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Case: 13-10024 Date Filed: 09/22/2014 Page: 1 of 26
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-10024
________________________
D.C. Docket No. 3:10-cr-00277-TJC-TEM-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LYDIA CLADEK,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Florida
________________________
(September 22, 2014)
Before HULL, MARCUS, and BLACK, Circuit Judges.
PER CURIAM:
After a jury trial, defendant-appellant Lydia Cladek was convicted of one
count of conspiracy to commit wire fraud and mail fraud, 18 U.S.C. §§ 1341, 1343,
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1349, four substantive counts of wire fraud, id. § 1343, and nine substantive counts
of mail fraud, id. § 1341. The district court imposed a total sentence of 365
months’ imprisonment. On appeal, Cladek challenges only her conviction of the
conspiracy offense and her 365-month sentence. After careful review of the record
and the briefs, and with the benefit of oral argument, we affirm.
I. CLADEK’S FRAUD SCHEME
Cladek challenges the sufficiency of the evidence as to her conspiracy
conviction. Cladek argues there was insufficient evidence that she formed an
agreement with another person to accomplish an unlawful object. Therefore, we
describe the trial evidence of Cladek’s fraud and of unindicted co-conspirator
Ivette Reyes’s knowing participation in that scheme.
A. The Formation of Cladek’s Company, LCI
Around 1998, defendant Cladek formed a business in St. Augustine,
Florida—Lydia Cladek, Inc. (“LCI”). LCI’s original business model was to:
(1) receive money from investors in exchange for LCI’s executing one- or two-
year fixed interest promissory notes payable to the investors; (2) use investor
money to purchase subprime auto loan notes at discounts; (3) pledge auto loan
notes as security for the investors’ notes; (4) service the auto loan notes and thus
collect the high interest payments attached to them; and (5) pass a percentage of
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the money earned from the auto loan notes back to investors and keep the rest as
profit.
Cladek promised investors interest payments of between fifteen and eighteen
percent. Cladek also represented that the promissory notes LCI executed would be
fully collateralized by the auto loans, and that, if an auto loan defaulted, was paid
off, or became unsecured (because a car was wrecked or stolen), LCI would use
reserve funds to purchase a replacement auto loan note.
Specifically, the promissory notes LCI executed stated: “[LCI] hereby
pledges and assigns to [the investor] all of its interests in the automobile retail
installment sales contracts listed on attached Addendum[.]” The notes warranted:
(1) “[t]he contracts hereby assigned as collateral are genuine and valid”; (2) “[t]he
contract[s] hereby assigned are free and clear of all liens and encumbrances”;
(3) “[LCI] shall not, until such time as all of the terms of the promissory notes are
met, subject the contracts to any other liens or encumbrances”; and (4) “[LCI]
agrees to maintain a principal balance of collateral equal to or in excess of payee’s
loan.”
B. Ivette Reyes’s Role at LCI
At trial, one of the government’s key witnesses was Ivette Reyes. In 2001,
Reyes started working for LCI, when LCI employed only five or six people. Reyes
continued working there until February 2010. Reyes started working at LCI after
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her mother, Ruth Reyes, had first worked for Cladek. Initially, Reyes was a
secretary. In April 2001, Reyes began doing accounting work and later became the
head of LCI’s accounting department.
One of Reyes’s accounting duties was overseeing LCI’s general operating
account. Reyes prepared checks from that account for Cladek to sign. These
checks were for interest payments to investors and for purchasing subprime auto
loan notes from car dealers. Reyes also deposited investors’ checks into that
account.
Additionally, Reyes prepared promissory notes, from LCI to be issued to
investors, for Cladek to sign. Upon receiving an investor’s check, Reyes entered
information about the investor and the investment into a standard form and then
sent Cladek a draft promissory note. Cladek signed all of the promissory notes
Reyes prepared.
Reyes’s third main duty was attaching collateral to the promissory notes. To
do this, Reyes accessed a database containing information about all of the auto
loan notes LCI owned. Reyes selected a set of auto loan notes having a total value
of usually about ten to twenty percent more than the amount of the promissory
note. The attachment of collateral occurred only after Cladek signed a promissory
note. Reyes had discretion to determine which auto loan notes to attach to which
promissory notes.
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C. LCI’s Success
At first, LCI was very successful. Growing from a five-person operation in
2001, LCI soon employed close to 100 people in three separate departments—
collections, purchasing, and accounting.
LCI’s business was so prosperous that it outgrew the small, converted house
it used as office space. Around 2006, LCI moved into an office building large
enough to house each of LCI’s departments.
D. Misuse of Investor Funds
Although LCI was successful, it did not adhere to its original business
model. Instead of using investor funds to purchase new auto loan notes (and then
extracting profits from interest payments on the auto loan notes), Cladek funneled
LCI investor funds to her own personal account.
Reyes, who oversaw LCI’s general operating account, testified that LCI used
its single operating account to: (1) hold investor money; (2) pay interest to
investors; and (3) hold money collected on auto loan notes LCI owned. Reyes cut
checks from these commingled funds payable directly to Cladek. Usually, these
checks were for approximately $8,950. Occasionally, in a single day, Reyes would
draft as many as seven $8,950 checks payable to Cladek.
Reyes testified that she also cut checks from LCI’s operating account
payable to an individual named Roby Roberts, even though she did not know who
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Roberts was. In fact, in January 2005, Roberts agreed to sell Cladek a bayfront
residential property located in Captiva, Florida for a total price of $2.74 million.
Cladek owed Roberts monthly payments of $12,057.29. Cladek held this property
as a personal real estate investment. Thus, Cladek used LCI investors’ funds to
pay for her own investments. By cutting checks to unknown individuals who were
unaffiliated with LCI, Reyes helped Cladek divert LCI funds to benefit Cladek
personally.
Not only did Cladek use investor funds for personal investments, she also
used them to buy her own personal residence. In 2004, Cladek moved into a new
home in a gated, beachfront community. One former LCI investor described the
residence as a “[g]orgeous[,] . . . million-dollar house” that featured a “[b]eautiful
kitchen,” a swimming pool, and a guest house. Another former investor recalled a
“beautiful, expensive home.” Among the home’s flourishes were: (1) a dining
room table and chair set that was custom made and cost approximately $25,000;
(2) a piano costing approximately $17,000; and (3) over 40 pieces of furniture for
the pool area, including teak outdoor chairs each costing more than $600.
As more and more LCI money went to Cladek’s personal expenses and
investments, less and less went to LCI’s auto loan buying business. In 2008, LCI,
at Cladek’s direction, reduced its auto loan note buying to an almost nonexistent
level. One former employee testified that LCI went from buying “50 or 60 loans a
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day down to just maybe one or two loans a day.” Accounting head Reyes testified
that she was aware of the dwindling number of auto loan notes that LCI purchased
because she “cut the checks for the purchasing department.”
E. Attempts to Conceal LCI’s Fraud
Not surprisingly, LCI’s misuse of investor funds created a shortage of auto
loan notes to serve as collateral for the promissory notes it issued to investors.
Reyes testified that, from April 2001 (when she started doing accounting
work) until sometime in 2003, she had no difficulty attaching auto loan notes as
collateral for LCI’s promissory notes. In 2003, Reyes was preparing investors’
quarterly reports when she ran out of collateral. Reyes told Cladek, who told her
not to worry about it and said, “We’ll take care of it.”
Cladek did not, however, take care of the problem. Reyes, therefore, did not
send quarterly reports to those investors for whose notes LCI did not have enough
collateral. The next quarter, Reyes sent statements to only those investors who had
not received a statement previously. Eventually, at Cladek’s direction, Reyes
adopted a standard practice of issuing semiannual, instead of quarterly, reports.
At some point, to remedy the collateral shortage, Cladek instructed Reyes to
pull collateral from the promissory notes of Cladek’s family members and friends.
Reyes did so. Cladek also instructed Reyes to take collateral from existing
promissory notes and assign it to new notes as new investment funds came in.
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Reyes testified that, when a new promissory note came in, “I would
take . . . someone that had a collateral sheet, I would look at their notes, see how
much they had. And I would kind of make note of where I was putting it to, and
kind of keep track for myself where I was putting it, and assign it to that other
person.”
Although Reyes knew that the promissory notes “had to have buyable
collateral attached to them,” she created more than one promissory note having the
same collateral attached to it as attached to another note. Reyes also testified that
no investor ever gave her permission to pull the collateral from his or her note and
apply it to someone else’s note. But Reyes did so anyway, and, at trial, she
identified collateral sheets reflecting auto loan notes that she personally assigned to
multiple investors.
Doubly assigning the same collateral (instead of buying more auto loan
notes to serve as collateral) did not fix the collateral shortage. Reyes testified that
she was aware of the problem every day she came to work between 2003 and 2010,
and that she knew it was getting worse through the years.
F. LCI’s Demise
In the summer of 2008, LCI began receiving calls from investors concerned
about their investments. The calls became more frequent throughout the remainder
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of 2008. Reyes fielded these calls. She told Cladek about them, but, as Reyes
testified, she and Cladek “never really thought of a solution for it.”
The situation deteriorated as investors began attempting to withdraw their
money. Reyes testified that, sometime after the 2008 financial crisis began,
investors were asking for approximately $100,000 per day. That number then
started to rise. The calls from angry investors became so disruptive that Reyes and
the other accounting personnel were unable to get their work done. They asked
Cladek to route the calls to someone else and Cladek agreed to do so.
In late 2009, Cladek convened a meeting attended by Reyes and other LCI
employees. At the meeting, Cladek dictated a script for employees to use when
dealing with angry investors. When an investor called attempting to withdraw his
or her money, the LCI employee was to inform the investor that the auto loan notes
were performing as expected and that LCI would soon be buying more subprime
auto loan notes. Cladek told the employees, including Reyes, to tell customers that
she had “been proven to have unprecedented success” and that “plans [were] in
place.”
Meanwhile, in 2008, the U.S. Securities and Exchange Commission (“SEC”)
received an anonymous complaint about LCI alleging that Cladek was operating a
Ponzi scheme. The SEC passed the complaint along to Florida’s Office of
Financial Regulation (“OFR”). In December 2008 and January 2009, the OFR
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contacted several of LCI’s investors and heard their concerns. Later in 2009, the
OFR requested and received from LCI all promissory notes and accompanying
documents LCI issued between 2004 and 2008.
Reyes was aware of the OFR’s investigation and helped Cladek compile
documents to send to the investigators. Further, Reyes testified that she was aware
of the subject of the investigation, stating “Lydia informed us what it was for and
what she wanted to accomplish. And we just did whatever she told us.” Not
surprisingly, Reyes did not include copies of the ledgers showing doubly assigned
collateral in the documents she turned over.
The OFR turned the results of its investigation over to the FBI. LCI ceased
its operations in May 2010 after the FBI executed a search warrant and LCI’s
creditors forced the company into involuntary bankruptcy proceedings.
G. Indictment, Arrest, and Trial
On November 19, 2010, a federal grand jury indicted Cladek, charging her
with the conspiracy, mail fraud, and wire fraud offenses stated above. Cladek pled
not guilty and went to trial. At the conclusion of the government’s case, Cladek
moved for judgment of acquittal as to all counts.
As for the conspiracy count, Cladek argued that there was insufficient
evidence that she formed an agreement with any other person to accomplish an
unlawful objective. Cladek’s attorney noted that the government’s theory was that
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Reyes was Cladek’s co-conspirator, but that “[t]here was not any testimony that
demonstrated that Ms. Reyes knew any unlawfulness having to do with any of
[her] acts.” The district court denied the motion.
Thereafter, the jury found Cladek guilty on all counts. Afterwards, Cladek
renewed her motion for judgment of acquittal, again arguing that Reyes “never
acknowledged knowing that her action[s] were unlawful or criminal in nature.”
The district court denied the post-trial motion too.
II. SUFFICIENCY OF THE EVIDENCE ISSUE
With this factual background, we turn to Cladek’s first issue on appeal—
whether there was sufficient evidence to support her conspiracy conviction.
A. Standard of Review
We review de novo whether there was sufficient evidence to support a
conviction, viewing the evidence and drawing all inferences in favor of the verdict.
United States v. Isaacson, 752 F.3d 1291, 1303 (11th Cir. 2014). We will not
overturn a jury’s verdict if “any reasonable construction of the evidence would
have allowed the jury to find the defendant guilty beyond a reasonable doubt.”
United States v. Grzybowicz, 747 F.3d 1296, 1304 (11th Cir. 2014) (quotations
omitted). “It is not necessary for the government’s evidence to be inconsistent
with every reasonable hypothesis except that of guilt in order to be sufficient.”
United States v. Silvestri, 409 F.3d 1311, 1328 (11th Cir. 2005).
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B. Elements of the Conspiracy Offense
The jury convicted Cladek of conspiracy to commit mail and wire fraud.
Thus, the jury found that the government proved the following elements beyond a
reasonable doubt: (1) “an agreement between two or more persons”; (2) “to
execute a scheme to defraud”; and (3) “the use of either the mails or wire service in
furtherance of the scheme.” United States v. Ross, 131 F.3d 970, 981 (11th Cir.
1997).
Because conspiracy is “predominantly mental in composition,” there need
not be “a formal agreement” between co-conspirators as long as there is “a meeting
of the minds to commit an unlawful act.” United States v. Toler, 144 F.3d 1423,
1426 (11th Cir. 1998) (quotations omitted). To that end, a jury may use
circumstantial evidence to infer the existence of an agreement to commit a crime.
See United States v. Moore, 525 F.3d 1033, 1040 (11th Cir. 2008). Specifically, a
jury may find an agreement based on “the conduct of the alleged participants” or
other “circumstantial evidence of a scheme.” Silvestri, 409 F.3d at 1328
(quotations omitted).
C. Evidence Supporting Cladek’s Conspiracy Conviction
Cladek contends that the government failed to prove the existence of an
agreement between herself and someone else to accomplish an unlawful objective.
Cladek’s argument fails because a reasonable jury could readily infer that the head
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of LCI’s accounting department, Reyes, knew of LCI’s unlawful practices and
agreed with Cladek to help LCI carry out this fraud.
The trial evidence established that Reyes was very familiar with LCI’s
business model and finances. Reyes knew that LCI told investors that it would use
their monies to purchase subprime auto loan notes. Reyes also knew that LCI was
not doing this and was instead spending investor funds on Cladek’s personal
expenses and investments. Reyes was aware LCI was spending its money this way
because she was the one cutting LCI’s checks. Reyes also was aware of what she
was not being instructed to cut checks for—the purchase of new auto loan notes.
Thus, Reyes’s testimony established that she was aware that LCI was misleading
its investors about how it would use their investments. From Reyes’s knowledge, a
reasonable jury could infer that Reyes agreed to help Cladek mislead investors.
Reyes’s testimony further established that she was aware of and indeed
facilitated LCI’s efforts to conceal its fraud. When LCI did not have enough
collateral to back all of the promissory notes it issued, Reyes personally assigned
collateral doubly and prepared statements reflecting the double assignments.
Reyes was the primary person responsible for putting the double assignment
scheme into effect, testifying that she personally chose which notes to assign
doubly and made a record of which notes had been doubly assigned. Reyes’s co-
worker, Kay Osgatharp, assisted Reyes with execution of these double assigments.
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Reyes also stopped sending out quarterly statements to investors, thus
ensuring that LCI would not issue two statements at the same time reflecting the
double assignments. Reyes did all of this even though she knew that LCI
warranted to investors that the auto loan notes serving as collateral were free of
other encumbrances.
Further, Reyes knew that the double assignment of collateral was not a
legitimate business strategy to get LCI out of short-term financial difficulty. Reyes
testified that LCI had insufficient collateral from 2003 until 2010 and that the gap
between LCI’s obligations and its collateral continued to grow during that period.
Over the course of seven years, Reyes did not take any legitimate measures to fix
the problem of which she was fully aware. Instead, she acted to conceal it from
investors. A reasonable jury could infer, from Reyes’s testimony about her
actions, that she was not merely an unwitting dupe when she took carefully
calibrated steps to conceal LCI’s fraud. Instead, a reasonable jury could conclude
that Reyes had knowingly agreed with Cladek to take these concealment actions.
Reyes’s later actions even more strongly showed her agreement with Cladek
to commit fraud. Reyes testified that she was aware that the Florida OFR was
investigating LCI in 2008 and 2009. Reyes even assisted Cladek in preparing
documents to turn over to the state agency and in pulling some documents back
from LCI’s production.
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Reyes also attended the meeting in 2009 during which Cladek told her
employees what to say to angry investors who called wanting to withdraw their
investments. Reyes heard Cladek say that employees should tell investors that LCI
had experienced “unprecedented success.” Reyes knew that this was a lie since
she had become aware of LCI’s financial troubles six years earlier, in 2003.
Thus, at least by early 2009, Reyes was aware that a government agency
thought LCI’s business practices may be fraudulent and that Cladek wanted
employees to lie to investors about LCI’s financial condition. Nonetheless, Reyes
continued to doubly assign collateral and cut checks payable to Cladek’s personal
account up until LCI stopped its operations in 2010. A reasonable jury could
believe that Reyes did so pursuant to an agreement with Cladek.
Last, a reasonable jury could infer an agreement between Cladek and Reyes
based on their close relationship. Reyes and her mother were among LCI’s very
first employees. For almost a decade, Reyes was intimately involved in LCI’s
operations. Her testimony revealed that she had a very close working relationship
with Cladek. A reasonable jury could find it difficult, if not impossible, to believe
that, over a ten year period, Reyes could work so closely with a fraudster like
Cladek, helping Cladek steal investors’ money and then conceal the fraud, and yet
never agree to participate in the scheme.
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In short, there was more than enough evidence for a reasonable jury to find
that Cladek formed an agreement with another person, Reyes, to commit mail and
wire fraud. We thus reject Cladek’s challenge to her conspiracy conviction.
III. CLADEK’S SENTENCE
Cladek raises two challenges to her total 365-month sentence. We review
the proceedings in the district court culminating in the sentence.
A. The Presentence Investigation Report
Prior to sentencing, the probation office prepared a presentence investigation
report (“PSI”). The PSI stated that Cladek was responsible for a loss of
approximately $69 million. To reach this figure, the PSI reported that LCI
received approximately $112 million from investors between 2005 and March
2010 (the conspiracy period alleged). From this amount, the PSI subtracted a total
of $43 million, representing $39 million in payments made to investors and $4
million for LCI’s assets when its operations ceased.
Starting with a base offense level of six, see U.S.S.G. § 2B1.1(a)(2), the PSI
added (1) 24 levels because Cladek’s loss amount was greater than $50 million and
less than $100 million, pursuant to § 2B1.1(b)(1)(M); (2) six levels, pursuant to
§ 2B1.1(b)(2)(C), because Cladek’s offense involved more than 250 victims; and
(3) four levels because Cladek was the organizer or leader of a “criminal activity
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that involved five or more participants or was otherwise extensive,” pursuant to
§ 3B1.1(a). Cladek’s total offense level, therefore, was 40.
Cladek’s criminal history category of I and total offense level of 40
produced an advisory guidelines range of 292 to 365 months’ imprisonment.
Because the highest statutory maximum penalty for Cladek’s offenses was 240
months’ imprisonment, the PSI recommended that the sentence on one of Cladek’s
offenses be imposed consecutively to the extent necessary to produce a combined
sentence equal to the total punishment called for by the guidelines. See id.
§ 5G1.2(d).
B. Cladek’s Objection to the Loss Amount
At sentencing, Cladek objected to the PSI’s calculation of the loss amount
enhancement. First, Cladek argued that the PSI’s loss amount was inaccurate
because it did not take into account “non-criminal acts that resulted in the loss to
the company”—specifically the economic downturn during the 2007 to 2009
period. Cladek’s attorney urged that Cladek’s estimated gain of $16.7 million,
rather than the amount of loss she caused, should be used to calculate her offense
level. See id. § 2B1.1, app. n.3(B).
Cladek also contended that the PSI was incorrect in stating that LCI received
approximately $112 million from investors between 2005 and 2010. Cladek’s
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attorney noted that the government’s trial evidence, specifically LCI’s bank
records, showed that LCI received approximately $90 million in investments.
The government responded that the $112 million figure was “arrived at by
reference to Lydia Cladek’s own accounting documents which she created to send
to her accountant.” Acknowledging the discrepancy between the PSI and the trial
evidence, the government stated that the $90 million figure introduced at trial was
“a conservative [estimate]” that was “based entirely upon bank records,” and did
not take into account the balance sheets Cladek created. The government
maintained that the $112 million figure was actually correct. 1 As for Cladek’s
argument about “legitimate business losses,” the government contended that LCI
could not have suffered legitimate losses, as it “was not a legitimate business” and
was instead a “scheme to defraud from the very beginning.”
The district court overruled Cladek’s objections to the amount of the loss
and the 24-level increase to her offense level. The district court found that LCI
received an amount between $93 million and $112 million over the course of the
fraud. After subtracting the $39 million paid to investors and the $4 million
1
The district court also called on the probation officer to explain the discrepancy between
the PSI’s $112 million investment amount and the trial evidence’s $90 million figure. The
probation officer stated that the PSI’s figure was based on the 2,443 promissory notes LCI
issued, and thus represented “the total investments pledged.” On the other hand, LCI’s bank
records for that period showed only $90 million in deposits. The probation officer could not
account for the $22 million variation.
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leftover when LCI ceased operations, the district court arrived at a loss amount of
greater than $50 million and less than or equal to $69 million.
The district court explained that it believed this greater than $93 million
figure to be “a reasonable number” because it “capture[d] what Ms. Cladek was
promising . . . to investors . . . . And then . . . the $39 million figure shows what
was actually paid out. And then the $4 million figure is what was left at the time
the business was raided.” The district court reiterated that its loss amount was only
“a reasonable estimate” and “a construct.” In light of this loss amount, the district
court determined that the PSI correctly added 24 levels to Cladek’s offense level. 2
C. Cladek’s Objection to the Role Increase
Cladek’s other objection at issue in this appeal was to the four-level
increase, pursuant to U.S.S.G. § 3B1.1(a), for being the organizer or leader of a
criminal activity involving five or more participants “or that was otherwise
extensive.” (emphasis added) Cladek’s attorney argued that Cladek’s scheme did
not “require any additional work other than Ms. Cladek . . . just transferring funds
from LCI into the professional account, making purchases of property.” He
suggested, “That doesn’t require any extensive action on anybody’s part.”
2
The district court did state that it rejected the government’s position that LCI was never
a legitimate business. However, the rejection of this argument did not factor into the district
court’s guidelines calculation or sentence.
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The district court denied this objection as well. The district court pointed
out that, in determining whether a criminal activity is extensive, it could consider
“all persons involved during the course of the entire offense . . . , including
outsiders who provided unknowing services.” The district court noted that the
government needed to prove the existence of at least one other knowing participant
and found that the evidence established “Ms. Reyes’[s] conspiratorial
participation.” Further, the district court acknowledged that “there may well have
been others who could have been unindicted co-conspirators.”
D. Sentence
Based on these rulings, the district court determined that the PSI correctly
calculated Cladek’s total offense level of 40, her criminal history category of I, and
her advisory guidelines range of 292 to 365 months. In light of “the amount of
loss” and “the brazenness of” Cladek’s crimes, “the lack of insight, . . . [and]
concern for future potential criminal conduct,” the district court determined that “a
significant sentence is required by law.”
The district court imposed concurrent sentences of 240 months’
imprisonment on thirteen of Cladek’s offenses and a consecutive sentence of 125
months’ imprisonment on Cladek’s fourteenth offense, resulting in a total 365-
month sentence. The district court followed the same procedure when it sentenced
Cladek to supervised release, imposing concurrent three-year supervised release
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terms on thirteen of Cladek’s offenses, followed by a consecutive three-year
supervised release term on Cladek’s fourteenth offense, yielding a total of six years
of supervised release.
IV. SENTENCING ISSUES
On appeal, Cladek argues that the district court erred in overruling her
objections to the loss amount and role increases in her offense level calculation.
As explained below, Cladek’s arguments fail.
We review de novo the district court’s interpretation and application of the
guidelines. United States v. Lee, 427 F.3d 881, 892 (11th Cir. 2005). We review
only for clear error the factual findings the district court used to calculate a
defendant’s guidelines range, such as loss amount or whether the defendant was
subject to a role increase. Id.; see also United States v. Martinez, 584 F.3d 1022,
1025 (11th Cir. 2009); United States v. Maxwell, 579 F.3d 1282, 1305 (11th Cir.
2009).
A. Loss Amount Enhancement
Under U.S.S.G. § 2B1.1(b)(1), in fraud cases like Cladek’s, 24 levels are
added to a defendant’s offense level when the loss is greater than $50 million and
less than $100 million. U.S.S.G. § 2B1.1(b)(1). “Loss” refers to the greater of
“actual loss or intended loss.” Id., cmt. n.3(A). Here, the district court determined
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Cladek’s actual loss, which refers to “the reasonably foreseeable pecuniary harm
that resulted from the offense.” Id., cmt. n.3(A)(i).
A district court “need only make a reasonable estimate of the loss,” as that
court “is in a unique position to assess the evidence and estimate the loss based
upon that evidence.” Id., cmt. n.3(C); See United States v. Campbell, ___ F.3d
___, 12-11952, 2014 WL 4338404 at *12 (11th Cir. Sept. 3, 2014) (affirming
district court’s loss calculation under the Sentencing Guidelines). Accordingly,
this Court must give deference to a district court’s loss calculation, and a district
court’s “reasonable estimate . . . will be upheld on appeal.” United States v.
Gupta, 463 F.3d 1182, 1200 (11th Cir. 2006) (quotations omitted). However, a
district court may not base a loss calculation on “mere speculation.” Id. Instead,
the district court “must make factual findings sufficient to support the
government’s claim of the amount of fraud loss attributed to a defendant in a PSI.”
Id.
Here, the district court made factual findings sufficient to support its
determination that Cladek’s loss was greater than $50 million and less than or
equal to $69 million. The district court explained the figures and calculations it
used to reach the loss amount. Of course, there was some uncertainty at sentencing
as to how much money LCI received from investors. However, the district court
found that, even assuming that the number was as low as one dollar more than $93
22
Case: 13-10024 Date Filed: 09/22/2014 Page: 23 of 26
million, the guidelines calculation would be the same. In light of the evidence of
LCI’s income—gleaned from LCI’s own business records—the district court had a
reasonable basis for finding that LCI received greater than $93 million from
investors, and we therefore must defer to the district court’s loss calculation. See
id.
Cladek argues that the district court should have measured loss by looking to
the gain Cladek received—money diverted from LCI to her personal account
(which at sentencing she estimated was $16.7 million). But, a defendant’s gain
should be used as a substitute “only if there is a loss but it reasonably cannot be
determined.” U.S.S.G. § 2B1.1, cmt. n.3(B) (emphasis added). This Court has
“cautioned against abandoning a loss calculation in favor of a gain calculation
where a reasonable estimate of the victims’ loss based on existing information is
feasible.” United States v. Bradley, 644 F.3d 1213, 1289 (11th Cir. 2011)
(quotation marks omitted, alterations adopted). We have done so because a
defendant’s gain “ordinarily underestimates the loss.” Id.
Here, Cladek has not shown that it was infeasible to calculate the investors’
loss she caused. Cladek contends that the district court’s figure failed to take into
account legitimate business losses and that it double counted money that was never
withdrawn and reinvested when a promissory note matured. But, Cladek does not
state the extent of LCI’s market-inflicted losses, nor how much money was double
23
Case: 13-10024 Date Filed: 09/22/2014 Page: 24 of 26
counted. She simply asserts that the district court should have used the $16.7
million gain figure as a proxy for a loss that could not be calculated. But, even
assuming that there were some legitimate business losses and some double
counting, nothing in the record suggests that these factors caused the district
court’s loss calculation of approximately $69 million to be off by more than $50
million (the difference between the district court’s loss amount and Cladek’s gain
amount). Thus, this is an example of a case where the defendant’s gain
“underestimates the loss.” See id.
Accordingly, we must defer to the district court’s analysis. While the issues
Cladek raises may suggest de minimus discrepancies, they do not make the district
court’s calculation of Cladek’s loss amount anything other than a “reasonable
estimate.” See U.S.S.G. § 2B1.1, cmt. n.3(C).
We conclude that the district court did not err—much less clearly err—in its
fact findings and loss calculations and in increasing Cladek’s offense level by 24
levels pursuant to § 2B1.1.
B. Role Increase
Under § 3B1.1, a defendant’s offense level is subject to a four-level increase
when she “was an organizer or leader of a criminal activity that involved five or
more participants or was otherwise extensive.” U.S.S.G. § 3B1.1(a). The district
24
Case: 13-10024 Date Filed: 09/22/2014 Page: 25 of 26
court found that Cladek was the organizer or leader of an “otherwise extensive”
criminal activity.
To receive a role increase under § 3B1.1, the defendant must have been the
organizer or leader of at least one or more criminally responsible participants. Id.,
cmt. nn.1–2. But, that criminally responsible participant “need not have been
convicted.” Id., cmt. n.1. In determining whether a criminal activity was
“otherwise extensive,” once a court determines that there was at least one
criminally responsible participant, the court may take into account “all persons
involved during the course of the entire offense,” including outsiders who provided
“unknowing services.” Id., cmt. n.3.
The district court did not clearly err in applying the § 3B1.1 role increase.
There was ample evidence to establish that Reyes was a participant in Cladek’s
fraud. As discussed, a reasonable jury could find, based on the trial evidence, that
Reyes formed an agreement with Cladek to accomplish an unlawful objective.
Once it was satisfied that Cladek was the leader of at least one criminally
responsible participant (Reyes), the district court could consider that there were
more than 100 LCI employees who provided “unknowing services” in furtherance
of Cladek’s fraud. Furthermore, LCI’s scheme was massive both in duration and
scope, involving the receipt of millions of dollars from investors over a ten-year
period. See United States v. Holland, 22 F.3d 1040, 1046 (11th Cir. 1994)
25
Case: 13-10024 Date Filed: 09/22/2014 Page: 26 of 26
(holding “there are a number of factors relevant to the extensiveness determination,
including the length and scope of the criminal activity as well as the number of
persons involved”). We cannot fathom how such a scheme could be labeled as
anything other than “extensive.”
Thus, we affirm the district court’s application of the four-level increase
under § 3B1.1.
V. CONCLUSION
Based on the foregoing, we affirm Cladek’s convictions and 365-month
sentence. However, we vacate the consecutive three-year term of supervised
release on Count Fourteen and direct the district court on remand to amend
Cladek’s sentence to state that the three-year term of supervised release on Count
Fourteen shall run concurrently with the supervised release terms on Counts One
through Thirteen already imposed concurrently. See 18 U.S.C. § 3624(e); United
States v. Magluta, 198 F.3d 1265, 1283 (11th Cir. 1999), vacated in part on reh’g,
203 F.3d 1304 (11th Cir. 2000) (“As Magluta and the government correctly point
out, ‘any term of supervised release imposed is to run concurrently with any other
term of supervised release imposed.’ ” (citing § 3624(e))); U.S.S.G., App. C,
amend. 507 (stating that § 3624(e) “requires multiple terms of supervised release to
run concurrently in all cases”).
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
26
| {
"pile_set_name": "FreeLaw"
} |
Filed 8/27/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE, B248383
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BA393121)
v.
MICHAEL LOFCHIE,
Defendant and Respondent.
APPEAL from an order of the Superior Court of Los Angeles County. Clifford L.
Klein. Affirmed.
Jackie Lacey, District Attorney, Phyllis C. Asayama and Mathew Brown, Deputy
District Attorneys for Plaintiff and Appellant.
Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow, Gary S.
Lincenberg and Benjamin D. Lichtman for Defendant and Respondent.
Crowel & Moring and J. Daniel Sharp; University of California Los Angeles
Office of Legal Affairs and Kevin S. Reed; University of California Los Angeles Office
of the General Counsel and Charles F. Robinson, Karen J. Petrulakis, Stephen P. Morrell,
Mark Morodomi, and Elizabeth C. Yap as Amicus Curiae on behalf of Defendant and
Respondent.
The issue presented in this case is whether a University of California1 faculty
member may be criminally prosecuted under Government Code section 10902 for
participating in a decision to hire his wife as a program assistant for a four-week summer
study abroad course. We conclude that he may not, and for reasons we discuss affirm the
trial court’s order dismissing the information under Penal Code section 995.
