entitled to introduce evidence of the cost of obtaining reimbursement or payment of medical or hospital expenses. "(b) In such civil actions, information respecting such reimbursement or payment obtained or such reimbursement or payment which may be obtained by the plaintiff for medical or hospital expenses shall be subject to discovery. "(c) Upon proof by the plaintiff to the court that the plaintiff is obligated to repay the medical or hospital expenses which have been or will be paid or reimbursed, evidence relating to such reimbursement or payment shall be admissible. "(d) This section shall not apply to any civil action pending on June 11, 1987." Because Senn's requested jury charges were erroneous as a matter of law, they were properly refused. We note that the writ in Ex parte Brooks, [Ms. 1911577, August 21, 1992], was denied by this Court without an opinion. Our denial of the writ should not be understood as an affirmance or ratification of the holding of the Court of Civil Appeals in that case (i.e., that § 12-21-45 is somehow irrelevant or inapplicable in civil cases where damages for medical expenses are claimed, see Carver v. Walden, 602 So.2d 426 (Ala.Civ.App.1992)). To the extent that the decision of the Court of Civil Appeals in Carver is inconsistent with our holding today, it is hereby overruled. For the foregoing reasons, the judgment is affirmed. AFFIRMED. MADDOX, SHORES, ADAMS, STEAGALL and INGRAM, JJ., concur. HORNSBY, C.J., concurs specially. HORNSBY, Chief Justice (concurring specially): Although I agree with the majority, I write separately to clarify why the trial court's refusal of the plaintiff's requested jury charges on the collateral source rule was not reversible error in this case. During trial, the defendants elicited testimony from Senn that Blue Cross Insurance Company had paid Senn's hospital bills. For this reason, Senn requested that the trial court give three jury charges on the collateral source rule. The trial court refused, and Senn argues on appeal that its refusal constituted reversible error. Senn's requested charges on the collateral source rule read as follows: No. 37: "Accordingly, benefits received by a Plaintiff, from a collateral source, such as his medical benefits, may be considered as evidence by you but not preclude recovery of those benefits by Plaintiff if based on the evidence it is your view that Plaintiff is entitled to recover such benefits." No. 38: "Under the `collateral source doctrine' the amount paid by an insurer to its insured for the latter's personal injuries or medical bills does not affect the individual's measure of recovery against the wrongdoer." No. 39: "The `collateral source doctrine' is that doctrine which provides that damages for 1326 a wrongdoing are not diminished because the injured party has been wholly or partially indemnified or compensated for his loss by insurance in incidents where the wrongdoer did not contribute to such insurance." Because these charges were misleading and inaccurate statements of the law, I agree with the majority that the trial court did not err in refusing to give them. The common law collateral source rule provided that "benefits received by the plaintiff from a source wholly independent of and collateral to the wrongdoer will not diminish the damages otherwise recoverable from the wrongdoer." 22 Am.Jur.2d Damages § 566 (1988). In accordance with this rule, evidence that a plaintiff had received any payments from a collateral source was virtually inadmissible at trial, because it lacked relevance as to the plaintiff's right to recover and because it posed an undue prejudice to the plaintiff's ability to recover. See Gribble v. Cox, 349 So.2d 1141, 1143 (Ala.1977); Carlisle v. Miller, 275 Ala. 440, 444, 155 So.2d 689, 691 (1963); Vest v. Gay, 275 Ala. 286, 289, 154 So.2d 297, 299-300 (1963); Sturdivant v. Crawford, 240 Ala. 383, 385, 199 So. 537, 538 (1940). However, effective June 11, 1987, Ala. Code 1975 § 12-21-45, altered the collateral source rule in civil actions in which a plaintiff seeks damages for any medical or hospital expenses. Under § 12-21-45, a defendant has the option of introducing evidence that a collateral source has paid or will pay or reimburse, a plaintiff for his medical or hospital expenses, and if a defendant elects to introduce such evidence, a plaintiff may present evidence as to the cost of obtaining the reimbursement or payment of medical or hospital expenses, including evidence of any right of subrogation claimed by the collateral source. Thus, under § 12-21-45, a plaintiff is not entitled, necessarily, to fully recover medical or hospital expenses, as Senn's requested jury charges indicate. Instead, in such cases a jury must consider all of the evidence introduced at trial regarding payments from collateral sources and determine to what extent the plaintiff is entitled to recover his medical or hospital expenses, and the trial court should instruct the jury that it has this duty.	{ "pile_set_name": "FreeLaw" }
616 F.3d 1212 (2010) UNITED STATES of America, Plaintiff-Appellee, v. Lorenzo RAINER, a.k.a. Reno Rainer, Defendant-Appellant. No. 09-14014. United States Court of Appeals, Eleventh Circuit. August 31, 2010. 1213 David R. Clark (Court-Appointed), Prattville, AL, for Defendant-Appellant. Matthew W. Shepherd, Brent W. Woodall, Montgomery, AL, for Plaintiff-Appellee. Before TJOFLAT, CARNES and COX, Circuit Judges. CARNES, Circuit Judge: This is yet another felon-in-possession case involving yet another variation on the issue of whether a previous conviction qualifies as a "violent felony" for purposes of the enhanced penalties provided in the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e)(1).[1] The specific question in this case is whether a conviction for violating Alabama's third-degree burglary statute, Ala.Code § 13A-7-7, is a "violent felony" for ACCA purposes. Although convictions under the statute will not be "violent felon[ies]" in every case, the charging documents leading to this defendant's previous convictions for third-degree burglary convince us that they do qualify as violent felonies. Lorenzo Rainer was convicted of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1). His conviction resulted from a jury trial in which a police officer testified that during a foot chase Rainer had pulled out a silver, snub-nosed revolver and pointed it at him. The officer also testified that soon thereafter he found a revolver fitting that description in a yard through which Rainer had run. Rainer never disputed that he was a convicted felon but he does contend that there was insufficient evidence to prove that he knowingly possessed a firearm. That contention is frivolous in light of the officer's testimony, which the jury was entitled to credit, that Rainer had pointed a firearm at him. Rainer's non-frivolous contention is that the district court erred when it decided at sentencing that he qualified for an enhanced sentence under the ACCA, 18 U.S.C. § 924(e)(1), which applies to a defendant convicted under § 922(g) who has three previous convictions for violent felonies or serious drug offenses. Two of the three earlier convictions that were used to qualify Rainer as an armed career criminal were Alabama convictions for third-degree burglary, Ala.Code § 13A-7-7, which he argues are not "violent felon[ies]" for ACCA purposes. The ACCA provides that a "burglary" that is punishable by more than a year in prison is a violent felony. See 18 U.S.C. § 924(e)(2)(B)(ii). Alabama law makes third-degree burglary a Class C felony, which is punishable by up to ten years in prison. See Ala.Code §§ 13A-5-6(a)(3); 13A-7-7(b). The ACCA does not, however, view all burglaries as equal. It discriminates between two types, using terminology created for that purpose in ACCA decisions. As the statute has been interpreted a conviction for "generic burglary" counts as a violent felony, while a conviction for "non-generic burglary" does not. In Taylor v. United States, 495 U.S. 575, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990), the Supreme Court held that "a 1214 person has been convicted of burglary for purposes of a § 924(e) enhancement if he is convicted of any crime, regardless of its exact definition or label, having the basic elements of unlawful or unprivileged entry into, or remaining in, a building or structure, with intent to commit a crime." Id. at 599, 110 S.Ct. at 2158. Regardless of its state law label, a burglary that includes those elements is a "generic burglary" and qualifies as a "violent felony" for ACCA purposes. See United States v. Rodriquez, 553 U.S. 377, 387, 128 S.Ct. 1783, 1790, 170 L.Ed.2d 719 (2008) (observing that "the meaning of `burglary' for purposes of [the] ACCA does not depend on the label attached by the law of a particular State"); Shepard v. United States, 544 U.S. 13, 16-17, 125 S.Ct. 1254, 1257, 161 L.Ed.2d 205 (2005) (explaining that the listing of burglary as a predicate "violent felony" in the ACCA refers to "generic burglary," which is the "unlawful or unprivileged entry into, or remaining in, a building or structure, with intent to commit a crime" (quotation marks omitted)); United States v. Miles, 290 F.3d 1341, 1347 (11th Cir.2002) ("Because the statutory definition of burglary differs in many states, a burglary conviction serves as a predicate for enhanced sentencing under section 924(e) only if the conviction is for a crime involving the elements of `generic' burglary."). The Supreme Court explained in Taylor that some state statutes "define burglary more broadly" than generic burglary, and it gave as an example statutes that include automobiles and boats among the property that may be burglarized. See Taylor, 495 U.S. at 599, 110 S.Ct. at 2158-59; see also Gonzales v. Duenas-Alvarez, 549 U.S. 183, 186-87, 127 S.Ct. 815, 818, 166 L.Ed.2d 683 (2007) (noting that breaking into a vehicle falls outside the generic definition of burglary because a vehicle is not a "building or structure" (quotation marks omitted)); Shepard, 544 U.S. at 15-16, 125 S.Ct. at 1257 (explaining that the ACCA "makes burglary a violent felony only if committed in a building or enclosed space (`generic burglary'), not in a boat or motor vehicle"); United States v. Adams, 91 F.3d 114, 115 (11th Cir.1996) (giving burglary of a vehicle as an example of non-generic burglary). Burglaries that do not include all of the elements essential to generic burglary are non-generic and do not count as violent felonies under the ACCA. The Alabama third-degree burglary statute underlying two of Rainer's three previous felony convictions provides that: "[a] person commits the crime of burglary in the third degree if he knowingly enters or remains unlawfully in a building with intent to commit a crime therein." Ala. Code § 13A-7-7 (1979). That provision is not the problem. The problem is contained in the applicable definition of "building" as: [A]ny structure which may be entered and utilized by persons for business, public use, lodging or the storage of goods, and includes any vehicle, aircraft or watercraft used for the lodging of persons or carrying on business therein. Where a building consists of two or more units separately occupied or secured, each shall be deemed both a separate building and a part of the main building. Ala.Code § 13A-7-1(2) (1979) (emphasis added).[2] Rainer contends that statute 1215 sweeps in more conduct than generic burglarythat it is "a nongeneric-burglary statute," see Taylor, 495 U.S. at 599-600, 110 S.Ct. at 2159because Alabama's definition of a "building" includes vehicles, aircraft, or watercraft if those objects were used "for the lodging of persons or carrying on business therein." See Ala.Code § 13A-7-1(2) (1979). The government contends that the definition's conditional clause narrows the burglary statute's sweep to generic burglary. We agree with Rainer that Alabama's third-degree burglary statute is a non-generic burglary statute because it covers some vehicles, aircraft, and watercraft, which are places or property falling outside the scope of generic burglary. See Taylor, 495 U.S. at 599-600, 110 S.Ct. at 2158-59; Shepard, 544 U.S. at 16-17, 125 S.Ct. at 1257. The conditional clause does not limit the statute's sweep to generic burglary. Even if used "for the lodging of persons or carrying on business therein," see Ala.Code § 13A-7-1(2) (1979), vehicles, aircraft, and watercraft are not "building[s] or structure[s]" in the generic burglary sense. See Taylor, 495 U.S. at 599-600, 110 S.Ct. at 2158-59; Shepard, 544 U.S. at 15-16, 125 S.Ct. at 1257. The definitional focus is on the nature of the property or place, not on the nature of its use at the time of the crime. The finding that Alabama's third-degree burglary statute is a non-generic burglary statute does not end our inquiry. A conviction under a non-generic burglary statute still counts as "burglary" under the ACCA if the defendant was actually found guilty of the elements of a generic burglary. See id. at 602, 110 S.Ct. at 2160; United States v. Palomino Garcia, 606 F.3d 1317, 1328 (11th Cir.2010); United States v. Bennett, 472 F.3d 825, 832 (11th Cir.2006) ("A conviction constitutes `burglary' for purposes of § 924(e) if either the statutory definition of the offense substantially corresponds to generic burglary or there is a finding of fact that a particular crime contained all the elements of generic burglary." (emphasis added)). In determining whether a conviction under a non-generic burglary statute was nonetheless for generic burglary, courts employ the "modified categorical approach." See United States v. Sneed, 600 F.3d 1326, 1330-32 (11th Cir.2010) (explaining that the modified categorical approach addresses "what material sentencing courts may use to determine the nature of a defendant's prior felony convictions for purposes of the § 924(e)(1) ACCA enhancement"). This approach allows a "court to determine which [state] statutory phrase was the basis for the [defendant's] conviction by consulting the trial recordincluding charging documents, plea agreements, transcripts of plea colloquies, findings of fact and conclusions of law from a bench trial, and jury instructions and verdict forms." Johnson v. United States, ___ U.S. ___, 130 S.Ct. 1265, 1273, 176 L.Ed.2d 1 (2010); see also Chambers v. United States, ___ U.S. ___, 129 S.Ct. 687, 691, 172 L.Ed.2d 484 (2009); Shepard, 544 U.S. at 26, 125 S.Ct. at 1263; Taylor, 495 U.S. at 602, 110 S.Ct. at 2160; Palomino Garcia, 606 F.3d at 1337 (explaining 1216 that under this approach a court may consult a "narrow universe" of documents to determine which state statutory phrase was the basis for the conviction). The district court concluded that both of Rainer's previous third-degree burglary convictions counted for ACCA purposes only after reviewing the indictment and judgment in each one. A 1980 Alabama state court indictment charged that Rainer "did knowingly enter or remain unlawfully in a building of Richie's Shoe Store, Inc., a corporation, with intent to commit a crime therein, to-wit: theft of property, in violation of Section 13A-7-7 of the Code of Alabama." The corresponding judgment shows that he was convicted of those charges. A 1982 indictment charged that Rainer "did knowingly enter or remain unlawfully in a building of, to wit: Whiddon's Gulf Service Station, owned by Wilson M. Whiddon, with intent to commit a crime therein, to wit: theft of property, in violation of § 13A-7-7 of the Code of Alabama." The corresponding judgment shows that he was convicted of those charges. Rainer argues that those state court records establish only that he burglarized a "building" and Alabama's broad definition of "building" makes it possible that his convictions were for unlawful entry of places that fall outside the scope of generic burglary. The question is whether "building of Richie's Shoe Store, Inc." and "building of, to wit: Whiddon's Gulf Service Station" in the indictments show that Rainer's convictions were for burglary of a shoe store and service station, places that fall squarely within the scope of generic burglary. See Taylor, 495 U.S. at 599-600, 110 S.Ct. at 2158-59. Rainer's argument hinges on the proposition that under the § 13A-7-1(2) definition of "building" the indictments' description of a "building of Richie's Shoe Store, Inc." and of a "building of, to wit: Whiddon's Gulf Service Station" could have been referring not to structures but to vehicles. To fit within the statutory definition of "building" vehicles must be used "for the lodging of persons or carrying on business therein." See Ala.Code § 13A-7-1(2) (1979). But a vehicle could not be used to carry on the business of a gasoline service station, which is mainly to dispense gasoline for sale. While a shoe store theoretically could be operated out of a vehicle, that possibility is too farfetched to undermine our conviction that Rainer's two previous convictions were for burglary of a building in the generic burglary sense of the word. The Supreme Court has instructed us that the "ACCA does not require metaphysical certainty." James v. United States, 550 U.S. 192, 207, 127 S.Ct. 1586, 1597, 167 L.Ed.2d 532 (2007). The ACCA is part of the real world, and courts should not refuse to apply it because of divorced-from-reality, law-school-professor-type hypotheticals that bear no resemblance to what actually goes on. The Supreme Court has told us that a conviction under a non-generic burglary statute qualifies as an ACCA predicate offense "if the indictment . . . show[s] that the defendant was charged only with a burglary of a building." Shepard, 544 U.S. at 17, 125 S.Ct. at 1258 (quotation marks omitted). The indictments in Rainer's two previous cases sufficiently show that he was. AFFIRMED. NOTES [1] See, e.g., United States v. Harris, 608 F.3d 1222, 1223-24 (11th Cir.2010); United States v. Lee, 586 F.3d 859, 872-74 (11th Cir.2009); United States v. Harrison, 558 F.3d 1280, 1290-96 (11th Cir.2009); United States v. Wade, 458 F.3d 1273, 1277-78 (11th Cir. 2006); United States v. Dowd, 451 F.3d 1244, 1255 (11th Cir.2006); United States v. James, 430 F.3d 1150, 1155-57 (11th Cir.2005). [2] After Rainer's first third-degree burglary conviction in 1981 and his July 1982 arrest leading to the second third-degree burglary conviction, Alabama amended the definition of "building" to read as follows: Any structure which may be entered and utilized by persons for business, public use, lodging or the storage of goods, and such term includes any vehicle, aircraft or watercraft used for the lodging of persons or carrying on business therein and such term includes any railroad box car or other rail equipment or trailer or tractor trailer or combination thereof. Where a building consists of two or more units separately occupied or secure, each shall be deemed both a separate building and a part of the main building. Ala.Code § 13A-7-1(2) (1982) (effective Aug. 22, 1982). The amendment broadened the definition of "building" to include "any railroad box car or other rail equipment or trailer or tractor trailer or combination thereof." Id. The result was to make Alabama's third-degree burglary statute even more non-generic than it had been. See Taylor, 495 U.S. at 599-600, 110 S.Ct. at 2158-59. Because it did not apply to either of Rainer's Third Degree Burglary convictions, we have not considered the amendment in our analysis, but it would not have made any difference if we had.	{ "pile_set_name": "FreeLaw" }
393 F.2d 731 Guy Wellman HOLLOWAY, Jr., Appellant,v.UNITED STATES of America, Appellee. No. 21828. United States Court of Appeals Ninth Circuit. April 12, 1968. Guy W. Holloway, Jr., in pro. per. Edward Davis, U.S. Atty., Lawrence Turoff, Asst. U.S. Atty., Phoenix, Ariz., for appellee. Before HAMLIN, KOELSCH and BROWNING, Circuit Judges. HAMLIN, Circuit Judge. 1 Guy Wellman Holloway, Jr., hereinafter appellant, has filed a timely appeal in this court from an order of the United States District Court for the District of Arizona denying without a hearing appellant's petition to vacate two convictions in the District of Arizona, the sentences on which have already been served. The appeal is in forma pauperis and in pro per. From the documents filed in the district court and in this court the following facts appear. 2 In December, 1961, appellant, represented by appointed counsel, pleaded guilty to a Dyer Act charge (18 U.S.C. 2313) in the District of Arizona. Before sentence on that charge he apparently escaped and was recaptured. He was then charged with escape (18 U.S.C. 751). It appears that at the time of appellant's arraignment in the District of Arizona on the escape charge there was some conversation between appellant's counsel and the United States attorney concerning another possible charge pending against appellant in the state of Texas, and of the possibility of that charge being heard and disposed of also by the Arizona District Court under Rule 20, Federal Rules of Criminal Procedure.1 There was a short continuance of the arraignment to permit appellant's counsel to consult with the United States attorney, after which, appellant contends, his counsel advised him that the United States attorney would recommend concurrent sentences in all matters if appellant agreed that the Texas case might be transferred to the District of Arizona. 3 Appellant contends that he so agreed and upon that basis entered a plea of guilty to the escape charge. After this plea of guilty appellant's attorney requested that sentencing be deferred on both the Dyer Act charge and the escape charge unitl the time when the Taxas Rule 20 charge could also be before the court. Accordingly, the date for sentencing was set for March 19, 1962. On this day appellant's counsel did not appear and a colloquy ensued between the court, appellant and the United States attorney concerning the pendency of the Rule 20 charge which at that time was not before the court. Appellant stated that he wanted 'to get it all straightened up at the same time.' In answer to a question by the court as to the Rule 20 charge the United States attorney stated 'I know there was an investigation, but as far as I know there is no other charge.' Appellant then stated, 'No other charges? Okay, I just don't want to have to be coming back and forth if I could get it taken care of at one time.' The court then proceeded to sentence appellant to five years imprisonment on the Dyer Act charge and five years imprisonment on the escape charge, the sentences to run concurrently.2 No formal waiver of counsel appears in the record. 4 Two months later, while appellant was is custody, he was indicted in Texas on the charge there and was ultimately sentenced to four years imprisonment on that charge, such imprisonment on secutive to the two prior three-year concurrent sentences. 5 While the above contentions of appellant were not set out in his petition to vacate filed in the Arizona court in as much detail as we have set them out above, there were sufficient statements in his petition to show that the contended that a bargain had been made in reference to sentence recommendations and that this bargain had not been kept. 6 The petition filed by appellant in the district court was on a form supplied by the clerk of the district court and was entitled 'Motion, Pursuant to Section 2255 * * .' However, in a later document filed in the district court in Arizona appellant requested the court to treat his motion 'in the nature of a writ of error coram nobis' and he cited in that document the case of United States v. Morgan 346 U.S. 502, 74 S.Ct. 247, 98 L.Ed. 248 (1954), which case authorized the filing of a petition for a writ of coram nobis after sentences have been completed. 7 The district court denied appellant's petition without a hearing indicating that it had no jurisdiction by reason of the fact that the sentences in the District Court of Arizona had been completed. 8 We disagree. One of the purposes of coram nobis is to allow a defendant to attack a conviction notwithstanding the fact that he has completed sentence. United States v. Morgan, supra at 512, 74 S.Ct. 247. A defendant may be harmed by an invalid conviction even after he has served his sentence; i.e., subsequent conviction may carry heavier penalties, and his civil rights may be affected. Coram nobis must be kept available as a post-conviction remedy to prevent 'manifest injustice' even where the removal of a prior conviction will have little present effect on the petitioner. See Mathis v. United States, 369 F.2d 43 (4th Cir. 1966); see generally Note, 55 Geo.L.J. 851, 865-70 (1967). Here the appellant alleges that his guilty plea was induced by a 'bargain' made with the United States attorney, and that that 'bargain' was not kept. He is certainly entitled to a hearing to determine whether or not his prior conviction was based upon an involuntary guilty plea.3 We do not deal here with a 'moot' question; if appellant is sucessful in vacating the two earlier convictions, the three years he spent in jail on those convictions must be credited against his present term based on the Texas Dyer Act conviction, and he would thus be entitled to earlier release. 9 The case is remanded to the district court for further proceedings, during which appellant should be permitted to amend or amplify his prior contentions. CONCURRING OPINION 10 KOELSCH, Circuit Judge. 11 Unless Holloway can successfully establish a vital flaw in both the conviction on the Dyer Act charge and the escape charge, he is not entitled to a writ of coram nobis, for the sentences being concurrent, each causes the harm which is the necessary predicate for issuance of the writ. 12 The opinion indicates that Holloway's attack in the district court was directed against his conviction of the escape charge (which he asserted rested upon an involuntary plea); that not until the proceeding reached this court on appeal did he seek to question the Dyer Act conviction; and that he now suggests in his brief that the district court, at his arraignment for plea on the Dyer Act Charge (and likewise on the escape charge), failed to comply with the requirements of Rule 11, Fed.R.Crim.P. Thus, his first attack on both judgments is made in this court. 13 In ordinary circumstances, I suggest the orthodox procedure would be to simply affirm the judgment. However, it is perhaps better in this instance to confine the matter to one package and, without seeming to fault the trial judge, to remand the matter to the district court with directions to first afford Holloway a fair opportunity to amend his pleadings and, if he can and does, to then set aside the judgment and conduct further proceedings. 1 Rule 20. * * * * * A defendant arrested or held in a district other than that in which the indictment or information is pending against him may state in writing that he wishes to plead guilty or nolo contendere, to waive trial in the district in which the indictment or information is pending and to consent to disposition of the case in the district in which he was arrested or is held, subject to the approval of the United States attorney for each district. * * * 2 The sentences were later reduced to three years on each charge to run concurrently 3 While not raised below, the appellant now also alleges that in taking his guilty plea to the escape charge the court did not comply with the requirements of Rule 11, Federal Rules of Criminal Procedure. See Heiden v. United States, 353 F.2d 53 (9th Cir. 1965). The court should allow appellant to be heard on this issue. The court should also consider appellant's contention that his guilty plea to the Arizona Dyer Act charge was taken in contravention of Rule 11, even though appellant raised this issue for the first time on appeal	{ "pile_set_name": "FreeLaw" }
167 F.3d 541 U.S.v.Pemberton* NO. 98-8657 United States Court of Appeals,Eleventh Circuit. December 22, 1998 1 Appeal From: S.D.Ga. , No.98-00001-1-CR-1-DHB 2 Affirmed. * Fed.R.App.P. 34(a); 11th Cir.R. 34-3	{ "pile_set_name": "FreeLaw" }
FILED NOT FOR PUBLICATION MAR 05 2014 MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT CESAR MARROQUIN-IBARRA, No. 10-72178 Petitioner, Agency No. A092-248-316 v. MEMORANDUM* ERIC H. HOLDER, Jr., Attorney General, Respondent. On Petition for Review of an Order of the Board of Immigration Appeals Submitted March 3, 2014 Pasadena, California Before: KOZINSKI, Chief Judge, GRABER, Circuit Judge, and ZOUHARY, District Judge.* * This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). * The Honorable Jack Zouhary, District Judge for the U.S. District Court for the Northern District of Ohio, sitting by designation. page 2 1. The Board of Immigration Appeals (BIA) didn’t err in examining the criminal complaint and the abstract of judgment to determine that Marroquin- Ibarra had been convicted of elder abuse with a dangerous weapon. See 8 U.S.C. § 1229a(c)(3)(B); Taylor v. United States, 495 U.S. 575, 602 (1990); see also Cal. Penal Code §§ 368(b)(1), 12022(b)(1). Marroquin-Ibarra’s claim that he didn’t use a dangerous weapon is an impermissible collateral attack on his state court conviction. See Ramirez-Villalpando v. Holder, 645 F.3d 1035, 1041 (9th Cir. 2011). 2. The BIA didn’t err in adopting the immigration judge’s determination that elder abuse with a dangerous weapon is a crime of violence because the crime presents a “substantial risk that physical force . . . may be used” against another person. 18 U.S.C. § 16(b); see also 8 U.S.C. § 1101(a)(43)(F). Marroquin-Ibarra’s argument that he lacked intent is belied by the fact that a conviction for elder abuse requires a finding that the defendant “willfully cause[d] or permit[ted] any elder . . . to suffer.” Cal. Penal Code § 368(b)(1). DENIED.	{ "pile_set_name": "FreeLaw" }
593 F.Supp.2d 393 (2009) UNITED STATES of America, Plaintiff, v. Jorge DE CASTRO FONT [1], Defendant. Criminal No. 08-337 (FAB). United States District Court, D. Puerto Rico. January 15, 2009. 394 Lydia Lizarribar-Buxo, Lizarribar Masini Law Office, Joseph A. Eloucher-Martinez, San Juan, PR, for Dependant. Juan A. Marques-Diaz, McConnell Valdes, Leslie Yvette, Flores-Rodriguez, McConnell Valdes, Luis Berrios-Amadeo, Cancio, Nadal, Rivera & Diaz, San Juan, PR, for Interested Parties. Daniel A. Schwager, Mathew L. Stennes, United States Department of Justice Public Integrity Section, Washington, DC, Ernesto G. Lopez-Soltero, Timothy R. Henwood, United States Attorneys Office, District of Puerto Rico, San Juan, PR, Jacqueline D. Novas-Debien, US Attorney's Office, District of Puerto Rico, Hato Rey, PR, for Plaintiff. MEMORANDUM AND ORDER FRANCISCO A. BESOSA, District Judge. On January 2, 2009 defendant Jorge De Castro-Font ("De Castro") filed a motion requesting both that the Court suppress certain Title III wire intercepts and that the Court order a Franks hearing. (Docket No. 151) On January 8, 2009, the United States ("government") opposed De Castro's motion. (Docket No. 159) For the reasons provided below, the Court DNIES De Castro's two-pronged request. Discussion Necessity requirement of 18 U.S.C. § 2518(1)(c) Pursuant to Title III (of the Omnibus Crime Control and Safe Streets Act of 1968) a wiretap application must include "a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous." 18 U.S.C. § 2518(1)(c); United States v. Hoffman, 832 F.2d 1299, 1306 (1st Cir. 1987). This provision, also known as the necessity requirement, see, e.g., United 395 States v. Santana, 342 F.3d 60, 65 (1st Cir.2003); United States v. Lopez, 300 F.3d 46, 52-53 (1st Cir.2002), was "simply designed to assure that wiretapping is not resorted to in situations where traditional investigative techniques would suffice to expose the crime." United States v. Kahn, 415 U.S. 143, 153 n. 12, 94 S.Ct. 977, 39 L.Ed.2d 225 (1974). To satisfy this requirement the statement supporting the wiretap application "must demonstrate that the government has made a reasonable, good faith effort to run the gamut of normal investigative procedures before resorting to means so intrusive as electronic interception of telephone calls." Santana, 342 F.3d at 65 (quoting United States v. London, 66 F.3d 1227, 1237 (1st Cir.1995) (quoting Hoffman, 832 F.2d at 1306-07)). The statement need not show, however, that the government exhausted all investigative procedures, nor must the government "run outlandish risks" prior to seeking a wiretap. Hoffman, 832 F.2d at 1306. The statement suffices "if it satisfies the burden that it indicate a `reasonable likelihood' that alternative techniques would fail to expose the crime." United States v. Ashley, 876 F.2d 1069, 1073 (1st Cir.1989) (quoting United States v. Abou-Saada, 785 F.2d 1, 12 (1st Cir.), cert. denied, 477 U.S. 908, 106 S.Ct. 3283, 91 L.Ed.2d 572 (1986)). De Castro contends that Special Agent Ruben Marchand-Morales's ("Marchand") affidavits offered in support of the July 2, 2008 and August 7, 2008 wiretap applications fail to show that investigative procedures less intrusive than a wiretap would not work. In fact, De Castro argues that the affidavits themselves show that the government already had sufficient information that it gathered from a confidential source identified as "CS1" to complete the investigation, thus obviating the need to resort to intercepting De Castro's telephone calls. (Docket No. 151, p. 8) As a corollary to this argument, De Castro asserts that the affidavits and the applications themselves are pretextual because subsequent to filing the applications the government relied only upon information it received from CS1 to request a search warrant (a method of investigation which the government claimed would be insufficient to develop its investigation of De Castro fully). The Court finds De Castro's argument meritless because Agent Marchand's affidavits explained in detailed, non-conclusory terms why some less intrusive means of investigation had already proven insufficient and why others were unlikely to succeed if attempted. Agent Marchand's affidavits described several alternative investigative techniques that had already been attempted and failed to provide the government with important information: the communications between De Castro and other persons who were part of the investigation. Specifically, Agent Marchand explained that the government had already conducted physical surveillance, had interviewed cooperating persons, had utilized confidential sources, had analyzed pen register and toll record information, and had convened a grand jury to [subpoena] financial records and obtain other information. The utilization of these investigatory methods produced the information that Agent Marchand used to request the wiretaps. These methods revealed that De Castro was in communication with the individuals who were part of the investigation, and that these individuals provided payments, often in cash, to individuals working for De Castro. The methods utilized also provided indirect evidence that the payments were provided in exchange for political favors. These investigatory methods did not, however, make the government privy to the communication between De Castro and the other individuals who were part of the investigation. This information was necessary for 396 the government to know the true nature of the exchanges between De Castro and those other individuals. CS1, the source that De Castro suggests provided sufficient information for the entire indictment against him, did not participate in meetings or phonecalls between De Castro and other individuals. Even if CS1 had been privy to some of these communications, the information from other confidential sources indicated that there were other suspicious transactions that did not involve CS1. Clearly, CS1 could not have provided the government with information related to transactions that did not involve him/her. If the government had relied solely upon CS1 and the other confidential sources, then it would have left significant stones unturned in terms of the scope of illegal activity in which De Castro was allegedly involved. Nor could the government have obtained this information via other investigatory methods less intrusive of privacy. As Agent Marchand explained, other investigatory methods less intrusive of privacy than a wiretap that had not yet been attempted at the time of the wiretap applications were unlikely to produce the information that was being sought. The government considered and rejected the use of undercover agents, the search of De Castro's trash ("trash runs"), and the execution of a search warrant. Agent Marchand explained that for an undercover agent to aid in the investigation, the agent would have to pose as someone willing to purchase a political favor, and to do that the agent would need to establish an "undercover business" with a credible history that would not arouse suspicion in De Castro. This task would be exceedingly difficult given De Castro's familiarity with the business, political and legal community in Puerto Rico. Even if successful, it would also only provide information from that one undercover agent's interactions with De Castro; it would not provide information as to De Castro's interactions with other individuals. As for the trash runs, they would be difficult to carry out without arousing the suspicion of De Castro and others because De Castro resides in a high security condominium and he worked in the Capitol. This is also true for search warrants which, once acted upon, would alert De Castro and others to the ongoing investigation. Moreover, as Agent Marchand explained, the payments that had been detected were usually made in plain, unmarked envelopes and the funds contained in the envelopes were distributed the same day that they were received. As detailed in Agent Marchand's affidavit, De Castro also communicated with other individuals via phone or in person, rather than in writing or via some other medium that might have been discoverable during a search of De Castro's office or home. Even though the government ultimately sought and obtained a search warrant, as noted by De Castro, the ultimate use of a search warrant in this case does not invalidate Agent Marchand's argument that a search warrant [issued earlier in the investigation] would tip off De Castro and other possible conspirators to the existence of the investigation. Nor does it prove that at the time the applications were made that it was likely that a search warrant would have revealed the nature of the discussions between De Castro and other persons, the primary information sought in the wiretaps. Lastly, the information sought via wiretap is of unique relevance to the first twenty counts filed against De Castro. C.f., Ashley, 876 F.2d at 1072-73 ("The authorizing court is also not precluded from referring to the nature of the alleged crimes in its evaluation of the sufficiency of the affidavit as to the required showing 397 of antecedent efforts.") To commit honest services wire fraud, an individual must make use of the wires. Prior to the wiretap, the government had evidence from the pen register analysis that De Castro used his phones to talk with other individuals, but the government did not know the subject of the conversations. Presumably, De Castro's use of his own phones to communicate with others may have been unrelated to the alleged criminal activity involving De Castro and those persons. Because (as discussed above) no other less intrusive form of investigation appeared likely to reveal the subject matter of the wire communications, the government properly demonstrated the need for the wiretaps to determine whether the wires were utilized to further the suspected fraud. Thus, for the reasons explained above, the Court affirms that Agent Marchand's affidavits provided a sufficient explanation for why traditional (or non-wiretap) investigative techniques would not suffice to expose the extent of the alleged criminal activity in this case. Therefore, the Court DENIES De Castro's challenge to the affidavits under Title III's necessity requirement, 18 U.S.C. § 2518(1)(c). Franks Hearing Where a defendant makes a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in a warrant affidavit, and if the allegedly false statement is necessary to the finding of probable cause, the Fourth Amendment requires that a hearing be held at the defendant's request. Franks v. Delaware, 438 U.S. 154, 155-56, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978). This is known as a Franks hearing. See, e.g., United States v. Adams, 305 F.3d 30, 36 n. 1 (1st Cir.2002). "There is, of course, a presumption of validity with respect to the affidavit supporting [a] search warrant." Franks, 438 U.S. at 171, 98 S.Ct. 2674. To obtain an evidentiary hearing, a challenger must accompany allegations of deliberate falsehood or of reckless disregard for the truth with an offer of proof. Id. Affidavits, sworn statements, or otherwise reliable witness statements should support the challenge, or the absence of such support should be satisfactorily explained. Id. "Mere inaccuracies, even negligent ones, are not enough." Adams, 305 F.3d at 36 n. 1. De Castro claims that he is entitled to a Franks hearing because Agent Marchand mistakenly attributed more power to De Castro than he actually had as Chairman of the Senate's Rules and Calendar Committee. Agent Marchand stated that De Castro, as Chairman of the Rules and Calendar Committee, "prepares the working calendars of the Senate. He supervises the work of the Committees, and decides which legislation will and will not be considered by the full Senate." (Misc. No. 08-094(FAB), Docket No. 5, Aff't. p. 6, ¶ 8A) De Castro understands this to mean that he alone controlled which bills would appear before the full Senate. He asserts that in reality he "followed the orders of Senate President Kenneth McClintock and executed the mandates of the `Autenticos' Caucus and `the new majority.'" (Docket No. 151, pp. 2-3) Although De Castro correctly met the procedural requirement of Franks by supporting his challenge with a statement submitted under penalty of perjury, his challenge fails both the first and second substantive prongs of Franks; De Castro neither shows that the affiant acted knowingly and intentionally or with reckless disregard for the truth by inserting the challenged portion of the affidavit into the affidavit, nor does he show that without the suggestion that De Castro controls the Senate's calendar the affidavit fails to support a finding of probable cause. 398 De Castro asserts that the challenged portion of the affidavit is false; in other words, he claims that despite holding the Chairmanship of the Rules and Calendar Committee, De Castro did not decide what legislation to forward on to the full Senate. Furthermore, it is debatable whether the challenged portion of the affidavit did not say that De Castro exclusively or singlehandedly decided what bills to forward to the Senate. Nonetheless, De Castro's only statement regarding what Agent Marchand knew, or should have known, is that "[t]his information was readily available and verifiable by the Federal Bureau of Investigations through the Caucus Minutes, the notes of the Caucus Secretary or interviews with Senate employees knowledgeable on those subjects." (Docket No. 151, p. 3) Agent Marchand's presumed mistake does not rise to the level of reckless disregard for the truth let alone knowing and intentional inclusion of a falsehood. Although the concept of reckless disregard of the truth cannot be encompassed in one infallible definition, it has been described as acting with a high degree of awareness of probable falsity or as acting while entertaining serious doubts as to the truth. See Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 667, 109 S.Ct. 2678, 105 L.Ed.2d 562 (1989) (discussing reckless disregard in the context of a defamation claim). De Castro does not suggest that Agent Marchand had any awareness of the probable falsity of the challenged statement or that he had any doubts as to its truth (let alone serious doubts). In its opposition brief the government clarified that in concluding that it was De Castro who decided what legislation would be considered by the full Senate, Agent Marchand actually relied on De Castro's own recorded statements. In essence, De Castro has claimed that it was he who controlled the Senate's calendar. In recorded meetings on May 29, 2008 and June 18, 2008 he states that he controls, or at the very least may manipulate, which bills and designations reach the full Senate. (Docket No. 159, pp. 4-5) The irony of the incongruence between De Castro's recorded statements and his statement under penalty of perjury is not lost on this Court. Perhaps in the recorded statements De Castro exaggerated his influence; perhaps his statements are all bluster. Whatever the explanation, however, Agent Marchand cannot be faulted for accepting as true De Castro's own statements as to his degree of influence over the Senate's agenda. Even if the Court were to find that the government failed the first prong of the Franks test, the Court would still hold that De Castro is not entitled to a hearing. The absence of the portion of the affidavit stating that De Castro decides which bills come before the full Senate does not sap the remaining portions of the affidavit of probable cause. De Castro seems to take the logical leap that if he did not decide what bills go before the full Senate then he would be unable to promote the agenda of those who allegedly paid him for political favors. De Castro provides no explanation for this leap of logic nor does he cite any law supporting it. It is not the situation that a Senator may only commit honest services wire fraud if he or she controls the agenda of the Senate. As the government noted, "[i]t is common knowledge that powerful legislative leaders are not dependent on their own votes to make things happen. The honest services that a legislator owes to citizens fairly include his informal and behind-the-scenes influence on legislation." United States v. Potter, 463 F.3d 9, 18 (1st Cir.2006). Also, De Castro's focus on quid pro quo is misplaced; that is not a required element of an honest services wire 399 fraud charge. Id. The remaining portions of Agent Marchand's affidavit provide more than sufficient evidence for the inference that others, such as confidential source 2, provided De Castro payments in exchange for his political support. Accordingly, the Court DENIES De Castro's request for a Franks hearing because he fails to offer a basis for suspecting that the misstatements (if there were any) were deliberate or reckless and because, even if any of those misstatements were removed, Agent Marchand's affidavit would have still supported a finding of probable cause. Conclusion For the reasons provided above, the Court DENIES De Castro's motion to suppress for violation of the necessity requirement of Title III and the Court DNIES De Castro's request for a Franks hearing. IT IS SO ORDERED.	{ "pile_set_name": "FreeLaw" }
47 F.3d 1169 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.Thomas G. MANOS, Petitioner-Appellant,v.Betty MITCHELL, Respondent-Appellee. No. 94-3944. United States Court of Appeals, Sixth Circuit. Feb. 13, 1995. 1 Before: NELSON and NORRIS, Circuit Judges, and BELL, District Judge.* ORDER 2 Thomas G. Manos appeals the dismissal of his petition for a writ of habeas corpus filed under 28 U.S.C. Sec. 2254. The case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination, this panel unanimously agrees that oral argument is not needed. Fed. R. App. P. 34(a). 3 Pursuant to a plea agreement, petitioner pleaded guilty in the Cuyahoga County, Ohio, Court of Common Pleas in 1992 to four counts of making a false tax return and three counts of theft. Petitioner was sentenced to maximum consecutive one and one-half year sentences for each count of making a false tax return and consecutive two year sentences for each theft count, for a cumulative sentence of twelve years of imprisonment. An additional fine was vacated by the Ohio Court of Appeals on direct appeal, but petitioner's convictions and sentences otherwise were affirmed. State v. Manos, No. 64616, 1994 WL 43898 (Ohio Ct. App. Feb. 10, 1994). Petitioner did not seek review by the Ohio Supreme Court. 4 While his direct appeal was pending before the Court of Appeals, petitioner filed a petition for a writ of habeas corpus in the Hocking County, Ohio, Court of Common Pleas. That court denied the petition, and the Ohio Court of Appeals affirmed the judgment. Manos v. Shiplevy, No. 93CA9, 1993 WL 386331 (Ohio Ct. App. Sept. 29, 1993). The Ohio Supreme Court denied petitioner's subsequent motion for leave to appeal. Manos v. Shiplevy, 626 N.E.2d 688 (Ohio 1994). In addition, petitioner filed two motions for post-conviction relief in the sentencing court, both of which were denied. An appeal to the Ohio Court of Appeals taken from the denial of one of the motions was dismissed for failure to file the record on appeal. Otherwise, petitioner did not attempt to appeal the denial of either motion for post-conviction relief. 5 Thereafter, petitioner filed his petition for habeas corpus relief in the district court alleging fourteen grounds for relief. Respondent filed a return of the writ, and petitioner filed a traverse. The district court denied the petition as without merit. Thereafter, the district court issued petitioner a certificate of probable cause to appeal. 6 Upon consideration, the judgment is affirmed for reasons somewhat different from those stated by the district court. See Russ' Kwik Car Wash, Inc. v. Marathon Petroleum Co., 772 F.2d 214, 216 (6th Cir. 1985) (per curiam). First, the district court properly concluded that petitioner is procedurally barred from presenting to Ohio courts the claims which could have been litigated on direct appeal. See State v. Perry, 226 N.E.2d 104, 105-06 (Ohio 1967) (syllabus paragraphs 6-9). However, petitioner is also barred from pursuing a further motion for post-conviction relief in the state courts. See State v. Castro, 425 N.E.2d 907, 909 (Ohio Ct. App.1979). Petitioner defaulted the claims asserted in his motions for post-conviction relief by his failure to appeal the denial of those motions to the Ohio appellate courts. Therefore, petitioner is required to show cause and prejudice to excuse his default of all of his claims. See Teague v. Lane, 489 U.S. 288, 298-99 (1989); Murray v. Carrier, 477 U.S. 478, 488 (1986); Riggins v. McMackin, 935 F.2d 790, 793 (6th Cir. 1991). 7 Petitioner cannot show cause or prejudice to excuse the default of any of his claims. The only allegation made in the district court or on appeal which could be construed as cause for the default is a claim that petitioner asked appointed counsel to argue his speedy trial and additional unspecified constitutional claims on direct appeal. However, this allegation simply does not excuse or explain petitioner's failure to pursue appeals in the state courts from the denial of his motions for post-conviction relief. Finally, the district court properly concluded that this case does not reflect circumstances in which cause and prejudice need not be shown such as where a petitioner is actually innocent or where a miscarriage of justice will otherwise occur. See Coleman v. Thompson, 501 U.S. 722, 750 (1991); Murray, 477 U.S. at 495-96. Under these circumstances, petitioner's default cannot be excused. 8 For the foregoing reasons, the judgment of the district court is affirmed. Rule 9(b)(3), Rules of the Sixth Circuit. * The Honorable Robert Holmes Bell, United States District Judge for the Western District of Michigan, sitting by designation	{ "pile_set_name": "FreeLaw" }
Opinions of the United 2005 Decisions States Court of Appeals for the Third Circuit 8-18-2005 Wooden v. Eisner Precedential or Non-Precedential: Non-Precedential Docket No. 05-1725 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2005 Recommended Citation "Wooden v. Eisner" (2005). 2005 Decisions. Paper 678. http://digitalcommons.law.villanova.edu/thirdcircuit_2005/678 This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2005 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact [email protected]. BPS-338 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT NO. 05-1725 ________________ HERMAN WOODEN, JR., Appellant v. CASE MANAGER, SUSAN EISNER, LSCI Allenwood _______________________________________ On Appeal From the United States District Court For the Middle District of Pennsylvania (D.C. Civ. No. 03-cv-00190) District Judge: Honorable Yvette Kane _______________________________________ Submitted For Possible Dismissal Under 28 U.S.C. § 1915(e)(2)(B) August 11, 2005 Before: RENDELL, FISHER AND VAN ANTWERPEN, CIRCUIT JUDGES (Filed August 18, 2005) _______________________ OPINION _______________________ PER CURIAM. Herman Wooden, Jr., an inmate at the Federal Correctional Institution in Fairton, New Jersey (“FCI-Fairton”), filed a pro se complaint pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), against numerous prison officials. The District Court found that the complaint did not comply with Federal Rule of Civil Procedure 20, but granted Wooden leave to amend it, cautioning him that failure to properly amend would result in dismissal of all claims except the one against defendant Susan Eisner, a case manager at FCI-Fairton. Thereafter, the District Court twice-granted Wooden an extension of time to file an amended complaint. When Wooden failed to properly amend, the District Court dismissed all claims except that against Eisner. In his surviving claim, Wooden alleged that Eisner denied Wooden access to the courts by failing to give him time off from his work detail to prepare an appeal for his 28 U.S.C. § 2255 motion. Eisner filed a motion to dismiss, contending that Wooden failed to file his complaint within the applicable two-year statute of limitations, and that Wooden failed to exhaust administrative remedies. The District Court granted Eisner’s motion to dismiss, finding that because Wooden did not properly allege a 42 U.S.C. § 1985 conspiracy, the five-year statute of limitations in § 1985 does not apply. Moreover, it found that Wooden knew or should have known of the alleged injury, at the latest, on June 10, 2000, when the Fourth Circuit Court of Appeals denied rehearing on the appeal of Wooden’s § 2255 motion. Therefore, applying the two-year statute of limitations, the District Court dismissed the complaint as time-barred. Wooden filed a motion for reconsideration, further contending that his cause of action did not accrue until December 2002 when he was “definitely” put on notice that a wrong has been committed and was entitled to 2 redress. The District Court rejected this argument, and denied the motion. Wooden timely filed this appeal. He has been granted leave to proceed in forma pauperis on appeal. We have jurisdiction pursuant to 28 U.S.C. § 1291. When an appellant proceeds in forma pauperis, we must dismiss the appeal if it is “frivolous.” 28 U.S.C. § 1915(e)(2)(B)(I). A frivolous appeal has no arguable basis in law or fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989). After a careful review of the record, we will dismiss this appeal as frivolous. As the District Court explained, a Bivens claim in which the plaintiff is alleging personal injury has a two-year statute of limitations. See Kost v. Kozakiewicz, 1 F.3d 176, 190 (3d Cir. 1993); King v. One Unknown Fed. Correctional Officer, 201 F.3d 910, 913 (7th Cir. 2000) (noting that same state statute of limitations applies to all Bivens and § 1983 claims); 42 Pa. Cons. Stat. § 5524. A Bivens claim accrues when the plaintiff knows, or has reason to know, of the injury that forms the basis of the action. Sameric Corp. of Del. v. City of Phila., 142 F.3d 582, 599 (3d Cir. 1998). Wooden’s action against Eisner accrued, at the latest, on June 10, 2000, upon the Fourth Circuit Court of Appeals’ denial of rehearing on the appeal of Wooden’s § 2255 motion. Because Wooden filed the instant action on January 31, 2003, he was beyond the statutory period, and thus his Bivens claim against the Eisner was properly dismissed as time barred. In conclusion, because Wooden’s appeal lacks arguable merit in fact or law, we will dismiss it pursuant to 28 U.S.C. § 1915(e)(2)(B)(I). 3	{ "pile_set_name": "FreeLaw" }
325 B.R. 791 (2005) In re Stephan OLSON, Debtor. Integrated Practice Management Inc., Plaintiff, v. Stephan Olson, Defendant. Bankruptcy No. 03-04787S, Adversary No. 04-9051S. United States Bankruptcy Court, N.D. Iowa, Western Division. April 21, 2005. 792 793 Wil L. Forker, Sioux City, IA, for Debtor. ORDER RE COMPLAINT WILLIAM L. EDMONDS, Bankruptcy Judge. The matter before the court is final trial of the plaintiff's complaint to determine the dischargeability of debt owed to it by Stephan Olson. Trial was held January 25-27, 2005 in Sioux City. Attorney Jeana L. Goosmann represented the plaintiff, Integrated Practice Management, Inc. ("Integrated"). Attorney Wil L. Forker represented defendant Stephan Olson. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(I). FINDINGS OF FACT Stephan Olson, age 42, resides in Correctionville. In about the mid-1990s, he was employed by Hoffman Agency as an insurance representative. In about 1999 he formed Castle Rock Development, L.L.C. as its sole member and manager. The business was involved in real estate development and construction. Castle Rock's first project was the River Valley housing development in Correctionville. The project was planned in two phases. The completed project was to have approximately sixty lots. The first phase was begun, and four or five houses have been built. In late 1999 or early 2000, Olson and Castle Rock were involved in the building of a medical clinic in Correctionville. The clinic was built for Third Rock Leasing, L.L.C. Castle Rock owned 80% of Third Rock and Olson was a member of Third Rock. Several other people invested in the clinic. St. Luke's Medical Center operated the clinic. In 2002, Third Rock sold the clinic to St. Luke's for approximately $600,000. The clinic has since closed, and the building is being used as a church. In 2000 Castle Rock also built Naps Alabama Barbeque, a restaurant owned by 794 Tri Nic, L.L.C. Olson was the sole member and manager of Tri Nic. In 2003, Tri Nic filed a Chapter 11 bankruptcy petition. The case was converted to Chapter 7 later that year. Castle Rock ceased operations in 2004. Integrated Practice Management is the management company of Multi Care Physicians Group, a clinic that offers care by a chiropractor, a medical doctor, a physical therapist and a massage therapist. Dr. Scott Sneller is a doctor of chiropractic. He is co-owner of the Multi Care clinic and president of Integrated. The Multi Care clinic is located on Stadium Drive in Sioux City. Dr. Sneller formerly practiced at a clinic on South Lakeport Drive in an office that offered only chiropractic services. Sometime in 2001, Dr. Sneller decided that he would like to build a new clinic. He was operating at capacity at his clinic on Lakeport and needed a larger building. He wanted to own the building rather than lease it from someone else. He wanted also to change his business from a chiropractic office to a clinic offering additional health services. In the fall of 2001, Dr. Sneller met Olson. Olson managed Naps Alabama Barbeque and Dr. Sneller was a customer of the restaurant. Dr. Sneller spoke with Olson about his plans to build a new clinic. He told Olson that he wanted to expand his practice, needed more room, and would be hiring a new chiropractor. Olson represented himself as the ideal person to manage the project. Olson told Dr. Sneller of his construction experience with the River Valley housing development, the Naps restaurant building, and the Correctionville medical clinic. Olson stated that his experience with the Correctionville clinic, in particular, would be an asset in building Dr. Sneller's clinic. Olson said he had access to workers who had built the Correctionville clinic, and their experience would make construction of Dr. Sneller's clinic more efficient. Olson said he was talking with Mercy Medical Center about doing another clinic. Dr. Sneller would have to decide quickly whether to hire him, Olson said, or he might get tied up with a new job. Olson's duties as project manager would include bidding out the construction jobs competitively. Olson would coordinate the workers and keep the project on schedule. He would review invoices from subcontractors to ensure that Dr. Sneller was staying within budget and was not being over-billed for the work. Sometime in November 2001, Olson took Dr. Sneller to Correctionville in the evening and gave him an after-hours tour of the clinic. Olson had with him a few sheets of architectural drawings, including a floor plan and elevation views. The latter drawings showed what the outside of the building would look like on each side. Olson represented to Dr. Sneller that he owned the full set of blueprints and that the plans were those he had used in construction of the Correctionville clinic. Olson told Dr. Sneller that it would take from $50,000 to $100,000 in architectural fees to design "from scratch" the type of medical building that Dr. Sneller wanted to have built. Olson represented that Dr. Sneller would be able to use the full set of blueprints for his clinic, saving a significant sum of money. Olson said the only necessary changes would be to the inside walls, which would cost Dr. Sneller "next to nothing" in architectural fees. A full set of blueprints consists of several sheets. A floor plan is a drawing of the basic layout of the rooms in a building. A floor plan shows where the walls and the openings in the walls for doors and windows are located. A set of blueprints would contain a separate sheet for each 795 component of the construction of the building, such as electrical work and plumbing. Other sheets show such items as the sizes of doors, locations of light fixtures, and types of finishes to be used on the walls, floors and ceilings in each room. The full set of plans includes exterior and interior views. Dr. Sneller agreed to hire Olson for the project. Olson drafted a "Project Manager Agreement" between Integrated and Castle Rock Development. Dr. Sneller reviewed the contract document with family members and negotiated with Olson for some changes in the contract. The parties executed the contract on November 28, 2001. The agreement described the project as follows: Castle Rock will act as project manager for the construction [sic] a 7000 square foot building to be built in Sioux City, Woodbury County, Iowa pursuant to the specifications, architectural drawings, or other documentation in a good and workmanlike manner satisfactory to Integrated. . . . All architectural drawings, specifications and other documentation shall be supplied by Integrated. Castle Rock will supervise and arrange for the necessary labor, equipment, tools and materials needed to construction [sic] the building and for landscaping. The work will be constructed in conformance with these plans and specifications. Exhibit 1. The contract provided that construction would begin December 15, 2001 and would be completed no later than May 1, 2002. The completion date was important to Dr. Sneller, because the lease on his clinic on Lakeport Drive was to expire on April 30, 2002. The owner wanted to sell the building and wanted the property vacated. Dr. Sneller communicated the importance of the completion date to Olson, and Olson assured Dr. Sneller that he would be able to meet this deadline. Under the terms of the contract, Castle Rock was solely responsible for the supervision of construction of the clinic. Integrated agreed to pay for all construction costs, including labor and materials. Castle Rock agreed to provide liability insurance for the work site until completion of the project. At about the same time the parties entered into the agreement, Olson provided Dr. Sneller with an itemized estimate of the total cost of the project. The estimate allocated $327,735.00 for purchase and development of land. With the addition of $483,792.71 for building costs, $418,719.42 for project management fees and $20,000 for architectural prints, the total project cost was estimated at $1,250,247.13. After the walk-through of the Correctionville clinic, Dr. Sneller told Olson that his Multi Care clinic would need some larger rooms. An added section was sketched into the floor plan of the Correctionville clinic. See Exhibit 29, pages 2-3. Olson represented to Dr. Sneller that the budgeted figure for architectural prints was a high estimate. Olson said the money would cover the plans for the added section and any change orders. The project manager contract document initially provided that Castle Rock would receive a fee of 30% of the total project cost. The estimate of project costs included an item for project management fees. Dr. Sneller interpreted the contract to mean that Castle Rock would receive a 30% fee on top of the line item amount for its project management fees. Dr. Sneller negotiated a change in the contract. A handwritten notation was added to the document stating that "contractor gets 36.56% of project cost as determined by bill invoice." The change was based on 796 Dr. Sneller's understanding that the total "project cost" would not include the project manager's fee. Dr. Sneller estimated that, with this change, the project would cost $120 per square foot. The revised estimated total cost was $1,235,805.13. The contract document initially provided that 50 per cent of the project manager fee was payable upon the execution of the document. Olson agreed to accept payment of the first half of the fee upon the commencement of activity on the building site. Olson said he needed a large portion of his fee up front in order to initiate work on the project. Olson represented that one use of the money would be to "float" bills, such as equipment rental. Dr. Sneller wrote a check to Castle Rock for $152,000 on December 19, 2001. Olson deposited the check into his Naps restaurant bank account. None of the money was used for the clinic project. Olson took Dr. Sneller to several locations to view possible sites for the clinic. Olson told Dr. Sneller that the requirements for design and construction of buildings were more stringent in the city of Sioux City than in other areas. Olson encouraged Dr. Sneller to look at locations outside the city limits of Sioux City in order to reduce building costs. Dr. Sneller located the Stadium Drive site on which the Multi Care clinic was eventually built. He negotiated directly with the owner for a price of $134,000. The price included the cost of earthwork to prepare the site. Four or five feet of dirt was brought to the site and was compacted. The site preparation was completed before Dr. Sneller paid the purchase price and obtained a deed. He signed the purchase agreement December 18, 2001. Additional dirt work was performed by Goldsmith & Sons in early January 2002. Olson arranged for Goldsmith to build up the site with an 18-inch pad of soil so that rain would run away from the building. The cost of this work was $3,000. On about December 27, 2001, Dan Moos Construction Co. provided Olson with an estimate for concrete work for Dr. Sneller's clinic. The estimate included the following items: Excavation of footings $ 2,604.00 Concrete footing labor & material 24" × 4' w/foam 12,282.00 Concrete footing labor & material 24" × 4' 2,574.00 top wall 12" × 6" w/anchors 3,689.00 Exhibit 4. These items total $21,149.00. "Excavation of footings" means to dig a trench below frost level to prepare for pouring the concrete footings. Sometime in December, Dan Moos Construction Co. did excavation for footings and poured concrete footings. After the work was completed, Olson telephoned Jeff Dahl of Moos Construction and asked Moos to eliminate the word "excavation" from its estimate. In response, Moos Construction prepared Exhibit 52, an invoice in the amount of $21,149.00 dated December 31, 2001, addressed to Stephan Olson, 4229 S. Lakeport, Sioux City. The invoice contained the following items: Concrete footing labor & material 24" × 4' w/foam $14,062.00 Concrete footing labor & material 24" × 4' 2,964.00 top wall 12" × 6" w/anchors 4,123.00 The bottom of the document stated, "Please sign this estimate to indicate your approval." Moos Construction prepared a nearly identical invoice dated January 21, 2002. Exhibit 3, page 2. Olson prepared an invoice dated January 30, 2002 from Castle Rock to Integrated in the amount of $41,655.00. The invoice directed Integrated to make its check payable to Castle Rock. The invoice consisted of these items: Concrete footings labor & materials $21,149.00 Site excavation 18,000.00 Building permit fee 2,608.00 Exhibit 5. 797 Dr. Sneller paid the Moos Construction invoice directly to Moos Construction on February 4, 2002. Larry Stinger, a representative of Moos, picked up the check and signed a lien waiver in Dr. Sneller's office. On February 8, Stinger signed a statement that Moos Construction had done all the footings work, including footing excavation. When Dr. Sneller received the invoice from Castle Rock, he believed it contained items for which he had already paid. He showed the invoice to Dale McKinney, architect for the project. McKinney advised Dr. Sneller that the charges for installing the footings were too high, based on the measurement of the footings and the amount of footing excavation work that needed to be done. Dr. Sneller confronted Olson about the bill for excavation. Olson insisted that some of his "Correctionville boys" had done the work. At trial Olson testified that he had prepared the invoice before the work was completed, and he thought someone other than Moos Construction had done the work. He said the invoice was a mistake. Olson prepared another invoice from Castle Rock to Integrated, dated February 14, 2002, in the amount of $17,500. The invoice consisted of these items: Equipment rental/backhoe, trencher, skidloader, lazer site, etc. $6,000.00 Building permit fee 2,500.00 Payroll & payroll taxes paid 9,000.00 Exhibit 6. Olson did not provide documentation to explain these charges, despite numerous requests from Dr. Sneller. Olson signed a lien waiver dated February 8, 2002 for the amount of $17,500. Exhibit 54. There is no evidence, however, that Dr. Sneller paid the invoice. In about late 1999, Olson obtained architectural drawings for a clinic that had been built in Mapleton. Olson testified that he obtained the plans from a Dr. Hesse, but the evidence did not reveal Dr. Hesse's connection to the clinic or the specific circumstances of Olson's acquisition of the plans. Olson wanted to use the plans for the clinic he was planning to build in Correctionville. He tried to have copies of the plans made at Sioux City Blueprint. He was told that the plans could not be copied because they were owned by the architectural firm now known as Cannon, Moss, Brygger & Associates. Olson met with Jim Ruble and Jim Brygger of the firm. Olson told the architects that he liked the floor plan of the Mapleton clinic and wanted to use it in the clinic he was planning to build in Correctionville. Ruble and Brygger told him that their design would have to be modified before Olson could use it. They explained that the clinic was designed for a particular client, and that the design could not be used directly in another building. Ruble testified that controls over the copying of blueprints are matters of safety concerns, ethical conduct toward the previous client, and protection of the architect's copyrighted interest in the work. Olson expressed his intention to omit part of the Mapleton clinic design in the design for his building in Correctionville. Ruble's firm made a proposal to make the modifications for Olson for approximately $30,000. This amount was more than Olson wanted to spend. Olson then took the Mapleton clinic blueprints to Wil Gerking, a draftsman. Olson asked Gerking to make changes to the plans for use in the Correctionville clinic. Olson led Gerking to believe that Olson's firm owned the prints. Gerking was initially reluctant to make the changes, because he was aware of copyright law. Gerking was persuaded that he would not be "plagiarizing" the drawings, because he would be making substantial 798 changes to the plans. Olson paid Gerking $500.00 to do the drawings. Some time after making the drawings for Olson, Gerking was contacted by an attorney for the Cannon, Moss, Brygger firm. The firm claimed that Gerking's use of the Mapleton clinic blueprints was an infringement of its rights in the prints. Gerking testified that the firm initially sought to impose on him a $20,000 "fine." The matter was resolved without a lawsuit. Dale McKinney is an architect with InVision Architecture. McKinney first met Olson when McKinney was asked by St. Luke's to do some work at the Correctionville clinic. Olson later asked McKinney to be the design architect for Dr. Sneller's clinic. In late 2001, McKinney made a verbal agreement with Olson to do the work for $20,000. A written agreement, using an American Institute of Architects form, was entered into on January 11, 2002. The agreed compensation for the architect's services was a lump sum of $32,000. Exhibit 28, Article 1.5.1. Olson was designated "construction manager" in the contract document. McKinney testified that under an AIA contract, the architect owns the architectural plans for a project, unless otherwise specified. When he first met with McKinney about the Sioux City project, Olson brought two pages of drawings with him. See Exhibit 29, pages 2, 3. Olson testified that these two pages were the work he had paid Wil Gerking to do. McKinney understood from Olson that the drawings were based on plans for a building in Ida Grove and that Wil Gerking had modified the plans for use in constructing the clinic in Correctionville. Olson hoped to use the same plans for the clinic in Sioux City. McKinney was led to believe that Olson owned the plans. He later learned that another architect was involved in the design of the plans. The architectural work began with the two pages provided by Olson, a floor plan and a sketch of part of the floor plan drawn to a different scale. McKinney's firm used these drawings to produce a full set of architectural drawings to be used in the bidding and building processes. The architectural work required much input from Dr. Sneller as the owner. McKinney stated that communication was accomplished more efficiently by dealing directly with Dr. Sneller, rather than going through Olson. He believed Olson's involvement delayed the project. Olson told Dr. Sneller that he had taken a full set of blueprints to the architect to make changes to the floor plan. In a letter dated January 8, 2002, Olson again represented to Dr. Sneller that his clinic would be based on the architectural drawings used in the Correctionville clinic. Exhibit 10. On February 26, 2002, Dr. Sneller discovered that another architect was involved with the architectural drawings that he had been shown by Olson. He believed Olson was using "plagiarized" drawings. Dr. Sneller asked InVision to redesign his clinic. He did not explain to McKinney why he wanted the changes. The locations of footings and entryways were changed. The building shape was changed from an L-shape to a squared-off shape. Architectural fees for the project ultimately totaled approximately $62,000. Dr. Sneller believed Olson had lied to him and could no longer be trusted. On March 1, 2002, Dr. Sneller fired Olson from the job. Dr. Sneller hired his father, Elmer Sneller, to act as project manager and paid him $50,000. Elmer Sneller has worked for many years as an electrical contractor. Dr. Sneller hired Liberty Contractors as general contractor for the project. Liberty 799 began working on the project in April 2002. The clinic was not completed until October 2002. The owner of the clinic at Dr. Sneller's former location allowed him to stay upon the condition of signing a six-month lease at the rate of $4,000 per month. Dr. Sneller estimated that the delay in being able to move to the new clinic caused him to lose net revenue of $31,000 per month. The cost of completing the new clinic exceeded the initial estimate by $130,500. Dr. Sneller obtained additional financing by putting a second mortgage on his home. Integrated filed an action against Olson and Castle Rock in the Iowa District Court for Woodbury County, Case No. LACV124688. On October 21, 2003, Integrated obtained default judgment against the defendants for $1,964,500, an amount that included an award of $1.5 million for punitive damages. Olson filed an individual Chapter 7 petition on December 22, 2003. DISCUSSION Integrated argues that its claim should be excepted from Olson's discharge under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(6).