BACKGROUND
Defendant Michael Lofchie (Lofchie) has been a faculty member at the University
of California at Los Angeles since 1964. He was chairman of the political science
department in 2008. In July 2008, Lofchie taught a four-week summer session abroad
course and participated in a decision to hire his wife, Kelly Comras Lofchie (Comras), as
a program assistant for the 2008 summer session. Comras was hired by the University’s
Office of Summer Sessions and was paid $3,100 plus a per diem for her expenses.
Richard Anderson, another professor in the political science department, also
taught a class in the University’s 2008 summer session. When Anderson learned that
Comras had been hired as a program assistant, he objected, first to Lofchie, and then to
the person who succeeded Lofchie as chairman of the political science department.
Anderson also filed an anonymous whistleblower complaint and met with the
University’s director of compliance and the dean of the social science division. When the
University’s administration rejected his complaint, Anderson brought the matter to the
attention of the Los Angeles County District Attorney.
The district attorney, on behalf of the People of the State of California,3 filed an
information charging Lofchie with a felony violation of section 1090, alleging he was
“financially interested” in a contract made by him in his official capacity to hire Comras
as a program assistant in the summer of 2008. Lofchie filed a motion under Penal Code
1
Hereinafter, the University of California, or simply, the University.
2
All further statutory references are to the Government Code, unless stated
otherwise. Section 1090 may be referred to as section 1090 or Government Code section
1090.
3
The district attorney is referred to hereinafter as the People.
2
section 995 to set aside the information on various grounds, including that article IX,
section 9 of the California Constitution (hereafter article IX, section 9 or Cal. Const., art.
IX, § 9) precludes the Legislature from regulating the employment practices of the
University of California through Government Code section 1090; that section 1090 does
not apply to a University of California professor; and that a more specific statute, Public
Contract Code section 10516, preempts application of Government Code section 1090.
The People opposed the motion.
After hearing argument from the parties, the trial court granted Lofchie’s motion
to set aside the information. This appeal followed.
THE PARTIES’ CONTENTIONS
Lofchie and the Regents of the University of California (the Regents), to whom we
granted leave to file an amicus brief, both argue that section 1090 does not apply to the
University because it is not the “state” within the meaning of the statute, but rather a
constitutionally created public trust subject to legislative control in only specifically
enumerated areas that do not include internal hiring decisions. The Regents further
contend University of California employees are already subject to internal conflict of
interest policies, including policies that address conflicts of interest in decisions involving
spouses and family members, and that the district attorney’s expansive interpretation of
section 1090 would render the statute an unconstitutional interference with university
autonomy. Lofchie also contends the People forfeited the right to argue on appeal that he
is a state employee because they took the opposite position in the trial court below; that
Public Contract Code section 10516 supplants Government Code section 1090; and
section 1090 is unconstitutionally vague as applied to him.
The People contend they did not forfeit any argument that the University of
California is a state entity and Lofchie is an employee of the “state” within the meaning
of section 1090. The People further contend article IX, section 9 does not exempt the
University from regulation under Government Code section 1090, and Public Contract
Code section 10516 does not preclude application of section 1090.
3
DISCUSSION
I. Forfeiture
Lofchie argues that the doctrines of waiver and invited error preclude the People
from pursuing this appeal because they expressly conceded in the trial court below that he
is not a state employee. The doctrine of waiver precludes a party from changing its
position and adopting a new and different theory on appeal because “‘“to do so would not
only be unfair to the trial court, but manifestly unjust to the opposing party.”’” (Saville v.
Sierra College (2005) 133 Cal.App.4th 857, 873.) “Under the doctrine of invited error,
when a party by its own conduct induces the commission of error, it may not claim on
appeal that the judgment should be reversed because of that error. [Citations.]” (Mary
M. v. City of Los Angeles (1991) 54 Cal.3d 202, 212.)
The People acknowledge that they took inconsistent positions in the proceedings
below regarding Lofchie’s employment status, at times conceding he is not a “state
employee,” but rather a “public employee” subject to section 1090. They argue,
however, that both Lofchie and the trial court understood the People’s position to be that
University employees such as Lofchie are subject to section 1090, that Lofchie suffered
no prejudice, and that there was no invited error on the part of the trial court.
We agree that there was neither prejudice nor invited error. Lofchie successfully
opposed the People’s arguments in the trial court below that section 1090 applied to him
as either a “state employee” or a “public employee.” The trial court’s memorandum of
decision expressly rejects the People’s argument that University of California employees
should be included as employees of the “state” within the meaning of section 1090.
Finding no grounds for forfeiture, we address the merits of the parties’
contentions.
II. The legal framework
A. Section 1090
Section 1090 provides:
“Members of the Legislature, state, county, district, judicial district,
and city officers or employees shall not be financially interested in any
4
contract made by them in their official capacity, or by any body or board of
which they are members. Nor shall any state, county, district, judicial
district, and city officers or employees be purchasers at any state sale or
vendors at any purchase made by them in their official capacity.
“As used in this article, ‘district’ means any agency of the state
formed pursuant to general law or special act, for the local performance of
governmental or proprietary functions within limited boundaries.”
Section 1090 “represents the Legislature’s decision to codify the common law rule
prohibiting public officials from having a personal financial interest in the contracts they
form in their official capacities. [Citation.]” (People v. Wong (2010) 186 Cal.App.4th
1433, 1450.) A contract is made for purposes of section 1090 if the public official “had
the opportunity to, and did, influence execution [of the contract] directly or indirectly to
promote his personal interests. [Citation.]” (People v. Sobel (1974) 40 Cal.App.3d 1046,
1052.) A public official can violate the statute even if he did not participate in the
execution of the contract. (Ibid.)
There are both civil and criminal remedies for violations of section 1090.
Contracts made in violation of the statute may be voided by any party, except the
interested party. (§ 1092.) Persons who willfully violate section 1090 are subject to
criminal sanctions, including a fine of up to $1,000, imprisonment in state prison, and
disqualification from holding any office in the state. (§ 1097.)4
4
Criminal sanctions for violation of section 1090 are set forth in section 1097,
which states: “Every officer or person prohibited by the laws of this state from making or
being interested in contracts, or from becoming a vendor or purchaser at sales, or from
purchasing scrip, or other evidences of indebtedness, including any member of the
governing board of a school district, who willfully violates any of the provisions of such
laws, is punishable by a fine of not more than one thousand dollars ($1,000), or by
imprisonment in the state prison, and is forever disqualified from holding any office in
this state.”
5
B. Article IX, section 9
The University of California is a public trust established pursuant to article IX,
section 9.5 Article IX, section 9(a)(f) provides in pertinent part:
“(a) The University of California shall constitute a public trust, to be
administered by the existing corporation known as ‘The Regents of the
University of California,’ with full powers of organization and government,
subject only to such legislative control as may be necessary to insure the
security of its funds and compliance with the terms of the endowments of
the university and such competitive bidding procedures as may be made
applicable to the university by statute for the letting of construction
contracts, sales of real property, and purchasing of materials, goods, and
services. . . .”
“[¶] . . . [¶]
“(f) . . . The university shall be entirely independent of all political
or sectarian influence and kept free therefrom in the appointment of its
regents and in the administration of its affairs . . . .”
The California Supreme Court has recognized that “[a]rticle IX, section 9, grants
the regents broad powers to organize and govern the university and limits the
Legislature’s power to regulate either the university or the regents.”6 (San Francisco
Labor Council v. Regents of Univ. of Cal. (1980) 26 Cal.3d 785, 788 (Labor Council).)
This constitutional grant of power to the Regents includes both quasi-judicial and quasi-
5
The University of California was originally a corporation, with the Regents as its
board of directors. (Stats. 1967-1868, ch. 244, p. 248 [Organic Act of 1868].) During the
first decade of the University’s existence, controversy arose among political factions
seeking to control the University’s governance and curriculum. A “decisive battle” was
waged in the constitutional convention of 1879, culminating in the adoption of article IX,
section 9 and the establishment of the University as a constitutionally created public trust.
(See Horowitz, The Autonomy of the University of California Under the State
Constitution (1977) 25 UCLA L.Rev. 23, 25.)
6
In contrast, the Legislature possesses comprehensive powers of regulation “over
the California State University, which ‘“is subject to full legislative control and has
‘only such autonomy as the Legislature has seen fit to bestow.” [Citation.] . . .’”
(Native American Heritage Com. v. Board of Trustees (1996) 51 Cal.App.4th 675, 684,
quoting Slivkoff v. Board of Trustees (1977) 69 Cal.App.3d 394, 401.)
6
legislative powers, according them “virtual autonomy in self-governance.” (Regents of
University of California v. City of Santa Monica (1978) 77 Cal.App.3d 130, 135.) “‘The
Regents have the general rule-making or policy-making power in regard to the
University . . . and are . . . fully empowered with respect to the organization and
government of the University. . . .’ [Citations.]” (Regents of Univ. of Cal. v. Superior
Court (1970) 3 Cal.3d 529, 540.) “[P]olicies established by the Regents as matters of
internal regulation may enjoy a status equivalent to that of state statutes [citation].”
(Regents of University of California v. City of Santa Monica, supra, at p. 135; Campbell
v. Regents of University of California (2005) 35 Cal.4th 311, 321 [Regents’ policy for
handling whistleblower claims under their power to govern and organize the University
is treated as a statute in order to determine whether the exhaustion doctrine applies].)
Courts have recognized not only the broad powers accorded to the Regents to
govern the University of California, but also the University’s “general immunity from
legislative regulation.” (Labor Council, supra, 26 Cal.3d at p. 788.) For example,
courts have found the Regents and the University to be exempt from regulation under
the state prevailing wage law (id. at p. 787; Regents of University of California v. Aubry
(1996) 42 Cal.App.4th 579, 591), state overtime regulations (Kim v. Regents of
University of Cal. (2000) 80 Cal.App.4th 160, 166-167), state statutes authorizing
certain employee payroll deductions (California State Employees’ Asso. v. Regents of
University of California (1968) 267 Cal.App.2d 667), a statute requiring employer
indemnification of employee work uniform expenses (In re Work Uniform Cases (2005)
133 Cal.App.4th 328, 344), and a Labor Code statute mandating an award of attorney
fees and costs to the prevailing party in an action related to pension fund eligibility,
unpaid wages, or fringe benefits (Goldbaum v. Regents of University of California
(2011) 191 Cal.App.4th 703, 706 (Goldbaum)).
The Regents and the University of California are not completely exempt from
legislative regulation. As discussed, article IX, section 9 delineates three areas in which
the University and the Regents are subject to legislative control -- insuring the security
of its funds, compliance with the terms of its endowments, and competitive bidding
7
procedures made applicable to the University by statute for awarding construction
contracts, sales of real property, and purchase of materials, goods, and services.
Apart from the forms of legislative control specifically listed in the California
Constitution, there are only three areas in which the Regents and the University of
California are subject to legislative regulation. The California Supreme Court has
enumerated these three areas as follows: “First, the Legislature is vested with the power
of appropriation, preventing the regents from compelling appropriations for salaries.
[Citations.] [¶] Second, it well settled that general police power regulations governing
private persons and corporations may be applied to the university. [Citations.] For
example, workers’ compensation laws applicable to the private sector may be made
applicable to the university. [¶] Third, legislation regulating public agency activity not
generally applicable to the public may be made applicable to the university when the
legislation regulates matters of statewide concern not involving internal university
affairs. [Citation.]” (Labor Council, supra, 26 Cal.3d at p. 789.) Deciding what
constitutes a matter of statewide concern is a judicial, and not a legislative function.
(Regents of University of California v. Aubry, supra, 42 Cal.App.4th at p. 589.)
III. Whether section 1090 applies to the University
The People contend section 1090 falls into the third category of permissive
legislative regulation of the University delineated by the Supreme Court in Labor
Council, because prohibiting state employees from engaging in self-dealing when
contracting on behalf of the state is a matter of “statewide concern.” The People further
contend the term “state” as used in section 1090 includes the University of California
and that Lofchie is a “state” employee. Whether Lofchie and the University come
within the ambit of section 1090 is an issue of statutory interpretation that we review
de novo. (Farahani v. San Diego Community College Dist. (2009) 175 Cal.App.4th
1486, 1491.) Whether the University is constitutionally immune from legislative
regulation under section 1090 is a legal issue also subject to our independent review.
(Goldbaum, supra, 191 Cal.App.4th at p. 710.) These two legal issues are entwined
with one another.
8
A. Statutory construction analysis
1. General principles
The fundamental rule of statutory construction is that the court should ascertain
the intent of the Legislature so as to effectuate the purpose of the law. (Select Base
Materials v. Board of Equalization (1959) 51 Cal.2d 640, 645 (Select Base).) In
determining the intent of the Legislature, we first examine the words of the statute itself.
(California Teachers Assn. v. San Diego Community College Dist. (1981) 28 Cal.3d 692,
698.) If the language of the statute is clear and unambiguous, there is no need for
statutory construction. (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) However,
“the ‘plain meaning’ rule does not prohibit a court from determining whether the literal
meaning of a statute comports with its purpose.” (Ibid.) “‘We must select the
construction that comports most closely with the apparent intent of the Legislature, with
a view to promoting rather than defeating the general purpose of the statute, and avoid
an interpretation that would lead to absurd consequences.’ [Citation.]” (People v.
Coronado (1995) 12 Cal.4th 145, 151.) The Legislative purpose “will not be sacrificed
to a literal construction” of any part of the statute. (Select Base, at p. 645.)
2. Neither the plain language nor the legislative history of section 1090
reflect an intent to include the University of California
Section 1090 does not define the term “state.” The term is defined elsewhere in
sections of the Government Code that govern the construction of that code. (§§ 5, 18.)
Section 18 defines “State” as “the State of California, unless applied to different parts of
the United States,” in which case “it includes the District of Columbia and the
territories.” (§ 18.) But that definition is unhelpful in determining whether the
University of California is considered the “state” and whether a University professor is a
“state employee” within the meaning of section 1090.
Because the language of section 1090 provides no definitive answer as to whether
it applies to the University of California, we turn to the legislative history and the
purposes to be achieved by the statute. (People v. Coronado, supra, 12 Cal.4th at p.
151.) In addition, the statute must be construed “ ‘with reference to the whole system of
9
law of which it is a part so that all may be harmonized and have effect.’ [Citation.]”
(Select Base, supra, 51 Cal.2d at p. 645.)
The legislative history for section 1090 contains no expression of intent to include
the University of California and its employees within the ambit of the statute. The
predecessor statute to section 1090 was enacted in 1851, before the University of
California existed,7 and applied to government officials only. It prohibited “any
government official or legislator from being ‘interested in any Contract made by such
Officer or Legislature of which he is a member . . . in the discharge of his official duties.’
[Citations.]” (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1072, fn. 10, quoting
Stats. 1851, ch. 136, § 2, p. 522.) That prohibition was later codified in former section
920 of the Political Code and, in 1943, moved with only minor changes to the
Government Code. (Lexin, at p. 1072.) When the Legislature added the term
“employee” to section 1090 in 1963 (Stats. 1963, ch. 2172, p. 4559), the Legislative
Council’s Digest described the statute as a proscription on governmental actors only:
“Provides that employees, as well as officers of various governmental, judicial and
legislative bodies, shall not be interested in any contract executed by them in official
capacity.” (Legis. Counsel’s Dig., Assem. Bill No. 402 (1963 Reg. Sess.) 2 Stats. 1963,
Summary Dig., p. 151.) Nothing in the history of section 1090 refers to the University of
California or its employees.
The People argue that the language of section 1090 has been interpreted broadly in
order to uphold the strong public policy against public officials having a personal
financial interest in contracts they form in their official capacities, and that the terms
“state” and “state employee” should therefore be broadly construed to include the
University and its employees. It is true that section 1090 has been construed broadly with
respect to the scope of contractual or financial interests it covers (see, e.g., Stigall v. Taft
(1962) 58 Cal.2d 565, 571 [prohibited interest can include not only execution of contract,
7
The University of California was established by the Organic Act of 1868. (Stats.
1867-1868, ch. 244, p. 248.)
10
but also planning and preliminary discussions]; People v. Honig (1996) 48 Cal.App.4th
289, 322-323 [prohibited financial interest can be direct or indirect]), but not with respect
to the scope of individuals covered. (See Klistoff v. Superior Court (2007) 157
Cal.App.4th 469, 480, fn. 2 [section 1090’s “application is expressly restricted to the
public officials enumerated in that statute”].)
In People v. Christiansen (2013) 216 Cal.App.4th 1181, Division One of this court
rejected an argument similar to the one advanced by the People in this case that the term
“employees” as used in section 1090 should be broadly construed to include independent
contractors. As support for its expansive interpretation of this statutory term, the
Attorney General in Christiansen cited cases in which civil liability had been imposed on
independent contractors under section 1090. (Id. at p. 1189.) The court in Christiansen
“express[ed] no opinion on the soundness of those opinions in the civil context,” but held
that “expansion of the statutory term ‘employees’ to apply to independent contractors
does not apply to criminal prosecutions for violation of section 1090” absent a clear and
unequivocal intent by the Legislature to do so. (Id. at pp. 1189, 1190.)
Given the absence of clear and unequivocal legislative intent to include the
University of California within the ambit of section 1090, we, like the court in
Christiansen, will not judicially expand the scope of the statute to include the University
and its employees.
As support for their argument that section 1090 applies to the University, the
People cite other statutory schemes, such as the Political Reform Act, section 11000, and
the California Environmental Quality Act, which apply to a “state agency” and which
have been applied to the University even though the University is not expressly included
in the statutory definitions for “state agency.” That other statutory schemes, with
different statutory definitions, have been applied to the University is not a valid basis for
concluding that section 1090 applies in the instant case.8
8
The definition of “state agency” as used in section 11000 is expressly limited to
title 2 of the Government Code. Section 1090 appears in title 1. (§ 11000, subd. (a).)
11
3. There is no case law applying section 1090 to the University
There is no case law applying section 1090 to the University of California or its
employees. The People cite People v. Darby (1952) 114 Cal.App.2d 412 (Darby) and
People v. Elliott (1953) 115 Cal.App.2d 410 (Elliott) as support for the argument that the
University is the “state” and Lofchie a “state employee” within the meaning of section
1090, but both of those cases are distinguishable.
Darby held that an elected member of the Los Angeles Board of Education was
both a “City officer” and a “state officer” under section 1090. The elected board member
was a “City officer” because the Los Angeles City Charter so provided. He was also a
“state officer” because the City of Los Angeles was empowered by the California
Constitution to determine the manner in which Board members were elected or
appointed, as well as the duration of their terms, qualifications, compensation, and
removal. The court in Darby reasoned: “An officer is a state officer if the tasks
performed by him are accomplished for and on behalf of the state notwithstanding the
fact that his duties were restricted to a particular geographical portion of the state.
[Citation.] The school district is a state agency and its board members are state officers.”
(Darby, supra, 114 Cal.App.2d at p. 423.)
The court in Elliott reached the same conclusion with regard to members of the
City of Los Angeles School Board, noting that “[t]he term ‘state officers’ is not limited to
officers whose jurisdiction is coextensive with the state but applies generally to persons
clothed with functions which affect the public and duties assigned to them by state laws.
. . . [¶] The matter of education is of statewide concern and is one of the responsibilities
of the state government.” (Elliott, supra, 115 Cal.App.2d at p. 415.)
Unlike the City of Los Angeles in Darby and Elliott, the University of California
is not a political subdivision of the state invested with a portion of the state’s
governmental power -- it is a public trust. (Cal. Const., art. IX, § 9.) The purpose of
designating the University as a public trust was to insulate it from state government,
ensuring that the University and its faculty would be “entirely independent of all political
or sectarian influence.” (Cal. Const., art. IX, § 9(f).) Our Supreme Court has recognized
12
the “unique constitutional status of the University of California” (Miklosy v. Regents of
University of California (2008) 44 Cal.4th 876, 889), distinguishing it from other state
agencies that are subject to the Legislature’s comprehensive power of regulation. Darby
and Eliott are thus distinguishable.
4. The Williamson rule does not apply
Lofchie argues that section 1090 must be construed with reference to Public
Contract Code section 10516, a statute he claims allows University professors to make
contracts in which they have a financial interest. Lofchie further argues that the more
specific provisions of Public Contract Code section 10516 supplant the general
provisions of Government Code section 1090 under a principle of statutory interpretation
known as the Williamson rule, based on the Supreme Court’s decision in In re
Williamson (1954) 43 Cal.2d 651.
“Under the Williamson rule, if a general statute includes the same conduct as a
special statute, the court infers that the Legislature intended that conduct to be prosecuted
exclusively under the special statute. In effect, the special statute is interpreted as
creating an exception to the general statute for conduct that otherwise could be
prosecuted under either statute. [Citation.] ‘The rule is not one of constitutional or
statutory mandate, but serves as an aid to judicial interpretation when two statutes
conflict.’ [Citation.]” (People v. Murphy (2011) 52 Cal.4th 81, 86.) As we discuss, the
Williamson rule does not apply because section 1090 and Public Contract Code section
10516 can be interpreted such that the two statutes do not conflict.
Public Contract Code section 10516 provides:
“No officer or employee of the University of California shall engage
in any employment, activity, or enterprise from which the officer or
employee receives compensation or in which the officer or employee has a
financial interest if that employment, activity, or enterprise is sponsored or
funded, or sponsored and funded, by any university department through or
by a university contract unless the employment, activity, or enterprise is
within the course and scope of the officer’s or employee’s regular
university employment. No officer or employee in the university shall
contract on his or her own individual behalf as an independent contractor
with any university department to provide services or goods. This section
13
shall not apply to officers or employees of the university with teaching or
research responsibilities, nor shall it apply to student employees for
payment for additional campus activities or engagements outside of the
scope of their primary university employment.”
An officer or employee of the University “who corruptly performs any official act” in
violation of Public Contract Code section 10516 is guilty of a felony. (Pub. Contract
Code, § 10522.)
Lofchie argues that the exemption accorded by Public Contract Code section
10516 to “officers or employees of the university with teaching or research
responsibilities” allows a University professor to participate in the making of a University
contract in which he has a financial interest. That exemption, Lofchie claims, conflicts
with section 1090, to the extent section 1090 applies to University employees.
Public Contract Code section 10516 does not proscribe the same conduct as that
prohibited by Government Code section 1090. Public Contract Code section 10516 does
not preclude an employee from making University contracts in which the employee is
financially interested. Rather, it prohibits “any employment, activity, or enterprise” in
which the employee has a financial interest “if that employment, activity, or enterprise is
sponsored or funded . . . by any university department through or by a university contract
. . . .” (Pub. Contract Code, § 10516, italics added.)
The prohibition on contracts imposed by Public Contract Code section 10516
precludes a University employee from contracting “on his or her own individual behalf
as an independent contractor with any university department to provide goods or
services.” (Pub. Contract Code, § 10516, italics added.) Government Code section 1090,
by contrast, applies only to contracts made by state employees “in their official capacity.”
The two statutes do not conflict because they govern different types of conduct.
Public Contract Code section 10516, moreover, must be construed “‘with
reference to the whole system of law of which it is a part.’” (Select Base, supra, 51
Cal.2d at p. 645.) The statute is not part of the Government Code, but rather, part of
chapter 2.1 of division 2 of the Public Contract Code, entitled “University of California
14
Competitive Bidding.” That chapter governs competitive bidding requirements in
University contracts for construction projects; contracts with private architects,
engineering, environmental, and construction management firms; contracts for the sale of
real property owned by the University; and contracts for the procurement of goods,
services, and materials involving an expenditure of more than $50,000. (See Pub.
Contract Code, §§ 10500-10506; 10509; 10510.4-10510.9; 10511-10513.) The $3,100
employment contract at issue here does not come within any of the foregoing categories.
Because Public Contract Code section 10516 and Government Code section 1090
govern different types of conduct, and the two statutes can be construed so that they do
not conflict, the Williamson rule does not apply.
B. Constitutional analysis
Given the University’s “unique constitutional status,” we must construe section
1090 with reference to article IX, section 9 in a manner that harmonizes the statute with
that constitutional mandate. (Select Base, supra, 51 Cal.2d at p. 645.) As discussed,
article IX, section 9 limits the power of the Legislature to intrude upon the administration
of the University of California to three specified areas. It subjects the University to
legislative control only as necessary to ensure the security of its funds, compliance with
the terms of its endowments, and competitive bidding procedures made applicable to the
University by statute for construction contracts, real property sales, and purchases of
materials, goods, and services.
Section 1090 does not regulate the University’s fund security, endowment terms,
or bidding procedures. Of the additional categories of permissible legislative regulation
identified by the Supreme Court in Labor Council, the People concede that section 1090
potentially comes within only one -- legislation regulating public agency activity not
generally applicable to the public. Such legislation may be made applicable to the
University only when it “regulates matters of statewide concern not involving internal
university affairs.” (Labor Council, supra, 26 Cal.3d at p. 789.)
15
1. Case law regarding “matters of statewide concern” versus “internal
university affairs”
The distinction between “matters of statewide concern” subject to legislative
regulation and “university affairs” within the exclusive control of the Regents was first
made by the California Supreme Court in Tolman v. Underhill (1952) 39 Cal.2d 708
(Tolman).) At issue in Tolman was an oath to uphold the state and federal constitutions
required by article XX, section 3 of the California Constitution and implemented by the
Legislature in Government Code section 18150. (Tolman, at p. 710.) In addition to the
statutory oath, the Regents sought to require University faculty members to execute a
separate oath disclaiming membership in the communist party or in any other
organization advocating overthrow of the government by force or violence. Tolman and
other faculty members were unwilling to sign the University’s additional oath. (Ibid.)
The California Supreme Court invalidated the University’s oath, concluding that
“state legislation has fully occupied the field and that university personnel cannot
properly be required to execute any other oath or declaration relating to loyalty than that
prescribed for all state employees.” (Tolman, supra, 39 Cal.2d at p. 710.) In response to
the Regents’ argument that the state legislation was inapplicable because of the autonomy
conferred on the University under article IX, section 9, the Supreme Court stated: “It is
well settled . . . that laws passed by the Legislature under its general police power will
prevail over regulations made by the regents with regard to matters which are not
exclusively university affairs. [Citations.] There can be no question that the loyalty of
teachers at the university is not merely a matter involving the internal affairs of that
institution but is a subject of general statewide concern.” (Tolman, supra, 39 Cal.2d at p.
712, italics added.) Although the court in Tolman did not specify what matters are
“exclusively university affairs” and subject to the University’s constitutional autonomy,
its holding presumes that such matters exist.
The Supreme Court again addressed the issue of legislative control over the
University of California in Regents of University of Cal. v. Superior Court of Alameda
County (1976) 17 Cal.3d 533 (Alameda). In that case, the court held the University to be
16
subject to state usury laws when using its endowment funds to make secured loans to
individuals. (Id. at p. 537.) The high court reasoned that by lending money in the
commercial market, the University was “acting in a capacity no different” than a private
individual or corporation and was therefore subject to usury laws applicable to “any
person company or corporation.” (Id. at pp. 536, 537.) Although the court did not
discuss the distinction it had made in Tolman between matters of “statewide concern” and
“university affairs,” nor did it expressly mention article IX, section 9, it did address “the
question whether application of the usury laws to the University would infringe upon
sovereign governmental powers.” (Alameda, supra, at p. 536.) The court concluded
there was no such infringement, but found it unnecessary to “define precisely the extent
of immunity, if any, which the University enjoys.” (Ibid.)
More than 20 years after Tolman, the California Supreme Court revisited the
distinction it had made between matters of “statewide concern” and “university affairs”
by identifying one area of permissible legislative control over the University as follows:
“[L]egislation regulating public agency activity not generally applicable to the public
may be made applicable to the university when the legislation regulates matters of
statewide concern not involving internal university affairs. [Citation.]” (Labor Council,
supra, 26 Cal.3d at p. 789.) The court went on to conclude that a prevailing wage
requirement was a matter of local, rather than statewide concern, under case law
reserving to charter cities and counties the power to determine wages paid to their
employees. (Id. at p. 790.) Applying this principle to the University, the court
determined that “[s]alary determination is as important to the autonomy of the university
as it is to the independence of chartered cities and counties.” (Id. at p. 791.)
After Labor Council, courts of appeal have sought to define the boundaries of
legislative control over the University by identifying those matters that are “of statewide
concern” and those that involve “internal university affairs.” In Coutin v. Lucas (1990)
220 Cal.App.3d 1016 (Coutin), the court considered the validity of the Legislature’s
repeal of a statute designating the Chief Justice of California as president of the board of
directors of Hastings College of the Law. The appellant in Coutin claimed that the
17
legislative action violated article IX, section 9 because it interfered with the “internal
governance” of the university. (Coutin, at p. 1020.) The court in Coutin disagreed,
concluding that the legislative action involved a matter of statewide concern: “It seems
to us clear that the determination to eliminate the requirement that the Chief Justice of the
state serve as president of the board of trustees of Hastings addresses a matter of
statewide concern . . . . [U]nlike altering the size of the board or adding a student to the
board, a legislative determination that the Chief Justice of California should not be
involved with nonjudicial duties in a nonjudicial public entity, surely constitutes matters
of transcending statewide concern, and is patently not ‘“merely a matter involving the
internal affairs of [the university].”’” (Id. at p. 1026.)
The court in Coutin also sought to reconcile the differences in language used by
the Supreme Court in Tolman and in Labor Council to define the limits of legislative
control over the University: “The phrasing of the limitation in [Labor Council], as
matters of statewide concern ‘not involving internal university affairs’. . . does not mean
that the university or one of its colleges is immune from the effects of legislation of
paramount state concern merely because that legislation may in some fashion affect the
institution’s internal affairs. The Supreme Court in [Labor Council] relied upon
[Tolman] as authority for this formulation of an area of legitimate legislation regulation.
Tolman recognized the hegemony of the legislature in matters of statewide concern
‘which are not exclusively university affairs.’ [Citation.] Tolman nowhere indicates that
legislation on matters of manifest statewide concern will be inapplicable to the university
merely because it also relates to the internal affairs of the university. Indeed, the impact
of Tolman is that legislation on subjects of general statewide importance applies to the
university unless the matter is exclusively internal to the university. [Citations.]”
(Coutin, supra, 220 Cal.App.3d at p. 1026.)
The court in Coutin then applied one commentator’s suggested approach for
determining what matters constitute “exclusively University affairs” within the Regents’
exclusive governing powers, using the following three factors: “‘(1) the centrality of the
subject matter to the functioning of the University as a university; (2) the degree of
18
impairment of the Regents’ ‘full’ powers of governance; and (3) the interest advanced by
the legislative enactment.’ (Horowitz, supra, 25 UCLA L.Rev. at p. 36.)” (Coutin,
supra, 220 Cal.App.3d at p. 1027.) The court concluded: “Analyzing the matter in this
manner, we can readily observe that elimination of the designation of the Chief Justice to
serve ex officio as president of the board of Hastings is not exclusively an internal affair
of Hastings. Moreover, repeal of that legislation does not affect significantly, if at all, the
administration of Hastings or its academic activities. Nor, as far as we can see, does it
significantly affect internal governance of Hastings.” (Ibid.)
Other courts have sought to establish the boundaries of legislative regulation over
the University by identifying those matters that are exclusively university affairs. Courts
have recognized, for example, that “the evaluation of scholarship and the grant or denial
of tenure or promotion, unlike the ascertainment of loyalty, is a defining act of singular
importance to an academic institution,” precluding application of a statute that would
require the University to disclose documents generated during the faculty peer review
process. (Scharf v. Regents of University of California (1991) 234 Cal.App.3d 1393,
1405, fn. omitted.) Courts have refused to apply a statutory ban against the corporate
practice of medicine because doing so “would infringe upon the operation of [the
University’s] medical center as a teaching and research facility -- its core governmental
function, its raison d’etre. [Citations.]” (California Medical Assn. v. Regents of
University of California (2000) 79 Cal.App.4th 542, 548, fn. omitted.) Courts have also
concluded that a University construction project for student and staff housing was an
internal university affair not subject to state prevailing wage laws because “[e]nsuring
access to qualified students who otherwise could not attend, and securing the services of
outstanding faculty and staff who otherwise might decline to accept or continue
employment, is at the heart of UC’s educational function . . . .” (Regents of University of
California v. Aubry, supra, 42 Cal.App.4th at p. 590.)
19
2. This contract does not involve a matter of statewide concern and its
application impinges upon exclusively internal University affairs
Under the principles set forth above, we cannot conclude that section 1090 as
applied to the University in the circumstances presented here involves a matter of
statewide concern. Determining what policies and procedures should govern conflicts of
interest in the University’s decisions to hire program assistants for a four-week summer
study abroad course is not a matter of “transcending statewide concern.” (Coutin, supra,
220 Cal.App.3d at p. 1026.)
Application of section 1090 to criminally sanction Lofchie infringes upon the
Regents’ and the University’s exclusive powers of self-governance. In the exercise of its
“full powers of organization and government” (Cal. Const., art. IX, § 9), the University
has adopted detailed conflict of interest policies, including policies and procedures
governing the employment of relatives and near relatives of University employees.9
Among these policies is a general restriction on staff participation in employment
decisions involving a spouse or other near relative. The policy states: “A member of the
University staff shall not participate in the processes of review and decision-making on
any matter concerning appointment, promotion, salary, retention, or termination of a near
relative.” Violation of the University’s conflict of interest policy is also a violation of the
University’s faculty code of conduct and subjects the violator to potential discipline,
including written censure, suspension without pay, demotion, or dismissal. The
University’s policies accord its administration flexibility, however, in determining
whether a violation has occurred and in sanctioning any violation. Disputes over the
existence of a violation, or appropriate discipline, are “resolved on a case-by-case basis.”
The University concluded that Lofchie’s participation in the decision to hire
Comras as a summer study abroad program assistant did not constitute a violation
warranting discipline under its conflict of interest policy and its faculty code of conduct.
9
We granted the Regents’ request that we take judicial notice of the University’s
conflict of interest code, faculty code of conduct, code of ethics, and its policies,
guidelines, and personnel manuals implementing those codes.
20
Allowing the People to sanction Lofchie under section 1090 would infringe upon not
only the University’s conflict of interest policies, but its internal disciplinary policies as
well. These policies “enjoy a status equivalent to that of state statutes. [Citation.]”
(Regents of University of California v. City of Santa Monica, supra, 77 Cal.App.3d at p.
135.) Their impairment would substantially interfere with the Regents’ full powers of
governance over University affairs.
Moreover, it is far from clear whether applying section 1090 to the University in
the circumstances presented here would advance the legislative interests underlying the
statute. As discussed, neither the plain language of section 1090 nor its legislative history
contains an expression of intent to include the University of California within the ambit
of the statute.
3. Municipal home rule cases do not apply
The People concede that section 1090 “unquestionably intrudes somewhat into the
[University’s] affairs,” but argue that such intrusion does not preclude the statute’s
application. They claim the instant case is analogous to municipal “home rule” cases
determining when a state statute preempts an ordinance adopted by a charter city or
county and urge us to adopt the analysis courts have applied in such cases to distinguish
between “municipal affairs” and matters of “statewide concern.”
Charter cities have powers of self-governance similar to those held by the
University of California, in that they “are specifically authorized by our state Constitution
to govern themselves, free of state legislative intrusion, as to those matters deemed
municipal affairs.” (State Building & Construction Trades Council of California v. City
of Vista (2012) 54 Cal.4th 547, 555 (State Building).) Article XI, section 5, subdivision
(a) of the California Constitution provides: “It shall be competent in any city charter to
provide that the city governed thereunder may make and enforce all ordinances and
regulations in respect to municipal affairs, subject only to restrictions and limitations
provided in their several charters and in respect to other matters they shall be subject to
general laws. City charters adopted pursuant to this Constitution shall supersede any
21
existing charter, and with respect to municipal affairs shall supersede all laws
inconsistent therewith.”
The California Supreme Court has set forth the following four-part analysis for
determining whether or not a matter falls within a charter city’s constitutional home rule
authority: “First, a court must determine whether the city ordinance at issue regulates an
activity that can be characterized as a ‘municipal affair.’ [Citation.] Second, the court
‘must satisfy itself that the case presents an actual conflict between [local and state law].’
[Citation.] Third, the court must decide whether the state law addresses a matter of
‘statewide concern.’ [Citation.] Finally, the court must determine whether the law is
‘reasonably related to . . . resolution’ of that concern [citation] and ‘narrowly tailored’ to
avoid unnecessary interference in local governance [citation]. ‘If . . . the court is
persuaded that the subject of the state statute is one of statewide concern and that the
statute is reasonably related to its resolution [and not unduly broad in its sweep], then the
conflicting charter city measure ceases to be a “municipal affair” pro tanto and the
Legislature is not prohibited by article XI, section 5(a), from addressing the statewide
dimension by its own tailored enactments.’ [Citation.]” (State Building, supra, 54
Cal.4th at p. 556, quoting California Federal Savings & Loan Assn. v. City of Los
Angeles (1991) 54 Cal.3d 1, 16, 17, 24 (California Federal).)
The People urge us to apply the municipal home rule analysis to this case to
determine whether section 1090 addresses a matter of “statewide concern” and therefore
supplants the University’s powers of self-governance over “internal university affairs.”
Because the constitutional autonomy granted to the University under article IX, section 9
is substantially greater than that accorded to charter cities under article XI, section 5, we
decline to do so.
Article XI, section 5 of the California Constitution grants charter cities sovereignty
over matters deemed to be “municipal affairs,” but recognizes state legislative
supremacy over matters not within the ambit of that phrase. (California Federal, supra,
54 Cal.3d at p. 13.) It expressly states that “in respect to other matters,” charter cities
“shall be subject to general laws.” (Cal. Const., art. XI, § 5(a).) Even as to matters
22
involving “municipal affairs,” a charter city’s enactments supersede only those state
laws that are “inconsistent therewith.” (Ibid.) In contrast, article IX, section 9 limits
legislative control over the University to three areas -- fund security, endowment terms,
and competitive bidding -- and grants the University “full powers” of governance in all
other areas. (Cal. Const., art. IX, § 9.) The University’s policies concerning matters of
internal regulation “enjoy a status equivalent to that of state statutes” (Regents of
University of California v. City of Santa Monica, supra, 77 Cal.App.3d at p. 135), and
unlike charter city enactments, need not be “inconsistent” with a state law in order to
supplant that law. As one commentator has observed, “although the general approach in
some of the municipal affairs cases suggests elements of an approach to interpretation of
article IX, section 9, the conclusion does not follow that decisions about the scope of
‘municipal affairs’ would necessarily define the scope of ‘University affairs.’”
(Horowitz, supra, 25 UCLA L.Rev. at p. 36.) This is because “a decision that a matter is
not a municipal affair because of the need for uniformity in regulation of the matter
throughout the state” has little potential relevance to article IX, section 9, which “by
definition contemplates that regulation of an exclusively University affair by the Regents
may differ from regulation by the Legislature of that matter as applied other than to the
University.” (Horowitz, at p. 36.) The municipal home rule analysis is therefore
inapplicable to the University of California.
CONCLUSION
The matter presented here is not one of statewide concern. Allowing the People to
prosecute Lofchie under section 1090 would impair the Regents’ ability to govern and
would contravene article IX section 9 of the California Constitution.10
10
In view of our holding, we need not address Lofchie’s arguments that the
information is barred because section 1090 is unconstitutionally vague as applied to him
or that we should apply the rule of lenity to preclude criminal prosecution in this case.
(See Dunn v. United States (1979) 442 U.S. 100, 112 [“to ensure that a legislature speaks
with special clarity when marking the boundaries of criminal conduct, courts must
decline to impose punishment for actions that are not ‘plainly and unmistakably’
proscribed”].)
23
DISPOSITION
The order dismissing the information is affirmed.
CERTIFIED FOR PUBLICATION
____________________________, J.
CHAVEZ
We concur:
__________________________, P. J.
BOREN
__________________________, J.*
FERNS
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
24
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FILED
NOT FOR PUBLICATION DEC 13 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
NATHANIEL BANKS, Jr., No. 10-15970
Plaintiff - Appellant, D.C. No. 2:09-cv-02424-RCJ-LRL
v.
MEMORANDUM *
CLARK COUNTY NEVADA, a
governmental body or entity, PHILIP J.
KOHN, individually and also the agency
or office itself of CLARK COUNTY
PUBLIC DEFENDER; TIERRA D.
JONES, individually and as a Deputy
Clark County Public Defender; LAS
VEGAS JUSTICE COURT; and Doe
Individuals or Administrators 1-10, Roe
Entities 1-10, and Roe Institutions and
Agencies 11-20,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Nevada
Robert Clive Jones, Chief District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Submitted December 9, 2011 **
San Francisco, California
Before: TROTT and BEA, Circuit Judges, and STAFFORD, Senior District
Judge.***
Nathaniel Banks appeals the district court’s dismissal of his amended
complaint, pursuant to Fed. R. Civ. P. 12(b)(6). The complaint alleged 42 U.S.C. §
1983 and state law claims against various Nevada government defendants. We
have jurisdiction under 28 U.S.C. § 1291, and we affirm.
To recover for an allegedly unconstitutional conviction, “a § 1983 plaintiff
must prove that the conviction or sentence has been reversed on direct appeal,
expunged by executive order, declared invalid by a state tribunal authorized to
make such determination, or called into question by a federal court’s issuance of a
writ of habeas corpus.” Heck v. Humphrey, 512 U.S. 477, 486–87 (1994). Banks’
§ 1983 claims allege actions that, if true, would necessarily invalidate his
conviction. But his conviction has not been overturned, expunged, or declared
invalid. For this reason, Banks’s § 1983 claims must be dismissed under Heck.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable William H. Stafford, Jr., Senior District Judge for the
U.S. District Court for Northern Florida, sitting by designation.
2
Banks cites several cases as exceptions to Heck’s favorable termination
requirement, but his arguments are unconvincing. This case is closely analogous to
our decision in Guerrero v. Gates, where we stated that the § 1983 plaintiff
“cannot now use his failure timely to pursue habeas remedies as a shield against
the implications of Heck.” 442 F.3d 697, 705 (9th Cir. 2006) (internal quotation
marks omitted). Banks similarly cannot use his failure to timely appeal his
conviction as a shield against Heck. Banks’ state law claims were also properly
dismissed because they implied the invalidity of his conviction.1
Banks also appeals the denial of a motion for judicial notice of an
administrative order. The order proffers irrelevant factual evidence on a motion
which tests only the sufficiency of the allegations of the amended complaint. The
district court’s denial of the motion for judicial notice is affirmed.
AFFIRMED.
1
Dismissals pursuant to Heck must be without prejudice to give the
plaintiff the opportunity to re-file should he succeed in invalidating his conviction
or sentence. Trimble v. City of Santa Rosa, 49 F.3d 583, 585 (9th Cir. 1995).
3
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784 N.W.2d 182 (2010)
2010 WI App 46
STATE
v.
TOTZKE[1].
No. 2008AP2278-CR.
Court of Appeals of Wisconsin.
February 3, 2010.
Unpublished Opinion Affirmed.
NOTES
[1] Petition for Review Filed.
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JANUARY 31, 2008
THOMAS K. KAHN
No. 07-11250
CLERK
Non-Argument Calendar
________________________
D. C. Docket No. 03-00489-CR-T-17-MSS
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ALBERT BAKIAJ,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(January 31, 2008)
Before MARCUS, WILSON and HILL, Circuit Judges.
PER CURIAM:
Ryan Truskoski, appointed counsel for Albert Bakiaj in this appeal of
Bakiaj’s sentencing resulting from a resentencing hearing we ordered in Bakiaj’s
first appeal, has moved to withdraw from further representation of the appellant
and filed a brief pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18
L.Ed.2d 493 (1967). Our independent review of the entire record reveals that
counsel’s assessment of the relative merit of the appeal is correct. Because
independent examination of the entire record reveals no arguable issues of merit,
counsel’s motion to withdraw is GRANTED, and Bakiaj’s sentences are
AFFIRMED.
2
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United States Court of Appeals
For the First Circuit
No. 18-1465
UNITED STATES OF AMERICA,
Appellee,
v.
ERICK LEVAR ADAMS,
a/k/a X, a/k/a DEUCE,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. George Z. Singal, U.S. District Judge]
Before
Thompson, Selya, and Barron,
Circuit Judges.
Mary June Ciresi for appellant.
Benjamin M. Block, Assistant United States Attorney, with
whom Halsey B. Frank, United States Attorney, was on brief, for
appellee.
August 18, 2020
SELYA, Circuit Judge. Under the Constitution, a warrant
authorizing the search of property cannot issue except upon a
showing of probable cause. See U.S. Const. amend. IV. Under this
standard, such a warrant may issue only upon a showing that a crime
has been committed and that evidence of that crime is likely to be
found by a search of the designated property. See United States
v. Clark, 685 F.3d 72, 78 (1st Cir. 2012). In the case at hand,
defendant-appellant Erick Levar Adams, convicted of drug-
trafficking and firearms offenses, challenges the district court's
refusal to suppress the avails of a number of warrant-backed
searches. Concluding, as we do, that each of the challenged
warrants issued upon a sufficient showing of probable cause and
that the defendant's other claims of error lack bite, we affirm
his conviction and sentence.
I. BACKGROUND
We rehearse the facts as supportably found by the
district court following an omnibus hearing on several of the
defendant's motions to suppress. When appropriate, we supplement
these findings with uncontested facts drawn from the broader
record. See United States v. Dancy, 640 F.3d 455, 458 (1st Cir.
2011).
In December of 2014, two state police troopers stopped
a rental car being driven by the defendant near Sanford, Maine.
After learning that the defendant was driving without a valid
- 2 -
license, the troopers arrested him. A post-arrest search of the
defendant's person revealed that he was carrying approximately
$500 in cash.
During the course of the stop, Special Agent Randall
Medeiros of the Maine Drug Enforcement Agency (MDEA) was summoned
to the scene. The officers then conducted two separate canine
sniffs directed at the car. Both dogs alerted to the presence of
drugs in the passenger compartment. An ensuing search of the
passenger compartment and a backpack found in the backseat of the
car disclosed three cellphones, the cut corner of a plastic bag
(resembling a "Dominican tie" commonly used to package drugs), and
two loose screws (suggesting that parts of the rental car had been
disassembled, perhaps to hide drugs).
The car was towed to a police barracks, and a search
warrant was procured. The search revealed two additional
cellphones but no contraband. The defendant was allowed to leave
but — approximately one month later — Medeiros obtained search
warrants for the contents of the five cellphones.
The MDEA was not the only law enforcement agency
interested in the defendant. Roughly two months after the 2014
traffic stop, police officers in Connecticut obtained a search
warrant for an apartment rented by the defendant. During the
ensuing search, officers found (among other things) large
- 3 -
quantities of cocaine and heroin, along with drug-packaging
accoutrements.
Meanwhile, the MDEA continued its investigation of the
defendant's activities. Several confidential informants told the
authorities that the defendant and his associates were dealing
drugs in and around Biddeford, Maine. Agents proceeded to arrange
a number of controlled drug buys from the defendant's associates
and coordinated one buy from the defendant himself. The Maine
probe reached a climax in January of 2016 when agents secured
arrest warrants for the defendant and one of his associates,
pinpointed their location at a hotel in Saco, and secured a no-
knock search warrant for the particular hotel room in which the
two men were staying. Prior to executing the arrest warrant,
agents observed the defendant leave the hotel and retrieve a black
bag from a parked blue Volkswagen. Later — when executing the
arrest warrants — the officers observed drugs and drug
paraphernalia scattered in plain view throughout the hotel room.
They also saw drugs in the bag the defendant had retrieved from
the blue Volkswagen.
Based on these observations, the officers obtained an
additional warrant authorizing searches of both the hotel room and
the Volkswagen. A thorough search of the hotel room unearthed
substantial quantities of heroin, cocaine, and cocaine base (crack
cocaine), together with approximately $27,000 in cash.
- 4 -
One thing sometimes leads to another, and the Volkswagen
search turned up paperwork for a storage locker in the name of the
girlfriend of one of the defendant's associates. The agents
visited the storage facility and viewed video footage depicting
the man who had been sharing the hotel room with the defendant
driving the Volkswagen and entering the storage unit about twenty-
four hours earlier. Once a canine sniff produced a positive alert
for the presence of narcotics inside the storage locker, another
search warrant was obtained. This search yielded firearms and
additional drugs.
In due season, a federal grand jury sitting in the
District of Maine charged the defendant (in a superseding
indictment) in five counts. Only two counts are relevant for
present purposes: count 1 charged the defendant with conspiracy
to possess with intent to distribute and to distribute at least
280 grams of cocaine base and unspecified quantities of other
drugs, see 21 U.S.C. §§ 841(a)(1), 846, and count 4 charged him
with possession of a firearm by a felon, see 18 U.S.C.
§§ 922(g)(1), 924(e). The defendant initially maintained his
innocence and filed a flurry of motions to suppress evidence
stemming from the seizures and searches of the cellphones, the
hotel room, and the storage locker. After an omnibus evidentiary
hearing, the district court denied all of the motions. The
defendant subsequently moved to suppress evidence gleaned from the
- 5 -
search of the Connecticut apartment, and the court denied this
motion on the papers.
Jury selection was set to begin on June 5, 2017. A few
days before, the defendant entered a conditional guilty plea to
counts 1 and 4, see Fed. R. Crim. P. 11(a)(2), reserving the right
to appeal the district court's denials of his suppression motions.
Specifically, his conditional plea allowed him only "to have an
appellate court review" the district "court's decisions dated
November 29, 2016 and May 12, 2017 on [his] Motions to Suppress."
In exchange, the government agreed to dismiss the remaining charges
and to recommend a sentence of between 180 and 300 months. The
district court accepted this binding plea agreement.
A little under one month after the change-of-plea
hearing, the defendant moved to retract his guilty plea. Following
a further hearing, the district court denied the motion. Some
months later, the defendant moved unsuccessfully for
reconsideration of the earlier denials of the plethora of
suppression motions. At the disposition hearing, the court
sentenced the defendant to a 300-month term of immurement. This
timely appeal followed.
- 6 -
II. ANALYSIS
We subdivide our discussion of the defendant's
asseverational array into four segments.1 First, we treat with
the 2014 traffic stop. Second, we deal sequentially with the
defendant's attacks on the cellphone warrants, the warrant
authorizing the search of the Connecticut apartment, the no-knock
warrant, and the storage locker warrant.2 Third, we summarily
dispose of the defendant's vain attempt to secure review of the
district court's denial of his motion to reconsider its earlier
suppression rulings. Fourth, we train the lens of our inquiry on
the district court's denial of the defendant's motion to withdraw
his guilty plea.
A. The Traffic Stop.
We start with the defendant's remonstrances about the
2014 traffic stop that led to the seizure of the five cellphones.
Although we start there, these remonstrances soon encounter
1 We note that the defendant has augmented his counsel's
briefing with pro se briefing. For simplicity's sake, we address
the preserved and properly developed arguments contained in these
various briefs without attributing particular arguments to
particular briefs. Any claims of error not addressed in this
opinion are either insufficiently developed, patently meritless,
or both, and all such claims are rejected without further
elaboration.
2 Each of the challenged warrants was issued following the
submission of a warrant application. In turn, each application
incorporated a supporting affidavit or affidavits executed by one
or more law enforcement officers. We refer throughout to these
affidavits without pausing to identify the particular affiant(s).
- 7 -
insurmountable obstacles. The defendant never raised any of them
in his myriad motions to suppress and, in all events, they are
foreclosed by the terms of his conditional plea.
Federal Rule of Criminal Procedure 11(a)(2) allows a
defendant, "[w]ith the consent of the court and the government,"
to enter a conditional guilty plea "reserving in writing the
right to have an appellate court review an adverse determination
of a specified pretrial motion." A primary purpose of this rule
is to "'identify precisely what pretrial issues have been
preserved for appellate review,' and to husband scarce judicial
resources by permitting a defendant fully to litigate hoarded
issues while at the same time lessening the burden on busy
district courts and sparing the sovereign the expense of trial."
United States v. Caraballo-Cruz, 52 F.3d 390, 392 (1st Cir.
1995) (quoting Fed. R. Crim. P. 11 advisory committee's note to
1983 amendment). Virtually any and all nonjurisdictional issues
not explicitly preserved for appeal in the conditional plea
agreement — and certainly all Fourth Amendment suppression
issues — are deemed waived.3 See United States v. Anderson, 374
F.3d 955, 958 (10th Cir. 2004); United States v. Ramos, 961 F.2d
3We say "[v]irtually" because the Supreme Court has made
clear that a guilty plea does not waive a subsequent challenge to
"the Government's power to 'constitutionally prosecute'" the
defendant. Class v. United States, 138 S. Ct. 798, 805 (2018)
(quoting United States v. Broce, 488 U.S. 563, 575 (1989)).
- 8 -
1003, 1005-06 (1st Cir. 1992), overruled on other grounds by
United States v. Caron, 77 F.3d 1 (1st Cir. 1996) (en banc);
United States v. Simmons, 763 F.2d 529, 533 (2d Cir. 1985).
Under the terms of his conditional plea, the defendant
reserved the right to appeal only the district court's two
suppression rulings, namely, the omnibus order entered on
November 29, 2016, and the order entered on May 12, 2017 (which
denied the motion to suppress the fruits of the Connecticut
apartment search). Neither of those rulings was directed to the
validity of the traffic stop or the actions that followed at the
site of the stop. On its face, then, the conditional plea did
not reserve any right to challenge the traffic stop on appeal.
To be sure, the district court's first suppression
ruling (November 29, 2016) touched on the traffic stop. But
this was purely by way of background. For instance, the court
memorialized that "there [was] no issue concerning whether the
officers unreasonably prolonged the stop to effectuate the dog
sniffs" since the defendant had already been arrested at the
time of the sniffs. So, too, the court wrote that the roadside
search of the defendant's vehicle and backpack were justified
by the dogs' positive alerts for the presence of contraband and
by the automobile exception to the warrant requirement. See,
e.g., Carroll v. United States, 267 U.S. 132, 153-56 (1925);
United States v. Maldonado, 356 F.3d 130, 137 (1st Cir. 2004).
- 9 -
We conclude that the court's references to these
matters are plainly insufficient to reserve the traffic stop for
appeal when the motions to suppress never challenged that stop
and the defendant himself never raised any such challenge during
the suppression hearing. This conclusion is strengthened by the
fact that the defendant, during the lead-up to the omnibus
suppression hearing, never argued that the traffic stop was
unsupported by reasonable suspicion or probable cause; that the
stop was unlawfully prolonged; or that the canine sniffs and
subsequent search of the car were unlawful. And to remove all
doubt, the district court stated unequivocally in its omnibus
suppression ruling that the defendant did "not appear to challenge
the basis for the initial stop of the vehicle," and the defendant's
subsequent filings did not contradict this statement.
It is a commonsense proposition that defendants who
choose to enter conditional guilty pleas must "use care and
precision in framing the issues to be preserved for appeal."
Simmons, 763 F.2d at 533 (quoting United States v. Pinto-Mejia,
720 F.2d 248, 256 (2d Cir. 1983)). The natural corollary of
this proposition is that conditional plea agreements are to be
construed according to their tenor. See Ramos, 961 F.2d at
1005-06; Simmons, 763 F.2d at 533. Here, the conditional plea
agreement, fairly read, does not encompass the traffic-stop
claims that the defendant now seeks to pursue. Consequently,
- 10 -
those claims have been waived, and the defendant is foreclosed
from raising them in this appeal. See Anderson, 374 F.3d at 958
(explaining that entry of conditional plea waives all
suppression arguments not specifically preserved for appeal);
cf. United States v. Dietz, 950 F.2d 50, 55 (1st Cir. 1991)
("[A]rguments not seasonably addressed to the trial court may
not be raised for the first time in an appellate venue.").
B. The Warrants.
The defendant contends that a constellation of search
warrants used to gather evidence against him were unsupported by
probable cause or were otherwise infirm. The contested warrants
authorized, respectively, searches of the five seized cellphones,
a search of the defendant's Connecticut apartment, an entry into
the defendant's hotel room, and a search of the storage locker.
Before turning to the warrants, we offer a handy primer
on some matters of general application. When reviewing a district
court's disposition of a motion to suppress, we screen the court's
factual findings for clear error and assay its ultimate conclusions
about the existence of probable cause de novo. See United States
v. Almonte-Báez, 857 F.3d 27, 31 (1st Cir. 2017). In conducting
this tamisage, we construe the record in the light most congenial
to the district court's ruling and will affirm the court's denial
of a suppression motion "as long as that denial is supported by
any particularized and objectively reasonable view of the
- 11 -
evidence." United States v. Tanguay, 811 F.3d 78, 81 (1st Cir.
2016).
As relevant here, a finding of probable cause is
righteous "when the totality of the circumstances create 'a fair
probability that contraband or evidence of a crime will be found
in a particular place.'" Almonte-Báez, 857 F.3d at 31 (quoting
United States v. Tanguay, 787 F.3d 44, 50 (1st Cir. 2015)); see
United States v. Coombs, 857 F.3d 439, 446 (1st Cir. 2017). The
probable cause standard "is not a high bar." Kaley v. United
States, 571 U.S. 320, 338 (2014). It demands only "the kind of
'fair probability' on which 'reasonable and prudent [people,] not
legal technicians, act.'" Florida v. Harris, 568 U.S. 237, 244
(2013) (alteration in original) (quoting Illinois v. Gates, 462
U.S. 213, 231, 238 (1983)).
A showing of probable cause may be premised on either
direct or circumstantial evidence or some combination of the two.
See Gates, 462 U.S. at 238; Clark, 685 F.3d at 78. Such a showing
leaves ample room for reasonable inferences based on common
experience: an affidavit submitted to show probable cause need
not point to some straight-line connection but, rather, may rely
on the affiant's connecting of a series of dots in a commonsense
way. See Harris, 568 U.S. at 244.
It is against this backdrop that we consider the
defendant's challenges to the sundry warrants.
- 12 -
1. The Cellphone Warrants. We start with the warrants
authorizing searches of the five cellphones recovered in the wake
of the traffic stop. As might be expected, the affidavits
underpinning the five cellphone warrants closely resemble one
another, and we discuss them in the aggregate. The defendant's
criticism of these warrants focuses on Medeiros's statement,
contained in the affidavits annexed to the warrant application,
that the defendant had "been observed at several known drug
locations in the Southern Maine area over the course of several
months." The defendant suggests that this statement lacked any
factual context or indicia of reliability. He adds that when this
"unsubstantiated assertion" is removed from the probable cause
equation, the remaining information is too meager to support a
finding of probable cause to believe that the phones were likely
to contain evidence of drug trafficking.
It is true, of course, that an affidavit submitted in
support of a warrant application must demonstrate probable cause
"in some trustworthy fashion." United States v. Nocella, 849 F.2d
33, 39 (1st Cir. 1988) (quoting United States v. Aguirre, 839 F.2d
854, 857 (1st Cir. 1988)). Similarly, if data points limned in an
affidavit derive from confidential informants, a reviewing court
must take into account "the veracity and reliability of [those]
informants, and the basis of their knowledge." Id. Here, however,
the disputed statement is not attributed to information gleaned
- 13 -
from an informant. And in our judgment, a neutral magistrate would
be fully justified in deeming the sworn statements of an
experienced MDEA agent, presumably based on his knowledge of the
ongoing investigation, as trustworthy. After all, "[w]e have,
with a regularity bordering on the echolalic, endorsed the concept
that a law enforcement officer's training and experience may yield
insights that support a probable cause determination." United
States v. Floyd, 740 F.3d 22, 35 (1st Cir. 2014).
In any event, we need not probe this point too deeply.
Even if we excise the disputed statement from the probable cause
calculus, the remaining content of each affidavit amply supported
a finding of probable cause. The affidavits rehearsed the details
of the traffic stop, including the $500 found on the defendant's
person in small-denomination bills; the two positive dog sniffs;
and the items found as a result of the traffic stop, including the
five cellphones, the distinctively tied plastic bag, and the loose
screws. In addition, the affidavits contained Medeiros's
averments that drug traffickers often use multiple cellphones to
arrange transactions, package drugs in plastic bags using the
"Dominican tie" technique, and stow drugs in a vehicle's "natural
voids" accessible only after the removal of plastic molding held
in place by "screws or clips."
Direct evidence is not necessary to ground a probable
cause determination where, as here, the import of circumstantial
- 14 -
evidence is obvious. See United States v. Gonzalez-Arias, 946
F.3d 17, 24 (1st Cir. 2019), cert. denied, __ S. Ct. __ (2020);
United States v. Edmiston, 46 F.3d 786, 789 (8th Cir. 1995).
Notwithstanding that the car itself was not found to contain a
detectable quantity of drugs, all of the enumerated facts strongly
suggested drug-trafficking activities. See, e.g., Harris, 568
U.S. at 245-46, 246 n.2 (noting that police dogs alert to odor,
but not necessarily presence, of drugs and that such alerts
establish probable cause "that either drugs or evidence of a drug
crime . . . will be found"). Taken in their totality, the inference
that they suggest is inescapable.
To cinch the matter, the affidavit also recounted that
the defendant had been arrested twice before, resulting in
narcotics charges. Both arrests occurred in Rhode Island in 2013,
and both involved facts strikingly similar to the 2014 traffic
stop in Maine. In each instance, the defendant was operating a
rental car, driving without a valid license, and found in
possession of multiple cellphones and significant amounts of cash.
These earlier arrests — in each of which several ounces of crack
cocaine was seized — combined with the evidence harvested from the
2014 traffic stop gave rise to probable cause to believe that the
defendant had been, and continued to be, involved in a drug-
trafficking enterprise.
- 15 -
The defendant has a fallback position. He argues that
the passage of approximately one month between the 2014 traffic
stop and the issuance of the search warrants for the five
cellphones undermined any finding of probable cause since "[n]o
additional information" suggestive of drug trafficking emerged in
the interim. This argument lacks force. We have "repeatedly
refused to assess an affidavit's staleness by counting the number
of days between the events described in the affidavit and a
warrant's issuance, as a merchant would beads on an abacus."
United States v. Tiem Trinh, 665 F.3d 1, 13 (1st Cir. 2011).
Instead, we examine a variety of factors bearing on staleness,
such as "the nature of the information [in the affidavit], the
nature and characteristics of the suspected criminal activity, and
the likely endurance of the information." Id. at 13-14 (quoting
United States v. Morales-Aldahondo, 524 F.3d 115, 119 (1st Cir.
2008)). As we already have explained, the evidence garnered from
the 2014 traffic stop, coupled with the known details of the
defendant's 2013 arrests, gave rise to probable cause to believe
that he had been engaged in a continuous course of drug-trafficking
and that the multiple cellphones recovered from the traffic stop
were tools of the trade and, thus, likely to contain evidence of
criminal activity. The passage of approximately one month between
the seizure of the phones and the issuance of the warrant in no
way diminished the likelihood that the phones would contain
- 16 -
incriminating evidence. Cf. United States v. Schaefer, 87 F.3d
562, 568 (1st Cir. 1996) (explaining that "drug conspiracies tend
to be ongoing operations, rendering timely information that might,
in other contexts, be regarded as stale").
That is game, set, and match. The affidavits submitted
in connection with the applications for the five cellphone warrants
contained more than enough information to justify a finding of
probable cause to believe that the defendant was engaged in drug
trafficking and that the cellphones were likely to contain evidence
of that activity. The motion to suppress the fruits of the
cellphone searches was, therefore, appropriately denied.
2. The Connecticut Apartment Warrant. We turn next to
the warrant authorizing a search of the apartment in Norwich,
Connecticut. The defendant contends that this warrant was not
supported by probable cause sufficient to show that the apartment
likely contained evidence of drug trafficking. The record, though,
tells a different tale. The affidavit annexed to the application
for the challenged warrant contains more than enough information
to underpin a finding of probable cause.