[1] Integrated bears the burden of proving nondischargeability by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). Section 523(a)(2)(A) Section 523(a)(2)(A) of the Bankruptcy Code excepts from a debtor's discharge any debt for "money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained, by . . . false pretenses, a false representation, or actual fraud. . . ." To prove its claim under § 523(a)(2)(A), Integrated must show that- 1. The debtor made a false representation. 2. The debtor knew the representation was false at the time it was made. 3. The representation was deliberately made for the purpose of deceiving the creditor. 4. The creditor justifiably relied on the representation. 5. The creditor sustained the alleged loss as the proximate result of the representation having been made. Burt v. Maurer (In re Maurer), 256 B.R. 495, 500 (8th Cir. BAP 2000). Integrated claims Olson made the following false representations: that Olson had expertise in construction, that Olson owned the blueprints shown to Dr. Sneller in November 2001, that Dr. Sneller could use the full set of blueprints, that this use would save Dr. Sneller tens of thousands of dollars in architectural fees, that the construction of the clinic would be performed in a good and workmanlike manner, that Olson would review invoices to ensure the project was staying within budget and that work was being properly billed, and that Olson would complete the project on schedule. Olson may have "puffed" his qualifications, but he had in fact constructed the Correctionville clinic and the Naps restaurant. Dr. Sneller visited both buildings and saw them being occupied as going concerns. Integrated has not shown that Olson falsely represented having the expertise to construct the Multi Care clinic. 800 Nor has Integrated shown that any of Olson's representations were knowingly false when he promised to construct the clinic in a workmanlike manner, to review the invoices, and to complete the project on time. Olson had a financial incentive to complete the clinic to the satisfaction of Integrated. There was no evidence that the scheduled completion date was unreasonable or that Olson knew when he signed the contract that he would not complete the project by May 1. Olson submitted two invoices to be paid to Castle Rock, one purporting to be for footings and excavation and the other for equipment rental and payroll. Exhibits 5, 6. Olson testified that the first invoice was a mistake. This explanation was not credible. Olson offered no explanation as to the second invoice. The court finds that Olson presented the invoices, knowing they were false, in order to deceive Dr. Sneller and to obtain payment for expenses that were not incurred. The evidence shows, however, that Dr. Sneller did not pay either invoice. Therefore, Olson obtained nothing and Dr. Sneller sustained no damages as the proximate result of the false invoices. During the tour of the Correctionville clinic in November 2001, Olson showed Dr. Sneller a few sheets of architectural drawings. He represented that the drawings were his property, that he would give Dr. Sneller access to the full set of drawings, and that there would be a nominal cost to modify the drawings for use in the Multi Care clinic. He told Dr. Sneller that use of the drawings would save tens of thousands of dollars in project costs. These representations were false and Olson knew they were false. Although it is unnecessary to this decision to identify precisely the architectural drawings shown to Dr. Sneller during the tour of the Correctionville clinic, the court finds they were something more than the two pages prepared by draftsman Wil Gerking. A reasonable inference is that the drawings were those prepared by the Cannon, Moss architectural firm for the Mapleton clinic. Olson had possession of the Mapleton clinic drawings. The only evidence that Olson acquired other drawings prior to November 2001 was the testimony relating to Gerking's work. Even assuming the drawings were not those for the Mapleton clinic, the court finds that Olson misrepresented the manner in which existing architectural drawings would be used to construct the Multi Care clinic. Olson knew from his discussions with Jim Ruble that architects retain a controlling interest in their drawings. Ruble had explained to Olson that an architect may not copy one client's design for use in another client's building. Olson knew the use of architect's drawings in the manner he was proposing to Dr. Sneller would be unethical, if not in violation of copyright law. Olson also knew that modification of the existing drawings for use in another building would involve a substantial cost, in addition to the costs for design changes and change orders. When he budgeted $20,000 for architectural prints, Olson represented this amount was a high estimate of what would be needed to pay for the design of an added section and future change orders. Although he had taken only two pages of drawings to architect McKinney, Olson told Dr. Sneller that he had given the architect a full set of blueprints. Olson made this series of misrepresentations regarding the architectural drawings in order to deceive Dr. Sneller. Olson made false statements regarding his rights in the drawings in order to induce Dr. Sneller to enter into the project management 801 agreement for the Multi Care clinic. Olson made other false statements to conceal the manner in which the clinic was actually being designed and to cover up his prior false statements. There was no evidence that Dr. Sneller had reason to believe Olson's representations regarding the architectural drawings were false. The court concludes that Dr. Sneller justifiably relied on these representations to his detriment. The misrepresentations were material to the contract. See City of Ottumwa v. Poole, 687 N.W.2d 266, 269 (Iowa 2004) (elements to rescind contract based on fraudulent inducement). Dr. Sneller was led to believe he would save costs and gain efficiency by use of the architectural drawings. He fired Olson from the project when he came to believe that another architect's work was involved in the design of the drawings. The court concludes Olson obtained $152,000 from Dr. Sneller by fraud. Olson's debt should be held nondischargeable to this extent. Dr. Sneller claims that he suffered further damages as a result of Olson's fraud. Costs for the entire project exceeded the initial estimate by $130,500, including $42,000 in additional architectural fees. Dr. Sneller paid his father $50,000 to assume the role of project manager. The clinic was not completed until October 2002. Dr. Sneller paid $24,000 to lease his old premises for six months until he could move. He estimated a loss of profits of $186,000 because of the delay in completing the new clinic ($31,000 × six months). None of these consequential damages are amounts of money that Olson obtained by fraud. Nor can it be said that these damages were proximately caused by fraud. Under the original contract, Dr. Sneller would have been obligated to pay Olson the balance of his project manager fee, approximately another $152,000. Dr. Sneller hired his father to manage the project. The evidence showed that the architectural firm InVision also assumed some of the duties that Olson would have performed. Dr. Sneller was not damaged by having to pay the fee instead to those who took over the job. Architectural fees also increased because Dr. Sneller made the decision to make major changes to the design. InVision was hired to design the clinic based on a floor plan, and it was being paid to make substantial changes to the plan. The evidence did not show that InVision's use of the plans would have been unethical, much less in violation of copyright law. Dr. Sneller made the decision to request changes in the plans, without consulting anyone and without telling Dale McKinney why he was doing it. The additional fees were breach of contract damages, at most. Such damages are dischargeable. See Sandak v. Dobrayel (In re Dobrayel), 287 B.R. 3, 24-25 (Bankr.S.D.N.Y.2002) (distinguishing between debts for money obtained by fraud and damages resulting from debtor's failure to perform the contract). The additional costs for lease payments and the claimed loss of profits were caused by the delay in completing the Multi Care clinic. The delay, in turn, was likely caused by a number of things. Changes were made to the design. Weather may have been a factor. Even if the court assumes the delay was caused by Olson's conduct, the lease payments and lost profits are damages for breach of contract. The court makes the same conclusion as to the amount by which the project went over budget. The damages are not excepted from the discharge by § 523(a)(2)(A). Section 523(a)(2)(A) of the Bankruptcy Code excepts "any debt" for money to the extent obtained by fraud. The Supreme 802 Court in Cohen v. de la Cruz, 523 U.S. 213, 118 S.Ct. 1212, 140 L.Ed.2d 341 (1998), explained the scope of damages made nondischargeable under this statute. In Cohen v. de la Cruz, debtor owned several residential properties in the vicinity of Hoboken, New Jersey. Debtor violated the local rent control ordinance, and the rent control administrator determined that he had charged $31,382.50 in excess rents. When debtor filed a Chapter 7 petition, the tenants filed an adversary proceeding under § 523(a)(2)(A). Plaintiffs requested a determination that the debt was nondischargeable for fraud. They also requested an award of treble damages, attorney's fees and costs pursuant to a New Jersey statute. The bankruptcy court ruled in plaintiffs' favor; the district court and Court of Appeals for the Third Circuit affirmed. On appeal to the Supreme Court, the debtor argued that the treble damage award did not constitute money which he had "obtained" by fraud. The Court affirmed, holding that § 523(a)(2)(A) "prevents the discharge of all liability arising from fraud." Id. at 1215. The phrase "to the extent obtained by" does not limit the debt excepted from discharge to the value of the money the debtor obtained by fraud. Id. at 1217. The statutory damages arose out of debtor's fraudulent conduct. Therefore, the treble damages were within the scope of the exception, even though they were in the form of punitive damages. In the case now before the court, Integrated seeks to have all its damages held nondischargeable. As discussed above, some of Integrated's damages were for breach of contract and were not proximately caused by fraud. The state court judgment to the extent of those damages will not be excepted from the discharge. The award of punitive damages, however, is attributable at least in part to Olson's fraud. The court will assume that the state court took into account the total amount of compensatory damages in fixing the amount of punitive damages. See Green v. Pawlinski (In re Pawlinski), 170 B.R. 380 (Bankr.N.D.Ill.1994) (holding attorney fees and punitive damages nondischargeable in same proportion of entire award as compensatory damages held nondischargeable). The court concludes that compensatory damages of $152,000 should be excepted from Olson's discharge. This amount is approximately 33 percent of the total award for compensatory damages. Thirty-three percent of the awards for attorney fees ($10,500) and punitive damages ($1,500,000) is $498,465. The court will find this amount nondischargeable as well. Section 523(a)(6) Section 523(a)(6) of the Bankruptcy Code excepts from a debtor's discharge any debt for "willful and malicious injury." This court recently outlined the definition of this phrase. "Willful" means deliberate or intentional. The injury, not just the act causing injury, must be intended. To be malicious, the debtor's conduct must be targeted at the creditor in the sense that conduct is certain, or almost certain, to cause harm. The conduct must "be more culpable than that which is in reckless disregard of creditors' economic interests and expectancies, as distinguished from mere legal rights. Moreover, knowledge that legal rights are being violated is insufficient to establish malice, absent some additional `aggravated circumstances'. . . ." First Federal Bank v. Mulder (In re Mulder), 306 B.R. 265, 270 (Bankr.N.D.Iowa 2004) (quoting Barclays American/Business Credit, Inc. v. Long (In re Long), 774 F.2d 875 (8th Cir.1985), and citing Johnson v. Logue (In re Logue), 294 803 B.R. 59 (8th Cir. BAP 2003)); see also Geiger v. Kawaauhau (In re Geiger), 113 F.3d 848 (8th Cir.1997), aff'd, 523 U.S. 57, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). Integrated argues that Olson used fraudulently obtained architectural drawings and made misrepresentations, knowing that his conduct would cause financial harm to Integrated. The court makes no conclusion as to how Olson acquired the drawings he showed to Dr. Sneller during the tour of the Correctionville clinic. Olson's improper use of the drawings was in his misrepresentations to Dr. Sneller. Thus, Integrated alleges as culpable conduct under § 523(a)(6) the same conduct complained of in its claim under § 523(a)(2)(A). Integrated's position is that Olson's fraud also constitutes willful and malicious injury. It contends that its claim under § 523(a)(6) entitles it to a determination that its entire state court judgment is nondischargeable. The creditor in Berkson v. Gulevsky (In re Gulevsky), 362 F.3d 961 (7th Cir.2004), made a similar argument. In that case, the debtor orally misrepresented his financial condition, inducing the creditor to advance $100,000 on his behalf. The debtor never repaid the money, and the creditor obtained judgment for the sum. After the debtor filed a bankruptcy petition, the creditor filed an adversary proceeding under 11 U.S.C. §§ 523(a)(2)(B) and 523(a)(6). The bankruptcy court dismissed the complaint for failure to state a claim and the district court affirmed. The Seventh Circuit affirmed. The court was guided by two principles of statutory construction. "Exceptions to discharge are to be construed narrowly, and the subsections of § 523 should not be construed to make others superfluous." In re Gulevsky, 362 F.3d at 963 (citing In re Geiger, 118 S.Ct. at 977). Gulevsky's conduct was not actionable under § 523(a)(2)(B), because his statements were not in writing. The circuit court agreed with the lower courts that allowing the creditor to proceed under § 523(a)(6) "would render the writing requirement of § 523(a)(2)(B) superfluous." Id. at 963. The court recognized that fraud is an intentional tort and that § 523(a)(6) excepts many intentional tort claims from discharge. Id. However, the court rejected the notion that all debts procured by fraud are claims for willful and malicious injury. Id. at 964. This court agrees with the Seventh Circuit's analysis. Moreover, Integrated has failed to prove malice under the standards applicable in the Eighth Circuit. The claim under § 523(a)(6) should be dismissed. IT IS ORDERED that the judgment arising in the Iowa District Court for Woodbury County, Case No. LACV124688, in favor of Integrated Practice Management and against Stephan Olson is nondischargeable to the extent of $650,465 pursuant to 11 U.S.C. § 523(a)(2)(A). IT IS FURTHER ORDERED that the claims of Integrated Practice Management against Stephan Olson pursuant to 11 U.S.C. §§ 523(a)(4) and 523(a)(6) are dismissed. Judgment shall enter accordingly. NOTES [1] Integrated pleaded a claim under 11 U.S.C. § 523(a)(4), relating to debt for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny. The court does not believe that Integrated proved the elements of § 523(a)(4) and concludes that Integrated has abandoned this claim.	{ "pile_set_name": "FreeLaw" }
Order Michigan Supreme Court Lansing, Michigan August 11, 2015 Robert P. Young, Jr., Chief Justice Stephen J. Markman Mary Beth Kelly 149372(128) Brian K. Zahra Bridget M. McCormack David F. Viviano PEOPLE OF THE STATE OF MICHIGAN, Richard H. Bernstein, Plaintiff-Appellee, Justices SC: 149372 v COA: 279161 Kent CC: 06-003485-FC DENNIS LEE TOMASIK, Defendant-Appellant. _________________________________________/ On order of the Chief Justice, the motion of plaintiff-appellee to extend the time for filing its brief on appeal is GRANTED. The brief will be accepted as timely filed if submitted on or before September 15, 2015. I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. August 11, 2015 Clerk	{ "pile_set_name": "FreeLaw" }
449 F.3d 1059 UNITED STATES of America, Plaintiff-Appellee-Cross-Appellant,v.Alvaro PLANCARTE-ALVAREZ, Defendant-Appellant-Cross-Appellee. No. 03-50062. No. 03-50121. United States Court of Appeals, Ninth Circuit. Argued February 6, 2004. Submitted May 11, 2004. Filed June 6, 2006. Benjamin L. Coleman and Gerald Singleton, San Diego, CA, for the defendant-appellant-cross-appellee. David P. Curnow, Assistant United States Attorney, Criminal Division, San Diego, CA, for the plaintiff-appellee-cross-appellant. Appeal from the United States District Court for the Southern District of California; Irma E. Gonzales, District Judge, Presiding. D.C. No. CR-02-02017-1-IEG. Before JAMES R. BROWNING, DAVID R. THOMPSON, and KIM McLANE WARDLAW, Circuit Judges. ORDER AMENDING OPINION ORDER 1 Alvaro Plancarte-Alvarez has filed a petition for panel rehearing and petition for rehearing en banc. We issued an order on August 13, 2004 deferring decision on the petitions pending the Supreme Court's decision in United States v. Booker, No. 04-104, and United States v. Fanfan, No. 04-105. Following issuance of the Supreme Court's opinion in United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), we issued an order on July 26, 2005 directing the parties to address the effect of the Booker decision on the present case. 2 Plancarte-Alvarez contends that we should amend our opinion in United States v. Plancarte-Alvarez, 366 F.3d 1058 (9th Cir.2004), to affirm the sentence without allowing the government to seek an increased sentence should he return to the United States. Plancarte-Alvarez contends that in light of Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621, and United States v. Ameline, 409 F.3d 1073 (9th Cir. 2005) (en banc), the government's claim with respect to error at his sentencing should now be reviewed for plain error, and that because the government cannot meet that standard, the sentence should be affirmed. This contention fails because our conclusion that resentencing is appropriate to remedy the district court's error at sentencing remains intact despite the intervening changes in sentencing law brought about by Booker and Ameline. Although Booker changed the nature of that error, resentencing remains appropriate. See United States v. Ruiz, 536 U.S. 622, 627, 122 S.Ct. 2450, 153 L.Ed.2d 586 (2002). 3 If we determine in any future appeal that the sentence eventually imposed upon Plancarte-Alvarez resulted from an incorrect application of the Sentencing Guidelines, and further that the error in application was not harmless, we will remand to the district court for further sentencing proceedings just as we would have under the pre-Booker sentencing regime. United States v. Cantrell, 433 F.3d 1269, 1279 (9th Cir.2006). 4 Our opinion included a de novo review of the government's claim that the district court misapplied the holding of Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), and we determined that the court had erred. Because of that error, we held that should Plancarte-Alvarez return to the United States, the government could apply to the district court to vacate the sentence and determine if the March 19, 2002 incident qualifies as relevant conduct under U.S.S.G. § 1B1.3. To correct our opinion to make it consistent with Booker, we strike in full the first full paragraph in the right-hand column of 366 F.3d at 1065 and replace that paragraph with the following: 5 If the March 19 incident qualifies as relevant conduct under the Guidelines, a question yet to be determined by the district court, the weight of that load of marijuana should be considered in determining the base offense level for Plancarte-Alvarez's jury convictions for the May 28 acts of importing marijuana in violation of 21 U.S.C. §§ 952 and 960, and possession of marijuana with intent to distribute in violation of 21 U.S.C. § 841(a)(1). 6 We reject Plancarte-Alvarez's suggestion that he is entitled to opt out of any potential vacatur and resentencing. The Ameline opinion describes an opt-out procedure for limited remands, the purpose of which is to allow the district court to answer the question of whether it would have imposed the same sentence had it known that the Guidelines were not mandatory. 409 F.3d at 1084. However, there is no general opt-out procedure for resentencing outside the limited Ameline framework, and neither party has requested Ameline relief. 7 The panel has voted to deny the petition for panel rehearing. 8 The full court has been advised of the petition for rehearing en banc and no judge has requested a vote on whether to rehear the matter en banc. See Fed. R.App. P. 35. 9 The petition for panel rehearing and the petition for rehearing en banc are denied. No further petitions for panel rehearing or for rehearing en banc may be filed. 10 IT IS SO ORDERED.	{ "pile_set_name": "FreeLaw" }
947 F.2d 998 RICO Bus.Disp.Guide 7870 Dana WILLIS, Plaintiff, Appellant,v.Kevin LIPTON, et al., Defendants, Appellees. No. 90-1930. United States Court of Appeals,First Circuit. Heard Feb. 4, 1991.Decided Oct. 28, 1991. Albert P. Zabin with whom R. Keith Partlow and Schneider, Reilly, Zabin & Costello, P.C., Boston, Mass., were on brief, for plaintiff, appellant. James B. Re with whom Ellen G. Grant, Daniel A. Less and Sally & Fitch, Boston, Mass., were on brief, for defendants, appellees Lipton, et al. Victor H. Polk, Jr., Boston, Mass., for defendant, appellee WGY Coin, Inc. Robert R. Pierce with whom Thomas E. Peisch and Conn, Kavanaugh, Rosenthal & Peisch, Boston, Mass., were on brief, for defendant, appellee Minshull. Before CAMPBELL, Circuit Judge, ALDRICH, Senior Circuit Judge, and CYR, Circuit Judge. CYR, Circuit Judge. 1 Plaintiff Dana Willis appeals the dismissal of his civil complaint alleging injuries resulting from defendants' fraudulent scheme for grading and pricing rare coins bought and sold by Standard Financial Management Inc. ("Standard"), a corporation formed by Willis and of which he was the major stockholder and chief executive officer. The complaint alleged a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and asserted pendent state law claims for interference with advantageous business relations and breach of fiduciary duty. The district court dismissed the RICO count, on the ground that Willis had not been harmed "by reason of" the RICO violation. See 18 U.S.C. § 1964(c). The pendent state law claims were dismissed without reaching the merits. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966); Rice v. President & Fellows of Harvard College, 663 F.2d 336, 339 (1st Cir.1981), cert. denied, 456 U.S. 928, 102 S.Ct. 1976, 72 L.Ed.2d 444 (1982). We affirm. 2 * BACKGROUND 3 The RICO count alleged that Willis was victimized by a broad-ranging conspiracy to defraud him, his business and its customers through a complicated "kickback" scheme involving sham corporations and over-grading of rare coins. According to the complaint, Willis purchased a portion of a rare coin business formerly owned and operated by alleged co-conspirators James Halperin and Steven Ivy. As a condition of the sale, Willis was to employ as chief numismatist, Paul Taglione, who was to become a stockholder in the acquiring corporation, and Willis was to retain Halperin as an independent consultant in the purchasing and grading of coins. Willis alleged that Halperin, Ivy, Taglione, and the remaining defendants, formed a conspiracy to sell Standard over-graded coins at excessive prices for resale to Standard's customers. Taglione, who oversaw coin purchases for Standard, would certify coin prices and grades in return for a "kickback" calculated at forty percent of the margin between their actual value and the inflated price certified by Taglione. The conspirators allegedly used the mails, telephone, electronic transfers and interstate carriers to execute their fraudulent scheme. 4 The Federal Trade Commission ("FTC") began to investigate Standard in 1984, in response to complaints from dissatisfied customers unable to recoup their investments. In 1987, the FTC brought an enforcement action against Standard in the United States District Court for the District of Massachusetts. See 15 U.S.C. § 53(b). Shortly thereafter Standard and the FTC entered into a consent judgment which called for district court appointment of a special counsel to take control of all Standard assets, but reserved to the FTC the right to pursue restitution in behalf of defrauded Standard customers. The special counsel filed a chapter 11 petition in behalf of Standard on the same day the consent judgment was entered. The special counsel immediately discharged Willis from his employment with Standard and brought an action for damages against him in behalf of Standard. Although there was no criminal indictment and Willis was not required to make restitution,1 he became the target of several consumer lawsuits and received adverse publicity. The complaint alleged that Willis suffered loss of employment and reputation, and incurred substantial legal expense as a consequence of the RICO conspiracy. II DISCUSSION 5 RICO accords a private right of action for treble damages and attorney fees to "[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter...." 18 U.S.C. § 1964(c). A plaintiff enjoys standing under section 1964(c) only if he can demonstrate (1) a violation of section 1962, and (2) harm "by reason of" the violation. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 495-496, 105 S.Ct. 3275, 3284-3285, 87 L.Ed.2d 346 (1985); Pujol v. Shearson/American Express, Inc., 829 F.2d 1201, 1205 (1st Cir.1987). The harm alleged may be either "direct" or "indirect," so long as it "flows from" the predicate acts. Bass v. Campagnone, 838 F.2d 10, 12 (1st Cir.1988). Mere "cause in fact" is insufficient to confer RICO standing, however, since section 1964(c) establishes a proximate cause requirement as well. See Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23 (2d Cir.1990) (distinguishing between "cause-in-fact" or "but for" causation and proximate cause); O'Malley v. O'Neill, 887 F.2d 1557, 1561 (11th Cir.1989) (referring to cause in fact as "but for" causation), cert. denied, --- U.S. ----, 110 S.Ct. 2620, 110 L.Ed.2d 641 (1990); Cullom v. Hibernia Nat'l Bank, 859 F.2d 1211, 1214 (5th Cir.1988) (requiring proximate cause); Sperber v. Boesky, 849 F.2d 60, 63 (2d Cir.1988) ("factual causation" should not define extent of RICO liability); Haroco, Inc. v. American Nat'l Bank & Trust Co., 747 F.2d 384, 398 (7th Cir.1984), aff'd, 473 U.S. 606, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985) (per curiam) (requiring proximate cause). Thus, although "RICO is to 'be liberally construed to effectuate its remedial purposes,' " Sedima, 473 U.S. at 498, 105 S.Ct. at 3286 (quoting Pub.L. 91-452, § 904(a)), RICO liability is not to be extended without limit, for " '[s]ome boundary must be set to liability for the consequences of any act, upon the basis of some social idea of justice or policy.' " Sperber, 849 F.2d at 63 (quoting W. Page Keeton, D. Dobbs, R. Keeton, D. Owen, Prosser & Keeton on the Law of Torts 264 (5th ed. 1984) (footnote omitted)). 6 Without deciding, the district court assumed that the instant complaint pled a section 1962 violation, but concluded on the basis of the allegations of the complaint that only Standard and its customers could have sustained harm proximately caused by any alleged RICO violation and, moreover, that any alleged harm to Willis was "incidental to, and the result of, that sustained by Standard." The district court accordingly ruled that any incidental injury to Willis was insufficient as a matter of law to confer RICO standing under section 1964(c). 7 Willis concedes that he lacks standing to bring a stockholder action to redress any injury sustained by Standard. Willis instead asserts individual standing under section 1964(c) on the basis that the alleged injuries--loss of employment, damage to reputation, and legal expense incurred as a result of the conspiracy--are personal to him and not simply derivative of the bankrupt corporation. We hold that the injuries allegedly sustained by Willis are too remote to have been proximately caused by the section 1962(c) violations pleaded in the complaint. 8 Willis asserts RICO-related harm in the form of lost employment with Standard. However, we have held that corporate-employee harm more immediately linked to an alleged RICO violation did not give rise to a right of action. See Pujol, 829 F.2d at 1205 (dismissal to prevent employee from reporting RICO violations); Nodine v. Textron, Inc., 819 F.2d 347 (1st Cir.1987) (dismissal of employee for reporting conduct constituting predicate acts under RICO insufficient to support employee RICO claim); see also Hecht, 897 F.2d at 24 (citing cases). In these cases we determined that the employees were not harmed "by reason of" the RICO violation since the predicate act itself did not cause their dismissal. 9 Similarly, Willis lost his employment not as a proximate consequence of the alleged RICO violations, but as a much more attenuated consequence of the FTC enforcement action in the district court, the ensuing chapter 11 proceeding, and the independent decision of the special counsel to terminate Willis' employment notwithstanding the continued operation of Standard's rare coin business under the auspices of chapter 11 and the supervision of the special counsel. Willis' loss of employment represents a far more remote consequence of the RICO predicate acts than were the employee dismissals in Pujol and Nodine. Thus, although in a sense an attenuated effect of the alleged predicate acts, Willis' loss of employment plainly was "incidental to the corporation's injury." Warren v. Manufacturers Nat'l Bank of Detroit, 759 F.2d 542, 544-545 (6th Cir.1985) (sole owner of corporation who lost employment when corporation was forced into bankruptcy by RICO violations cannot recover for loss of employment).2 10 An extension of RICO standing in these circumstances would serve to "federalize" a substantial volume of common law fraud litigation traditionally left to state courts. Moreover, while we recognize that "RICO is to be liberally construed," Sedima, 473 U.S. at 498, 105 S.Ct. at 3286, "[a]llowing every ... employee ... a cause of action for injuries derivative of those suffered directly by a corporation does not just permit a vast amount of litigation to be brought in federal court that previously could only have been brought in state court, but creates a potential avalanche of suits that previously could not have been brought at all. " Warren, 759 F.2d at 545 (emphasis in original). According RICO standing to discharged employees in these circumstances merely by reason of their corporate employer's inability to survive the effects of a RICO violation would pose a serious risk that potential RICO liability be extended beyond any principled boundary based in "justice or policy." Sperber, 849 F.2d at 63 (limiting, on proximate cause grounds, broad-ranging RICO liability claim). 11 Willis' RICO damage claims for loss of reputation and for legal expenses are less sweeping in scope and somewhat more personal to Willis. In the circumstances of the present case we nonetheless believe these considerations insufficient to confer individual standing under RICO, for the alleged injuries were occasioned Willis in his capacities as "officer, director, stockholder and incorporator" of Standard and, likewise, are derivative in nature. Moreover, like the claim for loss of employment, these alleged injuries bear too attenuated a causal connection to the alleged RICO violations. 12 First, the complaint makes clear that all primary and immediate RICO-related injuries were sustained by Standard and its customers.3 As "[a] RICO action to recover for injury to the corporation 'is a corporate asset,' " Roeder v. Alpha Industries, Inc., 814 F.2d 22, 30 (1st Cir.1987) (quoting Rand v. Anaconda-Ericsson, Inc., 794 F.2d 843, 849 (2d Cir.), cert. denied, 479 U.S. 987, 107 S.Ct. 579, 93 L.Ed.2d 582 (1986)), any treble damage recoveries by officers and stockholders for injuries incidental to the more immediate injury to the corporation would seriously "impair[ ] the rights of prior claimants to such assets," id., including the rights of the injured corporation's defrauded customer-creditors. Although Standard, through the special counsel, has released all defendants who are alleged to have harmed Willis individually, there is no indication that the FTC does not yet retain the statutory authority to seek restitution on behalf of Standard's defrauded customers from defendants not previously the subject of the FTC's enforcement action in 1987.4 To extend a corporate insider standing to assert individual RICO treble damage claims in these circumstances would seriously impede the efficient pursuit of available governmental and corporate recovery efforts to the potential detriment of the injured corporation's creditors. See 12B W. Fletcher, Cyclopedia of the Law of Corporations, § 5910, at 418 (rev. perm. ed. 1984) (one "reason underlying the general rule requiring the action to be brought by the corporation, even when the stockholder dominates the corporation ... [is] that the damages so recovered may be available for the payment of the corporation's creditors"). 13 We likewise reject Willis' contention that these RICO defendants are afforded unfair protection by the corporate veil he elected to place between himself and Standard.5 "Having chosen to conduct his financial affairs through the use of the corporate vehicle, with all of the benefits traditionally conferred by that device, [Willis] cannot simply shrug off the corporate mantle at the courthouse steps and demand recovery of all his losses as a private individual." McDonald v. Bennett, 674 F.2d 1080, 1086 (5th Cir.1982). Nor does the fact that Willis was the majority stockholder in a closely-held corporation alter the analysis to his advantage. "Whatever their identity in interest, [Willis and Standard] remained separate legal entities." Id. 14 "[T]he doctrine of proximate cause reflects social policy decisions based on shared principles of justice." Sperber, 849 F.2d at 65. "Regardless of the identity of financial interests between corporation and stockholder, [a sole or majority owner of stock] cannot employ the corporate form to his advantage in the business world and then choose to ignore its separate entity when he gets to the courthouse." Fletcher, § 5910, at 418. In these circumstances and absent an allegation that Willis was fraudulently induced to incorporate, we cannot think that Standard's incorporator, majority stockholder and chief executive possessed individual standing to assert RICO claims for damages derivative of the direct injury sustained by Standard. 15 Affirmed. 1 The special counsel apparently released Standard's claims against all wrongdoers 2 We would allow that the allegations of the complaint suggest that, but for the asserted RICO violations, Standard would not have been placed in reorganization proceedings. In the present circumstances we cannot agree, however, that the alleged RICO violations effectively caused Willis' loss of employment with Standard. The independent decision of the special counsel to dismiss Willis must be considered an efficient intervening cause 3 According to the facts alleged in the complaint, various defendants "began to purchase coins on Standard's behalf," to "illegal[ly] take from Standard," and "to sell over graded and over priced coins to Standard." Willis also alleges that the "conspirators knew that Standard had been cheating the consumers." He likewise alleges, conclusorily, that the "purpose" of the conspiracy was to "defraud[ ] Standard and Willis and their customers to whom the overgraded coins would be sold at inflated prices." 4 Pursuant to 15 U.S.C. § 53(b), the FTC is authorized to seek temporary or permanent injunctive relief for past or threatened unfair practices. Although the language of section 53(b) appears to limit the available remedy to injunctive relief, courts generally have interpreted section 53(b) to allow the FTC to invoke the full array of equitable remedies available to the district court, including divestiture of assets, appointment of a receiver, and restitutionary relief. See, e.g., FTC v. United States Oil & Gas Corp., 748 F.2d 1431 (11th Cir.1984); FTC v. Southwest Sunsites, Inc., 665 F.2d 711 (5th Cir.1982). The future maintenance of such FTC enforcement actions presumably would be constrained only by the doctrine of laches 5 Although the complaint alleges that the defendants conspired to induce Willis to accede to certain business arrangements, including the hiring of Taglione as chief numismatist, the complaint makes no allegation that the defendants in any way induced Willis to adopt the corporate form for conducting the coin business	{ "pile_set_name": "FreeLaw" }