Collectively, the two affidavits that underpinned the
issuance of this warrant recount various encounters by police
officers with the Connecticut apartment. In December of 2014,
officers observed a suspect in an unrelated murder investigation
enter and leave an apartment (later identified as Apartment #3) on
- 17 -
the third floor of the apartment building. The following February,
officers learned that the murder suspect had visited "Apartment
#3" three months earlier to retrieve a handgun. Also in February,
officers encountered one Larry Miliner, an associate of the
suspect, outside the apartment building and in possession of
cocaine. Miliner said that, roughly an hour before the officers'
arrival, he had entered the same apartment that the murder suspect
previously had visited. The police identified this apartment as
Apartment #3. Upon further inquiry, Miliner stated that it was
rented by his cousin "Eric" and also stated that the apartment
housed both "an aggressive pitbull" and "several other dogs locked
within a bedroom." When pressed for further details about the
apartment, he "became uncooperative."
When queried, the property manager identified "Eric
Adams" as the tenant renting Apartment #3. He reported that Adams
had not been seen in the vicinity for over a month. The affiants
then noted — drawing on their collective experience — that drug
traffickers often maintain "stash houses" for the storage of drugs
and firearms and that these sites are "commonly protected by
canines" and frequented by dealers for only short periods of time.
Finally, the affiants observed that Adams was known to be a
"member[] of the Bloods street gang" and had "recently been
investigated for trafficking large amounts of cocaine" in Maine.
- 18 -
While these facts, if taken in isolation, may leave room
for innocent explanation, we conclude that, taken together, they
form an adequate basis for a finding of probable cause to believe
that Apartment #3 was being maintained as a stash house and would
likely contain evidence of drug trafficking. Cf. Bourjaily v.
United States, 483 U.S. 171, 180 (1987) ("The sum of an evidentiary
presentation may well be greater than its constituent parts.").
The defendant resists this conclusion. His argument, though, is
easily dispatched.
One pillar of the defendant's argument is that Miliner
never told the officers that the drugs found on his person came
from Apartment #3. This is true as far as it goes, but it does
not take the defendant very far. According to the affidavit,
Miliner was found with drugs on his person, and he stated that he
had been in an apartment that the officers identified as Apartment
#3 roughly an hour before the officers' arrival. This information
took on added importance when, after a search, Miliner's own
apartment was found to be free of drugs. One reasonable inference
that could be drawn is that the drugs recovered from Miliner's
person came from Apartment #3. See Tanguay, 811 F.3d at 81
(explaining that reviewing courts must affirm denials of
suppression motions that are "supported by any . . . objectively
reasonable view of the evidence").
- 19 -
Another pillar of the defendant's argument is his
assertion that the information concerning the murder suspect's
retrieval of a gun from Apartment #3 had grown stale by the time
the officers were told about this event three months later. We
think that the district court had room to find that this
information was not stale, see Tiem Trinh, 665 F.3d at 13-14; and
in any event, the officers' encounter with Miliner took place on
the very same day that the warrant authorizing a search of
Apartment #3 was issued. The information gleaned from that
encounter, when fused with the officers' knowledge of the
defendant's involvement in gang activities and drug trafficking,
was enough to support a finding of probable cause for the search.
See Almonte-Báez, 857 F.3d at 32.
That ends this aspect of the matter. The remainder of
the defendant's arguments either depend upon information that is
dehors the record or relate to matters that are only of marginal
relevance to the probable cause calculus. Reading the affidavits
in their entirety and drawing reasonable inferences to the district
court's behoof, we hold that the court did not clearly err in
denying the defendant's motion to suppress the fruits of the
Connecticut apartment search.
3. The No-Knock Warrant. The defendant next trains his
fire on the warrant authorizing a no-knock entry into his hotel
room for the purpose of executing previously issued arrest warrants
- 20 -
for the defendant and his confederate. Once again, he is shooting
blanks.
At the outset, the defendant suggests that the factual
allegations contained in the underlying affidavit were inadequate
to permit a finding of probable cause to search the hotel room.
This suggestion is hopeless. The affidavit remarked the existence
of an outstanding arrest warrant for the defendant and described
both cellphone location data and physical surveillance
establishing the defendant's presence at the hotel. No more was
exigible to make out a sufficient showing of probable cause.
There is also a second, independently sufficient, reason
why this challenge fails: the defendant attempts to raise it for
the first time on appeal. We have held, with unrivaled
consistency, that (subject to narrow exceptions, not relevant
here) legal theories cannot make their debut in the court of
appeals. See Teamsters Union, Loc. No. 59 v. Superline Transp.
Co., 953 F.2d 17, 21 (1st Cir. 1992) ("If any principle is settled
in this circuit, it is that, absent the most extraordinary
circumstances, legal theories not raised squarely in the lower
court cannot be broached for the first time on appeal.").
The defendant does have one preserved argument
implicating the hotel room warrant. In the court below, he argued
that the no-knock provision of the warrant was unsupported.
- 21 -
Although the defendant renews this argument on appeal, he gains no
traction from it.
Urging us to find an insufficient factual basis for the
no-knock provision, the defendant seizes upon the affiant's
statement that "drug traffickers often keep firearms with them to
protect their product." He insists that "boilerplate language" in
the affidavit was inadequate to support a no-knock entry in the
absence of some particularized basis for believing that the
defendant was armed. The defendant, however, leans too heavily on
a dysphemism that does not fit.
Although law enforcement officers executing a warrant
ordinarily must knock and announce their presence, a magistrate
may authorize a no-knock entry if the applicant offers reasonable
grounds to expect that the typical knock-and-announce procedure
"would be dangerous or futile, or . . . would inhibit the effective
investigation of the crime by, for example, allowing the
destruction of evidence." United States v. Banks, 540 U.S. 31, 36
(2003) (alteration in original) (quoting Richards v. Wisconsin,
520 U.S. 385, 394 (1997)); see United States v. Jones, 523 F.3d
31, 36 (1st Cir. 2008). In the case at hand, the affidavit
submitted with the no-knock warrant application established
reasonable grounds to think that the defendant and his confederate
might be armed. It described evidence gathered from confidential
informants indicating that the two men were engaged in drug
- 22 -
trafficking. This evidence included descriptions of controlled
buys and contained assurances from an informant that the defendant
"ke[pt] his shit" at the hotel. We have previously deemed it "a
commonsense inference" that drug traffickers often keep firearms
on hand to protect "drug cash and spoils from any would-be
robbers." United States v. Rivera, 825 F.3d 59, 65 (1st Cir. 2016)
(explaining that this inference derives "from the everyday
understanding of the drug trade's violent nature"). Drawing this
commonsense inference, we conclude that the facts delineated in
the affidavit justified the inclusion of a no-knock provision in
the warrant.
4. The Storage Locker Warrant. This brings us to the
warrant authorizing the search of the storage locker rented by the
girlfriend of one of the defendant's associates. The defendant
claims that this warrant was not supported by a showing of probable
cause to believe that the storage locker was likely to contain
contraband or other evidence of drug trafficking. Relatedly, he
claims that the authorities had no reason to connect anything in
the locker to him. These claims do not withstand scrutiny.
To begin, the affidavit underpinning the warrant
painstakingly recounted the events leading up to the defendant's
arrest, including the affiant's observations of the defendant
leaving the hotel and retrieving a bag from the blue Volkswagen.
This account went on to catalog the contraband seen inside the
- 23 -
hotel room and in the bag that the defendant had retrieved. Then,
it described the paperwork for the storage locker found in a
subsequent warrant-backed search of the blue Volkswagen and noted
the existence of video footage showing the defendant's associate
accessing the locker shortly before the defendant's arrest.
Finally, it revealed that a canine sniff performed immediately
outside the storage locker had yielded a positive alert. Taken in
the ensemble, the facts contained within the four corners of the
affidavit comprised a solid predicate for a finding of probable
cause to believe that the storage locker was likely to contain
proof of the defendant's suspected drug trafficking.
There is one loose end. The defendant asserts that the
affidavit underpinning the storage locker warrant included
"intentionally or recklessly false information" and that the
district court brushed off his request for a hearing about these
supposed infirmities. See Franks v. Delaware, 438 U.S. 154, 155-
56 (1978); see also United States v. Barbosa, 896 F.3d 60, 67-69
(1st Cir. 2018) (outlining requirements for Franks hearing
challenging veracity of warrant application). This assertion,
though, lacks a foothold in the record: the defendant never
requested a Franks hearing concerning this affidavit.4 Seen in
4
The record citation that he furnishes in support of this
claim of error relates to his request for a Franks hearing about
the affidavit connected with the no-knock warrant for his hotel
room. That Franks claim has not been pursued on appeal.
- 24 -
this light, the defendant's claim of error falls squarely within
the general rule that a party cannot ask the court of appeals for
relief that he did not seek in the district court. See United
States v. Tkhilaishvili, 926 F.3d 1, 18 (1st Cir.), cert. denied,
140 S. Ct. 412 (2019); Beaulieu v. IRS, 865 F.2d 1351, 1352 (1st
Cir. 1989).
C. The Motion to Reconsider.
We need not linger long over the defendant's challenge
to the district court's denial of his motion to reconsider various
suppression rulings. As we explain below, this challenge does not
make it out of the starting gate.
To begin, we note a temporal anomaly. As said, the plea
agreement makes pellucid that the defendant may appeal only the
district court's orders denying his motions to suppress, that is,
the orders entered on November 29, 2016, and May 12, 2017,
respectively. On its face, then, the order denying the motion to
reconsider appears to fall outside the boundaries of these reserved
appeal rights. Because the conditional plea in this case reserved
to the defendant only the right to appeal those suppression rulings
specified in the plea condition, it would seem likely that the
defendant has waived any right to appeal the denial of the motion
to reconsider.
The problem, though, is that the motion to reconsider
was not filed until December 1, 2017, months after the district
- 25 -
court's acceptance of the defendant's conditional guilty plea. We
have been unable to find any persuasive authority applying a
conditional plea agreement's preclusive effect to a pretrial
motion filed after the conditional plea was accepted. Here,
however, we need not venture onto terra incognita and try to
resolve this conundrum: there is another — and fully dispositive
— reason why this claim of error goes up in smoke.
This dispositive reason rests on a familiar principle.
That principle relates to the novelty of the contents of the
motion to reconsider. Although the motion purported to challenge
the denial of the defendant's earlier suppression motions, it
featured an array of entirely new arguments. "[I]t is settled
beyond hope of contradiction that, at least in the absence of
exceptional circumstances, a party may not advance new arguments
in a motion for reconsideration when such arguments could and
should have been advanced at an earlier stage of the litigation."
Carib. Mgmt. Grp. v. Erikon LLC, ___ F.3d ___, ___ (1st Cir. 2020)
[No. 19-1421, slip op. at 21]; accord Mancini v. City of Providence
ex rel. Lombardi, 909 F.3d 32, 48 (1st Cir. 2018); United States
v. Allen, 573 F.3d 42, 53 (1st Cir. 2009). Since the new arguments
advanced in the motion for reconsideration were available to the
defendant both at the times that he moved to suppress and when he
entered his plea and since the circumstances of this case are in
no way exceptional, he is foreclosed from raising those new
- 26 -
arguments for the first time on appeal. Consequently, his claim
of error dies aborning.
D. The Plea-Withdrawal Motion.
The defendant has one last shot in his sling. He assigns
error to the district court's denial of his motion to withdraw his
conditional guilty plea. Some stage-setting helps to lend
perspective.
A criminal defendant "has no absolute right to withdraw
a guilty plea." United States v. Caramadre, 807 F.3d 359, 366
(1st Cir. 2015). Where, as here, a defendant moves to withdraw a
guilty plea after the district court has accepted the plea but
before sentencing, he bears the burden of establishing "a fair and
just reason for requesting the withdrawal." Id. (quoting Fed. R.
Crim. P. 11(d)(2)(B)). The most important integer in the plea-
withdrawal calculus is whether the defendant's "original guilty
plea was knowing, intelligent, and voluntary." Id. Of course, an
inquiring court also should consider other factors, such as "the
plausibility and weight of the reason given for the withdrawal,
the timing of the request, whether the defendant is now colorably
asserting legal innocence, and whether the original plea was
pursuant to a plea agreement." Id. (quoting United States v. Aker,
181 F.3d 167, 170 (1st Cir. 1999)). If the totality of these
factors militates in favor of allowing the plea to be withdrawn,
- 27 -
the court should then consider whether, and to what extent,
withdrawal would prejudice the government. See id.
We review a district court's denial of a motion to
withdraw a guilty plea for abuse of discretion. See United States
v. Dávila-Ruiz, 790 F.3d 249, 251 (1st Cir. 2015). "An abuse of
discretion 'occurs when a material factor deserving significant
weight is ignored, when an improper factor is relied upon, or when
all proper and no improper factors are assessed, but the court
makes a serious mistake in weighing them.'" United States v.
Soto-Beníquez, 356 F.3d 1, 30 (1st Cir. 2003) (quoting Indep. Oil
& Chem. Workers, Inc. v. Procter & Gamble Mfg. Co., 864 F.2d 927,
929 (1st Cir. 1988)).
In this instance, the defendant submits that his guilty
plea was neither knowing nor voluntary when tendered because he
had insufficient time to digest late-breaking discovery and to
consider the government's final plea offer. In addition, the
defendant says that the looming prospect of a potential life
sentence and concerns about his family clouded his judgment and
rendered his guilty plea involuntary. Following a hearing at which
the defendant testified, the district court rejected these
importunings and found that the defendant's original plea was
knowing, intelligent, and voluntary. The court emphasized that
the defendant — who was no "neophyte in dealing with the [criminal
justice] system" — had engaged in "fairly extensive plea
- 28 -
negotiations" and had not made a "spur-of-the-moment" decision.
In the court's view, the defendant was simply having "second
thoughts" about his earlier capitulation.
We discern nothing resembling an abuse of discretion in
the district court's determination that the defendant failed to
establish a fair and just reason for withdrawing his guilty plea.
There is no indication that the court overlooked any material
factor, relied upon any improper factor, or made a serious mistake
in judgment when weighing the relevant considerations. We add
only a few brief comments.
To begin, the defendant's contention that he had
insufficient time to consider belated discovery is unconvincing.
The defendant's chief complaint in this respect relates to the
production, shortly before the planned commencement of jury
selection, of the full arrest record of one of the participants in
a controlled drug buy. This record included two arrests, at least
one of which was for drug possession. As the defendant tells it,
this arrest record "bolstered his defense."
But there is a rub. The defendant had long been aware
of the affidavit underpinning the no-knock search warrant, which
made clear that this particular confidential informant had been
arrested for drug possession after the controlled buy and
subsequently terminated as an informant. The upshot is that the
defendant — when filing his motions to suppress and thereafter —
- 29 -
had available enough information to argue that the confidential
informant's drug use and difficulties with the law rendered her
unreliable. And to seal the deal, the defendant and his counsel
received all the remaining information about the confidential
informant at least a few days before the defendant decided to enter
a conditional guilty plea.5 It follows that, before deciding to
plea, the defendant had adequate time to weigh whether the
confidential informant's full arrest history might strengthen his
defense.
The defendant's remaining arguments in favor of allowing
him to withdraw his plea are equally unavailing. Although we do
not doubt that the defendant may have felt "[p]ressured by the
prospect of a life sentence" and the potential hardship such a
sentence would inflict on "his ailing mother and his children,"
many criminal defendants labor under the strain of such
considerations. See United States v. Pellerito, 878 F.2d 1535,
1541 (1st Cir. 1989) (explaining that criminal prosecutions are
inherently "stressful experiences" and that "many defendants" are
5
The record is murky as to exactly when the defendant received
this information — but it is beyond dispute that he received it
before he entered his conditional plea. The government told the
district court that full arrest histories had been provided to the
defendant roughly three weeks before the defendant tendered his
plea. The defendant maintains, though, that he received the
information just days before he pleaded. Either way, it is
apparent that the defendant and his counsel had at least a few
days to review the confidential informant's full arrest record and
decide whether to proceed with plea negotiations.
- 30 -
"sensitive to external considerations" such as familial
pressures). A defendant seeking to unravel a guilty plea "must
show more than a mere 'sensitiv[ity] to external considerations.'"
Caramadre, 807 F.3d at 369 (alteration in original) (quoting
Pellerito, 878 F.2d at 1541). Instead, such a defendant must show
that he pleaded guilty "under so much duress that [his plea] could
no longer be considered a product of free will." Id. Evidence of
agitation arising out of familial circumstances does not, without
more, show duress or lack of voluntariness. See Pellerito, 878
F.2d at 1541. In this case, there is no "more."
Nor is the needle moved by the defendant's argument that
he "did not have sufficient time" to consider the government's
final plea offer. Although he says that he had only ninety minutes
to weigh the offer, there is nothing to suggest that this was a
hard deadline imposed by the government. At any rate, the record
makes manifest that plea negotiations were ongoing throughout the
week that jury selection was slated to begin and that the defendant
had several meetings with his attorney during the course of that
week with respect to the government's offers. A defendant's
participation in the plea negotiation process is a highly relevant
fact in considering whether his guilty plea was knowing and
voluntary. See Caramadre, 807 F.3d at 370. So, too, is the length
of the period during which plea negotiations persisted. See United
States v. Pagan-Ortega, 372 F.3d 22, 29 (1st Cir. 2004).
- 31 -
We add, moreover, that the defendant has proffered no
meaningful claim of actual innocence. Although he made a vague
assertion of innocence at the hearing on his plea-withdrawal
motion, the district court gave that assertion "no credibility
whatsoever." Credibility determinations are normally grist for
the factfinder's mill, see Caramadre, 807 F.3d at 372, and we see
no abuse of discretion in the district court's determination that
the defendant's stroke-of-midnight claim of innocence was not
credible. After all, a district court is not obliged "to give
weight to a self-serving, unsupported claim of innocence." United
States v. Ramos, 810 F.2d 308, 313 (1st Cir. 1987). This is
especially true when — as in this case — such a belated claim of
innocence "flies in the face of several admissions to the
contrary." United States v. Santiago Miranda, 654 F.3d 130, 139
(1st Cir. 2011) (quoting United States v. Isom, 580 F.3d 43, 53
(1st Cir. 2009)).
Refined to its essence, this case strikes a familiar
note. The defendant "affirmatively declared under oath at a
properly conducted Rule 11 hearing that he was guilty of the crimes
with which he was charged." United States v. Flete-Garcia, 925
F.3d 17, 25 (1st Cir.) (quoting United States v. Dunfee, 821 F.3d
120, 128 (1st Cir. 2016) (per curiam)), cert. denied, 140 S. Ct.
388 (2019). He has failed to offer any persuasive reason as to
why we should permit him to walk away from those solemn
- 32 -
declarations. Consequently, the district court was free to give
decisive weight to the statements made by the defendant at the
change-of-plea colloquy. See id.
To say more would be pointless. "This court has not
allowed defendants, absent coercion or mistake, to renege on plea
agreements on the basis that they have miscalculated their risks
and benefits or have belatedly discovered a new defense." United
States v. Muriel, 111 F.3d 975, 981 (1st Cir. 1997). Buyer's
remorse is not enough. Hewing to that line, we conclude that the
district court did not abuse its discretion in determining that
the defendant failed to establish a fair and just reason for
withdrawing his conditional guilty plea.
III. CONCLUSION
We need go no further. For the reasons elucidated above,
the judgment of the district court is
Affirmed.
- 33 -
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30 So.3d 690 (2010)
Linda HUDAK, Appellant,
v.
FLORIDA UNEMPLOYMENT APPEALS COMMISSION, Appellee.
No. 1D10-0262.
District Court of Appeal of Florida, First District.
March 25, 2010.
Linda Hudak, pro se, Appellant.
Geri Atkinson-Hazelton, General Counsel, Florida Unemployment Appeals Commission, Tallahassee, for Appellee.
PER CURIAM.
DISMISSED. See Raysor v. Raysor, 706 So.2d 400 (Fla. 1st DCA 1998) (stating that the notice of appeal must be filed in the appropriate court within the appropriate time period and that mailing the notice within the time period is not sufficient).
WOLF, WEBSTER, and THOMAS, JJ., concur.
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NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STATE OF ARIZONA, Respondent,
v.
JOSE GENARO SALAZAR, Petitioner.
No. 1 CA-CR 16-0508 PRPC
FILED 10-17-2017
Petition for Review from the Superior Court in Maricopa County
No. CR 2000-010424
The Honorable Teresa A. Sanders, Judge
REVIEW GRANTED; RELIEF DENIED
COUNSEL
Maricopa County Attorney’s Office, Phoenix
By Diane Meloche
Counsel for Respondent
Jose Genaro Salazar, Kingman
Petitioner
MEMORANDUM DECISION
Judge Jennifer B. Campbell delivered the decision of the Court, in which
Presiding Judge Diane M. Johnsen and Judge Michael J. Brown joined.
STATE v. SALAZAR
Decision of the Court
C A M P B E L L, Judge:
¶1 Jose Genaro Salazar petitions this court for review from the
dismissal of his petition for post-conviction relief, pursuant to Arizona Rule
of Criminal Procedure 32. We have considered the petition for review and
grant review but deny relief.
¶2 On July 7, 2000, Salazar was indicted on nine counts of sexual
misconduct involving three victims. Salazar agreed to plead guilty to three
counts. Each count in the plea related to a different child. Each child was
under the age of 15 at the time of the events. At the December 2000 plea
hearing Salazar pled guilty to: count 3, sexual conduct with a minor, a class
2 felony and dangerous crime against children; count 7, attempted
molestation of a child, a class 3 felony and dangerous crime against
children; and count 9, attempted molestation of a child, a class 3 felony and
dangerous crime against children, reduced per plea agreement.
¶3 The superior court informed Salazar that he would get
lifetime probation for count 9, but he could receive a term of imprisonment
or probation for count 7. In January 2001, Salazar was sentenced to: 20 years
on count 3, sexual conduct with a minor; the presumptive term of 10 years
on count 7, attempted molestation to run consecutive to count 3; and
lifetime probation on count 9. 1
¶4 On April 3, 2001, Salazar filed his first petition for post-
conviction relief claiming he was improperly induced to enter the plea
agreement and his trial counsel had been ineffective. The superior court
dismissed the petition on April 25, 2002.
¶5 Over six years later, on August 27, 2008, Salazar filed a second
petition for post-conviction relief claiming newly discovered evidence, he
was without fault for failing to file a timely petition, and a significant
change in the law. Salazar alleged his sentence violated the sentencing
guidelines, his trial counsel had been ineffective by inducing him to accept
the plea agreement, the prosecution failed to turn over exculpatory material
in violation of Brady v. Maryland, 373 U.S. 83 (1963), and he was selectively
prosecuted based on his race and indigent status. The superior court
1 As discussed, infra ¶ 11, the plea, the superior court’s minute entry
regarding the change of plea hearing, and the sentencing minute entry
erroneously state count 7 was for attempted sexual conduct with a minor,
rather than attempted molestation.
2
STATE v. SALAZAR
Decision of the Court
dismissed the petition as untimely and precluded. This court denied
Salazar’s petition for review.
¶6 On April 22, 2016, Salazar filed his third petition in which he
again claimed ineffective assistance of counsel and newly discovered
evidence. Salazar added a new claim asserting he should have received
probation on count 7 and in failing to impose probation, the superior court
violated his right to due process. The superior court dismissed the petition
as untimely and the claims precluded.
¶7 On May 19, 2016, Salazar filed a Motion for Reconsideration.
He claimed that the superior court had misinterpreted the statute, and the
offense charged in count 7 was an attempted, not completed offense.
Therefore, meting out the presumptive sentence of 10 years was in error.
Salazar filed a second Motion for Reconsideration on May 24, 2016, raising
the same issue. The superior court denied both motions.
¶8 Salazar then filed a “Supplemental Rule 32” on June 16, 2016.
In the supplement, he pointed to a discrepancy between the statutory
citation of count 7 in the indictment and the statutory citation in the plea
agreement. He also claimed the superior court lacked subject matter
jurisdiction because of this discrepancy. On July 1, 2016, the superior court
dismissed the supplemental petition stating: “The pleading appears to be
the Defendant’s fifth attempt to avoid his consecutive prison term of 10
years imposed on January 26, 2001. The sentence imposed was a legal
sentence.”
¶9 On July 28, 2016, Salazar petitioned this court for review,
seeking only review of his supplemental petition. He notes that the
indictment charged count 7 as an attempt to commit an offense under
Arizona Revised Statutes (“A.R.S.”) section 13-1410 (molestation of a child
under 15 years of age) and the plea agreement changed the violation to an
attempt to commit an offense under A.R.S. § 13-1405 (sexual conduct with
a minor under the age of 15). He claims this change violates his right to
notice of the charges against him, and strips the superior court of subject
matter jurisdiction to accept the plea.
¶10 The reviewing court will not reverse a court’s summary
dismissal of post-conviction relief proceedings unless it finds an abuse of
discretion. State v. Ward, 211 Ariz. 158, 161, ¶ 7 (App. 2005). Here, the
superior court correctly found that Salazar’s claims in his “supplemental”
petition were untimely and the claims precluded.
3
STATE v. SALAZAR
Decision of the Court
¶11 We note however, that a review of the transcripts from the
change of plea hearing and the sentencing hearing demonstrate that count
7—the offense that Salazar pled to and for which he provided the
supporting factual basis—was attempted molestation. We therefore correct
the superior court’s minute entry regarding the plea agreement/change of
plea hearing and its sentencing minute entry to reflect that count 7 is
attempted molestation, a class 3 felony and dangerous crime against
children. See State v. James, 239 Ariz. 367, 368, ¶ 7 (App. 2016) (“When there
is a discrepancy between the trial court’s oral statements at a sentencing
hearing and its written minute entry, the oral statements control.”) (citation
omitted); State v. Contreras, 180 Ariz. 450, 453 n.2 (App. 1994) (“When we
are able to ascertain the trial court’s intention by reference to the record,
remand for clarification is unnecessary.”).
¶12 Accordingly, we grant review but deny relief.
AMY M. WOOD • Clerk of the Court
FILED: AA
4
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741 N.W.2d 378 (2007)
Margaret L. HALL, Plaintiff-Appellee,
v.
Susan E. COHEN, Defendant-Appellant.
Docket No. 133735. COA No. 270949.
Supreme Court of Michigan.
November 29, 2007.
On order of the Court, the application for leave to appeal the January 30, 2007 judgment of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the question presented should be reviewed by this Court.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
January 30, 2006
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
JENNIFER FURAUS,
Plaintiff - Appellant,
No. 03-2146
v.
(D.C. No. CIV 02-444 LH/LFG)
(D. N.M.)
CITADEL COMMUNICATIONS
CORPORATION,
Defendant - Appellee.
ORDER AND JUDGMENT*
Before SEYMOUR, HOLLOWAY, and BRISCOE, Circuit Judges.
Jennifer Furaus sued her former employer, defendant - appellee Citadel
Communications Corporation (Citadel or defendant), for unlawful gender discrimination
under the New Mexico Human Rights Act and Title VII of the Civil Rights Act of 1964,
42 U.S.C. §§ 2000e et seq. (2002). Citadel owns and operates a radio station in
Albuquerque, where Furaus worked as a radio announcer. The district court granted
summary judgment for Citadel on the grounds that it demonstrated legitimate business
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. This court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
reasons for its allegedly discriminatory conduct and that Furaus failed to show that those
reasons were pretextual under the burden-shifting framework established in McDonnell
Douglas Corp. v. Green, 411 U.S. 792 (1973). Furaus now appeals. Our jurisdiction is
based on 28 U.S.C. § 1291.
I
We will discuss now the facts developed in the record and the district judge’s
conclusions drawn from them which led to his grant of summary judgment for the
defendant.
Furaus was employed for three years, from July 1998 to July 2001, as an
announcer for a radio station owned by defendant Citadel, KGMA (“Magic 99.5”) in
Albuquerque, New Mexico. During her term of employment, Furaus (who used the name
Jenna James in broadcasts), Roger Gettler and Phil Moore were the announcers for the
station. Moore did the live morning show Monday through Friday, 5:30 to 10:00 a.m.;
Furaus did the mid-day show live Monday through Friday, 10:00 a.m. to 3:00 p.m.; and
Gettler did the late afternoon show, mostly live, Monday through Friday, 3:00 to 7:00
p.m., with the last hour pre-recorded. Moore pre-recorded one show to be aired on
Saturday mornings; Furaus pre-recorded two shows to be aired mid-day on both
Saturdays and Sundays; and Gettler pre-recorded two shows to be aired on both Saturday
and Sunday late afternoons. The radio station aired a syndicated show on Sunday
mornings so it did not need an announcer to pre-record a show for that slot. The pre-
-2-
recording process required the announcer to spend approximately 20 to 45 minutes to
prepare a show, which would air for approximately five or six hours.
Gettler earned a base salary of $44,100 in 2000, and $46,300 in 2001. Besides
serving as a radio announcer, Gettler was also program director and direct supervisor over
both Moore and Furaus. Moore earned a base salary of $39,690 in 2000 and $41,675 in
2001. Furaus earned a base salary of $24,333 in 2000, and she would have earned
$25,000 in 2001 if she had stayed the entire year.
A radio station’s revenues come from advertising, and advertisers want to know
how large an audience a station is reaching in making decisions about whether to
advertise on radio and on which station or stations to advertise. To satisfy the need for
this kind of information, defendant turned to a company called Arbitron, which conducted
“ratings” four times a year; the resulting ratings are called “books.” The spring and fall
were regarded as more important than the other ratings periods. It appears that Arbitron
rated individual time slots, as well as the overall station, according to different
demographic profiles (for instance, “Persons [aged] 25-54,” or “Women [aged] 25-54”).
The ratings can be quantified as an ordinal ranking – i.e., the station is placed first,
second, or third in a particular listener demographic – or as a percentage of the market
share of that demographic during a particular time slot.
Furaus claims that among most radio stations the morning show is usually the
highest rated show. Magic 99.5 was atypical, however, in that Furaus’s mid-day show
-3-
received higher ratings than the morning or late afternoon shows. When Furaus worked
at Magic 99.5, she claims that her show earned her employer higher revenues than the
male announcers’ shows. We do not accept this assertion.1 The record simply does not
reveal whether, and to what extent, plaintiff’s higher ratings resulted in higher revenues
for the station.
According to his employment contract with Citadel, Gettler was eligible for
bonuses for each book based on the ratings of the entire station (all time slots) for the
focus groups Persons 25-54 and Women 25-54. There were different bonus scales for the
two demographics, and Gettler’s entitlement to bonuses was based on the station’s ordinal
rankings in those two groups. Between November 2000 and November 2001, Gettler
received bonuses totaling $5,500.
Moore’s employment contract, similarly, allowed bonuses for each book based on
the ratings of his show in the demographics of Persons 25-54 and Women 25-54. Again
there were different bonus scales for the two demographics, and Moore’s entitlement to
1
The district judge concluded that Mr. Moede, on whose testimony plaintiff relied
for this point, “did not have personal knowledge about Plaintiff’s case[,] did not work at
Citadel in July 2001, when many of the events in this case took place, and he was never
involved in determining the salaries or bonus structures of either Moore or the Plaintiff.”
Memorandum and Opinion at 20. The judge concluded, for the purposes of summary
judgment only, that Moede was qualified to read the Arbitron print-outs, which he did
during his deposition. The judge held, however, that “to the extent he uses the print-outs
to interpret the value of Plaintiff as an employee and to comment on the conduct of
Defendant, Mr. Moede’s statements will not be considered.” Id. As Citadel correctly
notes, Furaus does not contest the district court’s evidentiary decision on this point and
has therefore waived the issue.
-4-
bonuses was based on ordinal rankings. Between November 2000 and November 2001,
Moore received bonuses totaling $3,550.00.
There is no evidence in the record that Furaus had a written employment contract.
On Nov. 7, 2000, Gettler sent Furaus a memo informing her that she had earned a $300
bonus based on the 2000 Summer Book in the demographic of Persons 25-54.
During most of Furaus’s employment with Magic 99.5, the station played “soft
rock” music. About March 2001, Citadel decided to change the format of the station.
Furaus was directed to add energy to her live shows, including spending more time on the
air talking with telephone callers and discussing current events, such as celebrity award
shows and weddings. Gettler told Furaus on a number of occasions, orally and in writing,
to increase her energy and talk more when she was on the air, in order to fit in with the
new format. Gettler also criticized Furaus for not arriving at the station a full half-hour
before her on-air shift was to begin in order to conduct the research necessary to have
topical information to discuss on the air.
In June 2001, Furaus requested two days of vacation to attend a wedding.
According to Citadel, this created a problem because June is part of the “spring book,” a
critical ratings period. Gettler asked Furaus to pre-record two shows to be aired while she
was gone. Moore has never been asked to pre-record shows before he took a vacation,
but he has never taken a vacation during the spring or fall book period.
On June 26, 2001, Gettler sent Furaus a memo telling her that her performance
-5-
needed improvement in the following areas: on-air energy, talking more and not relying
on “liners,”2 and her arrival time. On July 7, 2001, Gettler sent another memo, praising
Furaus for her improvement and identifying areas where she could still be better. In that
memo Gettler wrote: “Keep it up.” Gettler testified in his deposition that he noticed an
immediate drop in Plaintiff’s performance in these areas right after he had issued the July
7, 2001 memo. On July 12, 2001, at the direction of Citadel’s upper management, Gettler
placed Furaus on probation for a minimum of two weeks because of poor or inconsistent
performance under the new format.
On July 16, 2001, after trying to initiate a discussion about the probation with
manager Kris Abrams and being directed to take the matter up with Gettler the next day,
Furaus walked out of the station and later sent a resignation letter.
II
A
Plaintiff Furaus contends that the evidence she produced in the district court was
sufficient to support at least the inference that gender discrimination was one motivating
factor in her treatment, even if not the only factor, and that this case therefore should be
treated as a mixed motive case under the authority of Price Waterhouse v. Hopkins, 490
U.S. 228 (1989). Furthermore, plaintiff argues that the Supreme Court held in Desert
A “liner” was described as a standard statement about the radio station, such as
2
“99.5 Magic FM, continuous soft rock with less talk.” Aplt. App. at 49.
-6-
Palace Inc. v. Costa, 539 U.S. 90 (2003), that the McDonnell Douglas framework is
inapplicable to mixed motive cases and that her showing of mixed motive was sufficient
to entitle her to a jury trial.
We do not reach that issue. The Court in Desert Palace decided only that direct
evidence was not necessary to make out a mixed motive case and said nothing at all about
the McDonnell Douglas analysis. It is true that some courts and commentators have
viewed the Desert Palace holding as requiring either a departure from or a modification
of the McDonnell Douglas framework. See, e.g., Carey v. Fedex Ground Package
System, Inc., 321 F. Supp.2d 902, 914-17 (S.D. Ohio 2004) (collecting cases and
discussing three alternative views as to whether and how Desert Palace has affected the
validity of the McDonnell Douglas analysis). Ms. Furaus, however, did not raise any
mixed motive theory in the district court. Although Desert Palace was not decided until a
few days after judgment had been entered against her in the district court, plaintiff could
still have preserved the issue but failed to do so. And because she limits her argument on
appeal against application of McDonnell Douglas to her newly minted mixed motive
theory, which she failed to preserve, we proceed to address her alternative argument –
that the district court erred in applying the established mode of analysis.
B
Furaus’s primary claim appears to be that of discrimination in salary. As to this
claim the district court held that plaintiff had succeeded at the first stage in establishing
-7-
her prima facie claim by comparison of her salary and bonus structure to that of Mr.
Moore. In so holding, the judge rejected defendant’s contention that Mr. Moore and Ms.
Furaus were not similarly situated because they performed in different time slots and
because of Mr. Moore’s higher level of experience and greater length of service with the
defendant. The district judge noted that the plaintiff’s burden at the first step in the
McDonnell Douglas analysis is not intended to be onerous, and that consideration of
factors like those raised by the defendant at this step has been held inappropriate because
it may remove plaintiff’s opportunity to show that the proffered reasons are merely
pretext for discrimination, as we said in Ortiz v. Norton, 254 F.3d 889, 894 (10th Cir.
2001). Further, the judge found that plaintiff Furaus and Moore were radio announcers at
the station during the same time, that they both presented live shows on week days and
recorded shows on weekends, they were both salaried employees, and both were under
Gettler’s supervision.
We agree with the district court that this was a sufficient showing for plaintiff at
the prima facie stage. The points raised by defendant are, however, sufficient to carry its
burden of production in the second step of the analysis as gender neutral explanations for
the actions taken.
Thus, we turn to the parties’ arguments on whether plaintiff carried her burden of
showing that the proffered explanations were merely pretext for gender bias. “The
factfinder is entitled to infer from any weaknesses, implausibilities, inconsistencies,
-8-
incoherencies, or contradictions in the employer’s proffered reasons for its action that the
employer did not act pursuant to those reasons.” Miller v. Eby Realty Group LLC, 396
F.3d 1105, 1112 (10th Cir. 2005) (internal quotation marks omitted). A showing of
pretext is sufficient to permit, but not to require, a finding that the real motive was
unlawful bias. Exum v. U.S. Olympic Committee, 389 F.3d 1130, 1135 (10th Cir. 2004).
Defendant Citadel identified several factors to justify the significant difference in
compensation between Ms. Furaus and Mr. Moore. (We agree with the district judge and
the defendant that comparison to Mr. Gettler is inappropriate, since he was plaintiff’s
direct supervisor and so not similarly situated.) Mr. Moore had additional duties as the
morning “drive time” host, and he had 20 years’ experience compared with plaintiff’s
five. He also had greater length of service with defendant by about five years. Moreover,
defendant’s evidence was that the morning show is generally regarded in the industry as
the most important, which enables a successful morning host to command a higher rate of
pay.
Plaintiff’s rebuttal – her attempt to show pretext – was primarily that the evidence
showed this station to have been an atypical one in that her show was the higher rated of
the two shows being compared. The district judge was unimpressed with this evidence,
observing that he did not see how this fact tended to show that defendant’s proffered
explanation was false or unworthy of belief. We likewise conclude that plaintiff’s
argument does not withstand scrutiny.
-9-
The gist of plaintiff’s case, as we understand it, is that her performance was good
and perhaps even stellar by the objective measure of audience reaction, even if not
completely satisfactory to the station’s management. A jury could reasonably infer that
the purpose of the radio station is to make a profit, that profits come from advertising, and
that companies using radio for advertising wish to reach as many people as possible and
are more likely to buy advertising or to pay more for advertising on shows which reach a
greater audience. We conclude that this analysis is not sufficient to show pretext.
The district court ruled that the testimony submitted by plaintiff to show that her
ratings translated into profits was inadmissible. Although plaintiff asserts that her show
was the most profitable one carried by the station, she has not challenged the district
court’s evidentiary ruling,3 nor has she directed us to any other evidence to support her
assertion. Consequently, we have no evidence as to the rates the station was able to
charge for advertising during Moore’s morning show as compared with the rates charged
during plaintiff’s midday show. And even taking the evidence in the light most favorable
to plaintiff, which we must, we simply see no rebuttal of defendant’s point that the host of
the morning show is able to command greater compensation because it is customary in the
industry.
3
In her reply brief, plaintiff asks us to review the evidence without deference to the
trial court’s rulings, contending that this is the meaning of de novo review. This is
specious, and the only authority cited in support is not at all apposite to our review of a
district court’s grant of summary judgment.
-10-
Plaintiff also argues in this appeal that she had been treated less favorably than her
colleague, Mr. Moore, by having to pre-record one more show per week than he was
required to do; by once having to pre-record shows to air when she went on vacation; by
having to come to the station once when she had been sick to pre-record a program; by
having to perform the task of merging “commercial logs” and “music logs” for Mr.
Gettler when he was not in the office, a task that required her to stay at the station for
some minutes after her on-air shift had concluded; by having her music programming
responsibilities withdrawn in August 2000; and finally, by having been placed on
probation in July 2001.
Plaintiff concedes that defendant carried its burden of production to show a neutral
business reason for each of these actions. She argues that her evidence of the high ratings
of her show demonstrated pretext and should have enabled her to go to trial on the issues.
We disagree that the ratings earned by her performance is evidence of pretext in the
circumstances of this case. Plaintiff offers no argument in her briefs to support her
assertion of pretext based on her program’s rankings, and we note that any connection
between these instances and her ratings is even less apparent than the asserted connection
between her compensation and her ratings. We cannot agree with plaintiff’s argument
that the district court’s conclusion on this issue was in error.
We do think one other argument merits discussion. With respect to what would
appear to be the most serious of these actions by the employer, the probation announced
-11-
just before plaintiff resigned, plaintiff points to one other bit of evidence, the expression
of disagreement with this decision by her immediate supervisor, Mr. Gettler.
Mr. Gettler testified that he disagreed with the decision to put plaintiff on
probation:
Q. Looking back on it, do you think this probationary period was justified?
A. You know, it’s hard to say. We were given directives. And whether
those directives were necessary for the station to improve or not, we do
what we’re told. And if Jenna was not able to execute the directives, then
the probation was necessary.
Q. So it wasn’t for you to determine whether or not it was justified? That’s
what you’re saying?
A. Yeah. I followed my job orders.
Q. Looking back on it, though, do you believe that perhaps those who were
telling you what to do were unjustified in their approach?
A. Completely.
Aplt. App. at 75.
It was certainly within the province of management to insist on compliance with
the demands made on Ms. Furaus, whether or not the decision represented sound business
judgment. The reasonableness of management decisions is not the subject of the civil
rights laws, as we have observed countless times. Because this evidence raises no
inference that management’s decision – whether fair or unfair, wise or unwise – was
-12-
motivated by unlawful bias, it is unavailing.4
The judgment of the district court is AFFIRMED.
ENTERED FOR THE COURT
William J. Holloway, Jr.
Circuit Judge
4
As noted at the beginning of this order, the plaintiff-appellant asserted her claims
under both Title VII of the Civil Rights Act of 1964 and the New Mexico Human Rights
Act. N.M. Stat. Ann. § 28-1-13(A) (Michie 2002). Arguments and authorities are not
specifically developed by plaintiff-appellant on the state law claims. There is a
conclusory request at the end of her Reply Brief, p. 7, for remand of the case for a trial on
the counts for sex discrimination under Title VII and the New Mexico Human Rights Act.
Apparently the parties treated the federal and state law as applying the same principles,
and the district judge expressed the same view. Memorandum Opinion and Order at 7.
Hence what we have said concerning the federal law principles also disposed of the state
law claims for the same reasons.
-13-
| {
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} |
203 S.W.3d 896 (2006)
In re Fadi GHANEM, et al.
No. 09-06-205-CV.
Court of Appeals of Texas, Beaumont.
Submitted June 2, 2006.
Decided September 21, 2006.
Alex E. Cosculluela, Adams and Reese LLP, Michele E. Taylor, Tekell, Book, *897 Matthews & Limmer, LLP, Houston, for relators.
Catherine L. Schnaubelt, Trent D. Stephens, Strasburger & Price, LLP, Houston, for real party in interest.
Before McKEITHEN, C.J., KREGER and HORTON, JJ.
OPINION
CHARLES KREGER, Justice.
This is an original proceeding seeking mandamus relief. Fadi Ghanem, M.D., individually and d/b/a Fadi G. Ghanem, M.D., P.A., Maternal & Family Clinic, and Hussamaddin Al-Khadour, M.D. ("Relators") petitioned this Court for relief from an order by the Honorable Kathleen Hamilton, presiding judge of the 359th District Court, Montgomery County, Texas, ("Respondent"). The order, in essence, refused to completely stay parallel litigation prosecuted by Real Party in Interest, Harlon Borcherding, D.O., during the pendency of arbitration proceedings between Relators and parties aligned with Borcherding as plaintiffs in the parallel litigation. It is not disputed that Relators and Borcherding's co-plaintiffs, Rezik Saqer, M.D., Hazem El-Zufari, M.D., and Integra Medical Clinics, L.L.P., f/k/a/ Integra Health Clinics, L.L.P., were ordered to arbitration by Respondent based upon a document titled "Letter Agreement." This Letter Agreement appears to have been intended to settle a variety of business disputes which arose during the brief business partnership of the four signatory doctors, Ghanem, Al-Khadour, Saqer, and El-Zufari. The arbitration paragraph appears in the Letter Agreement in the following manner:
23. Dispute Resolution: All other issues related to any Partnership or Membership matters not covered by this Agreement (and all disputes arising under or interpretations of this Agreement) shall be resolved by binding arbitration. An arbitrator shall be chosen by agreement between counsel for Ghanem and counsel for Integra/Integrated. The arbitrator shall be paid by in an [sic] equal share by all Parties involved in the dispute. All Parties agree to waive any court action on any matter and allow all disputes to be resolved through binding arbitration. The arbitration rules shall be simple and informal and will include a written submission of all disputes to the arbitrator seven (7) days before the scheduled arbitration hearing. The hearing shall allow all Parties to express their views and present witnesses and testimony. The hearing shall be scheduled within fourteen (14) days of the submission of any dispute and a written decision shall be rendered by the arbitrator within forty-eight (48) hours of the hearing.
The record before us does not include Respondent's order compelling arbitration and staying all further judicial proceedings in the underlying litigation involving the arbitrating parties. However, although named as a plaintiff in the underlying parallel litigation, Borcherding was not ordered to arbitrate because he was not a signatory to the Letter Agreement which contained the arbitration provision. As a result, Respondent permitted Borcherding to proceed with the parallel litigation despite several motions by Relators requesting that Borcherding be stayed from proceeding any further with the underlying litigation during the pendency of the arbitration process. Indeed, the order at issue, entered May 15, 2006, granted, inter alia, Borcherding's motion to compel depositions of Relators Ghanem and Al-Khadour, *898 Relator's billing manager, and another non-party. The order also denied a motion by Relators for protection from further discovery related to the causes of action referred to arbitration.
The record also indicates that at the time Respondent issued the order, Borcherding's causes of action against Relators were set out in plaintiff's original petition filed April 17, 2006. In his response to the Petition for Writ of Mandamus, Borcherding directs our attention to a copy of his "First Amended Petition," which is apparently now on file in the parallel litigation. However, Borcherding's amended petition indicates it was filed May 22, 2006, one week after Respondent issued the order in question. As Borcherding's amended petition was not before Respondent at the time she entered the order at issue, we will not consider it. See Perry v. Del Rio, 66 S.W.3d 239, 259 (Tex.2001); Univ. of Tex. v. Morris, 162 Tex. 60, 344 S.W.2d 426, 429 (1961).
An examination of the original petition filed by all the plaintiffs, including Borcherding, reveals that the petition does not specifically segregate any of Borcherding's causes of action from those of the remaining plaintiffs. The various causes of action alleged appear to stem from the business relationship established by the four signatory doctors and the related business entities involved. Relators contend that the four signatory doctors agreed to arbitration after the filing of the plaintiffs' original petition, and that arbitration was appropriate under either the Federal Arbitration Act[1] ("FAA") or the Texas Arbitration Act.[2] Borcherding does not contest these assertions as they relate to the four signatory doctors. Relators argued to Respondent, and now argue to us, that they are entitled to a stay of the pending litigation because all of Borcherding's causes of action are identical to those of his co-plaintiffs, Doctors Saqer and El-Zufari, whose claims were referred to arbitration.
In support of his position that continuing with his parallel litigation is proper, Borcherding relies upon certain revised claims alleged in his first amended petition and on the fact that he was not a signatory to the Letter Agreement containing the arbitration clause. As noted above, we will not consider Borcherding's first amended petition because it was filed after Respondent issued the order from which the Relators now seek relief. From an examination of the entire record before us, it appears that Borcherding's non-signatory status is the only basis for Respondent's decision to permit Borcherding to fully proceed with parallel litigation involving causes of action identical to those previously referred to arbitration.
While the trial judge's decision to compel the four signatory doctors and their respective business entities to submit to arbitration is not before us, potentially damaging consequences became apparent when the trial court subsequently permitted Borcherding to fully proceed with the underlying litigation against Relators. As a general policy, both "[f]ederal and state law strongly favor arbitration." See Cantella & Co., Inc. v. Goodwin, 924 S.W.2d 943, 944 (Tex.1996) (orig. proceeding). The United States Supreme Court has held that the Federal Arbitration Act, as a matter of law, requires that any doubt concerning the scope of arbitrable issues under a contractual arbitration provision should be resolved in favor of arbitration. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 *899 S.Ct. 927, 74 L.Ed.2d 765 (1983). In the instant case, we assume without deciding that arbitration was ordered based upon the FAA because the Act "`extends to any contract affecting commerce, as far as the Commerce Clause of the United States Constitution will reach.'" See In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 69 (Tex.2005)(quoting In re L & L Kempwood Assocs., L.P., 9 S.W.3d 125, 127 (Tex.1999)(per curiam)). Borcherding does not take issue with Relators' contention that the business entities in question received Medicare payments. Such payments are sufficient to establish interstate commerce and the FAA's application. Id.
In both Harvey v. Joyce, 199 F.3d 790, 796 (5th Cir.2000), and Subway Equipment Leasing Corp. v. Forte, 169 F.3d 324, 329 (5th Cir.1999), the Fifth Circuit applied the FAA's mandatory stay provision[3] to non-signatories of the arbitration agreements because the issues presented in the non-signatory/signatory litigation, if litigated, would have rendered the arbitration redundant and thwarted the federal policy favoring arbitration. In Harvey, the parties to the arbitration agreement were all shareholders in a company, CTC, the non-party to the agreement. Harvey, 199 F.3d at 792. Joyce, one of the parties to the agreement, had been named along with CTC, as a defendant. Id. The allegations in the lawsuit against CTC were based upon actions taken by Joyce on behalf of CTC. Id. at 795. As a result, the Fifth Circuit found that allowing litigation to proceed could have "a critical impact in the Joyce arbitration." Id. Similarly, in Subway, the Fifth Circuit found that because the issues to be litigated by the non-signatories were identical to the issues to be arbitrated by the signatories, allowing the litigation to proceed would harm the signatories' rights to arbitrate. Subway, 169 F.3d at 329. As the Court noted in a more recent case reaffirming the concept, "[t]he question is not ultimately one of weighing potential harm to the interests of the non-signatory, but of determining whether proceeding with litigation will destroy the signatories' right to a meaningful arbitration." Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339, 343 (5th Cir. 2004) (citing Adams v. Ga. Gulf Corp., 237 F.3d 538, 541 (5th Cir.2001)).
Borcherding fails to recognize that when arbitration has been ordered and a stay requested by a party to the arbitration agreement, the question of whether to stay any parallel judicial proceedings involving a non-party to the arbitration process focuses on the potential impairment of the signatory-party's right to meaningful arbitration, as well as on the obvious impediment to both federal and state policy favoring arbitration created by redundant arbitration. See Adams, 237 F.3d at 541; Harvey, 199 F.3d at 796. The arbitration in the instant case will cover every aspect of the Letter Agreement, which was intended, inter alia, to "serve as both a settlement document and a binding resolution and/or consent action of the Members of Integrated and the Partners of Integra." This is so because the four signatory doctors agreed to binding arbitration to resolve all issues "not covered by this Agreement," as well as "all disputes arising under or interpretations of this Agreement[.]" This would, presumably, include the employment status of Borcherding, as well as the details for compensating him for his work.[4] Any attempt to judicially *900 determine Relators' liability, if any, to Borcherding under the causes of action pleaded in the original petition could, at the very least, adversely affect Relators' right to arbitrate, and certainly to meaningfully arbitrate. See Harvey, 199 F.3d at 796. Additionally, the record indicates the three-factor test for invoking the section 3 mandatory stay discussed in Waste Management, Inc. has been met, viz: (1) similarity of operative facts; (2) inseparability of claims; and (3) effect of the litigation on the arbitration. See Waste Mgmt., Inc., 372 F.3d at 344-45; 9 U.S.C.A. § 3.
With regard to the FAA, the intent of the United States Congress and its public policy goal is clear, as observed by the United States Supreme Court:
Congress's clear intent, in the Arbitration Act, [was] to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible. The Act provides two parallel devices for enforcing an arbitration agreement: a stay of litigation in any case raising a dispute referable to arbitration, 9 U.S.C. § 3, and an affirmative order to engage in arbitration, § 4. Both of these sections call for an expeditious and summary hearing, with only restricted inquiry into factual issues.
Moses H. Cone Mem'l Hosp., 460 U.S. at 22, 103 S.Ct. 927 (footnote omitted).
Mandamus relief is available only when a trial court clearly abuses its discretion and when there is no adequate remedy on appeal. In re Kuntz, 124 S.W.3d 179, 180 (Tex.2003) (orig. proceeding). With respect to factual issues, an abuse of discretion is shown when it is clear from the record that the trial court could have reasonably reached only one decision. Id. at 180. A trial court has no discretion in determining what the law is or in applying the law to the facts. Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992) (orig. proceeding). "Thus, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. . . ." Id. A trial court also abuses its discretion if it acts in an arbitrary or unreasonable manner, without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). Based upon the record before us, we find Respondent abused her discretion in refusing to stay all parallel judicial proceedings in the underlying litigation pending the results of the arbitration process. To permit Borcherding to carry on the litigation pursuant to claims identical to those involved in the arbitration process could seriously jeopardize Relators' right to have those claims resolved by binding arbitration, as per the Letter Agreement. Failing to stay the parallel litigation after ordering arbitration, under the facts and circumstances presented, could only have the effect of "frustrat[ing] the statutory policy of rapid and unobstructed enforcement of arbitration agreements." Moses H. Cone Mem'l Hosp., 460 U.S. at 23, 103 S.Ct. 927. Because we find an abuse of discretion by Respondent in failing to stay the entire parallel litigation during the pendency of the arbitration process, we conditionally grant the writ of mandamus and direct the trial court to issue a stay of all further judicial proceedings, including discovery and temporary injunctive relief. The writ will issue only if the trial court fails to comply with our directive.
WRIT CONDITIONALLY GRANTED.
*901 HOLLIS HORTON, Justice, dissenting.
In this case, the majority holds that a trial court abused its discretion in denying the defendants' request to stay discovery. The defendants were signatories to an arbitration agreement, as were some of the plaintiffs. However, the plaintiff against whom the defendants sought to stay discovery was not a party to the arbitration agreement. Because I disagree with the majority that the defendants carried their burden to demonstrate the trial judge abused her discretion in denying their request for a stay of discovery against a non-signatory to the arbitration clause, I dissent.
This case arises from a business dispute between doctors. Three doctors, Dr. Rezik Saqer, Dr. Hazem El-Zufari, and Dr. Harlan Borcherding, filed suit against Dr. Fadi Ghanem and Dr. Hussamaddin Al-Khadour seeking a temporary injunction, permanent injunction, and damages. The trial court entered a temporary restraining order. Drs. Ghanem and Al-Khadour appeared, sought to dissolve the temporary restraining order, and requested a stay of further proceedings. In their motion to stay, Dr. Ghanem and Dr. Al-Khadour asserted that "[t]his matter is subject to arbitration." Attached to their motion is a letter agreement containing an arbitration clause signed by Drs. Saqer, El-Zufari, Ghanem, and Al-Khadour. Dr. Borcherding (the non-signatory) did not sign the arbitration agreement, and Dr. Ghanem and Dr. Al-Khadour agree that Dr. Borcherding is not a party to the arbitration agreement.
The trial judge ordered the claims asserted by Dr. Saqer and Dr. El-Zufari to arbitration and stayed all further judicial proceedings between them and Drs. Ghanem and Al-Khadour. The trial judge did not order Dr. Borcherding's claims to arbitration. On May 15, 2006, the trial court refused to stay discovery, and granted Dr. Borcherding's motion to compel the depositions of four witnesses, including those of Dr. Ghanem and Dr. Al-Khadour. The court also set a temporary injunction hearing for June 16, 2006. Dr. Ghanem and Dr. Al-Khadour subsequently filed a writ of mandamus asserting that we should vacate the trial court's May 15 order because Dr. Borcherding's causes of action "are subject to arbitration." Since the temporary restraining order expired May 15, 2006, any issue regarding that portion of the trial court's order appears moot. The trial court's order also denied the defendants' request to stay Dr. Borcherding's discovery and ordered four witnesses to be deposed. The defendants assert that the trial court abused its discretion in allowing Dr. Borcherding to go forward with discovery.
The majority concludes that Drs. Ghanem and Al-Khadour, signatories to an arbitration agreement, are entitled to a stay of discovery in a lawsuit brought against them by Dr. Borcherding, a non-signatory to the arbitration agreement. As support for its position that litigation by non-signatories can be stayed pending the outcome of arbitration, the majority relies primarily on three Fifth Circuit cases: (1) Harvey v. Joyce, 199 F.3d 790 (5th Cir.2000); (2) Subway Equipment Leasing Corp. v. Forte, 169 F.3d 324 (5th Cir.1999); and (3) Waste Management, Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339 (5th Cir.2004). In my view, the majority's reliance on these cases is misplaced. In each of these cases, the parties seeking discovery stays were non-signatories to the arbitration agreements. Thus, none of these cases involved weighing the rights of parties that did not either by contract or by their actions in some way waive their right to file a lawsuit to resolve their disputes. *902 Therefore, these three cases are not authority for the proposition that a court must act to prohibit discovery being sought by a person who was not a party to the arbitration agreement.
The first step in evaluating a motion to compel arbitration is to determine whether the parties agreed to arbitrate. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 3353-54, 87 L.Ed.2d 444 (1985). Even under the Federal Arbitration Act ("FAA"), which the majority applies here, the federal policies that favor arbitration are "to make arbitration agreements as enforceable as other contracts, but not more so." Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n. 12, 87 S.Ct. 1801, 1806, 18 L.Ed.2d 1270 (1967). With respect to Dr. Borcherding, there is no dispute that he did not agree to arbitrate his claims against the defendants.
I recognize that some courts, applying Texas law in limited circumstances, have held that non-signatories were bound by the contract's arbitration clause. For example, when a non-signatory sues on the contract, courts have enforced all of the contract's terms, including its arbitration provision. In re FirstMerit Bank, 52 S.W.3d 749, 755-5 (Tex.2001) (finding that non-signatories who sued based on a contract subjected themselves to the contract's arbitration clause where the non-signatories' claims were identical to those asserted by the signatories). Further, the Texas Supreme Court recently recognized that "nonparties may be bound to an arbitration clause when the rules of law or equity would bind them to the contract generally." In re Weekley Homes, L.P., 180 S.W.3d 127, 129 (Tex.2005). In Weekley, the Texas Supreme Court relied upon the nonparty's obtaining a direct benefit from the contract, namely, repairs to a home. Id. at 133. But, the Supreme Court also noted that it did not "understand the doctrine [of direct benefits estoppel] to apply when the benefits alleged are insubstantial or indirect." Id. at 134. In In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex.2005), the Texas Supreme Court declined to apply the doctrine of direct benefits estoppel to require that a non-signatory arbitrate its claim. 166 S.W.3d at 734. The Court stated:
We conclude that, under "direct benefits estoppel," although a non-signatory's claim may relate to a contract containing an arbitration provision, that relationship does not, in itself, bind the non-signatory to the arbitration provision. Instead, a non-signatory should be compelled to arbitrate a claim only if it seeks, through the claim, to derive a direct benefit from the contract containing the arbitration provision.
Id. at 741. The Texas Supreme Court also recently held that non-signatories are bound by arbitration agreements when the non-signatory's case is premised on a claim that he is a third-party beneficiary of the contract. See In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 676 (Tex.2006).
Applying Texas law in Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069, 1077 (5th Cir.2002), the Fifth Circuit did not enforce an arbitration provision against non-signatories who had not embraced the contract. The Fifth Circuit held that children who asserted tort claims for personal injuries were not bound by an arbitration clause contained in a sales contract executed by their parents. Gaskamp, 280 F.3d at 1077. The Fifth Circuit declined to bind the non-signatory minors to a contract containing an arbitration provision when they were not parties to the contract, or were not third-party beneficiaries of the contract, and were not suing on the basis of the contract. Id. In Gaskamp, the Fifth Circuit reversed the district *903 court's order staying the children's lawsuits. Id. at 1078.
In this case, defendants asked the trial judge to stay Dr. Borcherding's discovery efforts, and so the court was not faced with a decision regarding whether his claims should be sent to arbitration. The defendants asked the trial court to make the decision on the pleadings and the unsworn documents attached to their motion for stay.
The majority apparently concludes that Dr. Borcherding's claims are identical to those of the signatories to the arbitration agreement. I disagree. Although it is true that the causes of action asserted by Dr. Borcherding are the same as those asserted by the other doctors who signed the arbitration agreement, the Plaintiffs' Original Petition is insufficiently specific to conclude that the claims (as distinguished from the causes of action) are the same. We are given little in the pleadings to detail Dr. Borcherding's claims. However, it is apparent from the Plaintiffs' Original Petition that Dr. Borcherding is not a present or former partner of the doctor groups involved in the litigation or a party to the letter agreement that contains the arbitration clause at issue. For example, all the plaintiffs sued each of the defendants for conversion, breach of oral and implied contracts, and tortious interference with business relations, but the Plaintiffs' Original Petition does not describe whether Dr. Borcherding's allegations are separate or part and parcel of the other doctors' claims. In addition, all of the plaintiffs generally claim that the defendants solicited the plaintiffs' patients and used the plaintiffs' confidential patient information to their detriment. From the pleadings, we cannot determine, with reference to Dr. Borcherding, whether his breach of contract claims are identical, or different, from those of the other doctors who were signatories to the arbitration agreement. We also cannot tell if the contract under which Dr. Borcherding sues the defendants is the same, or different from the contracts under which the other plaintiffs sue. We cannot tell if the patients that defendants allegedly solicited were patients of both Dr. Borcherding and the other plaintiff doctors, or not, or whether Dr. Borcherding is relying on the terms of a contract between the defendants and the other plaintiff doctors, or an oral contract that exists between him and the defendant doctors. All we know is that there were allegedly oral and written contracts involved in these disputes.
The evidence before the trial court at the hearing on the defendants' motion contained no depositions and no evidence that described Dr. Borcherding's employment arrangement with the other doctors involved in this dispute. The unsworn evidence attached to the defendants' motion to stay consists of: (1) the Letter Agreement, to which Dr. Borcherding is not a party but which contains the arbitration clause, that apparently was intended to resolve the disputes between Dr. Saqer, Dr. El-Zufari, Dr. Ghanem and Dr. Al-Khadour; (2) the Temporary Restraining Order dated April 17, 2006; (3) Board Minutes of a meeting of a partnership entity, Integra Medical Clinics, LLP ("Integra"); the meeting occurred on February 23, 2006, but the minutes do not mention Dr. Borcherding; and (4) resolutions and amendments to the Integra partnership agreement, which are dated March 2, 2006 and signed by Dr. Al-Khadour, Dr. El-Zufari, Dr. Ghanem, and Dr. Saqer, but which do not mention Dr. Borcherding; (5) copies of various e-mails and correspondence, which do not mention Dr. Borcherding; (6) an e-mail response to the arbitration demand that includes a demand to return a laptop in use by Dr. Borcherding; and (7) an e-mail dated April 13, 2006, that *904 offers Dr. Borcherding's attorney the opportunity to pick up the personal files of Dr. Borcherding.
Thus, although the petition asserts that the defendants breached oral and written contracts, we cannot ascertain from the pleadings before the trial court or the evidence before the trial court in Dr. Borcherding's case whether the terms of the written contracts allegedly breached were the same, or different, from the contracts allegedly breached with the other doctors. Dr. Borcherding does not appear to be named as a party or as an intended third-party in the Letter Agreement, which is the only written contract before us.
Regarding the defendants' motion, the trial court evidently conducted a non-evidentiary hearing, at which it heard argument, but no transcript of the hearing is before us on appeal. It seems likely to me that the trial judge might have asked the parties to explain how Dr. Borcherding's case related to that of the other doctors, if at all. If an explanation to such a question was before the trial court, it is not before us.
In my opinion, the party that seeks to stay discovery should be required to prove that the non-signatory litigant is bound to the arbitration agreement. The evidence before the trial court was insufficient to allow the court to reach the conclusion that Dr. Borcherding was bound to the arbitration agreement. Moreover, the defendants' evidence is insufficient to require a stay on the record before the trial court even if the test that applies when non-parties seek a stay against a party to an arbitration agreement also applies equally when a signatory to an arbitration agreement seeks a stay against a non-signatory. See White v. KPMG, LLP, 180 Fed.Appx. 498, 499-500 (5th Cir.2006) (holding that a non-party seeking a stay against a party to the arbitration must show that a failure to grant a discovery stay destroys the signatories' right to a meaningful arbitration). The majority fails to point to any evidence supporting a conclusion that meets this test, and in fact only says that an attempt to determine the defendants' liability "could, at the very least, adversely affect Relators' right to arbitrate, and certainly to meaningfully arbitrate." I am left to wonder, "Why?" Also, the fact that it could affect the signatories' right to meaningfully arbitrate is not the test. The defendants had to show that failing to stay discovery destroyed their right, a test they fail to meet.