THE THIRTEENTH COURT OF APPEALS 13-19-00237-CR DALLAS SHANE CURLEE v. THE STATE OF TEXAS On Appeal from the 24th District Court of Jackson County, Texas Trial Cause No. 18-1-10,036 JUDGMENT THE THIRTEENTH COURT OF APPEALS, having considered this cause on appeal, concludes that the judgment of the trial court should be AFFIRMED. The Court orders the judgment of the trial court AFFIRMED. We further order this decision certified below for observance. April 30, 2020	{ "pile_set_name": "FreeLaw" }
164 Cal.App.2d 571 (1958) THE PEOPLE, Respondent, v. ZACK THOMAS, JR., Appellant. Crim. No. 1187. California Court of Appeals. Fourth Dist. Oct. 27, 1958. Simmons & Simmons for Appellant. Edmund G. Brown, Attorney General, and Arthur L. Martin, Deputy Attorney General, for Respondent. COUGHLIN, J. pro tem. [fn. ] The defendant was charged with the violation of section 261 of the Penal Code, i.e., attempt to commit rape; was tried by a jury and found guilty; a motion for a new trial was made and denied; judgment of 573 imprisonment in the state prison ensued; and he takes this appeal from the judgment and "from the denial of the motion for new trial." On the night of June 10, 1957, at about 11:30 o'clock, the defendant and a companion named Howard, while driving home from a restaurant, stopped at an automobile parked near the corner of Broadway and 14th Street in the city of Blythe. In the parked car was a Mrs. Ethel Fielder and her baby. In reply to an inquiry from the two men as to why she was there, Mrs. Fielder told them she was waiting for her husband; that he would be along in a little while; and that they had better leave. The defendant and Howard left; went to the home of an uncle; and then decided to return to the parked automobile. In the interim the defendant had said to his companion, "Oh, man, we ought to go on and make it"__________ "we ought to go back and try to make this girl"__________ "there couldn't nobody know about it no way, because all the watermelon boys are here." Howard replied that he was scared to do this, but, upon assurance from the defendant, went along. Mrs. Fielder had been fixing a bottle for her baby, who was asleep in the back seat, and remained in the automobile at the place where the two men previously had seen her; they walked back and asked her to take them home; she refused and attempted to start her car but it stalled; the defendant pulled the car door open and told her to move over; she protested, telling him to leave, and began blowing the car horn. Thereupon the defendant jerked at her; hit her in the face; pushed her to the side; moved in; "broke the horn in two"; and directed Howard to drive off. As Howard drove, the defendant slapped Mrs. Fielder; started "fiddling" with her; tried to get into the top of her dress; tried to pull up her dress; got his hand up her dress; and grabbed her when she attempted to get out of the car. Eventually the automobile was stopped at a place about six miles from where they had started and Howard got out. Then the defendant tried to kiss Mrs. Fielder and tried to push her down in the seat. She struggled to keep him from pushing her down in the seat; grabbing hold of the steering wheel, and the defendant started "socking" her, and continued "socking" her until she was "half unconscious." At this time Howard returned; insisted that they leave, as he had to go to work the next morning; got into the car; and they left. On the way back the defendant continued to "sock" Mrs. 574 Fielder; pulled up her dress; pulled on her leg; and tried to get on top of her. She was in a hysterical condition. After reaching town the car stalled. Howard got out, and after some urging prevailed upon the defendant to accompany him to get some gasoline, believing that a lack of gasoline was the cause of the engine failure. After they left Mrs. Fielder attempted to and did get the car started; drove home; and immediately reported the incident to her landlord who called the sheriff. She had marks on her body and "discolorations or abrasions" in the area of her neck and the side of her leg. Mrs. Fielder did not testify in the trial court. It appearing that she could not be located, her testimony given at the preliminary hearing was read into evidence. The defendant contends that the evidence is insufficient to convict him of the offense with which he was charged, and that the trial court abused its discretion in admitting into evidence the testimony of Mrs. Fielder which was taken at the preliminary hearing. [1] The crime of attempted rape "is complete if there is a concurrence of the intent to commit such crime with a direct, although ineffectual, act towards its commission," (People v. Van Buskirk, 113 Cal.App.2d 789, 792 [249 P.2d 49]) providing the efforts of the accused "reach far enough towards the accomplishment of the desired result to amount to the commencement of the consummation." (People v. Miller, 2 Cal.2d 527, 530 [42 P.2d 308]; People v. Fratianno, 132 Cal.App.2d 610, 627 [282 P.2d 1002].) [2] To constitute such an attempt it is not necessary "that the act done should be the last proximate one for the completion of the offense," (People v. Fiegelman, 33 Cal.App.2d 100, 105 [91 P.2d 156]), or that there be any penetration whatever. (People v. Esposti, 82 Cal.App.2d 76, 78 [185 P.2d 866].) [3a] The defendant argues that the evidence does not prove that he attempted to have sexual intercourse with Mrs. Fielder, but only that he "slapped" and "fondled" her. The evidence establishes facts which justify an inference that the defendant intended to commit rape. [4] "Whenever the design of a person to commit a crime is clearly shown, slight acts done in furtherance of that design will constitute an attempt" (People v. Fiegelman, 33 Cal.App.2d 100, 105 [91 P.2d 156]; People v. Fratianno, 132 Cal.App.2d 610, 628 [282 P.2d 1002].) [3b] The acts of the defendant were far in excess of "slight." To describe his conduct as "slapping" and "fondling" is most incomplete, inadequate and 575 restrained. The record fully supports the conclusion that his advances, mistreatment, struggle to get Mrs. Fielder down in the seat, and other misconduct would have resulted in his having sexual intercourse with her had it not been for her resistance and the timely interruption by Howard. [5] The defendant claims that the evidence is insufficient because there was no showing that he had the ability to engage in sexual intercourse. This contention is without merit. Want of such ability is a matter of defense (People v. Wessel, 98 Cal. 352 [33 P. 216]). Moreover, the evidence establishes that he believed he had the ability; this belief must have been founded on his knowledge as to the fact of his ability. In addition, although testifying he made no statement respecting any such disability. (See People v. Osaki, 209 Cal. 169, 176 [286 P. 1025]; People v. Hassen, 144 Cal.App.2d 334, 343 [301 P.2d 80].) [6a] The defendant further contends that the trial court abused its discretion in determining that Mrs. Fielder could not "with due diligence be found within the state" (Pen. Code, 686, subd. 3), and in permitting the deposition of her testimony taken at the preliminary hearing to be read into evidence, pursuant to the provisions of section 686, subdivision 3 of the Penal Code. It is urged that the finding of the court respecting the exercise of due diligence was based on hearsay statements admitted over objection, and for this reason was erroneous. The deputy district attorney representing the plaintiff testified that on August 19, 1957, he had been notified by the sheriff's office that Mrs. Fielder had moved to 2032 North Ivar Street in Hollywood; that he was told the name and address of an attorney representing her, whom he called and was advised that the attorney also was trying to locate her, but that a letter written to the Hollywood address had been returned; that on October 14, 1957, the sheriff's office advised him that Mrs. Fielder was now living at 1516 First Avenue, Oakland, whereupon he caused a subpoena to be issued and forwarded to the sheriff's office in Oakland which returned it with a certificate of inability to locate the witness; that on December 9, 1957, he was advised by the sheriff's office that the Fielders might be living in Eagle Mountain, whereupon he caused a subpoena to be issued and placed with the sheriff for service and thereafter received a return with a certification that the witness could not be found at Eagle Mountain. 576 A deputy sheriff testified that on August 19, 1957, he received a subpoena to be served on Mrs. Fielder in Blythe; that he had her address and when he went there he found a young couple who told him that she no longer lived at this address and that they did not know of her whereabouts; that he contacted a police officer who, he was informed, was Mrs. Fielder's nephew, and upon inquiry respecting her whereabouts was told that she lived in Hollywood at the address heretofore noted, which information he gave to the district attorney; that on October 9, 1957, after receiving another subpoena for the witness, he went to an address on South Broadway, in Blythe, to which he had been directed, and upon finding no one at that place inquired of a neighbor who informed him that Mrs. Fielder had moved; that later he received some papers in a civil action from Reno, Nevada, in which Mrs. Fielder was the plaintiff and Mr. Fielder was the defendant, which had been sent him for service. On cross-examination the deputy sheriff testified that he attempted to serve a subpoena on Mrs. Fielder at different times between August 19 and August 30, attempted to contact her numerous times, with negative results; that the power company told him that Mrs. Fielder might be at Eagle Mountain and he sent this information to the district attorney's office. [7] "The question of what constitutes due diligence to secure the presence of a witness which will authorize the reading to the jury of testimony taken at the preliminary hearing of the case, is largely within the discretion of the trial court, and depends upon the facts of each particular case. [8] The decision of a trial judge on the question of diligence and of the propriety of receiving or rejecting the evidence will not be disturbed on appeal unless it appears that there was an abuse of discretion. (Citing cases.) The problem is primarily for the trial court, and its solution will not be disturbed if there is evidence of substantial character to support its conclusion. (Citing cases.)" (People v. Cavazos, 25 Cal.2d 198, 200-201 [153 P.2d 177].) [9] The evidence in this case on the issue in question was substantial. Testimony relating statements made by third parties, in response to inquiries concerning the whereabouts of an absent witness, are admissible to show what effort has been made to locate the witness; what inquiries have been made; what replies have been received in response to such inquiries; and what further investigation has been conducted as a result of such replies. This is direct testimony, not hearsay. 577 Such statements are admitted to prove that the statements have been made; not to prove that the facts therein related are true. The propriety of this type of testimony, to establish the exercise of due diligence, has been approved by affirmance of the trial courts' decisions based thereon in People v. Dunn, 29 Cal.2d 654, 660 [177 P.2d 553]; People v. Cavazos, 25 Cal.2d 198, 200 [153 P.2d 177]; People v. Lewandowski, 143 Cal. 574, 576 [77 P. 467]; People v. McDaniel, 157 Cal.App.2d 492, 498 [321 P.2d 497]; People v. Gardner, 128 Cal.App.2d 1, 5 [274 P.2d 908]; People v. Williams, 123 Cal.App.2d 226, 229 [266 P.2d 599]; People v. Harris, 16 Cal.App.2d 701 [61 P.2d 348]; and People v. Noone, 132 Cal.App. 89, 92 [22 P.2d 284]. [6b] There was no abuse of discretion in the case at bar. The judgment and order denying defendant's motion for a new trial are affirmed. Griffin, P. J., and Mussell, J., concurred. NOTES [fn. ] . Assigned by Chairman of Judicial Council.	{ "pile_set_name": "FreeLaw" }
08-0148-ag Chao v. BIA BIA A077 643 059 A072 020 152 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals 2 for the Second Circuit, held at the Daniel Patrick Moynihan 3 United States Courthouse, 500 Pearl Street, in the City of 4 New York, on the 5 th day of October, two thousand ten. 5 6 PRESENT: 7 JOSÉ A. CABRANES, 8 ROBERT D. SACK, 9 DEBRA ANN LIVINGSTON, 10 Circuit Judges. 11 ______________________________________ 12 13 14 YUAN LIU CHAO, REN XIN YANG, 15 Petitioners, 16 08-0148-ag 17 v. NAC 18 19 20 BOARD OF IMMIGRATION APPEALS, 21 Respondent. 22 23 ______________________________________ 24 25 FOR PETITIONERS: Donald Paragon, New York, New York. 26 27 FOR RESPONDENT: Gregory G. Katsas, Assistant 28 Attorney General, Civil Division; 29 Michele Gorden Latour, Assistant 30 Director; Brendan P. Hogan, Trial 31 Attorney, Office of Immigration 32 Litigation, Civil Division, United 33 States Department of Justice, 1 Washington, D.C. 2 3 UPON DUE CONSIDERATION of this petition for review of a 4 Board of Immigration Appeals (“BIA”) decision, it is hereby 5 ORDERED, ADJUDGED, AND DECREED that the petition for review 6 is DENIED in part and DISMISSED in part. 7 Petitioners, Yuan Liu Chao and Ren Xin Yang, natives 8 and citizens of China, seek review of a December 19, 2007, 9 order of the BIA denying their motion to reopen. In re Yuan 10 Liu Chao, Ren Xin Yang, Nos. A077 643 059, A072 020 152 11 (B.I.A. Dec. 19, 2007). We assume the parties’ familiarity 12 with the underlying facts and procedural history of the 13 case. 14 A. Motion to Reopen 15 As an initial matter, we lack jurisdiction to consider 16 petitioners’ arguments insofar as they challenge the 17 agency’s underlying decision denying their application for 18 relief from removal. See 8 U.S.C. § 1252(b)(1); Malvoisin 19 v. INS, 268 F.3d 74, 75 (2d Cir. 2001); Ke Zhen Zhao v. U.S. 20 Dep’t of Justice, 265 F.3d 83, 90 (2d Cir. 2001). Thus, the 21 only agency decision before the Court is the BIA’s December 22 2007 decision denying petitioners’ motion to reopen. 23 The applicable standards of review are well- 2 1 established. See Jian Hui Shao v. Mukasey, 546 F.3d 138, 2 168-69 (2d Cir. 2008). An alien may only file one motion to 3 reopen and must do so within 90 days of the agency’s final 4 administrative decision. 8 C.F.R. § 1003.2(c)(2). 5 Petitioners’ motion was indisputably untimely because it was 6 filed more than three years after the BIA entered its final 7 order of removal. However, the time limitation does not 8 apply to a motion to reopen seeking to apply for asylum 9 “based on changed circumstances arising in the country of 10 nationality or in the country to which deportation has been 11 ordered, if such evidence is material and was not available 12 and could not have been discovered or presented at the 13 previous hearing.” 8 C.F.R. § 1003.2(c)(3)(ii). 14 We have previously reviewed the agency’s consideration 15 of evidence similar to that which petitioners submitted and 16 have found no error in its conclusion that such evidence is 17 insufficient to establish either changed country conditions 18 excusing the time limit for filing a motion to reopen or a 19 realistic chance of forced sterilization. See Jian Hui 20 Shao, 546 F.3d at 169-73. Moreover, contrary to 21 petitioners’ argument, the BIA reasonably declined to accord 22 probative weight to the village committee notices they 3 1 submitted because the record contained inconsistent evidence 2 regarding how those documents were obtained. See Xiao Ji 3 Chen v. U.S. Dep’t of Justice, 471 F.3d 315, 335, 342 (2d 4 Cir. 2006) (holding that the weight to be afforded to 5 documentary evidence lies largely within the discretion of 6 the tribunal). The BIA’s refusal to credit the notices was 7 all the more reasonable in light of the IJ’s underlying 8 adverse credibility determination. See Qin Wen Zheng v. 9 Gonzales, 500 F.3d 143, 146-47 (2d Cir. 2007). 10 B. Constitutional Claims 11 We lack jurisdiction to review petitioners’ unexhausted 12 argument that delays in their removal proceedings violated 13 their due process rights. Although the BIA does not have 14 jurisdiction to adjudicate constitutional issues, see United 15 States v. Gonzalez-Roque, 301 F.3d 39, 47-48 (2d Cir.2002), 16 such claims must nevertheless be administratively exhausted 17 when the BIA may decide the underlying issues of fairness of 18 process. See Theodoropoulos v. INS, 358 F.3d 162, 172-73 19 (2d Cir.2004). Therefore, the petition for review is 20 dismissed to this extent. 21 Although we lack jurisdiction to review a BIA member’s 22 decision to resolve a particular appeal unilaterally, and 4 1 without opinion, pursuant to the agency’s streamlining 2 procedures, see Kambolli v. Gonzales, 449 F.3d 454, 463 (2d 3 Cir. 2006), here, petitioners challenge the 4 constitutionality of those streamlining regulations – an 5 argument over which we retain jurisdiction, see 8 U.S.C. 6 § 1252(a)(2)(D). However, it is well-settled that the 7 agency’s streamlining regulations do not violate the Due 8 Process Clause. See Kambolli, 449 F.3d at 459 (citing Yu 9 Sheng Zhang v. U.S. Dep’t of Justice, 362 F.3d 155, 156-59 10 (2d Cir. 2004). 11 Finally, petitioners failed to exhaust their argument 12 that their removal would deprive their U.S. citizen child of 13 his right to family unity and his right to remain in the 14 United States. See Theodoropoulos, 358 F.3d at 172-73. 15 Even if petitioners’ failure to exhaust this claim raises a 16 jurisdictional question, we assume hypothetical jurisdiction 17 to consider petitioners’ argument because the 18 “jurisdictional issues are complex and the substance of the 19 claim is . . . plainly without merit.” Ivanishvili v. U.S. 20 Dep’t of Justice, 433 F.3d 332, 338 (2d Cir 2006). Indeed, 21 it is well-settled that “an infant’s status as a citizen and 22 his dependence on his alien parent do not prevent the 5 1 deportation of the alien parent.” Emciso-Cardozo v. INS, 2 504 F.2d 1252, 1253 (2d Cir. 1974). 3 For the foregoing reasons, the petition for review is 4 DENIED in part and DISMISSED in part. As we have completed 5 our review, any stay of removal that the Court previously 6 granted in this petition is VACATED, and any pending motion 7 for a stay of removal in this petition is DISMISSED as moot. 8 Any pending request for oral argument in this petition is 9 DENIED in accordance with Federal Rule of Appellate 10 Procedure 34(a)(2), and Second Circuit Local Rule 34.1(b). 11 FOR THE COURT: 12 Catherine O’Hagan Wolfe, Clerk 13 14 6	{ "pile_set_name": "FreeLaw" }
NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________ No. 14-3345 _____________ UNITED STATES OF AMERICA v. ROBERT LAMAR WHITFIELD a/k/a LAMAR WHITFIELD a/k/a GOAT, Appellant _____________ On Appeal from the United States District Court for the Eastern District of Pennsylvania District Court No. 2-12-cr-00418-001 District Judge: The Honorable Juan R. Sanchez _____________ Argued February 29, 2016 Before: McKEE, Chief Judge, SMITH, and HARDIMAN, Circuit Judges (Opinion Filed: May 5, 2016) Eric B. Henson [ARGUED] Robert Zauzmer Virginia P. Pratter Office of United States Attorney 615 Chestnut Street Philadelphia, PA 19106 Counsel for Appellee J. Michael Farrell [ARGUED] Suite 402N 718 Arch Street Philadelphia, PA 19106 Counsel for Appellant ________________ OPINION ________________ SMITH, Circuit Judge. This appeal stems from a stash-house robbery sting operation that took place in Philadelphia from June to July of 2012. Of the eight individuals caught in the operation, three pled guilty prior to trial.1 Following their convictions in a joint trial, the remaining five,2 including Appellant Robert Lamar Whitfield, filed separate appeals, each contesting various issues relating to their convictions (and, for some, their sentences). For the reasons explained below, we will uphold Whitfield’s convictions and corresponding sentence.  This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does not constitute binding precedent. 1 These were Najee Murray, Lafayette Rawls, and Jamie Dales. 2 Whitfield’s co-defendants at trial were Marlon Graham, Kareem Long, Kenneth Parnell, and Frank Thompson. Separate opinions resolving each co-defendant’s appeal will be filed. See United States v. Graham, No. 14-3717; United States v. 2 I. In June of 2012, a confidential informant (CI) contacted Whitfield and asked for help getting in touch with a mutual acquaintance so that the CI could invite the acquaintance to rob a drug stash house. Whitfield instead volunteered to take care of the robbery himself, claiming that he had significant experience robbing stash houses in the past. The CI then put Whitfield in touch with the CI’s “uncle,” who turned out to be an undercover agent for the Bureau of Alcohol, Tobacco, and Firearms (ATF). Whitfield met with the agent on several occasions to discuss the robbery. Whitfield recruited others to join in the scheme, and these in turn recruited still more. Plans came to a head on July 18, 2012, when Whitfield and seven others met with the undercover agent in the parking lot of a Hilton Hotel where the agent once again told those present about the robbery, including that he expected ten kilograms of cocaine to be inside the stash house, and that he expected the house to be guarded by two men, one with a pistol and the other within reach of an assault- style rifle. The agent then made clear that any who wished to withdraw should do so at that time. After no one expressed hesitation about the plan, the group proceeded to a junkyard, presumably to check out a van that the agent was to have Long, No. 14-3703; United States v. Parnell, No. 14-4100; United States v. Thompson, No. 14-4512. 3 rented for use during the robbery. There, the group continued making preparations for the robbery, with several individuals arranging and inspecting firearms and Whitfield distributing gloves to all present. At the undercover agent’s signal, law enforcement officials then swarmed the yard and arrested the group. A grand jury returned an indictment charging each of the co-conspirators with multiple inchoate Hobbs Act robbery and drug distribution offenses, as well as with the crime of carrying a firearm during and in relation to a crime of violence or a drug trafficking crime.3 The jury convicted Whitfield and his co-defendants on all counts for which they were mutually charged. Whitfield was subsequently sentenced to 188 months in prison. He then timely filed this appeal.4 II. Whitfield raises a number of issues for our consideration on appeal. First, he argues that the government failed to prove that the plan to rob a fictitious stash house “obstruct[ed], delay[ed], or affect[ed] commerce,” as is required for a Hobbs Act robbery conviction, see 18 U.S.C. § 1951(a); second, he asserts that the District Court should have granted his and his co-defendants’ request for discovery 3 The indictment also charged Long, Thompson, and Dales with being felons in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). Long and Thompson were acquitted at trial on this count. 4 to support a possible selective enforcement claim; third, he claims that the indictment should have been dismissed due to “outrageous government conduct”; fourth, he argues that the District Court violated his Confrontation Clause rights by prohibiting him from cross-examining a cooperating witness about his mental health issues; and fifth, he claims that he was the victim of sentencing entrapment and/or sentencing factor manipulation, thereby resulting in an enhanced sentence. We will address each argument in turn below. A. Whitfield argues that the planned stash-house robbery could not possibly have “affect[ed] commerce” because the stash house and the cocaine were purely fictitious. Accordingly, he claims that the District Court erred by denying a motion to dismiss the Hobbs Act counts in the indictment,5 as well as motions for acquittal 4 The District Court had subject matter jurisdiction pursuant to 18 U.S.C. § 3231. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). 5 Section 1951(a) of the Criminal Code provides, in relevant part, as follows: Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery . . . or attempts or conspires so to do, . . . shall be fined under this title or imprisoned not more than twenty years, or both. 18 U.S.C. § 1951(a). The effect-on-commerce requirement is a “jurisdictional element,” United States v. Clausen, 328 F.3d 708, 710 (3d Cir. 2003), the absence of which prevents prosecution under the Hobbs Act. 5 and/or a new trial. This Court has already squarely rejected this argument. In United States v. Jannotti, we considered whether federal jurisdiction existed over Hobbs Act conspiracy and attempt charges arising from a sting operation featuring similarly fictitious elements. 673 F.2d 578, 581 (1982) (en banc). We concluded that it was “irrelevant that the ends of the conspiracy were from the very inception of the agreement objectively unattainable.” Id. at 591. Because “the defendants agreed to do acts which, had they been attainable, would have affected commerce,”6 it did not matter whether their agreement or attempt had “an actual effect on commerce.” Id. at 592.7 Accordingly, we will affirm the District Court’s orders denying Whitfield’s 6 At the trial of Whitfield and his co-defendants, the government’s expert witness testified that it is impossible to produce cocaine in Pennsylvania (or anywhere else in the United States), and that ten kilograms of cocaine have a street value of at least $360,000. Thus, the government presented ample evidence that, had the object of the conspiracy been accomplished, the robbery would have satisfied the Hobbs Act’s jurisdictional element. See United States v. Walker, 657 F.3d 160, 181 (3d Cir. 2011). 7 Whitfield and his co-defendants argue that Jannotti was impliedly overturned by our decision in United States v. Manzo, 636 F.3d 56 (3d Cir. 2011). This is clearly incorrect. Not only does Third Circuit procedure prohibit a panel of this Circuit from overturning an earlier precedent of a different panel, see Third Circuit I.O.P. 9.1, Manzo explicitly endorsed Jannotti’s continuing vitality. See Manzo, 636 F.3d at 68 (stating that “Jannotti represents the proper circumstances that support a charge for conspiracy to commit a Hobbs Act violation,” and distinguishing the facts in the case at bar from Jannotti). 6 motions that were premised on our lack of jurisdiction under the Hobbs Act. B. Whitfield next argues that the District Court erred in denying defendants’ post-trial motion for discovery to support a claim of selective enforcement.8 To support the motion for discovery, defendants cited statistics to the effect that every one of the approximately twenty people charged in stash-house robbery sting cases in the Eastern District of Pennsylvania since 2009 was African American. The District Court denied the motion because (i) defendants forfeited their selective enforcement claim by failing to raise it before trial, and (ii) even absent forfeiture, they failed to present sufficient evidence to satisfy the standard enunciated in United States v. Armstrong, 517 U.S. 456 (1996), and thus did not qualify for discovery into possible selective enforcement. We agree with the District Court that Whitfield and his co-defendants forfeited their selective enforcement claim. Claims or defenses based on a “defect in instituting the prosecution” must be raised before trial. Fed. R. Crim. P. 8 Though Whitfield and his co-defendants sometimes use the phrase “selective prosecution,” it is clear that their allegations of possible racial discrimination are directed toward law enforcement and their decisions about which individuals to target for stash-house stings rather than toward prosecutors and their decisions about which stash-house sting targets to ultimately prosecute. Thus, we will refer to their claim as one sounding in “selective enforcement.” 7 12(b)(3)(A)9; United States v. Salahuddin, 765 F.3d 329, 350 (3d Cir. 2014) (treating as forfeited selective prosecution claim not raised before trial). Nevertheless, Whitfield and his co-defendants did not file their motion seeking discovery to support their selective enforcement claim until months after trial. They also failed to show “good cause” for the delay, Fed. R. Crim. P. 12(e),10 as they pointed to no material evidence to support their claim that was not available before trial. See Salahuddin, 765 F.3d at 350. We will thus affirm the District Court’s order denying defendants’ motion for discovery.11 9 Rule 12 was amended after the District Court denied defendants’ motion for discovery to pursue a claim of selective enforcement. See Fed. R. Crim. P. 12 advisory committee notes to 2014 Amendments. None of these changes impact the District Court’s decision to deny the motion, nor our analysis of that decision. 10 The “good cause” provision of Rule 12 has since been relocated to subdivision (c)(3). 11 While we need not reach the issue, we also think the District Court did not abuse its discretion in applying the Armstrong standard to deny defendants’ discovery request. Although Armstrong dealt only with a discovery request into possible selective prosecution, and although it appears that the Third Circuit has not reached the precise question of whether the Armstrong standard for discovery applies equally to claims of selective enforcement, the prima facie elements for both selective prosecution and selective enforcement are the same: discriminatory effect and discriminatory intent. Compare Armstrong, 517 U.S. at 465 (elements for selective prosecution claim) with Hill v. City of Scranton, 411 F.3d 118, 125 (3d Cir. 2005) (elements for selective enforcement claim). Thus, it is unsurprising that other courts have used the Armstrong discovery standard in analyzing discovery requests related to selective enforcement. See United States v. Barlow, 310 F.3d 1007, 1010 (7th Cir. 2002) (“[A] defendant seeking discovery on a selective enforcement claim must meet the same ‘ordinary equal protection 8 C. Whitfield also claims that the District Court erred by denying his post-trial motion to dismiss the indictment due to outrageous government conduct. We need not discuss the merits of this argument, however, because, like the motion for discovery to pursue a claim of selective enforcement, Whitfield forfeited this issue standards’ that Armstrong outlines for selective prosecution claims.”); United States v. Alcaraz-Arellano, 441 F.3d 1252, 1264 (10th Cir. 2006). The above said, we acknowledge that the Armstrong standard poses a hurdle that is, in most cases, effectively insurmountable. See United States v. Thorpe, 471 F.3d 652, 663 (6th Cir. 2006) (collecting cases and commentary discussing difficulty of satisfying Armstrong burden); Richard H. McAdams, Race and Selective Prosecution: Discovering the Pitfalls of Armstrong, 73 Chicago-Kent L. Rev. 605, 618-23 (1998) (arguing that the Armstrong standard for discovery raises an effectively “insuperable” barrier to even meritorious selective prosecution claims because the only evidence regarding the non-prosecution of similarly- situated persons of a different race is typically within the prosecutor’s sole possession and control). This seems especially true in reverse-sting cases like this one: even assuming defendants were targeted because of their race, it defies reality to think that they could ever make “a credible showing” that “similarly situated persons” of other races “could have been [targeted] for the offenses for which the [defendants] were [targeted], but were not so [targeted].” Armstrong, 517 U.S. at 470. Perhaps this concern is what motivated the Seventh Circuit’s recent decision in United States v. Davis, 793 F.3d 712 (7th Cir. 2015) (en banc), a stash-house robbery sting case much like this one in which the court held that Armstrong did not apply to the defendants’ discovery requests related to a possible selective enforcement claim. See id. at 722 (“[S]ome of the discovery asks for information from supervisors or case agents of the FBI and ATF, and this is outside the scope of Armstrong.”). Whether or not the court in Davis was correct that Armstrong should not apply to selective enforcement claims is a question for another day. We simply note our concern regarding law enforcement tactics like those in this case, and add our 9 by failing to raise it before trial.12 See United States v. Pitt, 193 F.3d 751, 760 (3d Cir. 1999) (holding that the defense of outrageous government conduct “is covered by the provisions of Fed. R. Crim. P. 12(b),” and therefore must be raised pretrial). D. Whitfield next claims that the District Court violated his rights under the Confrontation Clause of the Sixth Amendment by preventing him from cross- examining a government witness regarding the witness’ mental health issues. We review for abuse of discretion any limitation that a district court places on the scope of cross-examination. United States v. Mussare, 405 F.3d 161, 169 (3d Cir. 2005). We will reverse only when the limitation “is so severe as to constitute a voice to others who have expressed doubts about the seemingly impossible burden facing those attempting to challenge these tactics as racially discriminatory. 12 In an attempt to show “good cause” for the untimely motion, Whitfield points to United States v. Hudson, 3 F. Supp. 3d 772 (C.D. Cal. 2014), in which the district court for the Central District of California concluded that the government’s conduct in a stash-house sting operation similar to the operation underlying this case violated the defendant’s due process rights. See id. at 788. Whitfield’s attempt fails for two reasons. First, Hudson does not provide any previously unavailable evidence to support his claim of outrageous government conduct. See Pitt, 193 F.3d at 761 (noting that outrageous government conduct defense forfeited because defendant “was always aware of the facts upon which he now claims this defense”). Second, the Ninth Circuit subsequently overturned Hudson, thereby undercutting any persuasive force it once had. United States v. Dunlap, 593 F. App’x 619, 621 (9th Cir. 2014) (concluding that the government’s conduct “did not violate fundamental fairness or shock the universal sense of justice mandated by the Due Process Clause of the Fifth Amendment” (internal quotation marks and citation omitted)). 