I would hold that the signatory parties to the arbitration agreement failed to meet their burden to show that Dr. Borcherding's lawsuit should be stayed pending the outcome of the arbitration. Because Dr. Borcherding was not a party to the arbitration clause, and because arbitration provisions are generally not applicable to non-signatories absent a few exceptions not shown to be applicable here, I would hold that the trial judge did not clearly abuse her considerable discretion in making an incidental discovery ruling. Further, with respect to staying claims of non-signatories, I would hold that the court has the discretion to permit some discovery to aid its determination of whether the claims are, or are not, sufficiently identical to the claims of the arbitrating parties to aid the court in determining whether allowing discovery in situations involving parallel litigation and arbitration proceedings deprives the arbitrating parties of meaningful arbitration. Because the trial court did not abuse its discretion, we should deny the defendants' petition.
NOTES
[1] See 9 U.S.C.A. §§ 1-16 (West 1999 & Supp. 2006).
[2] See TEX. CIV. PRAC. & REM.CODE ANN. §§ 171.001-.098 (Vernon 2005).
[3] See 9 U.S.C.A. § 3 (West 1999).
[4] According to the Letter Agreement, the accounts receivable of Borcherding belonged exclusively to Integra Medical Clinics, L.L.P., f/k/a Integra Health Clinics, L.L.P. "to be used by the remaining partners of Integra as they see fit." Additionally, the Letter Agreement provides that Dr. Saqer "agrees to pay any salary due and owing to Borcherding."
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43 F.3d 1475
Goodwin (Larry Dean)v.Belcher (Rebeca)
NO. 93-3875
United States Court of Appeals,Eighth Circuit.
Jan 13, 1994
Appeal From: N.D.Iowa, No. C-93-266
1
AFFIRMED.
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884 F.2d 1398
Unpublished DispositionNOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.In re William A. CASLER and Phillip E. Saureman.
No. 89-1138.
United States Court of Appeals, Federal Circuit.
Aug. 3, 1989.
Before MARKEY, Chief Judge, BALDWIN, Senior Circuit Judge, and PAULINE NEWMAN, Circuit Judge:
Per Curiam.
Judgment
1
AFFIRMED. See Fed.Cir.R. 36.
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683 F.2d 45
110 L.R.R.M. (BNA) 2990
DIVISION OF MILITARY AND NAVAL AFFAIRS, STATE OF NEW YORK,and Department of Defense, Petitioners,v.FEDERAL LABOR RELATIONS AUTHORITY, Respondent.
No. 1180, Docket 82-4036.
United States Court of Appeals,Second Circuit.
Argued May 24, 1982.Decided June 28, 1982.
Douglas Letter, Atty., Civil Division, Dept. of Justice, Washington, D. C. (J. Paul McGrath, Asst. Atty. Gen., Washington, D. C., William Kanter, Washington, D. C., Atty., of counsel), for petitioners.
Ellen Stern, Atty., Federal Labor Relations Authority, Washington, D. C. (Mary Elizabeth Medaglia, Acting Sol., Washington, D. C., of counsel), for respondent.
Robert M. Tobias, Gen. Counsel, National Treasury Employees Union, Washington, D. C., John F. Bufe, Deputy Gen. Counsel, William F. White, Associate Gen. Counsel, Washington, D. C., for amicus curiae National Treasury Employees Union in Support of respondent FLRA.
Mark D. Roth, Asst. Gen. Counsel, American Federation of Government Employees, AFL-CIO, Washington, D. C., James R. Rosa, General Counsel, Washington, D. C., for amicus curiae American Federation of Government Employees, AFL-CIO in Support of respondent FLRA.
Before LUMBARD, OAKES and PIERCE, Circuit Judges.
LUMBARD, Circuit Judge:
1
The New York National Guard1 petitions for review of an order of the Federal Labor Relations Authority (FLRA) which directs the Guard to pay the per diem and travel expenses incurred by representatives of civilian employees in collective bargaining with the Guard. The FLRA applies for enforcement of the order. We grant the petition for review and deny enforcement. We find no authority to support the FLRA's command that the federal government, alone among federally-regulated employers, must pay expenses incurred by its adversaries across the bargaining table.
2
The parties agree on the facts. The National Guard employs some 46,700 civilian technicians across the country to meet the day-to-day administrative, training and logistical needs of the Guard.2 Approximately three-quarters of the technicians are represented by various unions, including the New York State Council of Association of Civilian Technicians, Inc. On two days in November 1979, and one day in April 1980, five members of the New York State Council represented their union in contract negotiations with the New York National Guard in Albany, New York. The technicians incurred travel and per diem expenses because they were not stationed in Albany. The Guard's principal negotiator incurred similar expenses. The Guard paid the expenses of its own negotiator but pursuant to its past practice declined to pay the expenses of the Union representatives. The Union filed unfair labor practice charges in spring of 1980 with the FLRA, and in December 1981 the FLRA found that the Union representatives were entitled to their travel/per diem costs under a previously issued FLRA Interpretation and Guidance, 2 FLRA No. 31 (1979).
3
The FLRA's Interpretation was not a regulation promulgated under 5 U.S.C. § 7134, but rather an informal ruling issued under 5 U.S.C. § 7105(a)(1). The FLRA in its Interpretation noted that government employees are entitled to reimbursement of travel and per diem expenses incurred on official business :
4
(a) Under regulations prescribed under § 5707 of this title, an employee while traveling on official business away from his designated post of duty ... is entitled to ... is entitled to ... a per diem allowance ....
5
5 U.S.C. § 5702(a) (1976) (emphasis added).
6
The FLRA also noted that the Civil Service Reform Act of 1978 (CSRA) provided that government employees would draw their salaries for time spent in collective bargaining by designating such time as official time :
7
(a) Any employee representing an exclusive representative in the negotiation of a collective bargaining agreement under this chapter shall be authorized official time for such purposes.
8
P.L. 95-454, 95th Cong., 2d Sess. § 701, 92 Stat. 1111, 1214 (1978), 5 U.S.C. § 7131(a) (Supp. III 1979) (emphasis added).
9
Government employees had previously conducted collective bargaining under Executive Order 11491 (1969), 1969 U.S.Code Cong. & Ad.News 2948, which did not entitle employees to pay for time spent in collective bargaining. The FLRA concluded that when Congress expanded "official time" to compensate employees for bargaining time, Congress also meant to expand "official business" to compensate employee bargainers for travel and per diem expenses. The FLRA supported its conclusion by noting that Congress in the CSRA had declared that collective bargaining furthered the public business :
10
(a) The Congress finds that-(1) experience in both private and public employment indicates that the statutory protection of the right of employees to organize, bargain collectively, and participate through labor organizations of their own choosing in decisions which affect them-
11
(A) safeguards the public interest,
12
(B) contributes to the effective conduct of public business....
13
P.L. 95-454, 95th Cong., 2d Sess. § 701, 92 Stat. 1111, 1192 (1978), 5 U.S.C. § 7101(a) (Supp. III 1979) (emphasis added).
14
The FLRA held that collective bargaining done on official time, which contributed to the effective conduct of public business, was "official business" within the meaning of 5 U.S.C. § 5702(a) and therefore employees engaged in collective bargaining were entitled to per diem. The National Guard, one of the first federal employers to suffer the consequences of the FLRA's Interpretation & Guidance,3 argues the FLRA incorrectly interpreted the relevant statutes. We agree.
15
Our review of the FLRA's decision is not inhibited by the deference normally due the Authority's construction of its enabling statute. See Internal Revenue Service v. Federal Labor Relations Authority, 671 F.2d 560, 563 (D.C.Cir.1982). Here the FLRA's decision rests on an interpretation of "official business" in 5 U.S.C. § 5702(a)-a section not part of the CSRA, which created the FLRA, but instead part of a subchapter administered by the General Services Administration. 5 U.S.C. § 5707. No great deference is due an agency interpretation of another agency's statute. See New Jersey Air Nat'l Guard v. Federal Labor Relations Authority, 677 F.2d 276, at 281 n. 6 (3rd Cir. 1982).
16
We are cited to no legislative history supporting the FLRA's conclusion that collective bargaining on "official time" is also "official business." The FLRA relies instead on the Congressional finding that collective bargaining is in the public interest. Such a general declaration of policy is "too thin a reed" to support a substantive ruling which would cost the federal government substantial sums of money in per diem and travel expenses. Cf. Pennhurst State School v. Halderman, 451 U.S. 1, 19, 101 S.Ct. 1531, 1541, 67 L.Ed.2d 694 (1981) (statute's "bill of rights" for the handicapped does not create affirmative obligations on the states to treat the handicapped).
17
Moreover, the FLRA's extrapolation goes too far. Congress did not find that collective bargaining furthers the public interest. Congress found that statutory protection of collective bargaining furthers the public interest, see 5 U.S.C. § 7101(a) and CSRA § 3(10), 92 Stat. 1111, 1113 (1978). The import of the distinction becomes clear upon consideration of the legislative history of CSRA § 3(10), because the history indicates that Congress did not endorse collective bargaining as in the public interest. Congress merely stated that collective bargaining was not against the public interest and did not hamper public business:
18
The conference substitute ... adopts the Senate language which states as one of the policies of the United States that the right of Federal employees to ... bargain collectively ... with full regard for the public interest and the effectual conduct of public business, should be specifically recognized in statute."
19
Conference Report, H.R.Rep.No. 1717, 95th Cong. 2d Sess. 127 (1978), 1978 U.S.Code Cong. & Ad.News 2723, 2860. The same sentiments were expressed in the Senate Report:
20
(Section 3(10) ) states findings of Congress that the protection of the right of employees to ... bargain collectively ... can be accomplished with full regard for the public interest and contributes to the effective conduct of public business.
21
S.Rep.No. 969, 95th Cong. 1st Sess. 97 (1977), 1978 U.S.Code Cong. & Ad.News 2723, 2819 (emphasis added).
22
The reports indicate that Congress did not give collective bargaining the blanket endorsement that FLRA claims to have found in the statute. Moreover, the endorsement of collective bargaining was no more than the endorsement previously contained in Executive Order 11491. See S.Rep.No. 969, supra, at 17, 1978 U.S.Code Cong. & Ad.News at 2739.
23
Finally, though neither side saw fit to refer us to comparable practice in the private sector, we think it appropriate to note that the expense the FLRA would impose as routine upon the federal government is viewed as an extraordinary remedy by the National Labor Relations Board (NLRB). Only a decade ago, the NLRB held that it was without power to order a private employer to pay the costs of a breakdown in collective bargaining. Ex-Cell-O Corp., 185 N.L.R.B. 107 (1970). The D.C. Circuit remanded on the ground that the NLRB did have such power, International Union v. National Labor Relations Board, 449 F.2d 1046 (D.C.Cir.1971) (per curiam), but that power has been exercised to compel payment of employee bargainers' per diem and travel expenses only as an extraordinary remedy for the employers' failure to bargain in good faith. Marriott In-Flite Services, 258 N.L.R.B. No. 99 (Sept. 30, 1981); J. P. Stevens & Co., Inc., 239 N.L.R.B. 738, 773 (1978). Far from seeking a remedy for bad faith bargaining, the FLRA would hold that the federal government must always pay the bargaining costs of its adversaries. One of the obvious and universal purposes of collecting union dues is to pay for the expenses of such important activities as collective bargaining with the employer. Under all the circumstances we cannot believe that Congress meant the government to assume such an unusual burden, so different from any accepted practice in dealings between employers and employees, absent a clear and specific provision to that effect.
24
Petition granted; enforcement denied.
25
OAKES, Circuit Judge (dissenting).
26
I dissent.
27
The FLRA found that employees on official time under 5 U.S.C. § 7131(a) while representing their union in negotiating a collective bargaining agreement with their employing agency are entitled under 5 U.S.C. § 5702(a) to payments from that agency for their travel and per diem expenses. This construction is entitled to considerable deference. Bureau of Alcohol, Tobacco and Firearms v. FLRA, 672 F.2d 732, 735 (9th Cir. 1982) (upholding the FLRA's interpretation of section 7131(a) on the same issue as in this case). As the District of Columbia Circuit recently stated,
28
although we do not regard the agency argument to be without force, we have no doubt that the ruling of the FLRA should be upheld against it. It is the FLRA, not this court, that has been entrusted by Congress with broad powers to administer Title VII and to establish policies and provide guidance thereunder .... If the FLRA's construction of the statute is reasonably defensible, we are not free to reject it merely because we might decide differently if confronted with the question in the first instance. See Ford Motor Co. v. NLRB, 441 U.S. 488, 99 S.Ct. 1842, 60 L.Ed.2d 420 ... (1979).
29
Department of Defense v. FLRA, 659 F.2d 1140, 1162 n.121 (D.C.Cir.1981) (discussing the negotiability of certain union proposals).
30
Judge Lumbard's opinion does not defer to the FLRA because, it says, the FLRA's decision "rests on an interpretation of 'official business' in 5 U.S.C. § 5702(a)," which is administered by the General Services Administration, not the FLRA. This is simply not so. "Interpretation" of "official business" in section 5702(a) is at most secondarily involved. An employee travelling on official business is entitled under that statute to a per diem allowance. The FLRA simply made one brief reference to that statute in interpreting a provision of Title VII, 5 U.S.C. § 7131(a), authorizing "official time" for employees "representing an exclusive representative in the negotiation of a collective bargaining agreement."1 The FLRA's Interpretation and Guidance, 2 F.L.R.A. 265 (1979), was issued pursuant to 5 U.S.C. § 7105(a)(1), requiring the FLRA to "provide leadership in establishing policies and guidance" so as to carry out the purpose of Title VII. It was issued after due notice, 44 Fed.Reg. 42778 (July 20, 1979), and hearing, id. at 76581 (Dec. 27, 1979). The FLRA addressed two questions in the Interpretation and Guidance:
31
1) Whether employees who are on official time under section 7131 of the Statute while representing an exclusive representative in the negotiation of a collective bargaining agreement are entitled to payments from agencies for their travel and per diem expenses.
32
2) Whether the official time provisions of section 7131(a) of the Statute encompass all negotiations between an exclusive representative and an agency, regardless of whether such negotiations pertain to the negotiation or renegotiation of a basic collective bargaining agreement.
33
Virtually the entire Interpretation is devoted to the legislative history of Title VII and section 7131. Only a single paragraph in the eight page Interpretation refers to 5 U.S.C. § 5701 et seq.2
34
On the merits, while the position of the majority here has some strength, the FLRA's decision is "reasonably defensible" and should be upheld. In enacting section 7131(a) Congress rejected the limitations on official time contained in Exec. Order No. 11491, as amended, § 20 ("Employees who represent a recognized labor organization shall not be on official time when negotiating an agreement with agency management, except to the extent that the negotiating parties agree to other arrangements ..."). Congress thus determined that federal employees, like management representatives, should receive their usual compensation while negotiating collective bargaining agreements-certainly not an unreasonable position once Congress decided that collective bargaining in respect to government employees is desirable and in the public interest. In light of this complete reversal of past practice regarding official time, the past practice of not paying employees for travel and per diem expenses incurred in collective bargaining is at best a frail basis for challenging the FLRA's interpretation.
35
I think the FLRA could reasonably conclude that Congress intended to change the past practice. Unlike the executive order, 5 U.S.C. § 7101 explicitly states that collective bargaining "contributes to the effective conduct of public business," and that "labor organizations and collective bargaining in the civil service are in the public interest." Since this language indicates that employees on "official time" within the meaning of section 7131(a) are conducting "public business" which is in the "public interest," it seems to follow that they are on "official business" when they are negotiating. In that event, 5 U.S.C. § 5702 authorizes payment of travel and per diem expenses.
36
Further support for the Authority's interpretation is found in the intent of Congress to reduce the unequal status of union and management, and in section 7131(a)'s provision that the number of union representatives entitled to official time "shall not exceed the number of individuals designated as representing the agency for such purposes." This last provision enables the agencies to limit their expenditure of funds on behalf of union representatives simply by reducing the number of management representatives. The National Labor Relations Act policy in respect to private employees is irrelevant. In short, like the Ninth Circuit in Bureau of Alcohol, Tobacco and Firearms, supra, I do not find the FLRA's interpretation either arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A). I would grant enforcement.
1
The New York National Guard, although a state militia, is federally administered under Title 32 of the United States Code by the National Guard Bureau in the Pentagon, 10 U.S.C. § 3015 (1976). Therefore a division of the Department of Defense is petitioner here as the administrator of the New York National Guard
2
National Guard technicians are federal employees. 32 U.S.C. § 709(d) (1976)
3
Several other federal employers have challenged the FLRA's Interpretation & Guidance in similar cases before courts of appeals: Bureau of the Mint v. Federal Labor Relations Authority, 81-1194; 82-1195 (D.C.Cir.); Department of Agriculture v. FLRA, 81-1948 (8th Cir.); Florida National Guard v. FLRA, 81-5466 (11th Cir.)
The Ninth Circuit upheld the FLRA's determination that federal employers must pay the per diem and travel expenses of federal employee bargainers. Bureau of Alcohol, Tobacco & Firearms v. FLRA, 672 F.2d 732, 737-38 (9th Cir. 1982). We disagree.
1
5 U.S.C. § 7131 reads as follows:
Official time
(a) Any employee representing an exclusive representative in the negotiation of a collective bargaining agreement under this chapter shall be authorized official time for such purposes, including attendance at impasse proceeding, during the time the employee otherwise would be in duty status. The number of employees for whom official time is authorized under this subsection shall not exceed the number of individuals designated as representing the agency for such purposes.
(b) Any activities performed by any employee relating to the internal business of a labor organization (including the solicitation of membership, elections of labor organization officials, and collection of dues) shall be performed during the time the employee is in a nonduty status.
(c) Except as provided in subsection (a) of this section, the Authority shall determine whether any employee participating for, or on behalf of, a labor organization in any phase of proceedings before the Authority shall be authorized official time for such purpose during the time the employee otherwise would be in a duty status.
(d) Except as provided in the preceding subsections of this section-
(1) any employee representing an exclusive representative, or
(2) in connection with any other matter covered by this chapter, any employee in an appropriate unit represented by an exclusive representative,
shall be granted official time in any amount the agency and the exclusive representative involved agree to be reasonable, necessary, and in the public interest.
2
The full paragraph on the fifth page of the Interpretation, 2 F.L.R.A. at 269, reads:
Neither the Statute, nor it legislative history, expressly adverts to the payment of travel expenses or per diem during participation in these negotiation activities. However, it is well established that such expenses are authorized when an employee "is engaged on official business for the Government" (Chapter 57, Subchapter I-Travel and Subsistence Expenses; Mileage Allowances, 5 U.S.C. § 5701, et seq.). As already mentioned, Congress, in adopting the Statute, specifically found in section 7101(a) that collective bargaining "contributes to the effective conduct of public business," and that "collective bargaining in the civil service (is) in the public interest." Further, Congress expressly mandated in sections 7114 and 7116(a) (5) and (b)(5) that such negotiations be conducted in good faith by the parties involved (92 Stat. 1202, 1204). Thus, an employee, while negotiating a collective bargaining agreement as a union representative and while on paid time entitled to his or her usual compensation and not in a leave status, is clearly engaged on "official business for the Government."
A fair reading of the Interpretation and Guidance is that the FLRA made the determination whether employees on official time are entitled to payments for travel and per diem on the basis of section 7131(a) and Title VII, and then concluded that employees participating in negotiation activities under that section are on "official business" and entitled to the payment of travel and per diem under 5 U.S.C. § 5701 et seq., which simply operates to provide the authorization to expend funds.
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11 B.R. 108 (1981)
In the Matter of Raymond TROUTMAN and Peggy Troutman, Debtors.
Bankruptcy No. 180-07843-16.
United States Bankruptcy Court, E.D. New York.
May 22, 1981.
Salzman, Ingber & Winer, New York City, for debtors.
Robert W. Tauber, Brooklyn, N.Y., Chapter 13 Trustee.
MANUEL J. PRICE, Bankruptcy Judge.
Raymond G. and Peggy Ann Troutman, the debtors herein, filed a petition for relief under Chapter 13 of the Bankruptcy Reform Act of 1978 ("THE CODE"), 11 U.S.C. Section 1301 et seq., with this court on December 19, 1980. Their plan provides for the payment in full of debts owed to three secured creditors over a period of three years. They have no unsecured debt by reason of the fact that on September 18, 1980, three months before they filed this petition, this court granted the debtors a discharge under Chapter 7 of the Code, 11 U.S.C. Section 701 et seq., in a case commenced by them on January 23, 1980. In that case, they listed six unsecured creditors totaling $5,894 who received no distribution since the debtors listed no assets other than those which were exempt pursuant to Section 522 of the Code, 11 U.S.C. § 522. Their Chapter 7 petition scheduled three secured creditors: Union Mortgage Corporation which held a mortgage on their home in the amount of $32,000; Beneficial Finance Company and the Long Island Bank to which they owed $2,899 and $727 respectively and which held security interests in their automobile. The Chapter 7 trustee abandoned his interest in their home and automobile since the debtors had no equity in either property. By order of this court, dated December 8, 1980, the debtors' reaffirmation of their secured debt to Beneficial Finance Company in the amount of $2,899 was approved.
The only creditors scheduled in the debtors' Chapter 13 petition are the identical secured creditors previously scheduled in the debtors' Chapter 7 petition. In this case, Union Mortgage Corporation is listed as a secured creditor to which they owe $10,107.44 on account of twenty-eight months' arrears on their home mortgage plus late charges and attorneys' fees in connection therewith, together with the balance of the face amount of the mortgage of $31,410.38. The debtors' petition indicates that their home is involved in a foreclosure *109 proceeding by reason of the arrears. Their response to question number 9(a) in their Chapter 13 Statement regarding foreclosure proceedings states: "... Foreclosure sale for December 22, 1980 ...." Beneficial Finance Company and the Long Island Bank are scheduled as secured creditors in the sum of $2,300 and $600 respectively. Neither of these creditors has either filed a proof of claim or an objection to the confirmation of the debtors' plan.
The debtors are both employed by the New York City Department of Social Services, Mr. Troutman as a Social Worker. Mrs. Troutman is an Office Associate. Their combined monthly income totals $1,496.77. This amount includes $200 per month they receive on account of a rental contribution from one of their two sons. Their monthly expenses total $976. Of that amount, $839 has been allocated for their mortgage payment, utility and food bills. Their monthly income exceeds their expenses by $520. The debtors own a home which they value at $45,000. It is subject to a mortgage held by the Union Mortgage Corporation in the amount of $31,410.38 plus over $10,000 in arrears. Their automobile, a 1974 Dodge van, is valued at $2,000. They own no property over and above the exemptions claimed and allowed by the Code. Under their plan they proposed to pay the trustee $397.44 per month for 36 months. Such a plan will result in 100% payment to their secured creditors, without interest, over the life of the plan.
Recently, in In re Stein, et al., No. 180-04278 (E.D.N.Y. April 20, 1981), this court denied confirmation of several debtors' plans which provided for nominal payments to unsecured creditors on the ground that they were not proposed in good faith as required by Section 1325(a)(3) of the Code, 11 U.S.C. § 1325(a)(3), since they did not comply with the legislative purpose behind the chapter, namely, to enable debtors to repay their debts over an extended period. The majority of bankruptcy courts throughout the country have also denied confirmation of such plans on similar grounds. See e.g. In re Cook, 3 B.R. 480 (Bkrtcy.S.D.W. Va.1980), In re Heard, 6 B.R. 876 (Bkrtcy. W.D.Ky.1980), In re Aalto, 8 B.R. 157 (Bkrtcy.M.D.Fla.1981). Here, the debtors are attempting to accomplish in two proceedings what they could not accomplish in one. They have used Chapter 7 to discharge their unsecured debts and now seek to use Chapter 13 to deal with their secured creditors. Had they combined the two proceedings into one under Chapter 13, confirmation would have been denied since their plan would have offered no payments to unsecured creditors. This case is strikingly similar to the case of In re Diego, 6 B.R. 468 (Bkrtcy.N.D.Cal.1980). There, the debtors received a discharge under Chapter 7 several months prior to filing a petition for relief under Chapter 13. In the Chapter 7 proceeding, no distribution was made to general unsecured creditors whose debts were discharged. The only debts to be paid under their Chapter 13 plan, $3,764.47 in priority tax claims, had previously been scheduled in their Chapter 7 petition but were not discharged by virtue of Section 523(a)(1), 11 U.S.C. § 523(a)(1). The court denied confirmation on the ground that the Chapter 13 petition, considered in conjunction with their recent Chapter 7 petition, amounted to a Chapter 13 petition which provided for no payment to unsecured creditors and was therefore not proposed in good faith as required by Section 1325(a)(3). It said: "The combined petitions for all practical purposes constitute use of the bankruptcy remedies, Chapter 7 and Chapter 13, to accomplish by indirection what cannot be accomplished directly, namely, the proposal and confirmation of a Chapter 13 Plan proposing to pay nothing to general unsecured creditors." Id., at p. 469.
I must construe the Chapter 7 and Chapter 13 petitions filed by the debtors in the case at bar in this light. What they are seeking to do is to pay their unsecured creditors nothing while paying off their secured claims over the life of the plan. Confirmation is denied and the case is dismissed.
IT IS SO ORDERED.
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198 N.W.2d 84 (1972)
FIRST AMERICAN BANK & TRUST COMPANY, a domestic corporation, et al., Respondents,
v.
G. W. ELLWEIN, State Examiner and Commissioner, Department of Banking and Financial Institutions, et al., Appellants.
No. 8747.
Supreme Court of North Dakota.
April 12, 1972.
Rehearing Denied May 18, 1972.
*89 Helgi Johanneson, Atty. Gen., Bismarck, and Frank F. Jestrab, Sp. Asst. Atty. Gen., Williston, for appellants.
Frederick E. Saefke, Jr., and Thompson, Lundberg & Nodland, Bismarck, for respondents.
C. F. KELSCH, District Judge (On Reassignment).
This is an appeal from a judgment of the district court of Burleigh County entered August 20, 1971, wherein it determined and adjudged that the two Orders issued by the State Examiner on the 28th day of June, 1971, were in all things null and void.
The record shows, without dispute,
(1) That on the 28th day of June, 1971, G. W. Ellwein, as State Examiner, issued an Order directed to the First American Bank & Trust Company which, omitting the title, reads as follows:
Whereas, the Report of Examination of First American Bank & Trust Company, Bismarck, North Dakota, as of May 14, 1971 shows, and the undersigned finds that the First American Bank & Trust Company is insolvent. The report of insolvency has been certified to the State Banking Board.
Now therefore, you are duly directed to immediately relinquish possession of First American Bank & Trust Company's books, records and other property to Mr. Victor Abraham, Bank Examiner for the State of North Dakota.
By order of the Commissioner, Department of Banking and Financial Institutions, this 28th day of June, 1971.
/s/ G. W. ELLWEIN
G. W. Ellwein, Commissioner
Department of Banking and
Financial Institutions
and
(2) That the State Examiner issued a second Order on the same day wherein he found, among other things:
(a) That the actual cash market value of all of its assets are insufficient to pay its liabilities;
(b) That notwithstanding such fact said Bank continued to receive and accept deposits and by reason thereof he directed said Bank to forthwith cease accepting deposits, cease disbursing funds, call in numerous loans, cease certain advertising of investment programs, follow approved accounting practices, file the required statements, furnish $400,000.00 in new capital and divest the present stockholders of their ownership and control, or in the alternative, show cause before the State Banking Board at the office of the State Examiner in the State Capitol at Bismarck, North Dakota, on Thursday, the 1st day of July, 1971, at *90 9:30 a.m., or at such other time as may be allowed, why a receiver for the First American Bank & Trust Company should not be appointed as provided by law.
Dated this 28th day of June, 1971, at Bismarck, North Dakota.
/s/ G. W. Ellwein
G. W. Ellwein, State Examiner
and Commissioner
(3) That both of said Orders were served upon said Bank on the same day, whereupon it applied for and obtained a temporary injunction from the district court of Burleigh County
(a) Restraining the enforcement of both of said orders,
(b) Requiring the State Examiner and the State Banking Board to show cause why the temporary injunction should not be made permanent, and
(c) Why they should not be enjoined and restrained from issuing any further orders against said Bank.
(4) That upon the hearing on the 2nd of August, 1971, the court found and determined that both of said Orders were null and void ab initio. That judgment was entered accordingly on the 20th day of August, 1971, from which the State Examiner has taken this appeal.
Since both of these Orders were issued on the same day by the State Examiner we shall hereinafter, for the purpose of brevity, refer to the first, or short Order, as Order No. 1, and to the long Order in the alternative as Order No. 2.
Obviously the basic issue before us, in general terms, is the validity of the two Orders set out herein, but more precisely stated the crucial questions for decision are:
(1) Whether the State Examiner has the power and authority under § 6-07-04, N.D. C.C., to make an administrative finding that a bank or trust company which he has examined is insolvent, and if so to issue an ex parte order appointing a temporary receiver to take possession of all of its property to collect and conserve its assets and business for the benefit of its depositors and creditors, and
(2) Whether his administrative finding of insolvency and ex parte order appointing a temporary receiver are valid and binding upon the financial institution so examined:
(a) without regular proceedings having first been had before the State Banking Board upon the filing of a proper complaint alleging it to be insolvent and fixing a time for the hearing thereof upon the merits;
(b) without giving said bank reasonable notice thereof and affording it an opportunity to present evidence upon the issue of its insolvency;
(c) without making specific findings of fact and separate conclusions of law upon which its decision of insolvency is based;
(d) without the right of appeal and judicial review thereof; and
(e) without a substantial compliance with the principles of law applicable to administrative action and the fundamental requirements of due process of law.
Manifestly the answers to all of these questions will depend primarily upon the interpretation of all of our statutes applicable thereto, and therefore we believe that a proper evaluation of the public importance and the far-reaching consequences of our decision require that we set out and consider all of the pertinent provisions of our statutes relating:
(1) To the powers and duties of the State Banking Board;
(2) To the powers and duties of the State Examiner;
*91 (3) To the procedural provisions of our Administrative Agencies Practice Act; and
(4) To the relevant canons of statutory construction; in order to determine the constitutional validity of both of said Orders.
We proceed first to a consideration of our statutes which create the State Banking Board and define its powers and duties.
The State Department of Banking and Financial Institutions was created by § 6-01-01, N.D.C.C., as amended by Chapter 96, Session Laws 1969. The Board consists of five members, and the State Examiner acts as chairman thereof. It is required to hold four annual meetings and such special meetings as the State Examiner may call upon proper notice.
The Board is expressly authorized by statute:
(1) To make all rules and regulations for the government of all banks and financial institutions (§ 6-01-04, N.D.C.C.);
(2) To receive and approve all reports made by financial institutions under its jurisdiction;
(3) To appoint receivers; and
(4) To make and enforce such orders as in its judgment may be necessary or proper to protect the public, depositors and creditors (§§ 6-01-04 and 6-01-09, N.D.C.C.).
We next consider the powers and duties of the State Examiner. On this issue our statutes provide in substance:
(1) That the State Examiner shall serve as chairman of the State Banking Board;
(2) That he shall exercise constant supervision over the business affairs of all financial institutions placed within the jurisdiction of the Board;
(3) That he shall make periodic examinations of all banks and financial institutions, without previous notice, verify its assets and liabilities; he shall examine the validity of mortgages, investigate methods of operation and their system of accounting to ascertain whether such methods conform to law and sound banking usage and principles; and
(4) He shall report all infringements by such institutions to the State Banking Board and report their financial conditions, with his recommendations and suggestions, and the Board may take such action as, in its discretion, the exigencies may demand. Finally, if the State Examiner has reasonable cause to believe that a bank or financial institution which he has examined is insolvent then it is his mandatory duty to seize its property, books and records, collect moneys due it and conserve its assets and business for the benefit of its depositors and creditors. (§§ 6-01-09 and 6-07-04, N.D.C.C.)