10 denial of the defendant’s right to confront witnesses against him and . . . is prejudicial to [his] substantial rights.” United States v. Conley, 92 F.3d 157, 169 (3d Cir. 1996). At trial, the government called Najee Murray to testify about, among other subjects, several robberies that Whitfield had committed prior to the stash-house robbery opportunity in this case, including a robbery that Whitfield and Murray committed in concert. Prior to trial, the government disclosed to defense counsel that Murray had been receiving treatment for depression. During his cross- examination of Murray, Whitfield attempted to question Murray about his mental health problems, including any diagnoses other than depression. After the government objected, however, the District Court instructed Whitfield, in no uncertain terms, that he was not allowed to ask Murray about any other mental health diagnoses or the symptoms of any mental ailments that might have affected Murray’s ability to accurately perceive and/or recall the events to which he was testifying. Instead, Whitfield was permitted to ask Murray only about the effects, if any, that his depression medication had on his perception or memory. Preventing Whitfield from cross-examining Murray about how the symptoms of his depression or other potential mental impairments affected his perception or memory indeed constituted a significant limitation. Nevertheless, we do not think the District Court abused its discretion in imposing this limitation, nor 11 do we think it was “so severe as to constitute a denial of [Whitfield’s] right to confront [Murray].” Conley, 92 F.3d at 169. Other than his attorney’s observation that Murray “look[ed] . . . sedated” while on the stand, Whitfield never attempted to present evidence to the District Court outside the presence of the jury suggesting that Murray suffered from any mental infirmities other than depression, or that his depression impacted his credibility in any way.13 Furthermore, the limitation did not represent a total ban on questions relating to Murray’s mental health, as Whitfield was allowed to elicit testimony confirming that Murray indeed was undergoing treatment for depression during the period in question, and to cross- examine Murray about the effect of his depression medication on his memory and perception. Cf. United States v. Robinson, 583 F.3d 1265, 1274-75 (10th Cir. 13 This is not to say that depression can never affect a witness’ credibility. Indeed, some courts have recognized that, at least in some severe cases of depression, it can have such an effect. See, e.g., United States v. Smith, 77 F.3d 511, 516-17 & n.3 (D.C. Cir. 1996) (citing medical literature regarding “Major Depressive Disorder” to reject assertion that “a patient suffering from depression would not necessarily be subject to symptoms that might cast doubt on his testimony as a witness”). But where a defendant fails, as Whitfield did below, to point to any indication that a witness’ particular case of depression was so severe that it may have impaired his memory or perception, we think it is well-within the sound discretion of the district court to restrict cross-examination related to the witness’ depression. See Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986) (“[T]rial judges retain wide latitude insofar as the Confrontation Clause is concerned to impose reasonable limits on such cross-examination based on concerns about, among other things, harassment, prejudice, . . . or interrogation that is . . . only marginally relevant.”). 12 2009) (concluding that, “viewed against the backdrop of the [witness’] centrality to the government’s case,” district court’s “categorical” prohibition against cross- examination regarding witness’ mental health and use of prescription medications violated Confrontation Clause). Thus, we will uphold the District Court’s restriction on Whitfield’s cross-examination of Murray as a valid exercise of the court’s discretion. E. Finally, Whitfield argues that ATF engaged in sentencing factor manipulation14 by selecting ten kilograms as the quantity of cocaine to be obtained, thereby triggering the ten-year mandatory minimum sentence under 21 U.S.C. § 841(b)(1)(A) and resulting in a higher range under the Sentencing Guidelines. We review criminal sentences for reasonableness. United States v. Sed, 601 F.3d 224, 229 (3d Cir. 2010). We examine for clear error a district court’s factual 14 In his appellate brief, Whitfield uses the phrases “sentencing manipulation” and “sentencing entrapment” essentially interchangeably. To the extent he refers to sentencing entrapment as short-hand to argue that he was “indisposed” to committing the offenses presented to him by ATF in this case, United States v. Sed, 601 F.3d 224, 230 (3d Cir. 2010); United States v. Briggs, 623 F.3d 724, 729 (9th Cir. 2010), we hold that Whitfield has forfeited this argument by failing to adequately raise it on appeal. Simply put, despite his repeated invocation of the phrase “sentencing entrapment,” he never points to facts related to, or even mentions, his criminal predisposition (or lack thereof). Mere passing reference to an issue without argument or supporting citations waives the issue before this Court. United States v. Stock, 728 F.3d 287, 290 n.3 (3d Cir. 2013). 13 findings in support of the sentence imposed, and its legal conclusions de novo. Id. Whitfield had the burden of proving sentencing factor manipulation. United States v. Torres, 563 F.3d 731, 734 (8th Cir. 2009). As Whitfield acknowledges, this Circuit has “neither adopted nor rejected the doctrines of sentencing entrapment and sentencing factor manipulation.” Sed, 601 F.3d at 229. In contrast to the defense of sentencing entrapment, which “focuses on the defendant’s predisposition,” “sentencing factor manipulation focuses on the government’s conduct.” United States v. Sanchez, 138 F.3d 1410, 1414 (11th Cir. 1998). According to “its broadest formulation . . . it is ‘a violation of the Due Process Clause,’ that ‘occurs when the government unfairly exaggerates the defendant’s sentencing range . . . .’” Sed, 601 F.3d at 231 (quoting United States v. Torres, 563 F.3d 731, 734 (8th Cir. 2009)). We need not decide whether to adopt the doctrine of sentencing factor manipulation at this time, however, because the District Court did not clearly err in finding that ATF had legitimate reasons for depicting the stash house as containing at least ten kilograms of cocaine. Specifically, ATF selected this quantity based on information received from the Drug Enforcement Agency–Philadelphia Division and the Philadelphia Police Department-Narcotics Division to the effect that ten kilograms fairly represented the amount of cocaine one could expect to find in a real stash house in Philadelphia at the time. Thus, it was not the case that ATF 14 chose the quantity solely, or even principally, in order to inflate defendants’ sentences. Cf. United States v. Ciszkowski, 492 F.3d 1264, 1271 (11th Cir. 2007). We will therefore affirm Whitfield’s sentence as reasonable. Cf. Sanchez, 138 F.3d at 1414. III. We will affirm the District Court’s judgment and sentence as to Whitfield. 15	{ "pile_set_name": "FreeLaw" }
883 F.2d 77 U.S.v.Cornillot89-116069 NO. 88-6232 United States Court of Appeals,Eleventh Circuit. JUL 21, 1989 Appeal From: AFFIRMED 1 7/21/89. 2 --------------- * Fed.R.App.P. 34(a); 11th Cir.R. 34-3.	{ "pile_set_name": "FreeLaw" }
248 S.W.2d 657 (1952) OSBORN v. CHANDEYSSON ELECTRIC CO. No. 42521. Supreme Court of Missouri, Division No. 2. May 12, 1952. 658 J. L. London, St. Louis, for appellant. R. Forder Buckley, E. C. Friedewald, St. Louis, for respondent. BOHLING, Commissioner. Charles F. Osborn sued Chandeysson Electric Company, a corporation, of St. Louis, Missouri, for damages arising out of a contract of employment culminating in an alleged agreement wherein, as part of the consideration, the defendant agreed to assign to plaintiff 150 shares of its capital stock. Plaintiff's petition was in two counts and plaintiff states the first count was for conversion of the stock and the second count was for breach of contract. (We refer to the parties as designated in the trial court.) The suit was filed February 11, 1941. Plaintiff was in the Armed Services during World War II and the trial was had in October, 1950. The jury returned a verdict for defendant on the first count and for plaintiff on the second count, awarding plaintiff $26,550 damages $15,000 for the value of the stock, admitted to be $100 a share, and $11,550 interest. Defendant's motion for new trial was sustained. Plaintiff appealed. The issues presented embrace the submissibility of plaintiff's case on each count, the propriety of plaintiff's two verdict directing instructions, whether the verdicts on Count II and on Count I are inconsistent, and whether plaintiff should have been required to elect on which count he would proceed to the jury, grounds sustained in the order granting a new trial. Plaintiff's father, Joseph A. Osborn, and Dr. Pierre J. Chandeysson had been friends for fifty years and plaintiff had known Dr. Chandeysson from boyhood. Dr. Chandeysson started an electrical manufacturing business in 1902 and in 1919 incorporated the Chandeysson Electric Company. The company manufactures electro-plating motor generating sets. Dr. Chandeysson was President of the company and owned practically all of its stock. In 1919 plaintiff, then about 19 years old, worked for the company for several months. Plaintiff testified that when he informed Dr. Chandeysson he had another job, Dr. Chandeysson stated it would be a good thing to get experience in other electrical lines and after plaintiff had gained experience he would be glad to have him come back to work for 659 him. Dr. Chandeysson did not recall this conversation. Plaintiff gained experience in electrical engineering work. He went to work for the Ralston Purina Company as an electrical engineer in 1927 at $250 a month and received salary raises up to $325 a month, but the business depression of the 1930s resulted in his earnings falling to $225 a month. Plaintiff testified that on several occasions Dr. Chandeysson, who was a bachelor, told plaintiff he was alone in the world, had built up his business, did not have anyone to carry on, and wanted someone he could train to carry on his business when he retired, and talked to plaintiff about doing this. A day or two before Christmas in 1934, Miss Adele Swenson (later Mrs. Chandeysson) and Dr. Chandeysson were at plaintiff's home, and, while the men were alone, Dr. Chandeysson asked plaintiff when he could get things straightened out to work for him, stating that he had work for plaintiff, definite duties, and would direct plaintiff what to do; that if plaintiff were going to work for him, it would have to be then; that, in lieu of increasing his salary, "I will assign to you a substantial interest in the Chandeysson Electric Company." Plaintiff told Dr. Chandeysson he thought this would be a good thing for him, but he was in charge of important work for the Ralston company and would have to give them notice. Plaintiff next saw Dr. Chandeysson in early January, 1935. Dr. Chandeysson wanted to talk the matter over with plaintiff's father as he realized plaintiff had been working for the Ralston company for about nine years and it was an important step for plaintiff. The three made arrangements to meet at Bevo Mill. At that meeting, according to plaintiff, Dr. Chandeysson stated he knew the work plaintiff had been doing and there was no question in his mind that, if plaintiff followed his instructions, plaintiff would make good and some day be able to take over and assist him and run the company after he retired. Plaintiff testified: "Dr. Chandeysson told me he would pay me the same as Ralston Purina and in every conversation that he would assign to me a very substantial amount of Chandeysson Electric stock." Dr. Chandeysson did not say when or how much stock would be assigned or what plaintiff would have to do to be entitled to the stock. Joseph A. Osborn, plaintiff's father, testified that at the Bevo Mill meeting: "He [Dr. Chandeysson] said he knew the boy could make good. He said there was no question about that, he had perfect confidence in him. He said he would train him and give him as much compensation as he was getting at the Purina Mills and would give him a substantial interest in the business"; and otherwise fully corroborated plaintiff's testimony on the Bevo Mill meeting. Dr. Chandeysson was 75 years of age at the time of trial. His version differed from that of plaintiff and plaintiff's father. He testified, with respect to the material facts that plaintiff informed witness (he thought in September, 1934) he had given the Ralston company notice and "tackled me for a job"; that witness never at any time or place made the statements attributed to him by plaintiff or plaintiff's father; that he called Mr. Osborn, Sr., to have lunch with them at the Bevo Mill because he had decided to give his son a try, and told the father they had been friends a long time and he was taking a chance on losing his friendship by employing plaintiff, for if plaintiff did not make good it would be the end of their friendship, and if he did make good everything would be all right, and that was the reason for the father's presence. Plaintiff went to work for the Chandeysson Electric Company on March 1, 1935, after giving the Ralston company notice of his intention to quit. Plaintiff's salary was $225 a month and in December, 1935, he was given a raise of $25 a month and a bonus of $250. We need not detail his services. According to plaintiff he performed his part of the contract until his discharge hereinafter mentioned. Plaintiff testified that he was in Dr. Chandeysson's office about two weeks before Christmas, 1936, and Dr. Chandeysson had a stock book on his desk, and said: "`Charlie, I am assigning to you 150 shares of Chandeysson Electric Company stock.' 660 He always used I. He was the company." Plaintiff thanked him. Mr. C. A. Henneke was Vice-President, and Mr. C. E. Pfeiffer was Secretary and Treasurer of the company, and, with Dr. Chandeysson, constituted the Board of Directors. Dr. Chandeysson then called in Mr. Henneke and Mr. Pfeiffer and told them: "I have assigned 150 shares of stock to Charlie"; and in the absence of one of the others, plaintiff was to act on the Board of Directors. Plaintiff testified that he had faith in Dr. Chandeysson and never personally asked or made demand for the stock certificate. Dr. Chandeysson denied that he ever told plaintiff he was assigning 150 shares of the stock to plaintiff, and the testimony of Mr. Henneke and Mr. Pfeiffer corroborated Dr. Chandeysson. On the day before Christmas, 1936, Dr. Chandeysson handed plaintiff a check, stating: "Here's a bonus check for $1,800 to augment your salary." Plaintiff testified that on December 31, 1936, Dr. Chandeysson, while in his office, gave plaintiff another check, stating: "Here is a five per cent dividend on 150 shares of Chandeysson Electric Company stock." The check was dated December 31, 1936, payable to Charles F. Osborn in the amount of $750, and was stamped "Dividend Check." Dr. Chandeysson testified he handed this check to plaintiff, but denied stating: "This is the dividend on the 150 shares of stock which I have assigned to you." Mr. Pfeiffer, Secretary of the company, testified that a meeting of the Board of Directors was held December 18, 1936, and the minutes were written up and dated December 31, 1936. These minutes disclose that the meeting was for the purpose of approving the issuance of dividend checks to certain persons who were nonstockholders but potentially valuable to the company in "good will" and that "because the Internal Revenue might object to the outlay as not a justifiable deduction, Mr. Chandeysson had made the disbursement out of the dividend account." Miss Dolores Bundschuh, the bookkeeper, testified she made out the "dividend checks" from a list handed her by Dr. Chandeysson; that there were 34 checks in number, and 11 dividend checks were issued to stockholders and 23 dividend checks were issued to nonstockholders; that the $8,000 in dividends going to nonstockholders were taken from "Miss Swenson's" share of the dividends; and she stamped each check "Dividend Check" under Dr. Chandeysson's instructions. Plaintiff's name was on the list handed Miss Bundschuh as follows: "150 Osborne 750." The Chandeysson Electric Company reported on income tax forms to the United States Treasury Department and to the State of Missouri that it had paid plaintiff in the year 1936 $4,800 in salary and $750 in dividends. In December, 1936, the first trouble developed between Dr. Chandeysson and plaintiff, and on August 14, 1937, Dr. Chandeysson objected to items of a few dollars for railroad and pullman fare on a trip to Chicago (St. Louis-Chicago) appearing in one of plaintiff's expense accounts, and, according to plaintiff, he was discharged. Dr. Chandeysson testified that he did not discharge plaintiff. Thereafter and prior to suit, demand was made on plaintiff's behalf for the delivery of the 150 shares of stock. Miss Bundschuh testified that in December, 1936, the stockholders of record were: Adele Chandeysson, 2,100 shares, Dr. Chandeysson, 7,250 shares; C. A. Henneke, 150 shares; C. E. Pfeiffer, 150 shares; and each of the following had 50 shares standing of record in their respective names: Frank Eicholtz; Theobald A. Leonhardt; Richard Mort; George Schmidt; Jacob T. Sinn; Thelma E. Wrablik, and witness. Mr. Henneke and Mr. Pfeiffer each testified that, when informed a certificate for 150 shares had been issued in his name, he immediately endorsed the certificate in blank or to the company, and we understand that Miss Bundschuh did not pay anything for her stock and at the time of trial held only one share to qualify as an officer. 661 The jury awarded damages on plaintiff's count for breach of contract, Count II. Defendant says its after trial motion for judgment in accordance with its motion for a directed verdict at the close of all the evidence should have been sustained, Lilly v. Boswell, Mo.Sup., 242 S.W.2d 73, 77[10, 11]; Nelson v. Kansas City, 360 Mo. 143, 227 S.W.2d 672, 674 [3, 4], on the ground plaintiff failed to make a submissible case in that there was no contract to convey or assign any stock because the "contract" was too uncertain and indefinite as to the amount of stock plaintiff was to receive, when plaintiff was to receive the stock, and as to what plaintiff had to do, and for how long, before he would be entitled to any stock in the company. Defendant's authorities apply to the situation with respect to plaintiff receiving stock of defendant corporation as the contract existed at its inception under the instant record. Huttig v. Brennan, 328 Mo. 471, 41 S.W.2d 1054, 1062; Bay v. Bedwell, Mo.App., 21 S.W.2d 203, 205[3]; 1 Corbin on Contracts (1950), §§ 95, 97, 100; 12 Am. Jur. 554, § 64, nn. 2, 6, § 66, n. 15, § 69, nn. 20, 21, § 71, n. 20; 17 C.J.S., Contracts, §§ 31, 36c, page 359. However, viewing the evidence in the most favorable light to plaintiff a jury could find that the subsequent acts of Dr. Chandeysson in stating he was assigning 150 shares of the Chandeysson Electric Company stock to plaintiff made clear and enforceable the indefinite promise theretofore existing to assign to plaintiff a substantial interest in the company if the assignment was the carrying out of said original promise. Roberts v. Harmount Tie & Lumber Co., Mo.App., 264 S.W. 448[1]; Stout v. Caruthersville Hardware Co., 131 Mo.App. 520, 527, 110 S.W. 619, 621; Nelson v. Massman Const. Co., 231 Mo.App. 1, 91 S.W.2d 623, 626 [1-4]; Phillips Petroleum Co. v. Rau Const. Co., 8 Cir., 130 F.2d 499, 500[1, 2]; Talamini v. Rosa, 257 Ky. 228, 77 S.W.2d 627, 630[2, 3]; Kirkley v. F. H. Roberts Co., 268 Mass. 246, 167 N.E. 289[2, 3]; 1 Corbin, supra, § 101; 12 Am.Jur. 558, § 67; 17 C.J.S., Contracts, § 36, page 367, note 89; Restatement, Contracts, § 33. Defendant says plaintiff cannot recover for a breach of contract because plaintiff did not plead a breach of contract. The parties agree that Count I is for conversion. Count II, as stated by defendant, contains unnecessary allegations and, among other things, alleges plaintiff "was the owner of said stock" on August 14, 1937, when he was discharged, and that defendant "has converted the same." Count II also pleaded, briefly, the contract, the consideration, notification of plaintiff by defendant of the assignment of the stock to plaintiff, and the nondelivery of the stock certificate, full and continued performance of the contract by plaintiff until his discharge by defendant, and defendant's failure and refusal, after demand, to issue the stock certificate to plaintiff, the breach, and the damages. Defendant's answer to Count II pleaded, among other things, the indefiniteness of the contract with respect to plaintiff acquiring an interest in defendant corporation and denied that plaintiff was discharged and that there was any "`breach of said agreement by the defendant' for the reason that such an agreement as alleged by plaintiff, not being in writing, is barred by the Statute of Frauds." The record does not disclose any motion attacking plaintiff's petition. In the circumstances, with Count I stating a claim for conversion, the allegations complained of by defendant in Count II may be considered as surplusage and Count II treated as stating a claim for a breach of contract. Morrill v. Alexander, Mo.App., 215 S.W. 764, 765[3, 4]; Waiters' Benevolent Ass'n v. Cella, Mo.App., 223 S.W. 444, 445[2]. Is the "contract" void under the Statute of Frauds providing that contracts for the sale of goods for $30 or upward shall not be good "unless the buyer shall * * * give something * * * in part payment, or unless some note or memorandum in writing be made of the bargain, and signed by the parties to be charged * * ." Section 432.020 RSMo 1949, V.A.M.S. Houston v. Mahoney, Mo.App., 219 S.W. 128[1], citing authority; 37 C.J.S., Frauds, Statute of, § 142, page 630; 662 2 Corbin, supra, 630, § 478. The contract, according to plaintiff, was that he was to come to work for defendant and receive the same salary the Ralston company was paying him and a substantial interest in defendant company. Plaintiff thereupon entered upon the performance of his obligation by giving up his position with the Ralston company and working for defendant. Plaintiff's performance of services constituted a good consideration and was the payment agreed upon for the stock according to plaintiff. Vogeler v. Punch, 205 Mo. 558, 103 S.W. 1001, 1005; Ostrander v. Messmer, 315 Mo. 1165, 289 S. W. 609, 613[3]. Under plaintiff's view of the evidence it was a jury question whether there had been performance by plaintiff and a recognition by defendant of such performance as entitled plaintiff to the stock. Lorenz v. Morney, 221 Mo.App. 409, 282 S.W. 59, 61. The statute does not preclude a recovery. Defendant contends plaintiff sued the wrong party, basing the contention on the use of the personal pronoun by Dr. Chandeysson; i. e., that "he" would pay the same salary as the Ralston company and "he" would assign to plaintiff a substantial amount of the Chandeysson Electric Company stock. Defendant company had an authorized capital of $1,000,000, evidenced by 10,000 shares of stock authorized and outstanding, of which, as stated in defendant's brief, 7,250 were owned by Dr. Chandeysson and 2,100 were owned by his wife, "from which assignments of stock could have been made." C. A. Henneke only held his certificate for 150 shares of defendant's stock long enough to "endorse it to the company." The same situation existed with respect to the 150 shares standing in the name of C. E. Pfeiffer. Miss Bundschuh's testimony indicates she was not the owner of the 50 shares standing in her name. This accounts for 9,700 of the 10,000 shares of stock. The Secretary of the defendant company testified that Dr. Chandeysson was the owner of all the outstanding stock on December 12, 1933, when the last of the 10,000 shares were issued. The record is to the effect that Dr. Chandeysson handled the stock as he desired and was the Chandeysson Electric Company. He, as Chandeysson Electric Company, and not personally, employed plaintiff. The Chandeysson Electric Company paid plaintiff's salary, plaintiff's bonuses, and plaintiff's $750 "dividend" check. The parties understood and by their acts treated the contract as a contract between plaintiff and the Chandeysson Electric Company. "The trend of authority is to uphold as binding on the corporation acts or contracts on its behalf by a person or persons owning all or practically all the stock, even though there is a lack of, or defect in, some corporate step or action." 19 C.J.S., Corporations, § 1004, notes 39, 40, page 472. See also Id., § 1001, notes 82-90, page 467, § 1002. We think plaintiff could sue the defendant company. Plaintiff makes the point in his brief that defendant was estopped to deny that he was entitled to 150 shares of the Chandeysson Electric Company stock. Plaintiff did not plead estoppel and we think the facts of record are not sufficient to invoke the doctrine of estoppel with respect to the 150 shares of stock. Waugh v. Williams, 342 Mo. 903, 119 S.W.2d 223, 226[6, 8]; State ex rel. City of Sikeston v. Public Service Comm., 336 Mo. 985, 82 S.W.2d 105, 108[2]; Section 509.090 RMo 1949, V.A.M.S. The new trial was awarded for error in giving plaintiff's two verdict directing instructions and for not requiring plaintiff to elect between his counts on conversion and for breach of contract. We have considered plaintiff made a submissible case on breach of contract. Plaintiff's instruction No. II proceeded upon the theory he was the "absolute owner" of the stock involved, and he stresses Williams v. Everett, Mo.Sup., 200 S.W. 1045, 1049[1-10], for submitting a recovery on conversion. The petition in the Williams' case was in one count, sounding in conversion. In that case the Articles of Incorporation named Williams as the owner of 150 shares of the corporate stock, and were signed by him and the other incorporators. The court stated, 200 S.W. loc. cit. 1050, the Articles of Incorporation 663 "constituted the legal title of each [incorporator] to the number of shares stated * ." And: "The contract of incorporation is tripartite, the stockholders agreeing between themselves as to their interests * ." Williams had the legal title to the shares involved. The action of trover, or trover and conversion, seeks as damages the value of specific personal property of plaintiff which has been converted by defendant to his own use. To maintain trover, it has been considered that plaintiff must have title to, or a right of property in and a right to the immediate possession of, the stock at the time of conversion, and "`there must be an invasion of a legal, as contradistinguished from an equitable right.'" 11 Fletcher, Private Corporations, p. 149, § 5114, nn. 97, 98; Rosencranz v. Swofford Bros. Dry Goods Co., 175 Mo. 518, 529, 75 S.W. 445, 448, 97 Am. St.Rep. 609. "An equitable title or right will not suffice for the maintenance of trover, or at least it alone is not sufficient." 65 C.J. 60, § 94, nn. 26, 27. See also 53 Am.Jur. 869, § 73, n. 10; Newman v. Mercantile Trust Co., 189 Mo. 423, 445(2), 88 S.W. 6, 11(2); Wilkinson v. Misner, 158 Mo.App. 551, 555, 138 S.W. 931, 932; Luhmann v. Schaefer, Mo.App., 142 S.W. 2d 1088, 1090. There is no showing of record that plaintiff ever held legal title to 150 shares of defendant corporation stock; and Williams v. Everett, supra, does not establish error in connection with the ruling on the motion for new trial with respect to the count for conversion. Plaintiff states his instruction predicating a recovery for a breach of contract properly declared the law, citing Williams v. Everett, supra, and 11 Fletcher, Private Corporations, 338, § 5165, nn. 78-80, and 162, § 5117. Williams v. Everett was for conversion, as above stated, and did not rule an instruction submitting a breach of contract. The text references in Fletcher are to the effect that one having title to stock may sue in conversion and discuss his measure of damages, respectively. These authorities do not disclose that the court erred in awarding a new trial for the giving of plaintiff's said instruction. The instruction submitted many facts. It began by following the second count of the petition in requiring a finding that plaintiff and defendant entered into a contract for plaintiff's services; that plaintiff performed and rendered "valuable services" to defendant; that defendant notified plaintiff 150 shares of stock was being assigned to him; that plaintiff was later discharged "without reasonable cause"; that certain additional facts of an evidentiary nature occurred, such as the payment to plaintiff of a dividend of $750, "being a 5% dividend on said stock," the "said dividend was duly declared," the reporting of said dividend to the United States and the State of Missouri, "and that said payment was a dividend on said stock paid by the defendant to plaintiff as a stockholder, then you may find that plaintiff is entitled to recover the value of the stock" et cetera. Instead of following the count for a breach of contract with the allegations pertaining to a conversion deleted therefrom, the instruction commingled a claim in contract with one in conversion. It assumed the alleged dividend was paid to plaintiff "as a stockholder." Reading the verdict in light of the instructions on the separate counts, the verdict appears to be inconsistent in that on the conversion count the jury found plaintiff was not the owner of the stock while under the wording of the instruction on the breach of contract count the jury considered plaintiff was the owner of the stock. Shaw v. Richards, 208 Mo.App. 671, 236 S.W. 405, 406[1]; East St. Louis Cotton Oil Co. v. Skinner Bros. Mfg. Co., 8 Cir., 249 F. 439, 441[1]. Consult 28 C.J.S., Election of Remedies, § 5, page 1069; 18 Am.Jur. 161, § 44; 11 Fletcher, Private Corporations, 339, § 5165, n. 83; 1 C.J.S., Actions, § 51, note 28, page 1147. An essential element of plaintiff's claim for a breach of contract was that, when defendant notified plaintiff 150 shares of stock was being assigned to him, such action was the making of defendant's theretofore indefinite promise a definite and certain 664 promise under the contract. The finding of this fact should be required in plain language. Instructions should not assume or impliedly assume the existence of disputed essential facts. Glaser v. Rothschild, 221 Mo. 180, 203(I), 120 S.W. 1, 8, 9, 22 L.R.A.,N.S., 1045; Taylor v. Kansas City, 342 Mo. 109, 112 S.W.2d 562, 567[8, 9]; Barr v. Nafziger Baking Co., 328 Mo. 423, 41 S.W.2d 559, 563[7]; Dawes v. Starrett, 336 Mo. 897, 82 S.W.2d 43, 58[8]; Stark v. Bingaman, Mo.App., 223 S.W. 946, 947[4]. There was ample reason for the trial court's ruling and we are not inclined to interfere. The order granting a new trial is affirmed and the cause is remanded. WESTHUES and BARRETT, CC., concur. PER CURIAM. The foregoing opinion by BOHLING, C., is adopted as the opinion of the court. All concur.	{ "pile_set_name": "FreeLaw" }
673 F.3d 1248 (2012) AN NA PENG, Petitioner, v. Eric H. HOLDER Jr., Attorney General, Respondent. No. 06-75841. United States Court of Appeals, Ninth Circuit. Argued and Submitted June 13, 2011. Filed March 22, 2012. 1250 Maile M. Hirota (argued) and Ann C. Kemp (briefed), Lynch Ichida Thompson Kim & Hirota, Honolulu, HI, for the petitioner An Na Peng. William C. Minick, Office of Immigration Litigation, Civil Division, U.S. Department of Justice, Washington, D.C., for respondent Attorney General Holder. Before: ARTHUR L. ALARCÓN, KIM McLANE WARDLAW, and N. RANDY SMITH, Circuit Judges. OPINION N.R. SMITH, Circuit Judge: The enactment of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), which repealed the waiver of deportation under Immigration and Naturalization Act (INA) § 212(c), 8 U.S.C. § 1182(c), does not affect the right 1251 of aliens to use the § 212(c) waiver, when such aliens proceeded to trial and were convicted of a crime involving moral turpitude prior to the enactment of IIRIRA. Aliens charged with and convicted of a crime involving moral turpitude prior to the enactment of IIRIRA remain eligible for § 212(c) relief, regardless of whether they pleaded guilty or proceeded to trial. Such aliens can demonstrate reasonable reliance on § 212(c) prior to its repeal, because they may have acted differently had § 212 relief not been possible at such time. However, the seven year residency requirement for a waiver of inadmissibility under INA § 212(h), which became effective on September 30, 1996, is not impermissibly retroactive when removal proceedings were commenced after that date. Further, requiring Legal Permanent Residents (LPRs) (who have been convicted of crimes involving moral turpitude) to acquire seven years of continuous presence in the United States, but not imposing the same seven year requirement on non-LPRs who have been convicted of the same crimes, does not violate equal protection. We therefore grant the petition in part, deny it in part, and remand for further proceedings consistent with this opinion.[1] BACKGROUND An Na Peng is a native and citizen of China. She legally entered the United States on May 3, 1991 as an LPR based upon her marriage to Huan Zhang Wang, an LPR. She and her husband have two United States citizen children. In the mid-1990s, the Immigration and Naturalization Service (INS)[2] had authorized the Naturalization Assistance Service and its affiliates to administer naturalization examinations. During those years, Peng worked for a short time at an affiliate's testing facility. Employees of that testing facility, including Peng, were caught providing answers to examinees and changing incorrect answers on completed exams. In January 1996, a grand jury indicted Peng on one count of a conspiracy to defraud the INS, in violation of 18 U.S.C. § 371 (1995).[3] Peng pleaded not guilty to the indictment. Upon indictment, this criminal prosecution presented potential immigration consequences to Peng. First, if convicted, Peng would be guilty of a crime involving moral turpitude. Second, at the time of Peng's indictment, a conviction would have rendered Peng deportable if she ultimately received a sentence of one or more years of imprisonment. INA § 241(a)(2)(A)(i), 8 U.S.C. § 1251(a)(2)(A)(i) (emphasis added);[4]see also 18 U.S.C. § 371 (providing 1252 for a sentence of up to five years). Lastly, at the time of her indictment, INA § 212(c) allowed for a discretionary waiver of removal, unless an alien "ha[d] been convicted of one or more aggravated felonies and ha[d] served for such felony or felonies a term of imprisonment of at least 5 years." 8 U.S.C. § 1182(c) (1995). However, it is important to note that Peng was charged with a crime involving moral turpitude, not an aggravated felony. Further, a conviction could not have resulted in a term of imprisonment of over five years. Thus, although a conviction could have rendered her deportable, it would not have disqualified her from eligibility to apply for relief under § 212(c). These potential consequences changed just prior to Peng's trial, because the law changed. Effective April 24, 1996, Congress enacted the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), which amended the INA to make crimes of moral turpitude deportable offenses as to any alien "convicted of a crime for which a sentence of one year or longer may be imposed." 8 U.S.C. § 1251(a)(2)(A)(i) (effective April 24, 1996) (emphasis added), codified at INA § 237(a)(2)(A)(i), 8 U.S.C. § 1227(a)(2)(A)(i) (2008). Therefore, because Peng was charged under a statute allowing for at most a five-year sentence, she faced a trial on a charge that would automatically render her deportable if convicted. Additionally, by enacting AEDPA, "Congress further restricted the scope of § 212(c) relief by denying it to any alien who had been convicted of an aggravated felony or [two or more] crimes of moral turpitude." Luna v. Holder, 659 F.3d 753, 756 (9th Cir.2011). Thus, although (just prior to trial) a conviction would have rendered Peng deportable, it would not have disqualified her from eligibility to apply for relief under § 212(c), because (1) Peng was not charged with an aggravated felony and (2) she stood charged with only a single crime involving moral turpitude. Peng did not change her plea before trial. Her jury trial commenced on May 8, 1996. On May 9, the jury returned a guilty verdict. On December 2, 1996, Peng received a non-custodial sentence of two years of probation. While Peng awaited sentencing, Congress enacted the IIRIRA on September 30, 1996. IIRIRA § 304(b) repealed INA § 212(c), replacing it with a narrower form of relief called cancellation of removal. See 8 U.S.C. § 1229b. In addition, IIRIRA § 304(b) added a seven-year continuous presence requirement to INA § 212(h), 8 U.S.C. § 1182(h), under which an LPR may apply for a waiver of inadmissibility. The INS commenced removal proceedings against Peng on September 10, 1997. Peng conceded removability and applied for asylum and voluntary departure. The Immigration Judge (IJ) denied her applications, and the Board of Immigration Appeals (BIA) dismissed her appeal in 2002. Peng then filed a motion to remand to apply for adjustment of status. The BIA denied the motion, because (1) Peng's conviction rendered her inadmissible and (2) Peng had not submitted an application for a waiver of inadmissibility under § 212(h). Peng appealed. In 2005, our court granted Peng's petition for review to allow her to submit the requisite application. Peng v. Ashcroft, 121 Fed.Appx. 776 (9th Cir. 2005). The BIA then remanded Peng's case to the immigration court. On remand from the BIA, the IJ denied Peng's request for a waiver of inadmissibility under § 212(h), because Peng had not maintained a continuous presence in the United States for seven years before the commencement of her removal proceedings. Because Peng was statutorily ineligible for the § 212(h) waiver, she remained inadmissible and could not qualify for an adjustment of status. See INA § 245(a). 1253 Additionally, the IJ denied Peng's request for a continuance to apply for a waiver of removal under former § 212(c), on the ground that Peng's immigration proceedings had been ongoing since 1997. The IJ also cited 8 C.F.R. § 1003.44(b) noting that, due to the repeal of § 212(c), the waiver was not available to aliens who had pleaded not guilty at their criminal proceedings. Peng appealed. The BIA dismissed Peng's appeal in 2006. It concluded that Peng was ineligible for a § 212(c) waiver of removal, because the repeal of § 212(c) was impermissibly retroactive only as applied to aliens who had pleaded guilty to their criminal charge(s). Because Peng had pleaded not guilty and proceeded to a jury trial, the BIA concluded she was ineligible to apply for former § 212(c) relief. The BIA also noted that 8 C.F.R. § 1003.44(b) limited relief to aliens who entered a plea agreement. It further held that § 212(h) was not impermissibly retroactive as applied to Peng. Because Peng did not establish that she had lived in the United States for seven years prior to the commencement of her removal proceedings, the BIA held her ineligible to apply for a § 212(h) waiver of inadmissibility. Peng thus remained ineligible for an adjustment of status. She now petitions this court for review. STANDARD OF REVIEW Where, as here, the BIA conducts its own independent review, "our review is limited to the BIA's decision, except to the extent the IJ's opinion is expressly adopted." Cordon-Garcia v. INS, 204 F.3d 985, 990 (9th Cir.2000). DISCUSSION I. The BIA abused its discretion when it denied Peng a continuance, because she was eligible to apply for a waiver of deportation under INA § 212(c) Peng contests the BIA's decision affirming the denial of a continuance in order to apply for the § 212(c) waiver of removal. We review the denial of a continuance for an abuse of discretion. Baires v. INS, 856 F.2d 89, 91 (9th Cir. 1988). The BIA abuses its discretion "when it fails to state its reasons and show proper consideration of all factors when weighing equities and denying relief." Ahmed v. Holder, 569 F.3d 1009, 1014 (9th Cir.2009) (internal quotation marks omitted). An IJ may grant a motion for a continuance for "good cause shown." 8 C.F.R. § 1003.29; Ahmed, 569 F.3d at 1012. The regulations do not define "good cause," but the IJand, on appeal, the BIAshould consider factors including "(1) the nature of the evidence excluded as a result of the denial of the continuance, (2) the reasonableness of the immigrant's conduct, (3) the inconvenience to the court, and (4) the number of continuances previously granted." Id. In reviewing the IJ's decision, the BIA did not review these relevant factors. Instead, the BIA affirmed the IJ's denial of the requested continuance, because Peng was not eligible for a § 212(c) waiver as she was convicted after a trial and not under a plea agreement.[5] When the BIA denies a continuance on legal grounds such as these, we will find an abuse of discretion if the BIA acted "arbitrarily, irrationally, 1254 or contrary to law." Hernandez-Velasquez v. Holder, 611 F.3d 1073, 1077 (9th Cir.2010) (internal quotation marks and alterations omitted). To determine whether the BIA acted arbitrarily, irrationally, or contrary to law, we must determine whether Peng's reliance upon the availability of § 212(c) relief (when she decided to proceed to a jury trial) is sufficient to distinguish Supreme Court and Ninth Circuit general precedent that § 212(c) relief is only available to aliens whose convictions were obtained through plea agreements. See INS v. St. Cyr, 533 U.S. 289, 326, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001); Armendariz-Montoya v. Sonchik, 291 F.3d 1116, 1121 (9th Cir.2002). We review de novo whether the enactment of IIRIRA (repealing § 212(c) relief) is impermissibly retroactive. Hernandez de Anderson v. Gonzales, 497 F.3d 927, 932 (9th Cir.2007). Peng argues that, because § 212(c) relief was available to her at the time she proceeded to trial, the application of IIRIRA § 304(b)'s repeal of § 212(c) relief would result in an impermissible retroactive effect. We agree. A. Section 212(c) is available to aliens who pleaded guilty Though Congress has the power to make statutes apply retroactively, such statutes pose special concerns. See Landgraf v. USI Film Prods., 511 U.S. 244, 266, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). The Supreme Court has thus recognized that a "presumption against retroactive legislation" is "deeply rooted" in its jurisprudence. Id. at 265, 114 S.Ct. 1483. Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to conform their conduct accordingly; settled expectations should not be lightly disrupted. Id. In determining whether legislation's effects are impermissibly retroactive, a two-step test is employed. United States v. Reynard, 473 F.3d 1008, 1014 (9th Cir. 2007). Under the first step, "[a] statute may not be applied retroactively . . . absent a clear indication from Congress that it intended such a result." St. Cyr, 533 U.S. at 316, 121 S.Ct. 2271. "If Congress's intent is sufficiently clear from the text and legislative history, then the statute may be applied retroactively, and the court need not address the second step." Reynard, 473 F.3d at 1014. "Step two must be employed where Congress's retroactive intent is not clear. We must then determine whether application of the act violates the Due Process Clause and consequently has a `retroactive effect.'" Id.[6] In St. Cyr, the Supreme Court addressed the retroactivity of IIRIRA § 304(b) in the context of an alien who had pleaded guilty to an aggravated felony. Applying the retroactivity analysis laid out in Landgraf, the Court first asked whether Congress had clearly expressed an intention to make IIRIRA § 304(b) retroactive. St. Cyr, 533 U.S. at 315, 121 S.Ct. 2271. The Court concluded that it had not. Id. at 320, 121 S.Ct. 2271. Proceeding to step 1255 two, the Court inquired whether the new law would produce an impermissibly retroactive effect upon aliens who had pleaded guilty "at a time when their plea would not have rendered them ineligible for § 212(c) relief." Id. "The inquiry into whether a statute operates retroactively demands a commonsense, functional judgment about `whether the new provision attaches new legal consequences to events completed before its enactment.'" Martin [v. Hadix, 527 U.S. 343, 357-58, 119 S.Ct. 1998, 144 L.Ed.2d 347 (1999)] (quoting Landgraf, 511 U.S., at 270, 114 S.Ct. 1483). A statute has retroactive effect when it "`takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past. . . .'" Id., at 269, 114 S.Ct. 1522 (quoting Society for Propagation of the Gospel v. Wheeler, 22 F.Cas. 756, 767, No. 13,156 (C.C.D.N.H.1814) (Story, J.)). Id. at 321, 121 S.Ct. 2271 (footnote omitted). Examining the situation of aliens who entered plea agreements with the government (presumably with the expectation that they would receive sentences that would leave them eligible for § 212(c) relief, see id. at 323, 121 S.Ct. 2271), the Court concluded the repeal of § 212(c) "clearly attache[d] a new disability" to the past decision to give up certain rights by pleading guilty. Id. at 321-22, 121 S.Ct. 2271 (internal quotation marks omitted). As the Court stated, "[p]lea agreements involve a quid pro quo between a criminal defendant and the government," such that by giving up the right to a trial, a defendant "grant[s] the government numerous tangible benefits, such as promptly imposed punishment without the expenditure of prosecutorial resources." Id. at 322, 121 S.Ct. 2271 (internal quotation marks omitted). It would be unfair to an alien, having given up his right to trial in reliance on remaining eligible to apply for the § 212(c) waiver, to then deprive him of the opportunity to apply for that relief. Thus, the Court concluded that IIRIRA § 304(b) was impermissibly retroactive as applied to aliens who had pleaded guilty to deportable offenses before its effective date. Id. at 322-23, 121 S.Ct. 2271. B. Section 212(c) is not available to aliens who proceeded to trial if they cannot plausibly argue that they relied on the availability of relief One year after St. Cyr, our court decided Armendariz-Montoya v. Sonchik, 291 F.3d 1116 (9th Cir.2002), a case that was factually similar to St. Cyr except that Armendariz-Montoya had pleaded not guilty and was convicted of an aggravated felony by a jury. Focusing on this factual difference, we determined thatunlike aliens who gave up their right to a trial in reliance on the possibility of remaining eligible for § 212(c) reliefaliens accused of aggravated felonies who pleaded not guilty could not demonstrate any past act done in reliance on the availability of § 212(c) relief. Id. at 1121. Aliens accused of aggravated felonies were on notice that, if convicted and sentenced to more than five years' imprisonment, they would be ineligible to apply for the § 212(c) waiver. See INA § 212(c), 8 U.S.C. § 1182(c) (1995) (repealed). By proceeding to trial and leaving their sentences in the hands of the sentencing court, these aliens could not plausibly argue that they relied on the availability of § 212(c) relief. Nor could such aliens argue that reliance on the availability of § 212(c) relief caused them to change any other past behavior. See Armendariz-Montoya, 291 F.3d at 1121 (reasoning that "[i]t would border on the absurd to argue that these aliens might have decided not to commit [aggravated felonies], or might 1256 have resisted conviction more vigorously, had they known that if they were not only imprisoned but also, when their prison term ended, ordered deported, they could not ask for a discretionary waiver of deportation") (quoting LaGuerre v. Reno, 164 F.3d 1035, 1041 (7th Cir.1998)). Accordingly, we held that the elimination of § 212(c) did not result in an impermissible retroactive effect on Armendariz-Montoya. Id. at 1122. In Kelava v. Gonzales, 434 F.3d 1120 (9th Cir.2006), we reaffirmed our holding in Armendariz-Montoya. Kelava was charged by the INS as removable for (1) having been convicted of an aggravated felony and (2) engaging in terrorist activity. Kelava, 434 F.3d. at 1122. We found Kelava ineligible for § 212(c) relief despite Kelava's plea of guilty to the aggravated felony. Id. at 1126. We held that Kelava's terrorist activity (which rendered him removable) precluded reliance on relief, because he could not plausibly claim that he would not have committed the terrorist activity if he had known about the elimination of § 212(c) relief. Id. Thereafter, the BIA interpreted Armendariz-Montoya and Kelava to create a bright-line rule barring aliens who proceeded to trial from seeking § 212(c) relief. The DHS urges us to adopt this interpretation. Although not wholly unreasonable, see Hernandez de Anderson, 497 F.3d at 944 (Tallman, J., dissenting), we have rejected such a bright-line rule. Id. at 940 (panel opinion) ("Landgraf and St. Cyr make clear that entering into a quid pro quo exchange is not the sole form of reliance on prior law that can support a retroactivity claim."); accord Ponnapula v. Ashcroft, 373 F.3d 480, 493 (3d Cir. 2004). Indeed, the Supreme Court has explicitly warned against creating presumptions in favor of retroactivity. See Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 950, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). C. Section 212(c) is available to aliens who proceeded to trial if they can plausibly argue that they relied on the availability of relief In the case before us, we are presented with an issue of first impression. Unlike the aliens in St. Cyr, Armendariz-Montoya, and Kelava, Peng was not charged with or convicted of an aggravated felony. Thus, those cases are distinguishable from our present case. Here, Peng was charged with and convicted of a crime involving moral turpitude. Thus, St. Cyr compels us to evaluate this case on its own merits, applying a "commonsense, functional judgment about whether [IIRIRA § 304(b)] attaches new legal consequences to events completed before its enactment." 533 U.S. at 321, 121 S.Ct. 2271 (internal quotation marks omitted), quoted in Hernandez de Anderson, 497 F.3d at 937. We are convinced that applying IIRIRA § 304(b) retroactively to Peng's case would result in an impermissible retroactive effect. To prevail on a retroactivity argument, an alien must demonstrate reasonable reliance on pre-IIRIRA law. Hernandez de Anderson, 497 F.3d at 939. An alien demonstrates reasonable reliance "if it would have been objectively reasonable under the circumstances to rely on the law at the time." Id. at 941. At the time Peng was charged with her crime involving moral turpitude, a guilty plea with a guaranteed sentence of less than one year could have protected Peng against deportation. Notwithstanding, a conviction (by guilty plea or guilty verdict)even if sentenced to the maximum sentence of five yearswould not have disqualified her from eligibility to apply for § 212(c) relief, because only aliens who (1) 1257 were convicted of an aggravated felony and (2) served more than five years were disqualified from § 212(c) relief. By pleading not guilty, Peng had "two bulwarks" to protect herself against possible deportation. See United States v. Leon-Paz, 340 F.3d 1003, 1006 (9th Cir.2003). She could either be acquitted, thereby remaining non-deportable, or, if convicted, she could count on being eligible to apply for § 212(c) relief. Cf. id. On the other hand, before trial, if Peng pleaded guilty to the crime as charged, she would have automatically rendered herself removable. At that time, Peng could only avoid the possibility of deportation by being acquitted at trial. There would be no quid pro quo for Peng: the prosecution would get the benefit of a conviction without expending resources, see St. Cyr, 533 U.S. at 322, 121 S.Ct. 2271, and the DHS would similarly get an easy proof of removability. Meanwhile, based upon the plain language of § 212(c) (under either the pre or post April 24, 1996 amendment), Peng's eligibility to apply for § 212(c) relief remained the same, even if she were convicted by jury and afforded the maximum five-year sentence. We cannot fault her for exercising her constitutional right to a trial under these circumstances. Doing so was in no way "inconsistent with preserving a contingent interest in § 212(c) relief." Ponnapula, 373 F.3d at 495. Aliens in Peng's situation, who were not charged with aggravated felonies and made the decision to proceed to trial, thus did so in reasonable reliance on the pre-IIRIRA state of the law. See Hernandez de Anderson, 497 F.3d at 941. At the time she pleaded not guilty, Peng had a settled expectation that she would remain eligible to apply for § 212(c) relief. Cf. id. at 942. To draw a line between aliens who pleaded guilty and those who pleaded not guilty to a first crime involving moral turpitude would thus be arbitrary and out of line with Landgraf and St. Cyr's admonition to apply a "commonsense, functional judgment" to the facts of each individual case. Therefore, prior to the enactment of IIRIRA on September 30, 1996, an alien, who proceeded to trial on a crime involving moral turpitude (having not been convicted of one prior crime involving moral turpitude), remains eligible to apply for a § 212(c) waiver. Reviewing the factors necessary to determine whether good cause has been shown for a continuance, the BIA's denial of a continuance was an abuse of discretion. Peng should have been allowed to present evidence that she was eligible for § 212(c) relief. There is no evidence that Peng's conduct was unreasonable during the entirety of this underlying case. A continuance would not have inconvenienced the BIA. Lastly, as explained above, the BIA's denial of the continuance on legal grounds was contrary to law. We therefore grant the petition as to this issue and remand the case back to the BIA. On remand, Peng should be allowed a continuance to apply for a § 212(c) waiver of removal, though we make no comment on her ultimate eligibility for such relief.[7] Because we hold that Peng may apply for § 212(c) relief, we do not reach her equal protection claim based on the distinction between aliens who plead guilty and those who plead not guilty to identical crimes. 1258 II. The BIA did not err when it held that INA § 212(h)'s seven-year continuous presence requirement was not impermissibly retroactive Peng next contests the denial of her application for a waiver of inadmissibility under INA § 212(h). Without the waiver of inadmissibility, Peng's conviction renders her inadmissible, INA § 212(a)(2)(A)(i)(I), 8 U.S.C. § 1182(a)(2)(A)(i)(I), and thus ineligible to apply for an adjustment of status. See INA § 245(a), 8 U.S.C. § 1255(a). Peng argues that § 212(h)'s seven-year residency requirement was impermissibly applied retroactively to her case. She also raises an equal protection claim based on the distinction between LPRswho are subject to the seven-year residency requirementand non-LPRswho are not. A. Retroactivity of the seven-year residency requirement Effective September 30, 1996, Congress amended INA § 212(h) to add a seven-year residency requirement: (a) IN GENERAL.Section 212(h) (8 U.S.C. 1182(h)) is amended by adding at the end the following: "No waiver shall be granted under this subsection in the case of an alien who has previously been admitted to the United States as an alien lawfully admitted for permanent residence if either since the date of such admission the alien has been convicted of an aggravated felony or the alien has not lawfully resided continuously in the United States for a period of not less than 7 years immediately preceding the date of initiation of proceedings to remove the alien from the United States.["] (b) EFFECTIVE DATE.The amendment made by subsection (a) shall be effective on the date of the enactment of this Act and shall apply in the case of any alien who is in exclusion or deportation proceedings as of such date unless a final administrative order in such proceedings has been entered as of such date. IIRIRA § 348, Pub. L. No. 104-208, at 3009-639. proceedings did not commence until September 10, 1997, nearly one year after the amendment to § 212(h). Section 212(h)'s residency requirement is thus prospective as applied to Peng's case. Its effective date in relation to her criminal proceedings is irrelevant. Because Peng was admitted to the U.S. in May 1991, and her removal proceedings commenced in September 1997, Peng does not meet the seven-year residency requirement and is ineligible for § 212(h) relief. We therefore deny her petition for review as to her due process claim under § 212(h). B. Equal protection challenge Finally, Peng argues that it is a denial of equal protection to require LPRs, who have been convicted of crimes involving moral turpitude, to acquire seven years of continuous presence in the United States but not to impose the same requirement on non-LPRs who have been convicted of these crimes. Aliens are entitled to the benefits of equal protection. Yick Wo v. Hopkins, 118 U.S. 356, 369, 6 S.Ct. 1064, 30 L.Ed. 220 (1886). Nonetheless, Congress retains broad power to regulate the admission and removal of aliens. See United States v. Viramontes-Alvarado, 149 F.3d 912, 916 (9th Cir.1998). Accordingly, our review of the immigration laws is limited, and we will uphold a statute if there is a "facially legitimate and bona fide reason for enacting a discriminatory rule." Id. (internal quotation marks omitted). We hold that there is a rational basis for applying the seven-year residency requirement to LPRs and not to non-LPRs, having considered a similar challenge 1259 in Taniguchi v. Schultz, 303 F.3d 950 (9th Cir.2002). There, we held that a rational basis exists for denying a § 212(h) waiver to LPRs (who had been convicted of aggravated felonies) but not to non-LPRs (who had been convicted of aggravated felonies). Id. at 957-58. We noted that "LPRs enjoy substantial rights and privileges not shared by other aliens, and therefore it is arguably proper to hold them to a higher standard and level of responsibility than [non-LPRs]." Id. at 958 (alteration in original) (internal quotation marks omitted). In addition, LPRs that were convicted of aggravated felonies have demonstrated that the generally "stronger ties" they have to the United States "were insufficient to deter this criminal conduct." Id. "Therefore, Congress could have reasoned that aggravated felon LPRs pose a higher risk for recidivism than illegal aliens who did not have all of the benefits of legal permanent resident status to deter them from committing their crimes." Id. (internal quotation marks omitted). Congress may have deemed LPRs "less deserving of a second chance than non-LPRs." Id. (internal quotation marks omitted). Noting that it may have been wise to eliminate § 212(h) relief for non-LPR aggravated felons as well, we were nonetheless confined by our deferential standard of review to conclude that a rational basis existed for the LPR versus non-LPR distinction. Id. That Taniguchi involved an LPR convicted of an aggravated felony, rather than a crime involving moral turpitude, makes no difference. Taniguchi's rationalethat Congress may have wished to hold LPRs to a higher standard and considered them less deserving of a second chanceshould apply equally regardless of the category of crime the LPR commits. Accord Camacho-Salinas v. U.S. Att'y Gen., 460 F.3d 1343, 1348-49 (11th Cir.2006) (per curiam); see also De Leon-Reynoso v. Ashcroft, 293 F.3d 633, 640 (3d Cir.2002). The rationale focuses on the status of the alien, not the category of the crime committed. The framework for this equal protection challenge thus differs from our analysis concerning an alien's eligibility to apply for statutory relief under § 212(c), where Congress specifically precluded relief based upon offense category. We accordingly deny the petition for review as to Peng's equal protection claim, because a rational basis exists for the seven-year continuous presence requirement of § 212(h). CONCLUSION The petition for review is granted, and this case is remanded to allow Peng a continuance to apply for the former § 212(c) waiver of removal. The petition is denied as to Peng's claims arising under INA § 212(h). Each party shall bear their own costs. GRANTED and REMANDED in part; DENIED in part. NOTES [1] We have jurisdiction over this petition for review pursuant to 8 U.S.C. § 1252(a). [2] The INS's functions were transferred to the Department of Homeland Security (DHS) on March 1, 2003. See 6 U.S.C. § 542. For consistency, we use the former name when referring to acts taken before this date. [3] 18 U.S.C. § 371 (1995) provides in relevant part: If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, either shall be fined under this title or imprisoned not more than five years, or both. [4] INA § 241(a)(2)(A)(i) (effective until April 23, 1996) provided: Any alien who [] is convicted of a crime involving moral turpitude committed within five years (or 10 years in the case of an alien provided lawful permanent resident status under section 1255(i) of this title) after the date of entry, and [ ] either is sentenced to confinement or is confined therefor in a prison or correctional institution for one year or longer, is deportable. [5] We note that the BIA also cited 8 C.F.R. § 1003.44 in affirming the denial of a continuance. Section 1003.44 provides for a special motion to seek § 212(c) relief for aliens who pleaded guilty or nolo contendere to certain crimes before April 1, 1997. It explicitly does not apply to former LPRs who were convicted after a trial, but it does not say that such aliens are ineligible to apply for § 212(c) relief through some other avenue. Id. § 1003.44(a). [6] The government argues that, because relief is entirely discretionary under § 212(c) and § 212(h), Peng cannot establish a substantive due process violation. This argument lacks merit. While the Attorney General has discretion to grant the waiver of removal, the right to apply for the waiver is not subject to the Attorney General's discretion. Cf. United States v. Leon-Paz, 340 F.3d 1003, 1005 (9th Cir.2003) (holding that alien's due process rights were violated because the IJ incorrectly informed him that he was ineligible for § 212(c) relief); 8 C.F.R. § 1240.49(a) ("The immigration judge shall inform the respondent of his or her apparent eligibility to apply for . . . [a waiver of deportation] and shall afford the respondent an opportunity to make application therefor during the hearing."). [7] The DHS argues that we may deny Peng's petition by holding that she did not maintain a seven-year continuous presence in the U.S. before the commencement of her removal proceedings. See INA § 212(c), 8 U.S.C. § 1182(c) (repealed). However, neither the IJ nor the BIA ruled on this ground, and our review is confined to the decision of the BIA. See Cordon-Garcia, 204 F.3d at 990. We thus remand this issue to the BIA for decision in the first instance.	{ "pile_set_name": "FreeLaw" }
712 F.2d 1259 Robert HOLLMAN and Darlene Hollman, Appellants,v.LIBERTY MUTUAL INSURANCE CO., a corporation, Appellee.Robert HOLLMAN and Darlene Hollman, Appellants,v.DALE ELECTRONICS, INC., Appellee. No. 82-2043. United States Court of Appeals,Eighth Circuit. Submitted May 19, 1983.Decided July 28, 1983. Steven M. Johnson, Brady, Kabeiseman, Reade, Abbott & Johnson, Yankton, S.D., Murray Ogborn, Nelson & Harding, Lincoln, Neb., for appellants. James E. Doyle, Doyle, Bierle, Porter & Kennedy, Yankton, S.D., for appellee, Dale Electronics, Inc. Woods, Fuller, Shultz & Smith P.C., and Arlo Sommervold and Gary P. Thimsen, Sioux Falls, S.D., for appellee, Liberty Mut. Ins. Co. Before LAY, Chief Judge, and HEANEY and FAGG, Circuit Judges. LAY, Chief Judge. 1 This is a diversity suit based on a claim of damages for alleged bad faith exercised by plaintiff's employer and its worker's compensation carrier for failure to pay benefits on a work related claim. The district court held the South Dakota Worker's Compensation Act provided the exclusive remedy and granted summary judgment in favor of the defendants. The plaintiffs, Darlene Hollman and Robert Hollman, appeal. We reverse the grant of summary judgment and remand to the district court for further proceedings. 2 Darlene Hollman was employed by Dale Electronics, an electronics manufacturing company, located in Yankton, South Dakota. She had been employed approximately four years when she began to develop headaches, breathing problems and nausea. An allergy specialist, Dr. John Argabrite, after extensive testing, recommended that she quit work as her condition had severely worsened and was becoming permanent. Dr. Argabrite concluded that the primary chemical causing Mrs. Hollman's condition was "toulene di isocyanate" (TDI). 3 Mrs. Hollman reported her injury to Dale Electronics in August 1977. Dale Electronics contacted Liberty, its worker's compensation insurer. On September 3, 1977, Liberty informed Mrs. Hollman that the condition was "wholly foreign to employment." She thereafter filed a worker's compensation claim. 4 The Hollmans continually contacted Liberty concerning the claim but at best were treated with indifference. Until this lawsuit in federal district court was commenced, reports about the chemicals were withheld, labels with warnings of isocyanates and directions on ventilation were not revealed, and a list of persons who previously had reactions was not furnished. The continuing interrogatories indicated that no TDI existed at the Yankton plant.1 5 Mrs. Hollman was eventually awarded worker's compensation by the Director of the Department of Labor. Liberty appealed this decision to the circuit court of Yankton County which affirmed the award of benefits. Liberty then decided to appeal to the South Dakota Supreme Court, but before doing so, received this memo from its home office legal department: 6 It is even difficult to see how we could fairly employ appeal as settlement leverage. This case should be paid or settled. Appeal is not authorized. 7 Later that day Liberty's home office notified the Minneapolis branch as follows: 8 HO legal says we have no basis for appeal, I agree, I authorized settlement to $50,000.00. If case does not settle, you will withdraw the appeal and pay per award. 9 Notwithstanding these directives, Liberty filed an appeal with the South Dakota Supreme Court. No briefs were ever filed, and finally, on December 7, 1979, the Supreme Court dismissed the appeal. In January 1980, Mrs. Hollman received her worker's compensation benefits that had been previously awarded. Because there had been such a delay, and since both she and her husband were totally disabled and without funds (a fact known by Liberty and Dale Electronics), Mrs. Hollman requested a lump sum distribution. This request was contested by Liberty on the grounds that it would not benefit the employee, although no basis was given for such an assertion. The Director ordered a lump sum payment to Mrs. Hollman. 10 The Hollmans then sued Dale Electronics and Liberty in United States District Court. Their amended complaint alleged a conspiracy and refusal to disclose information on toxic chemicals, the nature of conducted tests, harassment and coercion, misrepresentations, unjustifiable denial of benefits, and refusal to pay. In essence, she sued for intentional, malicious and fraudulent actions which occurred after her employment and during the pendency of her claim. She requested compensatory, punitive and exemplary damages. 11 The district court granted Liberty's motion for summary judgment on the basis that Mrs. Hollman's exclusive remedy existed under section 62-8-6 of the South Dakota Worker's Compensation Act.2 Mrs. Hollman urges that her claim is for the intentional tort of the insurer and not for any injury covered by the worker's compensation laws. The district court held that Mrs. Hollman's only additional remedies were for attorney fees in accord with S.D. Codified Laws Ann. § 58-12-3 (1978).3 The issue on appeal is whether a worker who is covered under the South Dakota Worker's Compensation Act may assert a separate claim in the courts for intentional torts which occurred after employment ceased and during the processing and payment of the claim. 12 South Dakota case law and legislative history offer no direct guidance. We also note that it is well settled in our circuit that this court will give deference to a district court's interpretation of state law, unless, of course, we find the district court has not correctly interpreted the state statutes or properly applied local law. Red Lobster Inns of America, Inc. v. Lawyers Title Insurance Corp., 656 F.2d 381, 387 (8th Cir.1981); Bazzano v. Rockwell International Corp., 579 F.2d 465, 469 (8th Cir.1978); Harris v. Hercules, Inc., 455 F.2d 267, 269 (8th Cir.1972). Cf. Luke v. American Family Mutual Insurance Co., 476 F.2d 1015, 1019 (8th Cir.), cert. denied, 414 U.S. 856, 94 S.Ct. 158, 38 L.Ed.2d 105 (1973). 13 We agree that section 62-8-6 sets forth the exclusive remedy "on account of any disease or injury to health." However, this language does not involve torts which occur independent of the industrial injury. In the present case we conclude plaintiffs' cause of action is implicitly recognized within the South Dakota statutes. Section 58-12-3 provides that a grant of attorney fees "shall not be construed to bar any other remedy, whether in tort ... arising out of its refusal to pay such loss." This clause coupled with the language in the title "[o]ther remedies not barred" strongly suggests that the legislature did not intend to bar an action for intentional torts independent of the party's claim for worker's compensation.4 14 Similar results have been reached by other state courts addressing the same or similar issues. In Coleman v. American Universal Insurance Co., 86 Wis.2d 615, 273 N.W.2d 220 (1979), the insurer was sued for bad faith, refusal to pay the claim, and intentional infliction of emotional distress. The court held that these were separate torts not encompassed under the exclusivity provisions of the worker's compensation laws. Id. 273 N.W.2d at 221. The weight of the case law clearly supports causes of action for such intentional torts and does not recognize exclusivity provisions of worker's compensation statutes to be a bar to the action.5 As Professor Larson stated: 15 If the essence of the tort, in law, is non-physical, and if the injuries are of the usual non-physical sort, with physical injury being at most added to the list of injuries as a makeweight, the suit should not be barred. But if the essence of the action is recovery for physical injury or death, the action should be barred even if it can be cast in the form of a normally non-physical tort. 16 2A Larson, Workmen's Compensation Law § 68.34, at 13.31-32 (1976). 17 While we recognize that some jurisdictions have declined to allow a separate action for such intentional torts,6 we do not find their reasoning persuasive. We find that the South Dakota statutes permit the Hollmans to bring this claim in state court;7 as indicated, the South Dakota compensation laws reflect recognition of this cause of action.8 18 We hold that the Hollmans stated a cause of action for an intentional tort which occurred after the employment ceased under South Dakota law; we find the action is not barred by the exclusivity provision of section 62-8-6 of the South Dakota Codified Laws. 19 We therefore vacate the grant of the summary judgment in favor of the defendants and reverse and remand for further proceedings not inconsistent with this opinion. 1 At a later date OSHA confirmed the presence of TDI in the Dale Electronics Yankton plant 2 S.D. Codified Laws Ann. § 62-8-6 (1978) states: Employers and workers subject to chapter--Security for compensation--Right to compensation as exclusive remedy. Every employer of workers subject to the worker's compensation law shall be subject to the provisions of this chapter, and shall secure the payment of compensation in accordance with the provisions of this chapter by any method prescribed by the worker's compensation law at the time in effect in this state. Where the foregoing requirement is complied with, the liability of the employer under this chapter shall be exclusive, and shall be in place of any and all other civil liability whatsoever, at common law or otherwise to such employee, or to his spouse, children, parents, dependents, next of kin, personal representatives, guardian, or any others on account of any disease or injury to health, or on account of death from any disease or injury to health in any way contracted, sustained, aggravated, or incurred by such employee in the course of, or because of, or arising out of his employment, except only an injury compensable as an injury by accident under the provisions of the worker's compensation law. 3 S.D. Codified Law Ann. § 58-12-3 (1978) reads as follows: Attorney fees--Recovery in action against insurer failing to pay loss--Other remedies not barred. In all actions or proceedings hereafter commenced against any insurance company, including any reciprocal or interinsurance exchange, on any policy or certificate of any type or kind of insurance, if it appears from the evidence that such company or exchange has refused to pay the full amount of such loss, and that such refusal is vexatious or without reasonable cause, the department of labor, the trial court and the appellate court, shall, if judgment or an award is rendered for plaintiff, allow the plaintiff a reasonable sum as an attorney's fee to be recovered and collected as a part of the costs, provided, however, that when a tender is made by such insurance company or exchange before the commencement of the action or proceeding in which judgment or an award is rendered and the amount recovered is not in excess of such tender, no such costs shall be allowed. The allowance of attorney fees hereunder shall not be construed to bar any other remedy, whether in tort or contract, that an insured may have against the same insurance company arising out of its refusal to pay such loss. (Emphasis added). 4 Plaintiffs argue section 62-3-2 provides an exception for intentional torts. This language however refers to rights and remedies under the Worker's Compensation Act and relates to injuries incurred during the employment 5 See Reed v. Hartford Accident & Indemnity Co., 367 F.Supp. 134, 135 (E.D.Pa.1973) (action for intentional torts not barred); Dorr v. C.B. Johnson, Inc., 660 P.2d 517, 520 (Colo.App.1983) (worker's compensation is not exclusive remedy where conduct occurs after a compensable injury); Gibson v. National Ben Franklin Ins. Co., 387 A.2d 220 (Me.1978) (severe mental distress did not arise out of or in the course of employment and thus claim not barred by the exclusivity provisions of the compensation laws); Broaddus v. Ferndale Fastener Division, 84 Mich.App. 593, 269 N.W.2d 689 (1978) (suit against employer and worker's compensation carrier not barred by exclusivity provision, where essence of tort and damage was not physical); Hayes v. Aetna Fire Underwriters, 609 P.2d 257 (Mont.1980) (employers and insurance carriers not permitted to use compensation exclusivity provisions as a shield for committing intentional torts). See also Annot., 8 A.L.R. 4th 902 (1981) 6 Chavez v. Kennecott Copper Corp., 547 F.2d 541 (10th Cir.1977) (interpreting New Mexico law); Escobedo v. American Employers Insurance Co., 547 F.2d 544 (10th Cir.1977) (following Chavez ); Everfield v. State Compensation Insurance Fund, 115 Cal.App.3d 15, 171 Cal.Rptr. 164 (1981). See generally Annot., 8 A.L.R. 4th 902 (1981); Annot., 9 A.L.R. 4th 778 (1981) 7 Counsel for Liberty Mutual contends that the cases VerBouwens v. Hamm Wood Products, 334 N.W.2d 874 (S.D.1983) and Shearer v. Homestake Mining Co., 557 F.Supp. 549 (D.S.D.1983) are expressions of the South Dakota Supreme Court and the United States District Court for the District of South Dakota on this issue. We disagree. The VerBouwens case dealt with an alleged intentional tort, wanton and willful misconduct, that occurred during the employment. In the Shearer case, the employee's representatives brought a wrongful death action alleging the employer created extremely hazardous and dangerous working conditions, again during the course of employment. The district court would have permitted an action for intentional torts under the South Dakota statutes had the evidence shown the employer consciously committed these acts. It is clear that both of these cases occurred in the course of employment and are thus distinguishable from the case at hand 8 The final issue addressed by the parties is whether exemplary and punitive damages are recoverable by the Hollmans under South Dakota law. It is not necessary at this time to address that issue	{ "pile_set_name": "FreeLaw" }