We next proceed to the powers and duties of the State Banking Board under the rules prescribed by the Administrative Agencies Practice Act which apply to and govern the validity of administrative action.
The Administrative Agencies Practice Act requires that all administrative agencies observe rules of procedure, in substance as follows:
(1) In proceedings brought before an administrative agency the petitioner or the administrative agency when acting upon its own initiative shall prepare and file with the agency having jurisdiction a clear and concise statement or complaint which contains the claims of charges and the relief sought. (§ 28-32-05, N.D.C.C.)
(2) Upon the filing of such complaint the agency shall issue a notice for hearing which shall fix the time and place for the trial thereof upon its merits. A copy of the complaint and notice of hearing must be served upon the respondent. (§ 28-32-05, N.D.C.C.)
(3) At such hearing the agency shall afford the party proceeded against an opportunity to present evidence, to examine and cross-examine witnesses as is permitted to *92 the parties in an action in the district court. (§ 28-32-05, N.D.C.C.)
(4) No decision shall be made by the agency until all parties in interest have been furnished with written specifications of issues nor until an opportunity has been afforded to present evidence and to be heard on the precise issues so specified. But these requirements shall not apply to the Commissioners of the Workmen's Compensation Bureau, who may make an order without giving the notice required therein. (§ 28-32-08, N.D.C.C.)
(5) The agency shall make concise and explicit findings of fact and separate conclusions of law and base its decision thereon and give notice thereof to the interested parties by certified mail. (§ 28-32-13, N.D. C.C.)
(6) Any party to such proceedings, except in cases where the decision of the administrative agency is declared to be final by statute, may appeal to the district court from such decision within thirty days by giving the notice required. (§ 28-32-15, N.D.C.C.) Youmans v. Hanna, 35 N.D. 479, 160 N.W. 705 (1916).
We now proceed to consider the fundamental principles of law which apply to and govern the validity of administrative action. They are:
(1) That the legislature in creating an administrative agency must enjoin upon it a certain course of procedure and certain rules or decisions in the performance of its functions and that a substantial compliance with the statutory requirements is essential to the validity of administrative action. The Supreme Court of the United States in referring to this rule has said:
It is a wholesome and necessary principle that such an agency must pursue the procedure and rules enjoined, and show a substantial compliance therewith to give validity to its action. When, therefore, such an administrative agency is required as a condition precedent to an order, to make a finding of facts, the validity of the order must rest upon the needed finding. If it is lacking, the order is ineffective.
Wichita Railroad & Light Company v. Public Utilities Commission, 260 U.S. 48, 43 S.Ct. 51, 67 L.Ed. 124.
The principle that a substantial compliance with statutory requirements is necessary to render administrative action valid was recognized and approved by this Court in State ex rel. Public Service Commission v. Northern Pacific Railway Company, 75 N.W.2d 129, 135 (N.D.1956), where our Court said:
It is clearly established by the record that the Public Service Commission in issuing its order of November 27, 1954, was attempting to assert and exercise a general power given it without complying with jurisdictional requirements imposed by statute for such exercise. We conclude that the order of the Commission. . . was a nullity and that the judgment entered . . . was erroneous.
It is an elementary principle of law that an administrative agency can only exercise its statutory powers while duly assembled, upon proper notice, at a regular or special meeting. Its powers and duties cannot be exercised by a member thereof acting independently or separately from the administrative agency. (2 Am.Jur.2d Administrative Law § 227, page 57.) This principle of law has also been recognized and approved by this Court. While speaking of the State Examiner in Youmans v. Hanna, supra, 160 N.W. 711, the Court said:
Though an employé intrusted with responsible duties, the statute does not in any sense make him an independent public officer, but rather an agent of the banking board and subject to its directions and control.
We now reach the question as to whether the State Banking Board and the State Examiner are administrative agencies.
*93 An administrative agency is defined by our statute to include:
(1) Any board or commission, and
(2) Any officer
having statewide jurisdiction and authority to make any findings, determination or orders, award or assessments which have the force and effect of law; and which findings and decisions are by express statute subject to review by the courts of this state (§ 28-32-01, N.D.C.C.).
Construing the provisions of the statutes we have set out herein together in the light of the principles of law applicable to administrative action, we conclude that the State Banking Board is an administrative agency:
(1) Because it has statewide jurisdiction over all banks and financial institutions;
(2) Because it has the express power and duty to make rules and regulations for the government thereof which have the force and effect of law;
(3) Because it has the power and duty to file and serve complaints, specify issues for hearing, give reasonable notice to all parties interested, afford them an opportunity for a fair hearing, to make specific findings of fact and conclusions of law and render a decision based thereon, which by express statute are subject to judicial review.
Further we find and determine that the State Examiner is not an officer as said term is defined in the Administrative Agencies Practice Act for the reasons:
(1) That he has no statewide regulatory powers to make or enforce any rules or regulations;
(2) That he has no power to file complaints and to conduct hearings upon reasonable notice or to make specific findings of fact and to render decisions thereon:
(3) That he has no power to issue any orders for the enforcement thereof, except such limited authority that he may have under § 6-07-04, N.D.C.C.;
(4) That there is no provision in our statutes declaring that his orders shall be final; and
(5) That his findings of insolvency or ex parte orders are not, by express statute, subject to judicial review.
But counsel for appellant claims, however, that the two Orders here in issue were not the Orders of the State Examiner but the Orders of the State Banking Board. It is true that Order No. 2 contains a recital to the effect that the State Examiner submitted his report of the examination of the respondent bank to the State Banking Board and that the same was approved by it, but the record does not specifically show:
(1) That said Orders were issued by the State Examiner pursuant to a motion, resolution or other directive of the State Banking Board made or passed when the Board was duly assembled and acting as such at a regular or special meeting called by the State Examiner authorizing him so to do;
(2) That they were issued with reasonable notice to the respondent bank and without a fair hearing before the State Banking Board upon the issue of its insolvency.
In the Wichita case, supra, as here, it was claimed that the action there involved was in fact the action of the administrative agency, but the Court in its answer thereto said:
It is pressed on us that the lack of an express finding may be supplied by implication and by reference to the averments of the petition invoking the action of the Commission. We cannot agree to this.
Wichita R. R. v. Pub. Util. Comm., 260 U.S. 48, 59, 43 S.Ct. 51, 55.
*94 Therefore in the absence of a record showing that the State Banking Board while duly assembled and acting as such had substantially complied with the controlling provisions of §§ 28-32-05 to 28-32-13, inclusive, we follow the decision in the Wichita case and hold that the two Orders in question were not the Orders of the Banking Board as claimed, but of the State Examiner while acting as such official in an individual capacity.
Having determined that the State Examiner is not an administrative agency; that he has no authority to act separately in an individual capacity, that the two Orders here involved were not issued by the State Banking Board while duly assembled and acting as such agency but that they were issued by the State Examiner, the crucial question arises as to what authority the State Examiner had, if any, to find from his examination that the respondent Bank was insolvent and to issue an immediate ex parte order appointing a receiver to take possession of its property.
Counsel for appellant claims in effect that the State Examiner had such authority under the express provision of § 6-07-04, N.D.C.C.; that this is a special statute providing for a remedy in an emergency; that it is valid and vests a reasonable discretion in him to determine what remedy he should pursue.
On the contrary, counsel for the respondent Bank has challenged the validity of all of these contentions and strenuously contends in substance:
(1) That said section does not apply to the respondent Bank, which is organized under Chapter 6-05, N.D.C.C.; and
(2) That if it be held applicable without a substantial compliance with the procedural provisions of the Administrative Agencies Practice Act that such interpretation would render it unconstitutional for want of due process of law.
The argument that § 6-07-04 is inapplicable to the respondent Bank is based upon a fourfold premise, to wit:
(1) That §§ 6-05-27 and 6-05-29 define and limit the State Examiner's powers and his duties where he finds a bank which he has examined is insolvent;
(2) That if he finds a bank is insolvent he can require such bank to increase its deposits with the state treasurer sufficient in amount to insure the safety of all of its deposits, trusts and contingent liabilities, and that if such deposits are made it will foreclose any genuine claim that the bank in issue is in fact insolvent.
(3) That if the State Examiner finds that such bank was conducting its business in an unsafe or unauthorized manner and that it would be unsafe and inexpedient to permit it to continue to transact business that then he can direct said bank to discontinue such practices and communicate his findings to the Attorney General, who should initiate such proceedings as the case may require pursuant to § 6-05-29. That the powers of the State Examiner are limited and restricted to the remedies provided therein and which he must exhaust before he has any authority to proceed in any other way.
(4) That § 6-05-34, N.D.C.C., specifically enumerates the sections of law that shall apply to and be observed by corporations organized under said chapter. That it does not refer to or include § 6-07-04 therein, and consequently counsel claims that the express exclusion of said section from § 6-05-34 warrants the inference that the legislature did not intend to make it applicable to corporations organized under said chapter, for if it had so intended it could have included it therein.
We think that these contentions are unsound and intenable, and that § 6-07-04 does apply to the respondent Bank for the reasons:
(1) That § 6-05-28 expressly provides, in part, that the State Examiner *95 shall assume and exercise over such corporation, its business and officers, all the power and authority conferred upon him over banks and other financial institutions. Stated differently, this section, by reference, requires the State Examiner to exercise all of the powers he has under § 6-07-04 in his supervision of banks organized under Chapter 6-05; and
(2) That it is a general rule that all laws must be uniform in operation. North Dakota Constitution § 11.
We know of no principle of law or just and sound reason why this emergency measure should not be held to apply equally to all banks and financial institutions or why the respondent bank should be treated differently or be held to be exempt from its protective provisions. Clearly, to sustain the claim that it does not apply would render it discriminatory rather than uniform in its operation. F. W. Woolworth Co. v. Gray, 77 N.D. 757, 46 N.W.2d 295 (1951).
We now consider the second basic contention advanced and relied upon by the respondent for an affirmance of the judgment of the district court, and that is, in effect, that if it be held that § 6-07-04 applies and that the State Examiner's administrative finding of insolvency and his ex parte order appointing a receiver are final and binding upon it without a substantial compliance with the procedural requirements of the Administrative Agencies Practice Act, that such interpretation of said section would render it unconstitutional and void for want of due process of law.
The power and competency of the legislative assembly to authorize a banking official to make an administrative finding of insolvency and to issue an ex parte order to take possession of a financial institution which is found to be insolvent, without a prior judicial determination of its insolvency cannot be successfully challenged. The Supreme Court of the United States, in construing provisions of comparable statutes, has long since held that a State may, consistent with due process of law, clothe a bank commissioner with the power to close the doors of a state bank if on examination it is found to be insolvent without waiting for judicial proceedings. Noble State Bank v. Haskell, 219 U.S. 104, 31 S.Ct. 186, 55 L.Ed. 112; Title Guaranty & Surety Co. v. Allen, 240 U.S. 136, 36 S.Ct. 345, 60 L.Ed. 566; 10 Am.Jur.2d Banks § 654, page 716.
To determine the validity of this contention we must construe § 6-07-04 in the light of the relevant canons of statutory construction applicable thereto. They are:
(1) That in passing on the validity of a legislative enactment every reasonable presumption is in favor of its constitutionality unless it clearly violates some provision of our State Constitution or the Federal Constitution;
(2) That wherever possible statutes must be interpreted in accordance with constitutional principles of law so as to give to all interested parties reasonable notice and a fair hearing upon the merits, to adduce evidence and grant a judicial review of any order or decision upon appeal therefrom. American Power & Light Co. v. Securities and Exchange Commission, 329 U.S. 90, 67 S.Ct. 133, 143, 91 L.Ed. 103.
This principle of law has been recognized and approved by this Court in State ex rel. Lemke v. Chicago & N. W. Ry. Co., 46 N.D. 313, 179 N.W. 378, 381 (1920), where the Court, referring to the powers of the Board of Railroad Commissioners, said:
Its action, therefore, concerning any subject-matter within its jurisdiction, to be valid, must be in substantial conformity with the statutes governing its procedure, and must be consonant with due process of law.
(3) Where the validity of a statute is assailed and there are two possible interpretations, by one of which the statute would be unconstitutional, and by the *96 other of which it would be valid, the Court will adopt a construction which will sustain its validity. Anniston Manufacturing Co. v. Davis, 301 U.S. 337, 57 S.Ct. 816, 81 L. Ed. 1143; 16 Am.Jur.2d Constitutional Law § 145, page 347. This principle has likewise been approved and applied by this Court in State v. Burleigh County, 55 N.D. 1, 212 N.W. 217 (1927), where the Court said:
Where a statute is susceptible of two constructions, by one of which grave and doubtful constitutional questions arise, and by the other of which such questions are avoided, it is the duty of courts to adopt the latter construction.
Manifestly the issue before us is clearly not one of legislative power, but of legislative intent. To ascertain the true legislative intent of § 6-07-04 it is our primary duty to construe all statutes relating to the same subject matter together to harmonize their apparent conflicting provisions, if possible, and to give full force and effect to the true legislative intent. Harding v. City of Dickinson, 76 N. D. 71, 33 N.W.2d 626 (1948); Wallentinson v. Williams County, 101 N.W.2d 571 (N.D. 1960).
Applying this rule the questions arise whether the State Examiner while acting independently in his official capacity in the discharge of his administrative duties has the authority:
(1) To make an administrative finding that the financial institution which he has examined is insolvent, and
(2) To issue an ex parte order appointing one of his examiners to act as a temporary receiver to collect and conserve its assets and business for the benefit of its depositors and creditors.
We believe that the language of § 6-07-04 is plain and clear, that its meaning is not doubtful or ambiguous, and that when its words are construed in their ordinary sense we find and conclude that the State Examiner while acting independently in his official capacity has the authority:
(1) To make an administrative finding that the bank which he has examined is insolvent, and
(2) To issue an ex parte order appointing an examiner from his department to act as temporary receiver or conservator, as distinguished from a permanent receiver, to collect and conserve its assets and business for the protection of its depositors and creditors and thereby preserve the status quo during the pendency of regular proceedings before the State Banking Board to determine its insolvency, and if found insolvent to appoint a permanent receiver with the power to liquidate its business and to distribute its assets.
We now reach the more important and difficult question for decision, and that is whether the legislative assembly by the enactment of § 6-07-04 intended that the State Examiner's administrative findings of insolvency and his ex parte order appointing a temporary receiver or conservator should be held to be final and binding upon the financial institution in issue without reasonable notice and a fair hearing before the State Banking Board and without the right of judicial review upon timely appeal. We believe and find that the legislative assembly of this State did not intend such consequences for the reasons:
(1) That it only authorized him to appoint a temporary receiver for the purpose set out herein as distinguished from a permanent receiver with the power to liquidate its business affairs and to distribute its assets;
(2) That it did not authorize him to file a complaint specifying that the bank in issue was insolvent, to set a time for hearing upon the merits, to give reasonable notice, to make specific findings and a conclusion of insolvency, to render a decision based thereon and to issue an order for the enforcement thereof;
*97 (3) That it did not provide that his finding of insolvency or the ex parte order which he may make in the exercise of his administrative powers or discharge of his duties should not be subject to judicial review; and
(4) That it did not declare that his administrative findings or ex parte orders directing the seizure of the property of an insolvent bank were to be final and not subject to judicial review, which the legislature could have done by bringing within the exception contained in § 28-32-15, but did not do so.
It is elementary that the right of appeal is purely statutory. Helland v. Jones, 76 N.D. 511, 37 N.W.2d 513 (1949).
Although we find no express statutory provision authorizing an appeal from the State Examiner's ex parte orders we determine that the constitutional rights of all financial institutions must be respected and protected. Substantial compliance with the fundamental requirements of due process of law require that they be given reasonable notice and a fair hearing on the issue of insolvency and the appointment of a permanent receiver before the State Banking Board, held for that purpose.
This interpretation of said section safeguards and protects the constitutional right of the bank or trust company in issue to challenge the necessity, reasonableness and the legality of the State Examiner's administrative finding of insolvency and his ex parte order appointing a temporary receiver or conservator before the State Banking Board in a hearing had for the purpose of determining its solvency and the appointment of a permanent receiver. Its decisions upon these issues are, by express statute, subject to judicial review upon timely appeal.
We believe that our interpretation of this emergency measure is not only reasonable, sound and expressive of the true legislative intent but also finds support in and is consistent with the fact that §§ 6-05-27 and 6-05-29 expressly authorize the State Examiner:
(1) To make an administrative finding that the amount of cash deposited with the state treasurer is insufficient to secure its deposits, trust funds and liabilities, or that its banking practices are illegal;
(2) To issue ex parte orders requiring it to increase its deposits or to direct that it shall discontinue its illegal banking practices; and
(3) That neither of these sections expressly provide for the right of judicial review upon appeal of his administrative findings of insolvency or ex parte orders issued thereon.
Manifestly the nature of the administrative authority and the methods prescribed for the exercise thereof conferred on the State Examiner by § 6-07-04 does not differ materially from, but is comparable to, the administrative authority given to him in §§ 6-05-27 and 6-05-29 upon which the respondent relies to protect its constitutional and statutory rights. It must be self-evident, therefore, that the respondent's challenge of the constitutional validity of the former, while defending the constitutional validity of the latter, is not only utterly inconsistent but also unsound in principle and reason.
Counsel for the respondent Bank argues vigorously, however, of the grave inherent dangers that are involved in the exercise of the unlimited administrative powers by the State Examiner under § 6-07-04 if its validity is sustained. He stresses the irreparable injury that may result from an unreasonable, oppressive and arbitrary exercise of such power or the abuse of his official discretion. We believe, however, that the interpretation that we have placed upon said section herein should dispel all such fears and reduce the probability of irreparable injury from the exercise of his administrative powers to a minimum because he will ultimately be held responsible for his official administrative action.
*98 Construing all of the statutes relating to banks and financial institutions, to the State Banking Board, the State Examiner, and the Administrative Agencies Practice Act set out herein in the light of the canons of statutory interpretation set out herein we believe, find and conclude:
(1) That banks are engaged in a business affected with the public interest and that as such they are subject to reasonable regulation under the police power of the state. Wirtz v. Nestos, 51 N.D. 603, 200 N.W. 524 (1924); Divide County v. Baird, 55 N.D. 45, 212 N.W. 236 (1926); Engel v. O'Malley, 219 U.S. 128, 31 S.Ct. 190, 55 L.Ed. 128; 10 Am.Jur.2d Banks § 10, p. 35.
(2) That § 6-07-04 is a special emergency measure which provides a speedy and effective remedy in an emergency to protect the public and private interest, and to prevent an irreparable loss or injury arising from the insolvency of any bank or financial institution;
(3) That special statutes in case of an irreconcilable conflict prevail over general provisions of law and constitute a special exception thereto. Section 1-02-07, N.D.C.C.; Kershaw v. Burleigh County, 77 N.D. 932, 47 N.W.2d 132 (1951).
(4) That § 6-07-04 has not been repealed by necessary implication. That repeals by implication are not favored. There must be a clear repugnancy between the provisions of the new law and the old statute to such an extent that a necessary implication arises that the legislature by enactment of the latter Act intended to repeal the former, and then only to the extent of its repugnancy. County of Sargent v. Sweetman, 29 N.D. 256, 150 N.W. 876 (1915); Adams County v. Smith, 74 N.D. 621, 23 N.W.2d 873 (1946). We find that no clear repugnancy exists between this statute and any subsequent legislative Act.
(5) That the legislative assembly has the power to and did authorize the State Examiner to make a preliminary administrative finding that the bank which he examined was insolvent, and if he so found he had the mandatory duty to issue an ex parte order appointing a temporary receiver to protect and conserve its assets and business during the pendency of regular proceedings had before the State Banking Board to determine its solvency, and if found insolvent to appoint a permanent receiver to liquidate its business affairs and to distribute its remaining assets.
(6) That the legislative assembly by the enactment of § 6-07-04 did not intend to make the State Examiner's preliminary administrative finding of insolvency or his ex parte order appointing a temporary receiver or a conservator final and binding upon the bank involved without the right to reasonable notice and a fair hearing before the State Banking Board and the right of judicial review upon timely appeal; and
(7) That our statutes relating to the powers and duties of the State Banking Board and the State Examiner show with reasonable certainty that the legislative assembly did not intend to create dual administrative agencies with concurrent and conflicting regulatory powers in the discharge of their duties, but on the contrary they show that the legislative assembly intended to vest all of the regulatory powers over all banks and financial institutions in the state in the State Banking Board and that it, and it alone, has complete supervision and control thereof, with the exception of the administrative authority vested in the State Bank Examiner in the statutes set out here.
(8) That § 6-07-04 must be interpreted:
(a) To safeguard and protect the constitutional rights of all financial institutions to challenge the necessity, reasonableness and legality of the State Examiner's preliminary administrative finding of insolvency and of his ex parte orders appointing a temporary receiver before the State Banking *99 Board at a regular hearing on the issue of its insolvency and the appointment of a permanent receiver;
(b) To require a substantial compliance with the procedural requirements of the Administrative Agencies Practice Act as a condition precedent to the validity of its decisions; and
(c) To assure the right of judicial review upon appeal from such decisions. Langer v. Gray, 73 N.D. 437, 15 N.W.2d 732 (1944); Northern Pacific Ry. Co. v. McDonald, 77 N.D. 194, 42 N.W.2d 321 (1950).
To sustain respondent's challenge to the constitutional validity of the special emergency measure here in issue would require us:
(1) To strike down and nullify the only speedy and effective remedy provided by law in an emergency for the protection of the public and private interest in an insolvent financial institution;
(2) To adopt a construction which would render it void rather than one which would sustain its validity;
(3) To hold that the state was powerless to provide for such protection in an emergency notwithstanding the fact that the Supreme Court of the United States has specifically held, in effect, that a state may authorize a bank commissioner to close the doors of a state bank if on examination he finds it to be insolvent without waiting for judicial proceedings or granting the right of judicial review upon appeal.
This we have no right to do. It is our solemn duty to give full force and effect to this special emergency measure insofar as it is consistent with and does not violate any of the provisions of the State or Federal Constitutions. Gripentrog v. City of Wahpeton, 126 N.W.2d 230 (N.D.1964).
We are satisfied that the interpretation which we have placed upon this statute does not deny or deprive, but respects and fully protects, the constitutional and statutory rights of the respondent bank. We believe that our interpretation is reasonable, sound, expressive of the true legislative intent, and consistent with the essential requirements of due process of law.
Testing the constitutional validity of Order No. 1, we find from an examination thereof that although it does not state that he appointed his examiner to act only as a temporary receiver to protect and conserve its assets and business for the benefit of its depositors and creditors and to preserve the status quo during the pendency of regular proceedings before the State Banking Board to determine its solvency and for the appointment of a permanent receiver, we believe, however, the fact that he issued Order No. 2 on the same day requiring said bank to show cause, in the alternative, before the State Banking Board why a receiver should not be appointed supports and justifies our interpretation of Order No. 1.
We conclude that the issuance of Order No. 1 was authorized by and constitutes a substantial compliance with the express provision of § 6-07-04. We therefore sustain its constitutional validity and reverse the judgment of the district court declaring it null and void.
Finally we reach the question of the constitutional validity of Order No. 2 wherein the State Examiner recites, among other things, that his report shows that the respondent Bank was insolvent, which he certified to and which was approved by the State Banking Board and wherein he required the immediate compliance by said Bank with all of its directives, or to show cause, in the alternative, why a receiver should not be appointed.
Judging its validity by the conclusions we have reached herein, we determine:
(1) That the State Banking Board has no power or authority under the Administrative Agencies Practice Act to find that the respondent Bank was in fact insolvent *100 by a mere approval of the State Examiner's report containing such preliminary finding without a substantial compliance with the procedural requirements of said Act set out herein;
(2) That in the absence of a record showing that the State Banking Board had substantially complied with said requirements we conclude that said order was issued without any authority in law;
(3) That the issue for the appointment of a permanent receiver presented in the alternative order to show cause could not properly or lawfully arise for decision by the State Banking Board before it had determined that the respondent Bank was insolvent by a substantial compliance with the procedural requirements of the Administrative Agencies Practice Act.
We are therefore constrained to conclude that the issuance of Order No. 2 by the State Examiner was unauthorized, unlawful, and an arbitrary exercise of regulatory power vested in the State Banking Board; and as such it is null and void for want of due process of law.
Consequently we affirm the judgment of the district court declaring Order No. 2 null and void, without prejudice to the right of the State Banking Board to institute such further proceedings consistent with this decision that it may determine to be reasonable and necessary for the protection of public and private interests in said financial institution.
We therefore remand these proceedings to the district court to enter judgment accordingly, without statutory costs to either party.
ERICKSTAD, Acting C. J., and TEIGEN, J., concur.
STRUTZ, C. J., and PAULSON, J., deeming themselves disqualified, did not participate; C. F. KELSCH and EMIL A. GIESE, District Judges of the Sixth Judicial District, sitting in their stead.
EMIL A. GIESE, District Judge (dissenting).
I dissent and would affirm the decision of the trial court.
First American Bank & Trust Company was organized as an annuity, safe deposit, surety and trust company pursuant to Chapter 6-05, North Dakota Century Code.
Chapter 6-05, on the other hand, provides for the organization, powers, management and regulation of annuity, safe deposit, surety, and trust companies which come within the definition of banking institutions but not banking associations. Both are corporations but differ widely in requirements of organization, qualification, powers, scope of activities, and stringency of authorization and regulation.
Nelson v. Dakota Bankers Trust Company, 132 N.W.2d 903, 909 (N.D.1965).
First American Bank & Trust Company is a special type of corporation intentionally surrounded with safeguards not provided for general banking corporations, and which were undoubtedly provided for the purpose of protecting the interests, not only of creditors, but of shareholders and all others interested in or affected by the business of such a corporation.
The State Examiner in this case is governed by the provisions of Chapter 6-05, N.D.C.C., relating to annuity, safe deposit, surety, and trust companies. Under § 6-05-28, N.D.C.C., the State Examiner shall make a full, true, complete and accurate examination and investigation of the affairs of each corporation doing business under this Chapter once in each six months.
From such examination of the business of any such corporation if it shall appear to the State Examiner that the deposit made by the corporation with the state treasurer is insufficient to insure the safety of its deposit, trust and contingent liabilities, he shall make an order requiring an increase of such deposit under § 6-05-27, N.D.C.C. The corporation is then required *101 to make a deposit in an amount sufficient to comply with said order.
Further, under § 6-05-29, if from such examination it appears to the examiner that such corporation has committed a violation of law or is conducting its business in an unsafe or unauthorized manner or that the deposit made by it with the state treasurer is insufficient to protect the interest of all concerned, the examiner, by an order, shall direct the discontinuance of such illegal or unsafe practices and order it to conform to the requirements of the law or to make a further deposit with the state treasurer in an amount sufficient to insure the safety of its trust, deposit and contingent liabilities. Upon any such corporation refusing to comply with any such order or whenever it shall appear to the examiner that it is unsafe or inexpedient for any such corporation to continue to transact business he shall communicate the facts to the Attorney General, who thereupon shall institute such proceedings against any such corporation as the case requires.
In this case, the State Examiner has not issued any order requiring this corporation to make a further deposit with the state treasurer in an amount sufficient to insure the safety of its trust, deposit and contingent liabilities. I am of the opinion that the State Examiner is obligated under the provisions of this section to issue such order to the corporation involved directing a further deposit in an amount sufficient to insure the safety of the trust, deposit and contingent liabilities of this corporation if it appears from such examination that such deposit is necessary to insure the safety thereof.
Section 1-02-07, N.D.C.C., provides that whenever a general provision in the statute shall be in conflict with a special provision in the same or in another statute, the two shall be construed, if possible, so that effect may be given to both provisions; but if the conflict between the two provisions is irreconcilable the special provision shall prevail and shall be construed as an exception to the general provision, unless the general provision shall be enacted later, and it shall be the manifest legislative intent that such general provision shall prevail.
The general rule on statutory construction, as given in 82 C.J.S. Statutes § 369 is that:
General and special statutes should be read together and harmonized, if possible; but, to the extent of any necessary repugnancy between them, the special statute will prevail over the general unless it appears that the legislature intended to make the general act controlling.
Section 6-07-04, N.D.C.C., upon which the majority relied, is a general statute relating to the dissolution, insolvency, suspension, and liquidation of any association or corporation organized under the provisions of this Title, Banks and Banking, which includes all forms and types of banks, state banks, savings banks, trust companies, building and loan associations, mutual investment corporations, mutual savings corporations, banking institutions, and other financial corporations, exclusive of The Bank of North Dakota, and all credit unions, organized and doing business under the laws of North Dakota and engaged wholly or in part in the receiving of deposits or the selling of their certificates or other evidences of indebtedness or obligations to the public, including the First American Bank & Trust Company organized under Chapter 6-05, N.D.C.C.
However, §§ 6-05-27 and 6-05-29 are special statutes pertaining to the duties of the State Examiner in relation to banking institutions organized under Chapter 6-05 which require the State Examiner to do certain things upon finding that the banking institution is not complying with the law or that the deposit made by it with the state treasurer is insufficient to protect the interests of all concerned. The directives as contained in §§ 6-05-27 and 6-05-29, N.D.C.C., are mandatory and must be complied with by the State Examiner.
*102 KNUDSON, J., concurs in dissent of EMIL A. GIESE, District Judge.
ON PETITION FOR REHEARING
KELSCH, District Judge.
The respondent has filed an original and supplemental petition for a hearing, which contains a great number of specifications and assignments of error. We have carefully analyzed and considered all of them. We find that some are devoid of merit in fact and law; that many have been fully argued, considered and decided; and that some are new, in which the respondent has challenged the legality of our decision insofar as it sustains the validity of State Examiner's Order No. 1, and in which it claims that our decision is unsound, inconsistent and contrary to law.
We deem it advisable to accept and answer this challenge lest it be claimed and believed that our silence constitutes an indisputable admission that our decision is, indeed, as claimed, unsound, unreasonable and inconsistent with the true legislative intent.
The attack upon the validity of our decision is based upon seven grounds, which we shall state and answer separately.
First. Respondent claims that we erred in our interpretation of § 6-07-04 by concluding that the State Examiner while acting in an individual capacity had the authority
(1) To make an administrative finding of insolvency; and
(2) To issue an ex parte order appointing a temporary receiver to seize the property of the respondent bank.
It is argued, in effect, that this interpretation is unsound and inconsistent with our determination
(1) That under Youmans [Youmans v. Hanna, 35 N.D. 479, 160 N.W. 705 (1916)] the State Examiner had no power to act in an individual capacity but could only act as a member and chairman of the State Banking Board;
(2) That only the State Banking Board had the power to find and determine, after reasonable notice and a fair hearing, that the respondent bank was in fact insolvent;
(3) That having held that only the State Banking Board had the power to determine that a banking institution was in fact insolvent upon reasonable notice and a fair hearing, it could not be reasonably and consistently held, as we did, that the State Examiner could do so without such notice and hearing which the State Banking Board could not do; and
(4) That we have no statutory provision authorizing the State Examiner to appoint a temporary receiver to take possession of, control, and manage the banking business of the respondent, as we have held he did.
These contentions clearly show that the respondent has misinterpreted and misapplied our opinion. To clarify this misunderstanding and the confusion complained of it is sufficient to state that in our opinion we set out the pertinent provisions of our statutes relating
(1) to the powers and duties of the State Banking Board;
(2) to the powers and duties of the State Examiner; and
(3) to the applicable provisions of the Administrative Agencies Practice Act.
These statutory provisions clearly authorize the State Examiner to act in a dual or twofold capacity, first as a member and chairman of the State Banking Board while acting as an administrative agency, and second, as an administrative officer acting in an individual capacity as such official.
Stated differently, when the matter in issue in any proceeding comes within the exclusive jurisdiction of the State Banking Board that then he can only act as a member and chairman thereof and as *103 such he can only participate in its hearings, deliberations, findings and decisions. In such a proceeding he has no authority to act in an individual capacity independently of the State Banking Board.
On the contrary, when the subject matter involves the exercise of any power expressly conferred or the performance of any duty expressly imposed upon him as such official that then he has both the right and the duty to act in an individual capacity as such official without the presence of or the participation in or by the State Banking Board when acting as an administrative agency.