30 F.3d 871 UNITED STATES of America, Plaintiff-Appellee,v.Jerome HOWARD, Defendant-Appellant. No. 93-2658. United States Court of Appeals,Seventh Circuit. Argued April 1, 1994.Decided July 26, 1994. Robert Lee Garrison (argued), Office of the U.S. Atty., Crim. Div., Fairview Heights, IL, for U.S. Andrea L. Smith (argued), Office of the Federal Public Defender, East St. Louis, IL, for defendant-appellant. Before BAUER, FLAUM, and KANNE, Circuit Judges. KANNE, Circuit Judge. 1 Jerome Howard was the owner of a small ice cream/sandwich shop known as Mr. Penguin's Malt Shop located in East St. Louis, Illinois. After a flood damaged the malt shop in 1986, Howard applied for a disaster assistance loan from the United States Small Business Administration ("SBA"). The SBA loaned Howard a total of $12,500. Howard pledged the assets of the malt shop--the building housing the malt shop and its contents--as security for the loan. Howard further agreed to maintain hazard insurance on the building and its contents and to name the SBA as loss payee of the policy.1 2 Howard contacted insurance broker Ralph Thomas who arranged for Howard to purchase, inter alia, fire insurance from the Scottsdale Insurance Company. That policy provided $20,000 insurance coverage for the building itself and $10,000 insurance coverage for the building's contents. The insurance policy named Beverly Bush2 and the SBA as loss payees. That policy was effective from June 11, 1987 through June 11, 1988. Howard subsequently allowed the policy to lapse, but purchased a new fire insurance policy from the Monticello Insurance Company in 1989. He increased the amount of insurance coverage for the contents of the building to $20,000. The amount of insurance coverage for the building itself remained at $20,000. Bush and the SBA were named as loss payees for the building itself. However, Howard instructed Thomas to drop the SBA as loss payee for the contents portion of the policy. In June 1990, the building containing Mr. Penguin's Malt Shop and its contents were destroyed by fire. Howard thereafter submitted a fire damage claim to Monticello. 3 In October 1990, Thomas received two checks from Monticello as payment for the fire damage claim. The first check was made payable to Howard, d/b/a Mr. Penguin Malt Shop, and Golub & Associates3 in the amount of $19,500.4 This check was for fire loss to the contents of the building. Thomas forwarded this check to Golub & Associates. Ace Hart, an employee of Golub & Associates, accompanied Howard to the Motor Coach Employee's Credit Union, endorsed the check, and received payment of $3,900 for Golub's services. Howard then deposited the $19,500 check into his personal credit union account. 4 The second check was made payable to Howard, d/b/a Mr. Penguin Malt Shop, Beverly Bush, the SBA, and Golub & Associates. This check covered fire loss to the building itself. Thomas also forwarded this check to Golub & Associates. Hart endorsed the second check and gave it to Howard. Pearson Bush, Beverly Bush's attorney, subsequently contacted Howard and asked Howard to forward the check to him so that Ms. Bush would be certain to receive enough insurance proceeds to cover the $15,000 Howard still owed her on the purchase price of the building. Pearson Bush received the check from Howard approximately thirty days before it became stale.5 Bush then entered into negotiations with the SBA concerning the amount of insurance proceeds the SBA expected to receive. The SBA agreed to accept $200, with Ms. Bush receiving the remaining balance of $19,300. By the time this agreement was reached, however, the check had become stale and Pearson Bush returned it to Monticello. 5 Thereafter, Monticello issued a replacement check and again sent it to Thomas. Howard picked up the check from Thomas's office and signed a receipt acknowledging that he had received the check. The check was made payable to the same parties as before. Howard subsequently deposited $18,000 of the check into his personal savings account at Boatmen's National Bank of Belleville and received $1,500 in cash. The check was endorsed by Howard on behalf of Mr. Penguin Malt Shop, Beverly Bush, Sue Thomas on behalf of the SBA, and A.R. Hart on behalf of Golub & Associates. The check also contained stamped endorsements of the SBA and Golub & Associates. All of the endorsements, except Howard's, were forged. 6 Howard was charged in a two count indictment with bank fraud and conversion of government property in violation of 18 U.S.C. Sec. 1344 and 18 U.S.C. Sec. 641, respectively. The government alleged that Howard forged the endorsements on the replacement check and deposited it into his own account in violation of the bank fraud statute (Count One). The government also alleged that Howard illegally converted government property by dropping the SBA as loss payee from the insurance policy and depositing the insurance proceeds representing the building's contents into his personal credit union account (Count Two). The jury found Howard guilty on both counts. The district court sentenced him to ten months imprisonment on each count, his sentences to run concurrently. The court further sentenced Howard to three years supervised release following his discharge from prison and ordered him to pay a special assessment of $100 and restitution in the amount of $19,500 to the SBA. Howard now appeals. Discussion COUNT I 7 Howard initially argues that there was insufficient evidence to convict him of bank fraud.6 Specifically, he contends that the government failed to prove beyond a reasonable doubt that he acted with specific intent to defraud, a necessary element of the crime of bank fraud. See United States v. Sims, 895 F.2d 326, 328 (7th Cir.1990) (recognizing that intent to defraud is an essential element of bank fraud). 8 Howard has an uphill battle. We will uphold a challenge to the sufficiency of the evidence if, " 'after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.' " Id. at 329 (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original)). 9 Howard notes that there was no direct evidence presented at trial establishing that he deposited the check "knowing and believing that the signatures and stamps on it were forged." However, "[b]ecause direct evidence of a defendant's fraudulent intent is typically not available, specific intent to defraud may be established by circumstantial evidence...." United States v. LeDonne, 21 F.3d 1418, 1426 (7th Cir.1994). Here, the prosecution presented ample circumstantial evidence from which the jury could have reasonably inferred that Howard presented the check to the bank knowing that the endorsements were forged. 10 The government presented uncontroverted evidence that Howard picked up the replacement check from Thomas's office, signed for it, and deposited $18,000 of it into his personal savings account at Boatmen's National Bank of Belleville. 11 A total of fifteen witnesses testified in the government's case in chief. Their testimony revealed the following: Daino Jerome of the SBA's Inspector General's Office interviewed Howard and asked him how he had obtained the forged SBA endorsement. According to Jerome, Howard indicated that he had talked to Sue Thomas of the SBA's St. Louis district office and she told him to send the check to her and that she would "take care" of all the endorsements except Howard's. Howard indicated that he got the check back from Ms. Thomas with all the necessary endorsements except his own. 12 Kim Rogers, an SBA employee, stated that no Sue Thomas has ever worked for the SBA's St. Louis office. SBA employee Darryl Westbrook also said that no Sue Thomas worked for the SBA's St. Louis office. Moreover, the SBA does not use an endorsement stamp like the one used to endorse the replacement check. 13 Pearson Bush, Beverly Bush's attorney, contacted Howard shortly after he learned that Monticello had issued the replacement check. According to Pearson Bush, Howard told him that he had sent the check to the SBA's Denver, Colorado office. Raymond Baca of the SBA's Denver office said, however, that his office never received the check. 14 The signature of Ace Hart, Vice President of Golub & Associates, had been forged and the stamped Golub & Associates endorsement was also a forgery. Beverly Bush never endorsed the check and her purported signature was also a fake. 15 Handwriting expert William Storer testified that the signatures of Beverly Bush and Ace Hart were forgeries. Storer could not, however, determine whether Howard had committed those forgeries. 16 Given the uncontroverted evidence that Howard picked up the replacement check, deposited it into his own personal savings account, and told conflicting stories as to how he acquired the forged endorsements, a rational jury could have found beyond a reasonable doubt that Howard deposited the check knowing that the endorsements were forged. We therefore affirm Howard's conviction for bank fraud. COUNT II 17 Next, Howard challenges his conviction for converting government property in violation of 18 U.S.C. Sec. 641. The prosecution proved at trial that Howard failed to name the SBA as loss payee for the contents portion of the fire insurance policy as required under the terms of his loan agreement with the SBA. The prosecution also proved that Howard deposited the insurance check representing the fire damage to the building's contents into his own personal savings account. Howard argues, however, that his conviction should be reversed because neither the insurance check or its proceeds are "a thing of value of the United States." 18 Under 18 U.S.C. Sec. 641, "[w]hoever embezzles, steals, purloins, or knowingly converts to his own use or the use of another, or without authority, sells, ... any record, voucher, money, or thing of value of the United States ... [s]hall be fined not more than $10,000 or imprisoned not more than ten years, or both...." There are three elements to the crime of conversion under section 641: "(1) that the money or property belonged to the government; (2) that the defendant fraudulently appropriated the money or property to his own use or the use of others; (3) and that the defendant did so knowingly and willfully with the intent either temporarily or permanently to deprive the owner of the use of the money or property." United States v. McRee, 7 F.3d 976, 980 (11th Cir.1993) (en banc), cert. denied sub nom. Hale v. United States, --- U.S. ----, 114 S.Ct. 1649, 128 L.Ed.2d 368 (1994). 19 The only element of the crime in dispute is whether the insurance check or its proceeds belonged to the United States. "It is axiomatic that conversion must involve the property of another, not the property of the defendant." United States v. Kristofic, 847 F.2d 1295, 1297 (7th Cir.1988) (citation omitted) (emphasis in original). In its brief, the government argues that the United States had a perfected security interest in the proceeds of the insurance check. The government's position is supported by Illinois law. 20 In Kindred v. Boalbey, 73 Ill.App.3d 37, 29 Ill.Dec. 77, 391 N.E.2d 236 (1979), Francis L. Kindred entered into an installment contract with Richard M. Boalbey for the sale of a residence and the land on which the residence was located. Pursuant to the contract, Boalbey agreed to "keep all buildings at any time on said premises insured against loss by fire and extended coverage ... to the full insurable value...." Id. 29 Ill.Dec. at 79, 391 N.E.2d at 238. Boalbey purchased an appropriate insurance policy and the residence was subsequently damaged by fire. The insurance company issued a fire loss check naming Kindred and Boalbey as co-payees. A dispute arose between the parties as to who was entitled to the insurance proceeds. The state trial court determined that Boalbey could retain all the insurance proceeds. The Illinois Appellate Court reversed, holding that Kindred had a security interest in the insurance proceeds "to the extent of the unpaid purchase price due and owing" her. Id. 29 Ill.Dec. at 80, 391 N.E.2d at 239. 21 Similarly, we believe that the SBA retained a security interest in the insurance proceeds at issue here. Like the Kindred case, Howard agreed to maintain insurance on the contents of the building in which the malt shop was located. Moreover, the insurance requirement served the same purpose in both cases--to protect a lienholder's interest in property. The only difference between this case and Kindred is that Howard entered into such an agreement pursuant to a loan agreement, not a real estate contract. This difference is not significant, however, because it is nature of the insurance maintenance provision and not the type of the overall agreement that controls. Accordingly, we conclude that the SBA had a security interest in the proceeds of the fire loss check. 22 That does not end our inquiry, however, because Howard contends that the SBA's mere security interest in the insurance proceeds is not a "thing of value of the United States." In support of his contention, Howard cites us to United States v. Tana, 618 F.Supp. 1393 (S.D.N.Y.1985). In that case, Tana and his associates had received $1 million in loans from the United States Department of Commerce, Economic Development Administration ("EDA") for the operation of a business--Yonkers Plate Glass, Inc. and its subsidiary Fedentrol, Inc. (Collectively "YPG"). YPG had agreed to pledge all of its assets as security for the EDA loans. Thereafter, Tana stole many of YPG's assets and used them to start a new business--Associated Window Corporation. He was subsequently indicted for converting government property in violation of section 641. 23 The district court dismissed Tana's indictment. According to the court, "the legislative history of section 641 and of other sections of the federal criminal code indicates that Congress did not intend section 641 to apply to theft or conversion of property in which the government merely holds a general security interest." Id. at 1396. The court indicated that it had found no cases in the 110 year history of section 641 and its predecessor where an individual had been indicted for converting property in which the government held only a security interest. The court further noted that: 24 Expanding section 641 in the manner urged by the Government would expose vast new areas of conduct to federal criminal prosecution. Anyone, anywhere, who, knowingly or unknowingly, misappropriated property in which the federal government had a security interest, would be subject to federal criminal prosecution. Inevitably, the courts will be forced to draw fine distinctions to delineate the reach of section 641 in this new class of cases. The development of an area of law fraught with such fine distinction can and should be avoided, particularly where, as here, a variety of criminal statutes appear capable of prosecuting the conduct alleged herein. 25 Id. at 1397. 26 The rationale used in the Tana case is convincing. Consistent with that reasoning we refuse to expand section 641 to include the conversion of property in which the government has a mere security interest. We acknowledge that this would be a much different case if the SBA had been listed as payee of the insurance check. See United States v. Faust, 850 F.2d 575 (9th Cir.1988) (affirming the defendant's conviction under section 641 where he received an insurance proceeds check made payable to his company and the Secretary of Transportation and he forged the Secretary's endorsement and deposited the check into his company's account). Nonetheless, that is not the case before us and despite the government's contention to the contrary, it is irrelevant that Howard's own intentional and culpable conduct prevented the SBA from being loss payee on the check. We have no doubt that Howard's conduct was criminal under several other provisions of the United States Code. Even so, we must reverse Howard's conviction because the criminal conduct prohibited by section 641 is not the type of conduct that he engaged in. 27 We do stress, however, that our holding is a narrow one. It does not impact, for instance, those cases where a defendant is charged with stealing intangible property. Intangible property may unquestionably belong to the government. See United States v. Matzkin, 14 F.3d 1014 (4th Cir.1994) (information concerning Navy procurement practices is property of the United States within the meaning of section 641). Nor does it impact those cases where the government distributes property to local or state agencies and that property is subsequently stolen. "If the federal government maintains sufficient supervision and control over the property, we have held that the funds remain government property for purposes of federal prosecution under section 641." Kristofic, 847 F.2d at 1298 (citing United States v. Wheadon, 794 F.2d 1277 (7th Cir.1986), cert. denied, 479 U.S. 1093, 107 S.Ct. 1307, 94 L.Ed.2d 161 (1987); United States v. Bailey, 734 F.2d 296 (7th Cir.), cert. denied, 469 U.S. 931, 105 S.Ct. 327, 83 L.Ed.2d 263 (1984); United States v. Maxwell, 588 F.2d 568 (7th Cir.1978), cert. denied, 444 U.S. 877, 100 S.Ct. 163, 62 L.Ed.2d 106 (1979)). We only hold that the government's security interest in the insurance proceeds check is "not a thing of value of the United States" within the meaning of section 641.7 CONCLUSION 28 For all of the foregoing reasons, we AFFIRM Howard's bank fraud conviction and REVERSE his conviction for conversion of government property. This case is REMANDED to the district court for resentencing. 1 Howard's loan agreement with the SBA provided in pertinent part: DUTY TO MAINTAIN INSURANCE Prior to disbursement of Loan funds in excess of $5,000.00, Borrower will purchase hazard insurance, including fire, lightning, and extended coverage equal to 80% of the insurable value of the collateral or the minimum coinsurance requirement set forth in the insurance policy provided by the Borrower, whichever is greater, or such other amounts and types of coverage as SBA may require. Borrower will provide proof of such hazard insurance coverage to SBA together with an endorsement naming SBA as mortgagee or loss payee, and Borrower will maintain such coverage throughout the entire term of this Loan. 2 Beverly Bush and Howard entered into a contract in 1984 whereby Howard agreed to pay $20,000 plus 13% interest to purchase the building housing the malt shop. Under the terms of the contract, Howard was required to maintain liability and property damage insurance on the building at all times 3 Howard hired Golub & Associates to establish the value of the building and its contents and to determine the amount of loss caused by the fire. Golub & Associates determined that the fire was a total loss 4 The policy had a deductible of $500, hence the check was for $19,500, not $20,000 5 Like many checks, this check could only be cashed within ninety days of being issued 6 Under 18 U.S.C. Sec. 1344, "whoever knowingly executes, or attempts to execute, a scheme or artifice--(1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both." 7 Because of our holding, it is unnecessary for us to address Howard's contention that section 641 is unconstitutional as applied	{ "pile_set_name": "FreeLaw" }
519 F.2d 1405 Harrisv.U. S. 75-1268 UNITED STATES COURT OF APPEALS Seventh Circuit 7/2/75 1 S.D.Ind. AFFIRMED	{ "pile_set_name": "FreeLaw" }
34 P.3d 401 (2001) The PEOPLE of the State of Colorado, Petitioner, v. Antonio S. FARRELL, Respondent. No. 00SC307. Supreme Court of Colorado, En Banc. October 22, 2001. As Modified on Denial of Rehearing November 13, 2001.[] 402 Ken Salazar, Attorney General Laurie A. Booras, First Assistant Attorney General, Denver, CO, Attorneys for Petitioner. James Grimaldi, Denver, CO, Attorney for Respondent. Justice KOURLIS delivered the Opinion of the Court. In this case, we address the issue of whether the trial court properly admitted a co-defendant's statement against interest in the case against Defendant Antonio Farrell. The trial court ruled that the co-defendant's confession was reliable and accordingly admitted it into evidence in a redacted form that omitted certain portions of the statement it found to be prejudicial. In People v. Farrell, 10 P.3d 672 (Colo.App.2000), the court of appeals reversed the trial court's ruling, concluding that the statement did not possess the particularized guarantees of trustworthiness necessary to justify its admission under the requirements of the Confrontation Clause. We reverse the court of appeals' decision regarding admissibility of the statement. Specifically, we find that our decision in Stevens v. People, 29 P.3d 305 (Colo.2001), controls this case. When we analyze the statement within the framework of Stevens, we conclude that it was genuinely self-inculpatory and therefore sufficiently reliable to be admissible. I. On August 18, 1997, a jury convicted Defendant Antonio Farrell of intentional first-degree murder,[1] felony first degree murder,[2] robbery of an at-risk adult,[3] aggravated robbery,[4] second degree kidnapping,[5] two counts of second degree burglary,[6] theft,[7] first degree criminal trespass,[8] and two counts of conspiracy.[9] The trial court sentenced Farrell to a mandatory life sentence for the merged first degree murder convictions and concurrent sentences for the aggravated robbery, kidnapping, second degree burglary, first degree criminal trespass, theft, and conspiracy convictions. In addition, the trial 403 court, finding extraordinarily aggravating circumstances, sentenced Farrell to consecutive sentences totaling fifty-six years for the convictions of robbery of an at-risk adult and second degree burglary against a second victim.[10] In November 1996, a witness observed a woman, driving a gray four-door sedan, who appeared confused about which way to turn. As the witness attempted to pass that woman's car, she saw one of the two "dark-skinned" males in the back seat exit the car. The witness observed that the male who remained in the car had a gun to the driver's neck. In court, the witness identified Farrell as the person she believed had exited the car. Subsequently, several Brighton residents observed two unfamiliar males leaving the residence of their seventy-six-year-old neighbor, Barbara Castor. They also noticed a broken bathroom window and decided to contact Castor's family who, in turn, contacted the police. While the police were investigating, Tim Maldonado, the brother of Farrell's girlfriend, arrived at Castor's house. Upon questioning, Maldonado confessed that he had engaged in ransacking Castor's house with Farrell and Farrell's sixteen-year-old companion, Kevin Blankenship. Maldonado admitted that the three had also stolen guns from the garage of a second house. He informed the police officers that, when he expressed concern about whether Castor would return home and discover the three, Defendant and Blankenship told him that it was "taken care of" and that they had put her in the trunk of her vehicle and left her in a field buried under rocks and branches. Based on information provided by Maldonado, law enforcement officers arrested Defendant and Blankenship in connection with the disappearance of Castor. When the police entered the room to make the arrests, Defendant and Blankenship were standing on opposite sides of a bed. Blankenship was trying to hide something under the mattress. Under Defendant's side of the mattress, police found several automobile registration cards, an insurance card, and an AT & T calling card, all belonging to Castor. After the officers informed Blankenship of his rights under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), Blankenship agreed to talk to the officers. The statement that ensued is the subject of this particular controversy. According to Blankenship, he and Defendant had been living in Rockford, Illinois and had come to Colorado to see Defendant's girlfriend. The pair stole a car in Rockford to begin their trip. When that car had mechanical difficulties, they stole a second car in Nebraska, which also developed problems. The third car they stole belonged to Castor. Blankenship initially told the officers that he and Defendant had stolen the car from a K-Mart parking lot while Castor was looking under the hood of the vehicle and then had ransacked and robbed her house over a period of three days. The officers expressed disbelief that the pair would persist in plundering the house unless they knew that Castor would not return. The officers expressed hope that the victim might still be alive and that "the sooner we find this lady, the better off it's gonna be for everybody involved." They asked if Blankenship felt sorry for the lady and how he would feel if she were his own grandmother. They expressed the need to return Castor to her family. Blankenship then admitted that he did not know where they had left Castor. He informed the officers that he and Defendant had asked Castor for a ride; Castor agreed and drove the pair to a gas station where she asked them to get out. Blankenship then brandished a BB gun, which looked like a pistol, and told Castor to drive. Blankenship stated that Defendant exited the car and Blankenship forced Castor to drive down a side road where he threatened her with death and made her get into the trunk of the automobile. He then returned and retrieved Defendant. They drove the car a long way until they reached deserted fields. Blankenship informed the officers that he and Defendant tied Castor to a cement structure in a 404 field. He explained that they had used pieces of string and Castor's blanket, which Defendant ripped into pieces while Blankenship bound Castor. Blankenship related that, after he and Defendant had secured Castor, they placed logs, rocks, and a spare tire on top of her. Blankenship claimed that while they were restraining Castor, she pleaded with them. He explained that Defendant Farrell had said that God would "get us for this," so the two said a prayer before departing the scene. Blankenship and Defendant stopped at a gas station to get directions to Castor's residence. They then ransacked the house, searching for valuables. Blankenship informed the police that they had returned to the house several times to continue searching, to sleep, and to shower, describing in detail their actions and behavior over the course of the three-day period. Blankenship also explained that Maldonado had been involved in vandalizing Castor's house. Further, Blankenship confessed that the trio had broken into a second residence to steal guns. A. Based on Blankenship's detailed description of the surroundings where they had restrained Castor, the police located the deceased victim's body covered with 411 pounds of large logs, rocks, and a spare tire. They found her tied to an old washed-out dam with a ripped-up blanket and pieces of string. Law enforcement officers found Castor's blood in the trunk of her vehicle. They found Defendant's fingerprints in the house and the car. The police also recovered three pubic hairs from the shower at Castor's home that matched Defendant's pubic hair. Further, a handwriting analysis demonstrated that Defendant's handwriting was consistent with that found on a check written from Castor's account. While Farrell was in jail, he had a conversation with a detention facility deputy, in which he described meeting Castor at K-Mart and asking for a ride. He stated that Blankenship pulled a gun on Castor and told Farrell to get out of the automobile. Blankenship returned shortly, with Castor in the trunk. Defendant reentered the car, and they drove away. Defendant stated that thereafter he started to black out and that he didn't want to tell the deputy "because of his defense." Although the trial judge ruled that Defendant's statement was voluntary, he did not admit it at trial because he held that it was obtained in violation of that court's protective order.[11] Both Blankenship and Farrell were tried on various charges. The trial court severed the trials, and the People sought to admit Blankenship's confession into evidence at Farrell's trial. With certain redactions,[12] the trial court found the statement reliable and allowed it into evidence. II. The court of appeals concluded that admitting Blankenship's confession violated Farrell's constitutional right to be confronted with witnesses against him. Farrell, 10 P.3d at 675. The court of appeals determined that the statement's clearly self-inculpatory nature did not establish the requisite reliability necessary to rebut the statement's inherent untrustworthiness. Id. at 676. Although we hold that the statement does not fall within a firmly rooted hearsay exception, we conclude that it is nonetheless sufficiently self-inculpatory to be deemed reliable under Stevens. The statement at issue is indisputably hearsay. Hence, we begin our analysis, as we did in Stevens, with the applicable hearsay rule. Colorado Rule of Evidence 804(b)(3) provides that, if the declarant is unavailable as a witness, the trial court may admit the declarant's statement against interest into evidence at trial. The Rule defines a statement against interest as: 405 A statement which ... at the time of its making ... so far tended to subject [the declarant] to civil or criminal liability ... that a reasonable man in his position would not have made the statement unless he believed it to be true. A statement tending to expose the declarant to criminal liability and offered to exculpate the accused is not admissible unless corroborating circumstances clearly indicate the trustworthiness of the statement. CRE 804(b)(3). A. The first question under the Rule is whether the declarant is unavailable for purposes of the Rule. The prosecution has the burden of demonstrating such unavailability. Blecha v. People, 962 P.2d 931, 940 (Colo. 1998). In this case, the People maintained that Blankenship was not available because the previous week he had asserted his Fifth Amendment privilege against self-incrimination on the basis that he had viable appellate issues in his own case. Defendant argues that the People failed to demonstrate unavailability. At trial, defense counsel argued against the admission of Blankenship's statement based on the Sixth Amendment right to confrontation, but did not raise the issue of availability. The prosecution made the following statement: We are, in fact, relying on 804(b)(3), hearsay exception for statements against interest when a declarant is unavailable. The Court knows that the declarant, Kevin Blankenship, is unavailable. The Court has had Mr. Blankenship with his counsel saying he would not talk to anyone. And the Court knows that at the conclusion of last Friday's trial, when the Court was setting a sentencing date, Mr. Blankenship, through his counsel, indicated that he would not even talk to the probation department; that he believes he has valid appellate issues, and that his instructions counsel's instructions to Mr. Blankenship was not to talk to anyone. Now, we can bring Mr. Blankenship over here and have him make that record with Mr. Moya, but I think the record is clear before the Court now. I'm prepared to have Mr. Blankenship brought over if the Court would like or counsel would like. After the prosecutor's offer, the defense counsel neither requested that Blankenship appear nor made any objection based on availability even when the judge specifically asked the defense counsel if he had any further concerns. The trial judge who presided over Farrell's trial was the same judge who presided over the trial of Blankenship. Blankenship's trial preceded Farrell's. The trial judge was present when Blankenship invoked his Fifth Amendment rights in his own case. Accordingly, that judge was justified in relying upon such invocation in the related trial without making a new record. By admitting Blankenship's statement under CRE 804(b)(3), the trial court found, without so stating, that the People had established the declarant's unavailability. Such determination is sufficiently supported by the record. B. Thus, we turn to the substance of the statement to determine its admissibility. On its face, Blankenship's statement qualifies as a statement against interest because through his admissions, Blankenship exposed himself to liability for multiple criminal charges, including the murder of Castor. However, we cannot end our inquiry there, but must move from the technical analysis of the Rules to the broader analysis of the constitutional implications. Even if a statement would qualify as an exception to the hearsay rule, the court must deem it inadmissible if it would violate a defendant's constitutional right to confrontation. U.S. Const. amend. VI; Stevens, 29 P.3d at 311; People v. Newton, 966 P.2d 563, 573 (Colo.1998); Blecha, 962 P.2d at 941. The test for a hearsay statement that would not deprive a defendant of his constitutional right to be confronted with the witnesses against him is whether "`the declarant's truthfulness is so clear from the surrounding circumstances that the test of cross-examination would be of marginal utility.'" Lilly v. Virginia, 527 U.S. 116, 136, 119 S.Ct. 1887, 144 L.Ed.2d 117 (1999) (quoting Idaho v. 406 Wright, 497 U.S. 805, 820, 110 S.Ct. 3139, 111 L.Ed.2d 638 (1990)). To meet that high burden of truthfulness, the statement must either (1) fall within a firmly rooted hearsay exception, or (2) bear particularized guarantees of trustworthiness. Ohio v. Roberts, 448 U.S. 56, 66, 100 S.Ct. 2531, 65 L.Ed.2d 597 (1980); Stevens, 29 P.3d at 311. This court has acknowledged that a co-defendant's confession given during a custodial interrogation may be motivated by the co-defendant's desire to minimize his own culpability by implicating the accused; and, therefore, courts should view the statement with special suspicion. Stevens, 29 P.3d at 313; see also Lilly, 527 U.S. at 131-32, 119 S.Ct. 1887. In Stevens, when addressing the same argument made by the People in this case, we determined that a "statement against interest by a co-defendant made during custodial interrogation does not fall within a firmly rooted hearsay exception." Stevens, 29 P.3d at 313. Because Blankenship is a co-defendant who made a statement against interest in the course of a custodial interrogation, his statement cannot be classified as falling under a firmly rooted exception to the hearsay rule. C. Accordingly, we turn to the question of whether Blankenship's statement possesses sufficient guarantees of trustworthiness to be admissible under the reliability requirements of the Confrontation Clause. Lilly, 527 U.S. at 135, 119 S.Ct. 1887; Roberts, 448 U.S. at 66, 100 S.Ct. 2531; Stevens, 29 P.3d at 313. The People argue that the self-inculpatory nature of the statement, the absence of an expectation of benefit accruing to Blankenship, and Defendant's interlocking statements both to Maldonado and to the detention facility deputy all support a finding of reliability. The People assert that the totality of the circumstances surrounding Blankenship's statement justifies the admission of the confession. To the contrary, Defendant argues that Blankenship's custodial statement implicating Defendant should have been inadmissible because of the strong presumption against the statement's reliability. The court of appeals agreed, finding that neither the inherently self-inculpatory nature of the statement nor the circumstances surrounding the making of the statement demonstrated its trustworthiness or reliability. Farrell, 10 P.3d at 676-77. In deciding whether Blankenship's statement bears the particularized guarantees of trustworthiness necessary to justify its admission, we must examine the totality of the circumstances surrounding the making of the statement. Stevens, 29 P.3d at 314. We have held that the Confrontation Clause requires hearsay evidence to possess indicia of reliability based on inherent trustworthiness, not based on other evidence at trial. Id.; Newton, 966 P.2d at 574. The court should predicate its reliability determination on an examination of the circumstances surrounding the making of the statement. Stevens, 29 P.3d at 314; Newton, 966 P.2d at 575. In considering whether a statement bears particularized guarantees of trustworthiness, a court has considerable discretion in determining what factors may enhance or detract from the statement's reliability. Wright, 497 U.S. at 822, 110 S.Ct. 3139. Our cases have recognized that where, when, and how the declarant made the statement, to whom the declarant made the statement, what prompted the statement, and the statement's contents all provide indicia of reliability. Newton, 966 P.2d at 576. Additionally, we have found the nature and character of the statement, the relationship of the parties, the declarant's probable motivation for making the statement, and the circumstances surrounding the making of the statement probative of the statement's trustworthiness. Stevens, 29 P.3d at 314; People v. Fuller, 788 P.2d 741, 745 (Colo.1990). In Stevens, we identified several factors to consider when assessing a hearsay statement's trustworthiness: (1) whether the statement was truly self-inculpatory; (2) whether the statement was detailed; (3) whether police officers threatened or coerced the defendant to make the statement; (4) whether the confession was offered in exchange for leniency; (5) whether the declarant was likely to have personal knowledge of the events in the statement; (6) whether the declarant made 407 the statement shortly after the described events; (7) whether the declarant had a reason to retaliate against the defendant; and (8) whether the declarant was mentally or physically unstable at the time of the confession. Stevens, 29 P.3d at 314 (citing United States v. Gomez, 191 F.3d 1214, 1222-23 (10th Cir.1999) and Earnest v. Dorsey, 87 F.3d 1123, 1134 (10th Cir.1996)). In Stevens, we observed that the most important factor in evaluating the reliability of the tendered statement is whether it was genuinely self-inculpatory. Stevens, 29 P.3d at 314. A court must evaluate whether the statement is genuinely self-inculpatory or merely shifts the blame from the declarant to the defendant. Id. In this case, we view the statement as truly self-inculpatory for the following reasons. Blankenship accepted direct culpability and did not try to minimize his own involvement. He continuously used "we" throughout the entire confession, thereby exposing himself to full liability for each criminal act. Further, Blankenship attributed many of the most incriminating actions, including brandishing the BB gun, refusing to exit the car, and putting Castor in the trunk of the car, solely to himself. He also took sole responsibility for many of the most destructive acts of vandalism, detailing his own criminal acts while Defendant was showering, sleeping, or watching television. Because Blankenship did not attempt to minimize his participation and rarely attributed an action to Defendant without also highlighting his own involvement, his statements inculpating the defendant are inextricably intertwined with the self-inculpatory portions of his confession.[13] As we acknowledged in Stevens, the genuinely self-inculpatory nature of the entire statement distinguishes Blankenship's statement from those accomplice confessions that attempt to shift responsibility to the defendant while tending to minimize the accomplice's own culpability. Stevens, 29 P.3d at 315; cf. Lilly, 527 U.S. at 121, 138, 119 S.Ct. 1887 (expressing concern that the declarant would exonerate himself by transferring blame to the defendant where declarant had explained that the defendant, not the declarant, had committed murder). Hence, Blankenship's statement is blatantly self-inculpatory. In addition to being self-inculpatory, Blankenship's statement also meets various other tests we have identified as being pertinent to this inquiry. For example, it describes the various crimes and sequence of events at a level of detail that would be difficult to fabricate. Trustworthiness is buttressed by the likelihood that the declarant would have been unable to fabricate the details without having observed or participated in the events. Stevens, 29 P.3d at 317; see also Gomez, 191 F.3d at 1222-23; Earnest, 87 F.3d at 1134. In the present case, Blankenship provided detailed descriptions of the events and conversations that occurred, the surroundings at each stage of the criminal episode, and the actions attributable to each party. Further, Blankenship made his statement immediately after the criminal episode, making it unlikely that his recollection was faulty. See Gomez, 191 F.3d at 1222. Blankenship made his statement in a custodial setting after the police officers had issued Blankenship his Miranda warnings and in response to some leading questions. Importantly, however, the police officers did not threaten or coerce Blankenship in order to obtain his statement. See Stevens, 29 P.3d at 316. Further, Blankenship's confession was not the result of any offers of leniency or special deals. See id.; see also Earnest, 87 F.3d at 1134. The officers did state that there was a possibility that Castor was still alive and that the sooner they found her the better it would be for everyone. They also informed Blankenship that Farrell had talked to Maldonado who, in turn, had talked to the police. However, they did not threaten Blankenship with more severe penalties or use improper tactics. The police did not offer Blankenship any special treatment in return for his cooperation, and Blankenship did not inquire as to any possible benefits. There is no evidence indicating that Blankenship 408 made his statement as a result of threats, coercion, or promises of leniency. Further, nothing in the statement suggests that Blankenship had any reason to retaliate against Defendant. See Stevens, 29 P.3d at 317. Blankenship's confession did not reveal any animosity between him and Defendant. In fact, initially, Blankenship attempted to protect both himself and Defendant by stating that neither of them knew the whereabouts of Castor. When he confessed, he did not attempt to spread or shift the blame to Farrell but fully acknowledged his own participation and acts with no hint of animosity toward Defendant. Additionally, Defendant and Blankenship were together throughout the course of these events, clearly establishing that the declarant would have personal knowledge of the events in the statement. See Stevens, 29 P.3d at 314. Finally, in examining the declarant's mental and physical fitness at the time of the confession, the question is whether the declarant's agitation was much greater than would normally be expected from one arrested on a murder charge. Stevens, 29 P.3d at 318; see also Earnest, 87 F.3d at 1132. Here, Blankenship was not unduly agitated when he made the statement. The court of appeals in his case found that the confession proceeded in a conversational, calm, and non-threatening manner and that Blankenship did not pause or hesitate during the course of his statement. People v. Blankenship, 30 P.3d 698, 704 (Colo.App.2000), cert. denied, No. 01SC129 (Colo. Sept. 10, 2001).[14] Therefore, our analysis of Blankenship's statement demonstrates that it was genuinely self-inculpatory, not induced by threats, coercion, or promises, and not intended to shift blame to Defendant. We find that, although the statement does not fall into a firmly rooted hearsay exception, it was nonetheless supported by sufficient guarantees of trustworthiness to support its admissibility under the Confrontation Clause. III. Hence, we reverse the judgment of the court of appeals regarding the admissibility of the statement and remand this case to that court for return to the trial court for further proceedings consistent with this opinion and with the remainder of the court of appeals' opinion. Justice BENDER dissents, and Justice MARTINEZ joins in the dissent. Justice BENDER, dissenting: Because the majority applies the decision of Stevens v. People, 29 P.3d 305 (Colo.2001), as controlling precedent, I respectfully DISSENT for the reasons stated in my dissent in Stevens. I am authorized to say that JUSTICE MARTINEZ joins in this dissent. NOTES [*] Justice MARTINEZ and Justice BENDER would grant the petition. [1] § 18-3-102(1)(a), 6 C.R.S. (2001). [2] § 18-3-102(1)(b), 8B C.R.S. (Supp.1996). [3] § 18-6.5-103(4), 6 C.R.S. (2001). [4] § 18-4-302(1)(a), 6 C.R.S. (2001). [5] § 18-3-302, 8B C.R.S. (1986 & Supp.1996). [6] § 18-4-203(2)(a), 6 C.R.S. (2001). [7] § 18-4-401(1)(a), 6 C.R.S. (2001). [8] § 18-4-502, 8B C.R.S. (Supp.1996). [9] § 18-2-201(1), 6 C.R.S. (2001)(criminal conspiracy to commit first degree murder and criminal conspiracy to commit second degree burglary of a dwelling). [10] The court of appeals ordered the trial court to amend the sentence in various respects. That portion of the court of appeals' judgment is not before us on appeal. [11] On November 26, 1996, the trial court entered a protective order requiring law enforcement officers to obtain the consent of defense counsel before initiating contact with Farrell. [12] The trial court omitted Blankenship's account of conversations between Farrell, Blankenship, and the victim both while she was in the trunk and while Farrell and Blankenship were restraining her, on the grounds that the statements could have an inappropriate emotional impact on the jury. [13] Even when the police attempted to focus attention on Defendant, Blankenship usually asserted his own involvement. For example, when the police asked Blankenship what he saw Defendant take from Mrs. Castor's house, Blankenship responded, "Me and him just mostly took change and stuff." [14] The court of appeals in this case was concerned that Blankenship was only sixteen years old when the statement was made. However, in the companion case of Blankenship, 30 P.3d at 706-07, another panel of the court of appeals concluded that since Blankenship was a runaway from a state other than Colorado, under section 19-2-210(2), 8B C.R.S. (Supp.1996), although a parent, guardian, or legal custodian was not present when Blankenship made his statement, his confession was nonetheless admissible because he was of sufficient age and understanding to waive his rights himself.	{ "pile_set_name": "FreeLaw" }
FILED NOT FOR PUBLICATION JUL 26 2013 MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT PAMELLA LAWRENCE, No. 11-56463 Plaintiff - Appellant, D.C. No. 2:10-cv-04737-SVW-E v. MEMORANDUM* SONY PICTURES ENTERTAINMENT, INC., a Delaware corporation; COLUMBIA PICTURES INDUSTRIES, INC., a Delaware corporation; TRISTAR PICTURES, INC., a Delaware corporation; SIDNEY KIMMEL ENTERTAINMENT, LLC, a California limited liability company; SKE CREATIVE, LLC, a California limited liability company; TARGET MEDIA ENTERTAINMENT, GMBH; JIM TAUBER, an individual; SIDNEY KIMMEL, an individual; AMY BAER, an individual; BRUCE TOLLER, an individual; GARETH WIGAM, an individual; WILLIAM HORBERG, an individual; DIANA PHILLIPS, an individual; WONDERFUL FILMS CORP., a California corporation; LAWRENCE MALKIN, an individual; DEAN CRAIG, an individual; GLENN S. GAINOR, an individual; PHILIP ELWAY, an individual; ANDREAS * This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. GROSCH, an individual; SHARE STALLINGS, an individual; BRUCE TOLL, an indivdual; FRANK OZ, an individual; CHRIS ROCK; CHRIS ROCK ENTERPRISES, INC., a Delaware corporation; BEHAVE PRODUCTIONS, INC., a California corporation; NEIL LABUTE, an individual; AYESHA CARR, an individual; SCREEN GEMS, INC., a Delaware corporation; SCREEN GEMS DISTRIBUTION, INC., a Delaware corporation; PARABOLIC PICTURES, INC., a California corporation; STABLE WAY ENTERTAINMENT, INC., a California corporation, Defendants - Appellees. Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding Submitted July 8, 2013 Pasadena, California Before: BENAVIDES,* BYBEE, and NGUYEN, Circuit Judges. Pamella Lawrence appeals the district court’s grant of summary judgment The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). * The Honorable Fortunato P. Benavides, Senior Circuit Judge for the U.S. Court of Appeals for the Fifth Circuit, sitting by designation. 2 for Defendants and the district court’s grant of Defendants’ motion for attorneys’ fees. We have jurisdiction under 28 U.S.C. § 1291, and we affirm. Lawrence argues that the district court erred in granting summary judgment for Defendants on her copyright infringement claims.1 With regard to Lawrence’s claim that the Death at a Funeral films infringed her copyright to “Caught on Video” (“the Video”), Lawrence has failed to raise a genuine issue of material fact that she owned a valid copyright to the Video. See CDN Inc. v. Kapes, 197 F.3d 1256, 1258 (9th Cir. 1999). The copyright to the Video initially vested in Orlando Usher, the author of the Video, 17 U.S.C. § 201(a); see also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir. 1989), and was not validly transferred to Lawrence because any transfer of rights was not done in writing, 17 U.S.C. § 204(a); see also Konigsberg Int’l Inc. v. Rice, 16 F.3d 355, 357–58 (9th Cir. 1994). Although Lawrence has since obtained a copyright registration for the 1 We deem Lawrence’s supplemental brief, which was filed January 29, 2013, filed. Lawrence argues in her reply brief and supplemental brief that Defendants engaged in fraud upon the district court by substituting an attorney, which delayed trial. She also argues in her supplemental brief that we should impose sanctions on Defendants because they filed an allegedly fraudulent motion opposing Lawrence’s notice for new appointment of counsel before this court. Since Lawrence’s arguments are largely unsupported by citation to law or fact, we decline to consider them. See Fed. R. App. P. 28(a)(9)(A); W. Radio Servs. Co. v. Qwest Corp., 678 F.3d 970, 979 (9th Cir. 2012). 3 Video, it was not “made before or within five years after first publication of the work.” 17 U.S.C. § 410; see Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 345 F.3d 1140, 1144 (9th Cir. 2003). With regard to Lawrence’s claim that the Death at a Funeral films infringed her copyright to her book, Caught on Video . . . the Most Embarrassing Moment de Funeral July 11, 1994 (“the Book”), Lawrence has failed to raise a genuine issue of material fact as to whether there was a reasonable possibility that Defendants had access to the Book. See Three Boys Music Corp. v. Bolton, 212 F.3d 477, 482 (9th Cir. 2000). Lawrence’s claims that Defendants had access to the Book are speculative, see id., and Defendants presented uncontroverted evidence showing that they did not have access to the Book or the Video while creating the Death at a Funeral films. In any event, Lawrence has also failed to raise a genuine issue as to whether the Death at a Funeral films are substantially similar to either the Video or the Book. Smith v. Jackson, 84 F.3d 1213, 1218 (9th Cir. 1996). Under the extrinsic test for determining substantial similarity, all of the similar elements that Lawrence has alleged are unprotectable because they are historical facts, scenes-a-faire, or ideas. See Benay v. Warner Bros. Entm’t, Inc., 607 F.3d 620, 624–25 (9th Cir. 2010); see also Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 4 348–49 (1991). Even if the allegedly similar elements were protectable, there are few, if any, “articulable similarities between the plot, themes, dialogue, mood, setting, pace, characters, and sequence of events” in the Book and the Video, and the Death at a Funeral movies. Walt Disney Pictures & Television, 16 F.3d 1042, 1045 (9th Cir. 1994) (internal quotation marks omitted). Although a person is naked at a funeral in the Death at a Funeral films and in the Book and the Video, this is unremarkable since the reason why the person was naked differed substantially. Thus, the district court did not err in granting summary judgment for Defendants on Lawrence’s copyright claims.2 No reasonable jury could find that the works are substantially similar. Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002). In addition, Lawrence challenges the district court’s award of attorneys’ fees to Defendants. Since Lawrence has failed to show that the district court’s fee award was based on an inaccurate view of the law or a clearly erroneous finding of fact, we hold that the district court did not abuse its discretion in making the fee award. See Fantasy, Inc. v. Fogerty, 94 F.3d 553, 556 (9th Cir. 1996). The district court 2 Since Lawrence has failed to raise a material issue of fact with regard to direct copyright infringement of either the Video or the Book, she necessarily fails to establish contributory or vicarious copyright infringement. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019–22 (9th Cir. 2001). 5 articulated a reasoned explanation for awarding fees, Range Rd. Music, Inc. v. E. Coast Foods, Inc., 668 F.3d 1148, 1155 (9th Cir. 2012), based on the factors set forth in Fantasy, Inc. v. Fogerty, 94 F.3d at 557–58, which it found weighed against Lawrence. With regard to the amount of the fee award, the district court applied the lodestar method and concluded that both the number of hours and the hourly rates that Defendants submitted to the court were reasonable based on the factors set forth in Fischel v. Equitable Life Assur. Soc’y of U.S., 307 F.3d 997, 1006–07 & n.7 (9th Cir. 2002). The district court also properly relied, in part, on its own knowledge and experience to determine that the fees were consistent with the prevailing market wage. See Ingram v. Oroudjian, 647 F.3d 925, 928 (9th Cir. 2011). In sum, the district court “articulate[d] with sufficient clarity the manner in which it ma[de] its determination of a reasonable hourly rate and the number of hours which should reasonably be compensated.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986), amended by, 808 F.2d 1373 (9th Cir. 1987). AFFIRMED. 6	{ "pile_set_name": "FreeLaw" }
709 F.2d 1412 John B. WILEY, Jr., Petitioner-Appellant,v.Louie L. WAINWRIGHT, etc., Respondent-Appellee. No. 82-5710 United States Court of Appeals,Eleventh Circuit. July 18, 1983. Mark E. Grantham, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa, Fla. (Court-appointed), for petitioner-appellant. David T. Weisbrod, Asst. Atty. Gen., Tampa, Fla., for respondent-appellee. Appeal from the United States District Court for the Middle District of Florida. Before TJOFLAT, JOHNSON and HATCHETT, Circuit Judges. PER CURIAM: 1 John B. Wiley, Jr., entered a plea of guilty in the Hillsborough County, Florida Circuit Court to first-degree murder and was sentenced to life imprisonment. The judgment and sentence were affirmed by the state appellate court without opinion. In the habeas corpus petition filed in the United States District Court for the Middle District of Florida, Wiley alleged that he sought post-conviction relief in the state courts but the petition was denied without a hearing. 2 In the habeas petition filed in the district court Wiley sets forth two grounds for relief. Without holding an evidentiary hearing the United States Magistrate recommended that the petition be dismissed. No objections were filed and the report and recommendation of the magistrate were adopted by the district judge.1 3 The only ground for relief raised on this appeal is that appellant's court-appointed counsel rendered ineffective assistance. Wiley alleges that his attorney conferred with him only three times, did not adequately investigate the case, did not explain the elements of the offense, and coerced him into pleading guilty by telling him that the Florida statute which provided for a twenty-five year mandatory sentence prior to parole eligibility was about to be ruled unconstitutional and that he would serve only three to four years. 4 The standard for effective assistance of counsel in this Circuit is "counsel reasonably likely to render and rendering reasonably effective assistance." Washington v. Strickland, 693 F.2d 1243, 1250 (5th Cir.1982) (Unit B en banc).2 The burden is on Wiley to show by a preponderance of the evidence that he did not receive effective assistance of counsel and that he suffered actual and substantial prejudice thereby. Id. at 1250, 1258. 5 Whether assistance of counsel was effective is a mixed question of law and fact. Adams v. Balkcom, 688 F.2d 734, 739 (11th Cir.1982). The factual questions must be fully developed in order for an appellate court to review the lower court's decision. However, a hearing is not required if the district court can determine the merits of the ineffective assistance claim based upon the existing record. However, where, as here, the relevant factual issues were not developed at the state level, a hearing by the district court is mandated. 6 Wiley alleges sufficient facts which, if proved, could merit relief. An evidentiary hearing would have resolved these factual issues. We therefore remand for an evidentiary hearing. 7 REMANDED. 1 Wiley's failure to object does not limit his right to appeal since he was not informed that objections had to be filed within ten days. Nettles v. Wainwright, 677 F.2d 404, 410 (5th Cir.1982) (Unit B en banc) 2 This decision is binding on the 11th Circuit. See Stein v. Reynolds Securities, Inc., 667 F.2d 33, 34 (11th Cir.1982)	{ "pile_set_name": "FreeLaw" }
COURT OF APPEALS OF VIRGINIA Present: Judges Willis, Frank and Clements ROSS, FRANCE & RATLIFF, LTD., ETC. AND MONTGOMERY MUTUAL INSURANCE v. Record No. 1054-00-4 JOHN EDWARD BLEVINS MEMORANDUM OPINION* PER CURIAM JOHN EDWARD BLEVINS OCTOBER 24, 2000 v. Record No. 1069-00-4 ROSS, FRANCE & RATLIFF, LTD., ETC. AND MONTGOMERY MUTUAL INSURANCE COMPANY FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION (Lynn McHale Fitzpatrick; James Richard Ryan, Jr.; Jimese Pendergraft Sherrill; Siciliano, Ellis, Dyer & Boccarosse, on briefs), for Ross, France & Ratliff, Ltd., Etc. and Montgomery Mutual Insurance Company. (John Edward Blevins, pro se, on briefs). Ross, France & Ratliff and its insurer (hereinafter referred to as "employer") contend that the Workers' Compensation Commission erred in finding that John Edward Blevins (claimant) proved that he suffers from Lyme disease and that his disease constituted a compensable occupational disease pursuant to Code § 65.2-401. On cross-appeal, claimant contends that the commission erred in failing to award him temporary * Pursuant to Code § 17.1-413, recodifying Code § 17-116.010, this opinion is not designated for publication. total disability benefits from September 7, 1997 through September 19, 1997. Upon reviewing the record and the briefs of the parties, we conclude that employer's appeal is without merit. Accordingly, we summarily affirm the commission's decision with respect to the issue raised by employer. See Rule 5A:27. In addition, we conclude that claimant's appeal is procedurally barred, and therefore, we dismiss his appeal. I. Occupational Disease: (Record No. 1054-00-4) On appeal, we view the evidence in the light most favorable to the prevailing party below. See R.G. Moore Bldg. Corp. v. Mullins, 10 Va. App. 211, 212, 390 S.E.2d 788, 788 (1990). "'Whether a disease is causally related to the employment and not causally related to other factors is . . . a finding of fact.'" Ross Laboratories v. Barbour, 13 Va. App. 373, 377-78, 412 S.E.2d 205, 208 (1991) (citation omitted). When credible evidence supports a finding of fact, it is conclusive and binding on this Court. See id. at 378, 412 S.E.2d at 208. "'The fact that contrary evidence may be in the record is of no consequence if there is credible evidence to support the Commission's findings.'" Chanin v. Eastern Virginia Med. Sch., 20 Va. App. 587, 590, 459 S.E.2d 523, 524 (1995) (citation omitted). In order to prove a compensable ordinary disease of life under Code § 65.2-401, the claimant must establish "by clear and convincing evidence . . . that the disease exists and arose out - 2 - of and in the course of employment as provided in § 65.2-400 . . . and did not result from causes outside of the employment . . . and is characteristic of the employment and was caused by conditions peculiar to such employment." "Clear and convincing evidence has been defined as 'that measure or degree of proof which will produce in the mind of the trier of facts a firm belief or conviction as to the allegations sought to be established. It is intermediate, being more than a mere preponderance, but not to the extent of such certainty as is required beyond a reasonable doubt as in criminal cases. It does not mean clear and unequivocal.'" National Fruit Prod. Co. v. Staton, 28 Va. App. 650, 654, 507 S.E.2d 667, 669 (1998) (citation omitted), aff'd, 259 Va. 271, 526 S.E.2d 266 (2000). In ruling that claimant met his burden of proving a compensable occupational disease under Code § 65.2-401, the commission found as follows: [W]e note the claimant's testimony of exposure to deer ticks while working at the Quantico site. He has testified to not only profuse presence of such ticks, but to actually being bitten. His testimony is supported by that of Mr. [David] Worst, Mr. [James] Sheehan, and Mr. [Larry] Ratliff. We have no evidence of the claimant's actual exposure to such conditions outside his employment. His wife testified that she has not observed deer ticks at either their residence or at the claimant's mother's home. While the claimant's initial medical presentation was somewhat confused by his earlier LGV [lymphogranuloma venereum], there has been an unequivocal diagnosis of - 3 - Lyme disease by Dr. [Richard V.] Spera, Dr. [Richard K.] Sall, and Dr. [Marsha D.] Soni. Dr. Spera found the meningitis was secondary to burgdorfera, the causative agent of Lyme disease, and that this was the result of an exposure between February and April 1997. He also noted that the claimant's work as a field surveyor put him at risk, for this condition. Because a rash may occur in a location such as a person's scalp, where it would be obscured by his hair, the failure of this to be noted is not significant. Dr. Sall also found that it was "overwhelmingly likely" that the claimant's medical problems were secondary to Lyme disease. His symptoms were a continuation of an infection that likely occurred in 1997. The commission's factual findings are supported by credible evidence, including the witnesses' testimony and the medical records of Drs. Spera, Sall, and Soni. The commission, as fact finder, was entitled to weigh the medical evidence and to accept the opinions of Drs. Spera, Sall, and Soni and reject the contrary opinion of Dr. Schwartz, who reviewed the medical evidence upon employer's request, but never examined claimant. Based upon the witnesses' testimony and the opinions of claimant's treating physicians, the commission, as fact finder, could conclude that claimant proved clearly and convincingly that he suffers from Lyme disease and that his disease constituted a compensable occupational disease under Code § 65.2-401. Accordingly, we affirm the commission's decision. II. Disability: (Record No. 1069-00-4) Code § 65.2-706(A) provides that "[n]o appeal shall be taken from the decision of one Commissioner until a review of - 4 - the case has been had before the full Commission as provided in § 65.2-705, and an award entered by it." Claimant did not request review of the deputy commissioner's decision awarding disability benefits for the period from August 29, 1997 through September 6, 1997. Accordingly, claimant's appeal is procedurally barred, and therefore, we dismiss his appeal. Record No. 1054-00-4, Affirmed. Record No. 1069-00-4, Dismissed. - 5 -	{ "pile_set_name": "FreeLaw" }
IN THE COURT OF CRIMINAL APPEALS OF TEXAS NO. WR-84,444-01 EX PARTE TYRONE DENARD ANDERSON, Applicant ON APPLICATION FOR A WRIT OF HABEAS CORPUS CAUSE NO. 29512 IN THE 354TH DISTRICT COURT FROM HUNT COUNTY Per curiam. ORDER Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the clerk of the trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of possession of cocaine in an amount of one gram or more but less than four grams, with intent to deliver. He was sentenced to life imprisonment. The Sixth Court of Appeals affirmed his conviction. Anderson v. State, no. 06-14-00074-CR (Tex. App.—Texarkana May 28, 2015). Applicant contends that his trial counsel rendered ineffective assistance by failing to request an accomplice witness instruction, failing to present mitigation evidence, and failing to conduct an independent investigation. 2 Applicant has alleged facts that, if true, might entitle him to relief. Strickland v. Washington, 466 U.S. 668 (1984); Ex parte Patterson, 993 S.W.2d 114, 115 (Tex. Crim. App. 1999). In these circumstances, additional facts are needed. As we held in Ex parte Rodriguez, 334 S.W.2d 294, 294 (Tex. Crim. App. 1960), the trial court is the appropriate forum for findings of fact. The trial court shall order trial counsel to respond to Applicant’s claim of ineffective assistance of counsel. The trial court may use any means set out in TEX . CODE CRIM . PROC. art. 11.07, § 3(d). If the trial court elects to hold a hearing, it shall determine whether Applicant is indigent. If Applicant is indigent and wishes to be represented by counsel, the trial court shall appoint an attorney to represent Applicant at the hearing. TEX . CODE CRIM . PROC. art. 26.04. The trial court shall make findings of fact and conclusions of law as to whether the performance of Applicant’s trial counsel was deficient and, if so, whether counsel’s deficient performance prejudiced Applicant. The trial court shall also make any other findings of fact and conclusions of law that it deems relevant and appropriate to the disposition of Applicant’s claim for habeas corpus relief. This application will be held in abeyance until the trial court has resolved the fact issues. The issues shall be resolved within 90 days of this order. A supplemental transcript containing all affidavits and interrogatories or the transcription of the court reporter’s notes from any hearing or deposition, along with the trial court’s supplemental findings of fact and conclusions of law, shall be forwarded to this Court within 120 days of the date of this order. Any extensions of time shall be obtained from this Court. Filed: February 3, 2016 Do not publish	{ "pile_set_name": "FreeLaw" }
118 Ga. App. 186 (1968) 162 S.E.2d 886 THORNHILL v. BULLOCK. WELLS v. SEABOARD CONSTRUCTION COMPANY. 43477, 43629. Court of Appeals of Georgia. Argued March 4 and May 6, 1968. Decided July 3, 1968. Rehearing Denied July 23, 1968. Joseph E. Cheeley, for appellant. Whelchel, Dunlap & Gignilliat, William R. Gignilliat, Jr., Wright Willingham, for appellee. Jones, Kemp & Osteen, Charles M. Jones, for appellant. Bouhan, Lawrence, Williams & Levy, Walter C. Hartridge, II, E. Pomeroy Williams, Frank W. Seiler, for appellee. WHITMAN, Judge. These cases are considered together because of the similarity of the questions raised. Both cases involve an application of the renewal statute, Code 187 Ann. § 3-808, which allows a plaintiff after having filed a suit within the time required by the statute of limitation, to renew his case once within six months after it shall have been discontinued or dismissed, notwithstanding that the statute of limitation on the cause of action has since expired. Appellant Thornhill in his original suit sought to hold Carter Bullock and Joel Massey jointly and severally liable for injuries arising out of an automobile accident. The suit was brought in Hall County where defendant Massey resided. Bullock resided in a different county. A trial was had with the jury finding in favor of the resident defendant, Massey, but against the nonresident defendant, Bullock, for a certain sum. In such a case where the resident co-defendant is found not liable by the jury, the court's jurisdiction over the non-resident defendant vanishes. Southeastern Truck Lines v. Rann, 214 Ga. 813 (108 SE2d 561). Hall County Superior Court thereupon properly entered an order dismissing Bullock for want of jurisdiction. The renewal suit was brought within 6 months against Bullock in Meriwether County. The appeal in this case is from an order of Meriwether Superior Court sustaining Bullock's plea of statute of limitation and sustaining certain of his demurrers to the petition. The same are enumerated as error. Appellant Mrs. Marie Wells in her original suit sought a recovery against the Seaboard Construction Company and W. W. Bunkley for the wrongful death of her husband in an automobile accident. She charged the defendants with joint and concurrent negligence, alleging in summary that Seaboard was negligent in failing to erect various warning devices as required by its contract, to warn motorists that the road upon which it was doing construction work intersected with another road and came to a "dead end." Bunkley was charged with gross negligence in the operation of the car in which the decedent was a passenger. Mrs. Wells initially brought her suit against both defendants in Liberty County, the residence of Bunkley, then voluntarily dismissed the suit without prejudice. Thereafter, within 6 months, she renewed the suit in Glynn County against Seaboard. The appeal is from an order of Glynn Superior Court sustaining Seaboard's motion for summary judgment by which Seaboard's plea of statute of limitation was sustained. This order is enumerated as error. Held: 188 1. "While the second [renewal] suit must be for the same cause of action as the first suit, it need not be an exact copy of the same, nor necessarily brought against all the defendants who were parties in the dismissed suit, unless all were necessary parties to the first suit. "Where the first suit was brought against joint tortfeasors, each of whom was jointly suable but severally liable, it was not necessary that all the defendants should be parties to either the first or the second suit. In the first action any one of them could have been stricken by the plaintiff at any time over objection. Cox v. Strickland, 120 Ga. 104, 111 (47 SE 912, 1 AC 870); Western Union Tel. Co. v. Griffith, 111 Ga. 559 (36 SE 859)." Stevens v. Wood, 17 Ga. App. 756 (2) (88 SE 413). 2. The precise question before the court in both cases is whether the renewal actions were defective for failure to bring the second actions against the same defendants named in the first suits. In both the Thornhill and Wells cases the defendants named in the first suit were jointly suable but severally liable. Therefore, under the holding in the Stevens case, supra, it was not necessary that all the defendants should be parties to either the first suit or the second suit. See also Burks v. Wheeler, 92 Ga. App. 478 (88 SE2d 793). The argument is advanced by the appellees in both cases that the plaintiff's election to sue two defendants for the alleged torts vested in the defendants a right of contribution, thereby making both defendants necessary parties to any later renewal of the action. This argument is without merit. No right of contribution arises until a judgment is entered. Code Ann. § 105-2012. The case of Chapman v. Lamar-Rankin Drug Co., 64 Ga. App. 493 (13 SE2d 734), upon which both appellees rely, does hold that after a suit against tortfeasors has once been instituted, a subsequent renewal suit instituted against only one of the defendants will not prevent the bar of the statute of limitation from attaching to the cause of action for the reason that the defendant's right of contribution will be lost. The Chapman case is in direct conflict with the Stevens case on the question of necessary parties. And as held in Burks v. Wheeler, 92 Ga. App. 478, 479, supra: "Any conflict between . . . [the Chapman and Stevens cases] must yield to the older case." 3. An additional argument is made by the appellee in the Thornhill *189 case that Massey was a necessary party defendant for bringing the action in Hall County, and therefore must again be named in the renewal suit. To do so would be a useless act. Massey was found by the jury not liable on the merits and a judgment was so entered, which is res judicata as to him. Furthermore, Massey was necessary only for the purpose of venue in Hall County. "The law relating to renewals of dismissed cases forms an exception to the statute of limitations, and has no reference to the law of venue." Cox v. Strickland, 120 Ga. 104, 108 (4) (47 SE 912, 1 AC 870). 4. In the Thornhill case the appellee's first two demurrers were made upon the ground of no cause of action because barred by the statute of limitation. These demurrers should have been overruled for the reasons set forth above. The appellee's fourth and fifth demurrers, (1) to a paragraph of the petition reciting that appellee had previously been held liable for a certain sum, and (2) to an exhibit to the petition showing the judgment of Hall County Superior Court reflecting that appellee had been held liable but dismissed for want of jurisdiction, were properly sustained on the ground that such allegation and exhibit showing the determination of the jury in the prior suit were prejudicial to the defendant and irrelevant and immaterial to the plaintiff's cause of action. Judgment in Case No. 43477 reversed in part; affirmed in part. Judgment in Case No. 43629 reversed. Felton, C. J., and Eberhardt, J., concur.	{ "pile_set_name": "FreeLaw" }

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