That pursuant to and consistent with this basic difference between the action of an administrative agency and that of the State Examiner when acting in an individual capacity, we hold that the State Examiner has the authority to exercise the powers and to perform the duties imposed upon him by § 6-07-04 when acting in an individual capacity separately from and independently of the State Banking Board.
Further, the respondent strenuously insists that we erred in sustaining the right of the State Examiner to appoint a temporary receiver to seize the property of the respondent because there is no provision in any of our statutes authorizing him so to do.
It is true that we have no statutory provisions which expressly authorize the State Examiner to appoint a temporary receiver and that it might have been more appropriate to have held that he only had the power to act as a conservator to preserve the status quo or to appoint one of his deputies to act in such capacity. But there is ample judicial authority to sustain the right of the State Examiner to act as a conservator or to appoint one of his deputies to do so; that the functions of a conservator and those of a temporary receiver are substantially the same, namely, to obtain temporary possession, control and management of the banking institution involved and to conserve and preserve the status quo pending regular proceedings before the proper administrative agency. Obviously, the difference here is only one of terminology and not of substantive powers and functions, and as such it does not render our decision erroneous. Gunsch v. Gunsch, 69 N.W.2d 739 (N.D.1954); Hill v. Bank of San Pedro, 41 Cal.App.2d 595, 107 P.2d 399 (1940); Westveer v. Ter-Keurst, 276 Mich. 277, 267 N.W. 834 (1936); 10 Am.Jur.2d, Banks and Banking, § 679, p. 733.
Second. The respondent has assailed the validity of our decision on the ground that we erred in concluding that § 6-07-04 was a special statute and as such it prevailed over §§ 6-05-27 and -29. We disagree.
Speaking of the difference between general and special statutes, this Court has said:
"`"A statute relating to persons or things as a class is a general law; one relating to particular persons or things of a class is special." * * * "Special laws are those made for individual cases, or for less than a class requiring laws appropriate to its peculiar condition and circumstances." * * * A "general law," as the term is used in this constitutional provision, is a public law of universal interest to the people of the state, and embracing within its provisions all the citizens of the state, or all of a certain class or certain classes of citizens. It must relate to persons and things as a class, and not to particular persons or things of a class. It must embrace the whole subject, or a whole class, and must not be restricted to any particular locality within the state.'" Ferch v. Housing Authority of Cass County, 79 N.D. 764, 59 N.W.2d 849, 864 (1953).
Applying this definition to the provisions of § 6-07-04, we held that it was a special statute, first, because it confers certain powers and duties only upon the State Examiner, and, second, because the powers and duties referred to therein are limited to a specific thing or purpose, that *104 of conserving the status quo as distinguished from the general purpose of dissolution and liquidation. Our statute (§ 1-02-07, N.D.C.C.) expressly provides, in effect, that a special statute prevails only over a general provision when two conditions exist: (1) a conflict must exist between the two, and (2) that the conflict must be irreconcilable. Applying this statutory test to the statutes here, in issue, we believe that a careful analysis of their respective provisions in the light of the subject matter to which they relate clearly show that there is no actual conflict between the intent and purpose thereof. Sections 6-05-27 and -29 do not authorize the State Examiner to make any administrative finding of insolvency nor do they authorize him to seize the property of a bank which he may find to be insolvent upon examination thereof, while § 6-07-04 does expressly so provide. We are convinced that there is no actual conflict, much less an irreconcilable one, between these statutes because they do not deal with or relate to the same subject matter. We believe, therefore, that in the absence of the existence of an actual and irreconcilable conflict between the statutes here, in issue, they must be construed and applied together so as to carry out and give full force and effect to the true legislative intent expressed therein.
Third. The respondent has critically assailed our interpretation of § 6-05-34. It asserts that we erred in failing to consider and to apply the rule, to the effect that the express mention of one thing implies the exclusion of another; that § 6-05-34 does not mention § 6-07-04 and, therefore, we should have held that it was inapplicable to the respondent, which is organized and functioning under Chapter 6-05.
This contention would have merit if it were not for the provisions of § 6-05-28 which expressly renders § 6-07-04 applicable to the respondent, not only for the reasons set out in our opinion but for the further reasons:
(1) That § 6-01-09 provides in part that the State Examiner shall exercise constant supervision over the business affairs of all financial corporations and institutions placed within the jurisdiction of the State Banking Board. It is reasonably certain that the respondent is within the jurisdiction of the State Banking Board and that this section applies to it notwithstanding that it is not mentioned in § 6-05-34;
(2) It is equally certain that §§ 6-01-06, 6-07-05, and 6-07-06 likewise apply to the respondent even though they, too, are not expressly mentioned in § 6-05-34; and
(3) That § 6-05-28 expressly declares in part that the State Examiner shall assume and exercise "over each such corporation and its business . . . all the power and authority conferred upon him over banking and other financial or moneyed corporations or associations." [Emphasis supplied.] The word "all" has been defined to mean everything to which it applies. It does not mean some or a part, but means the whole or its entirety. Ulrich v. Amerada Petroleum Corporation, 66 N.W.2d 397 (N.D.1954). Manifestly, if we interpret § 6-05-28 in the light of this definition then it is reasonably certain that the authority to seize the property of a banking institution in the event of its insolvency under § 6-07-04 is one of the unquestionable powers which the State Examiner is required to assume and to exercise under the mandatory provisions of § 6-05-28.
These facts serve to confirm, rather than to impair, the validity of our decision on this issue and that under these circumstances the rule invoked and relied upon is of little value as an aid to statutory construction.
Fourth. The respondent vigorously insists again that we erred in sustaining the validity of the State Examiner's Order No. 1 because this conclusion, in effect, constitutes a determination that *105 the State Examiner has the power to arbitrarily determine that a banking institution is insolvent without any notice whatsoever and to seize its property without an opportunity to be heard on the issue of its insolvency.
It maintains that this determination is not only unreasonable and unsound but utterly inconsistent with our decision that only the State Banking Board had the authority to make such determination upon reasonable notice to and a fair hearing before it on the issue of insolvency. We disagree for three reasons. They are:
(1) That the State Examiner is not an officer in the sense that said word is defined and used in § 28-32-01 of the Administrative Agencies Practice Act for the reason set out in our opinion, and consequently the procedural requirements of said Act do not apply to the State Examiner when he is acting, as a conservator, in an individual capacity.
(2) We believe and find that there is a very substantial difference between the purpose and legal effect of a determination of insolvency made by the State Banking Board while acting as an administrative agency and an interim finding of insolvency made by the State Examiner when acting in an individual capacity pursuant to the provisions of § 6-07-04. These differences are:
(a) That the former requires the doors of a bank to be closed and its business to be discontinued, while the latter permits its doors to remain open and to continue its banking operations;
(b) That the former fixes and determines the rights and liabilities of all of the interested parties, while the latter is merely an intermediate finding to obtain possession and control for such period of time only as may be reasonably necessary for the State Banking Board to set up and hold a hearing on the issue of its insolvency;
(c) That the former is made for the purpose of appointing a receiver with the power to dissolve its existence, liquidate its business affairs and to distribute its assets, while the latter is only made for the purpose of preserving the status quo;
(d) That the former determination is final and binding upon all parties who had notice of or participated in the hearing before the State Banking Board unless it is modified or reversed upon timely appeal, while the latter is merely an interim finding subject to review before the State Banking Board and to judicial review thereof on appeal from its decision.
(3) We firmly believe that if § 6-07-04 were construed so as to require the State Examiner to hold a hearing on the issue of insolvency and to await the result of lengthy litigation before he has the right to seize the property of any banking institution, which he has found insolvent, that such interpretation, in the absence of a specific requirement to that effect would not only defeat the manifest legislative intent but would render said section wholly ineffective as a measure intended to protect the public and private interests in an emergency, which, as we have held, we have no power to do.
We are convinced that our interpretation of this section will not deny or deprive any banking institution of its constitutional right to due process of law, but on the contrary will fully safeguard and protect such right. That this interpretation of § 6-07-04 should set at rest once and for all the baseless and erroneous claims that, under our opinion, the State Examiner has the authority to arbitrarily find that a banking corporation is insolvent and to deliberately seize its property and to retain possession thereof for an indefinite period of time without the right of review before the State Banking Board and the right to a judicial review upon timely appeal from its decision.
*106 Fifth. The respondent again insists that our interpretation and application of §§ 6-05-27 and -29 is unsound and erroneous. It claims that these are special statutes; that they are applicable to and govern the State Examiner's actions and, therefore, he must first exercise all of the powers and discharge all of the duties imposed upon him thereby before he can resort to or exercise the right to seize the property of any banking institution under § 6-07-04.
We disagree because this contention erroneously assumes that the courts have the power to control and to direct the manner in which discretionary powers vested in an administrative agency or official should be exercised.
We are convinced that we have no such authority for the reasons:
(1) That it is a well established rule of law which has been recognized and approved by this court that where the performance of a legal duty involves the exercise of judgment and discretion the exercise of such judgment and discretion cannot be controlled by mandamus nor can the courts direct the manner in which such discretion should be exercised; and
(2) That the courts have no power to substitute their opinions for the judgment of qualified experts in matters entrusted to administrative agencies or public officials. Securities and Exchange Commission v. Chenery Corporation, 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626; Mogaard v. City of Garrison, 47 N.D. 468, 182 N.W. 758 (1921); State ex rel. Herbrandson v. Vesperman, 52 N.D. 641, 204 N.W. 202 (1925); Transport Oil Inc. v. Cummings, 195 N.W.2d 649 (Wis.1972); 2 Am.Jur.2d, Administrative Law, § 464, p. 277 and § 672, p. 546.
There is a sound and practical reason for these rules and that is that the courts do not have or possess the expert knowledge, training, experience, or competency to substitute their opinions for the judgment of qualified experts made in the exercise of their discretionary powers vested in them by the legislative assembly.
Sixth. Counsel for respondent claims that this court had to resort to and did exercise the power to legislate to justify its opinion. He asserts in effect that although we conclude that the right of appeal is purely statutory and that we have no provision in law providing for an appeal from or a review of the State Examiner's intermediate ex parte orders that we proceeded to legislate in order to provide for both such right and remedy.
We think that this accusation is unfounded and unwarranted for the reasons:
(1) That § 6-01-04 expressly requires the State Banking Board to approve or disapprove the Examiner's reports which he is required to certify to it; and
(2) That this section, as we construe it, necessarily implies the power to review, and that the power to review of necessity implies that the State Examiner is an inferior officer whose administrative findings and intermediate orders are subject to review and approval by the State Banking Board, his superior administrative agency.
Stated in other words, § 6-07-04 must be construed together with § 6-01-04, and when so construed it necessarily implies:
(1) The right to review of the interim findings and intermediate orders of the State Examiner; and
(2) The right to a judicial review thereof upon appeal from its decision. 2 Am. Jur.2d, Administrative Law, § 541, p. 351.
Seventh and finally. The respondent has bitterly denounced our interpretation that § 6-07-04 is a special statute enacted for the purpose of protecting the public and private interest in an emergency. It *107 has challenged the propriety and wisdom of the legislative policy as we have interpreted it. It has again predicted the grave and tragic consequences that will ensue if we adhere to our decision sustaining the validity of the State Examiner's Order No. 1.
We believe that this attack is unreasonable and indefensible for the reason that the Supreme Court of the United States and this Court have consistently held, in effect:
(1) That the legislative assembly is necessarily vested with a broad discretion to determine not only what the interests of the public require, but also what measures are necessary for the protection of that interest; and
(2) That the courts have no power to question the necessity, wisdom or utility of legislation or to substitute its opinions on matters solely within the province of the legislative assembly. Lawton v. Steele, 152 U.S. 133, 14 S.Ct. 499, 38 L.Ed. 385; Montana-Dakota Utilities Co. v. Johanneson, 153 N.W.2d 414 (N.D.1967); Ferguson v. Skrupa, 372 U.S. 726, 83 S.Ct. 1028, 10 L.E.2d 93.
We believe that a proper respect for and a decent compliance with these basic principles of law require that an attack upon the wisdom of the legislative policy should be made before the legislative assembly, and should not and ought not to have been made before this tribunal. Fetzer v. Minot Park District, 138 N.W.2d 601 (N.D.1965).
It must be self-evident from the conclusions we have expressed herein that we are convinced that our opinion, as we have held, is sound, reasonable, consistent with the true legislative intent, and is sustained by ample authority. Therefore, we adhere thereto. Under these circumstances we firmly believe that a rehearing would serve no useful purpose and, therefore, the original and supplemental petitions for a rehearing are hereby denied.
TEIGEN and ERICKSTAD, JJ., concur.
STRUTZ, C. J., and PAULSON, J., deeming themselves disqualified, did not participate; EMIL A. GIESE and C. F. KELSCH, Judges of the Sixth Judicial District, sitting in their stead.
EMIL A. GIESE, District Judge, and KNUDSON, J., on the Order Denying the Petition for Rehearing indicated they would have granted a rehearing.
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Ninth Court of Appeals
BE IT REMEMBERED:
THAT at the term of the Honorable Ninth Court of Appeals of the State of Texas,
begun and holden at Beaumont on the 1st day of January, A.D. 2014, present, Chief Justice
STEVE MCKEITHEN and Justices CHARLES KREGER, HOLLIS HORTON and LEANNE
JOHNSON.
“Pursuant to and in compliance with an Order of the Supreme Court of Texas,
dated March 18, 2014, it is ordered that these causes be transferred to the Thirteenth Court of
Appeals, at Corpus Christi, Texas, and that the Clerk of this Court certify all orders made in this
Court, and transmit all records and papers in said cause to the Clerk of the Thirteenth Court of
Appeals.
09-14-095-CR Zachary Ellis Armstrong v. State of Texas
09-14-097-CR Morris Alexander Wise v. State of Texas
09-14-102-CR James Thomas Jones II v. State of Texas
09-14-103-CR James Thomas Jones II v. State of Texas
09-14-104-CV Thomas W. Harrison v. Wells Fargo Bank
09-14-105-CR Christopher Neal Cormier v. State of Texas
09-14-107-CV Majdee Nassar d/b/a In and Out v. TX Alcoholic Beverage Comm.
09-14-109-CV Jefferson County Constables Assn. v. Jefferson County, Texas
09-14-110-CR David Alan Lott v. State of Texas
09-14-116-CV Christopher Mann and Gwenda Mann v. Rudis Robles
09-14-117-CR Salma Monala-Khalil v. State of Texas
09-14-118-CR John Michael Weatherly v. State of Texas
09-14-119-CR Phillip Joseph Farrell v. State of Texas
09-14-121-CR Yoandry Montano v. State of Texas
I, Carol Anne Harley, Clerk of the Court of Appeals for the Ninth District of
Texas, at the City of Beaumont, herein certify that the foregoing is a true copy of this Court’s
order entered from this Court to the Court of Appeals for the Thirteenth District of Texas at
Corpus Christi as appears of record in Minute Book Volume 18.”
IN WITNESS WHEREOF, I hereunto set my hand and affix the seal of this Court
at Beaumont this 24th of March 2014.
__________________________
Carol Anne Harley
Clerk of the Court
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168 F.Supp.2d 560 (2001)
In re USEC SECURITIES LITIGATION.
No. Civ. H-01-1858.
United States District Court, D. Maryland.
October 22, 2001.
*561 MEMORANDUM OPINION
HARVEY, Senior District Judge.
In this consolidated securities fraud class action, suit has been brought against USEC, Inc. ("USEC"), certain of its officers and directors,[1] and the lead underwriters of USEC's initial public offering[2]*562 (collectively the "defendants"). Ten separate actions have been instituted by shareholders of USEC, who seek damages for violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the "Securities Act"), 15 U.S.C. §§ 77k, 771(2) and 77(o), as amended by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. § 77z-1(a)(3)(B). Jurisdiction is alleged pursuant to Section 22 of the Securities Act, 15 U.S.C. § 77v, and 28 U.S.C. §§ 1331 and 1337. An Order has previously been entered by the Court consolidating these actions for all purposes pursuant to Rule 42(a), F.R.Civ.P.
Presently pending before the Court is a motion filed by class members Howard Cohen and Myles Wren (the "Movants"), requesting the Court: (1) to appoint the Movants as lead plaintiffs for the class under Section 15 U.S.C. § 77z-1(a)(3)(B) of the PSLRA, and (2) to approve the Movants' selection of the law firms of Milberg Weiss Bershad Hynes & Lerach LLP ("Milberg Weiss") and Savett Frutkin Podell & Ryan, P.C. ("Savett Frutkin") as lead counsel and Charles J. Piven, Esq. as liaison counsel.[3] Also pending before the Court are two motions to strike class allegations filed by the defendants. Memoranda and exhibits in support of and in opposition to all three pending motions have been submitted by the parties, and a hearing on the motions has been held in open court.
For the reasons stated herein, this Court will grant the Movants' motion to be appointed lead plaintiffs and will approve their selection of lead and liaison counsel. Defendants' motions to strike class allegations will be denied.
I
Procedural History
On October 27, 2000, plaintiff Paul Spirgel filed the first of these ten securities fraud actions in the United States District Court for the Western District of Kentucky, Paducah Division.[4] This action and similar later suits were brought on behalf of individuals purchasing USEC common stock in or traceable to USEC's July 23, 1998 initial public offering (the "IPO"), including all purchasers between July 23, 1998 and December 2, 1999 (the "Class Period").
Pursuant to 15 U.S.C. § 77z-1(a)(3)(A)(i), notice that a class action had been initiated against the defendants was published on the Business Wire, a widely circulated national business oriented wire service. The notice, as amended, advised members of the proposed class of their right to move the court to serve as lead plaintiff no later than January 8, 2001, which was 60 days after November 7, 2000, the date when the notice was published. On January 8, 2001, the Movants filed their motion for appointment as lead plaintiffs and for approval of their selection of lead and liaison counsel.
On June 14, 2001, the United States District Court for the Western District of Kentucky granted defendants' motion to *563 transfer venue of the ten cases to the District of Maryland pursuant to 28 U.S.C. § 1404(a). On August 3, 2001, the ten pending cases were reassigned to the undersigned. On August 10, 2001, following a status conference in open court, this Court entered an Order consolidating the ten pending class actions for all purposes.
II
Background Facts
USEC is a Delaware corporation whose principal executive offices are located in Bethesda, Maryland. USEC produces and sells enriched uranium to utility companies for use in nuclear power plants. USEC was wholly owned by the United States government[5] prior to its IPO of July 23, 1998. This class action arises as a result of purchases of stock made by investors during the Class Period.
On July 23, 1998, USEC filed a final Registration Statement with the SEC, which incorporated a prospectus. Between July 23 and July 28, 1998, USEC sold 100 million shares of common stock for $14.25 per share. Plaintiffs allege that the prospectus was false and misleading because it failed to disclose and misrepresented numerous adverse facts. It is asserted by plaintiffs that defendants failed to disclose or misrepresented that the market for enriched uranium was in severe decline as the supply available in the market was increasing, that USEC was locked into a contract to purchase uranium from Russia at a fixed price which would soon be greater than the price it could resell it on the markets,[6] and that an advanced enrichment technology known as ALVIS, which was mentioned in the prospectus and which theoretically would permit USEC to compete effectively in the future, was not technologically feasible and would be abandoned.[7]
On June 9, 1999, USEC announced that it was abandoning the proposed ALVIS technology. On October 30, 1999, it was publicly disclosed that USEC was seeking $200 million from the United States government to subsidize its contract with Russia. On December 2, 1999, USEC announced that it would continue with its agreement with Russia despite the government's refusal to grant any aid. On October 26, 2000, USEC common stock closed at $4.5625 per share.
Movants Cohen and Wren purchased, respectively, 118,950 and 135,000 shares of common stock during the Class Period, and allege that they suffered an estimated loss of $925,122 and $863,425 respectively.
III
Applicable Principles of Law
In 1995, Congress enacted the PSLRA, "in response to perceived abuses in securities *564 fraud class action litigation ..." In re Microstrategy Inc. Secs. Litig., 110 F.Supp.2d 427, 430 (E.D.Va.2000). The principal reason behind the congressional action "was the belief that the plaintiff's bar had seized control of class action suits, bringing frivolous suits on behalf of only nominally interested plaintiffs in the hope of obtaining a quick settlement." Greebel v. FTP Software, Inc., 939 F.Supp. 57, 58 (D.Mass.1996), citing S.Rep. No. 104-98, (1995), reprinted in 1995 U.S.C.C.A.N. 679, 687-90. Congress, in passing the PSLRA, intended to ensure more effective representation of investors in securities fraud class actions by transferring control of the litigation from the attorneys to the investors. In re Lucent Technologies Inc., 194 F.R.D. 137, 144 (D.N.J.2000).
To achieve the goal of more effective representation for investors, the "PSLRA provides a method for identifying the plaintiff, or plaintiffs, who is, or are, the most strongly aligned with the class of shareholders, and the most capable of controlling the selection, and actions, of counsel." Id. at 144-45. The PSLRA changed the procedure for establishing control of the litigation from being based on a "race to the court house" to a selection process whereby the most adequate plaintiff or plaintiffs would be selected to lead the litigation. Id.
The procedure established by the PSLRA is designed to provide assurances that the litigation in question is being pursued by the actual plaintiffs, as opposed to nominal or so-called "professional" plaintiffs. The PSLRA attempts to achieve this goal in part by imposing a disclosure requirement on a plaintiff seeking to serve as a representative party, as well as by requiring notice to be published early in the litigation informing potential plaintiffs of the pending litigation and of their right to move to be appointed lead plaintiff. Greebel, 939 F.Supp. at 58.
The PSLRA requires plaintiffs seeking to serve in a representative capacity to provide along with their complaint a sworn certification that:
(i) states that the plaintiff has reviewed the complaint and authorized its filing; (ii) states that the plaintiff did not purchase the security ... at the direction of plaintiffs counsel or in order to participate in any private action arising under this subchapter; (iii) states that the plaintiff is willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if necessary; (iv) sets forth all of the transactions of the plaintiff in the security ... during the class period; (v) identifies any other action under this subchapter, filed during the 3-year period preceding the date on which the certification is signed by the plaintiff, in which the plaintiff has sought to serve, or served, as a representative party on behalf of a class; and (vi) states that the plaintiff will not accept any payment for serving as a representative party on behalf of a class beyond the plaintiff's pro rata share of any recovery.
15 U.S.C. § 77z-1(a)(2)(A).
This information is required so that the court may be assured that the named plaintiff has suffered more than a nominal loss, is not a professional plaintiff, and is otherwise interested and able to serve as a class representative. In re Microstrategy, 110 F.Supp.2d at 432.
The notice requirement of the PSLRA provides that within 20 days after the filing of a complaint, the plaintiff filing the first action must cause notice to be published in a widely circulated national business oriented publication or wire service. The notice serves to advise members of the purported class of the pendency of the *565 action, the claims asserted therein and the purported class period. The notice must also advise prospective class members that no later than 60 days after publication of the notice, any member of the prospective class may move the court to be appointed lead plaintiff. "The fundamental purpose of the ... notice requirement is to present a fair recital of the subject matter of the suit and to inform all class members of their opportunity to be heard." In re Lucent, 194 F.R.D. at 146. The court is then required to consider any motions filed, including those by purported class members who have not been individually named as a plaintiff, and to appoint the member or members that the court determines to be the most capable of adequately representing the interests of the class members. 15 U.S.C. § 77z-1(a)(3)(B)(i). The "most adequate plaintiff" shall, subject to the approval of the court, select and retain counsel to represent the class. 15 U.S.C. § 77z-1(a)(3)(B)(v).
Insofar as the selection of a lead plaintiff is concerned, the PSLRA creates a "rebuttable presumption ... that the most adequate plaintiff ... is the person or group of persons that(aa) has either filed the complaint or made a motion in response to a notice ...; (bb) in the determination of the court, has the largest financial interest in the relief sought by the class; and (cc) otherwise satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure." 15 U.S.C. § 77z-1(a)(3)(B)(iii)(I). This presumption may be rebutted only upon proof by a member of the purported plaintiff class that the presumptively most adequate plaintiff will not fairly and adequately protect the interest of the class, or is subject to unique defenses that render such plaintiff incapable of adequately representing the class. 15 U.S.C. § 77z-1(a)(3)(B)(iii)(II).
Courts have debated the question whether the adequacy of the proposed lead plaintiff or plaintiffs can be challenged only by members of the prospective plaintiffs' class or can also be challenged by defendants. Resolution of this question is especially important where, as in the present case, the motion for appointment as lead plaintiff is not opposed by any other member of the prospective plaintiffs' class. The PSLRA clearly states that questions pertaining to the adequacy of a lead plaintiff may be challenged only by a member of the purported plaintiffs' class. Greebel, 939 F.Supp. at 60.
In Greebel, the court concluded that a defendant lacked standing to challenge whether the movants satisfied the statutory criteria to be adequate lead plaintiffs. Id. However, the court further held that a defendant could object to the adequacy of certification and notice, inasmuch as they are procedural prerequisites for the court's consideration of a motion for appointment of a lead plaintiff. Id. The failure of a named plaintiff to file a certification with the complaint and to serve notice to class members is fatal to the maintenance of the putative class action, and, as a result, defendants have an interest in insuring that these requirements are met. Id. Allowing defendants to object to certification and notice enhances judicial administration of the case, because inadequacies may not otherwise be brought to the court's attention. Id.
IV
Discussion
(a)
Lead Plaintiffs
The Movants contend that they satisfy all of the requirements of the PSLRA, and that they should therefore be appointed lead plaintiffs and have their selection for *566 lead and liaison counsel be approved by the Court. According to the Movants, they are entitled to the statutory presumption that they are the most adequate plaintiffs because they filed their motion in response to the published notice, because they have the largest financial interest in the relief sought by the class, and because they satisfy the requirements of Rule 23, F.R.Civ.P.
Applying the principles of the PSLRA and the many pertinent decisions construing it, this Court has concluded that the motion of Howard Cohen and Myles Wren to be appointed lead plaintiffs and for approval of their selection of lead and liaison counsel should be granted. They have timely filed a motion in response to the notice published on the Business Wire. No other plaintiff and investor has filed a similar motion. Cohen and Wren clearly have the largest financial interest in the relief sought by the class, and the Court is satisfied that, as lead plaintiffs, the Movants satisfy the requirements of Rule 23. In this regard, no more than a preliminary showing need be made early in the case. At this stage of the case, the Court concludes that the Movants have satisfied the typicality and adequacy provisions of Rule 23. A wide ranging analysis under Rule 23 is not appropriate at this initial stage of the litigation and should be left for the Court's later consideration of a motion for class certification. In re Milestone Scientific Sec. Litig., 183 F.R.D. 404, 414 (D.N.J.1998).
Accordingly, the Court concludes that Movants Cohen and Wren are entitled in this case to the statutory presumption that they are the most adequate investors and that they will fairly and adequately represent the class. No proof of inadequacy exists in the record here, and there has been no showing that the Movants are subject to unique defenses. See 15 U.S.C. § 77z-1(a)(3)(B)(ii)(II). In their oppositions to the Wren and Cohen motion, the defendants argue that the complaints under which the Movants seek to be appointed lead plaintiff fail to comply with the certification and notice requirements of the PSLRA. Defendants contend that such failures would preclude these cases from proceeding as a class action and that the need to appoint the lead plaintiffs is therefore obviated. They have accordingly moved to strike the class allegations.
Responding to the defendants' motions and to their opposition to the pending motion for appointment of lead plaintiffs, the Movants first contend that the defendants do not have standing in a securities class action like this one to oppose a motion for appointment of a lead plaintiff. This Court must disagree.
The standing of a defendant to challenge a motion to be appointed lead plaintiff depends upon the basis for that challenge. Greebel, 939 F.Supp. at 60. Here, the defendants contend that there has not been compliance with the certification and notice requirements of the PSLRA. The failure of a plaintiff to file a certification with the complaint and the failure of a plaintiff to serve a notice to class members are fatal to the maintenance of a putative class action. Id. Defendants have the same interest in demanding compliance with provisions of the PSLRA as they have with other requirements relating to the certification of a class, and the granting by a court of standing to defendants to object on these grounds enhances effective judicial administration of the case. Id. This Court accordingly concludes that the defendants have standing to assert the challenges contained in their oppositions to the pending Cohen and Wren motion.
However, the Court concludes on the record here that the notice and certification requirements of the PSLRA have *567 been met in this case. The notice in this case fairly explained the subject matter of the class action and informed all members of the class of their opportunity to be heard with regard to serving as lead plaintiff. See In re Lucent, 194 F.R.D. at 147-48. The notice in question which was published on the Business Wire informed potential class members (1) of the pendency of the action; (2) of the claims asserted therein; (3) of the purported class period; and (4) that any member might move to be appointed lead plaintiff within 60 days of the publication of the notice. See § 77z-1(a)(3)(A)(i). Although the 60 day deadline for the filing of a motion to be appointed lead plaintiff was inadvertently listed in the original notice as "January 6, 2000," the mistake was discovered and promptly corrected. Several hours after the original notice was published, a corrected notice went out over the Business Wire indicating that the deadline in question was January 8 of 2001.
Relying on Lucent, defendants argue that the notice in this case did not adequately list the claims asserted in the original complaint. This contention is without merit. In this case, the contents of the notice at issue went well beyond the "bare bones notification" challenged in the Lucent case. 194 F.R.D. at 147. The notice in this case stated that the prospectus failed to adequately disclose the true risks and uncertainness in the uranium enrichment business, that the prospectus downplayed the fact that the contract with Russia would turn unprofitable, and that the prospectus failed to reveal the true facts about the ALVIS technology which was essential for USEC's profitability. The notice gave the date when all of these misstatements occurred, gave the date when the prospectus was released, and stated that the price of the stock declined as these undisclosed risks materialized. The Court is satisfied that the notice in this case adequately met the requirements of the PSLRA. The subject matter of the class action was fairly explained, and the notice adequately informed all prospective members of the class of their right to be heard with regard to serving as lead plaintiff.
Defendants' reliance on Lucent is misplaced. The claims in that case were brought under the Securities and Exchange Act of 1934. In Lucent, the Court was concerned about the existence of possible conflicts between the purchasers of the securities at different times based on different misstatements. Here, the prospective class includes only individuals who purchased stock during or traceable to the IPO, and all of the alleged misstatements are to be found in the prospectus. Moreover, the notice in Lucent failed to include the caption of the case, the name of the judge to whom the case had been assigned, and the address of the court. The notice in this case contains all of these items and presents "a fair recital" of the subject matter of the suit. See In re Lucent, 194 F.R.D. at 146.
Defendants further argue that the certification filed with the initial complaint failed to attach, as claimed, an addendum setting forth all transactions in the securities during the class period. Responding to this argument, the Movants assert that due to a clerical error the addendum was not initially filed with the Court, and they have now filed the completed certification. According to the Movants, the Spirgel certification, as amended, satisfies the requirements of the PSLRA.[8] This Court would agree.
*568 The certification required by the PSLRA should show the court that the named plaintiff (1) has suffered more than a nominal loss, (2) is not a professional litigant and (3) is otherwise interested and able to serve as a class representative. Microstrategy, 110 F.Supp.2d at 432. The Spirgel certification challenged here by defendants meets all of these basic requirements. Although the challenged certification did not set forth "all of the transactions" of plaintiff Spirgel in the security during the class period, defendants concede that the other five requirements of 15 U.S.C. § 77z-1(a)(2)(A), namely subsections (i), (ii), (iii), (v), and (vi), were all met by the certification at issue.
Defendants argue that the certification was deficient in that it did not assure the Court that the plaintiff had suffered more than a nominal loss. However, the completed certification indicates that the complainant did purchase 700 shares on July 28, 1998 from the IPO. The date and amount of the purchase sufficiently demonstrate that the complainant in the original case suffered more than a nominal loss. From its review of the challenged certification, the Court is satisfied that the named plaintiff has suffered more than a nominal loss, that he is not a professional plaintiff and that he is otherwise interested and able to serve as a class representative. In re Microstrategy, 110 F.Supp.2d at 432. The Court accordingly concludes that the complainant in the Spirgel case is not the type of plaintiff whom Congress meant to exclude.
For these reasons, the Court concludes that the alleged defects in the notice and in the certification are not grounds for the striking of the class allegations. Accordingly, defendants' motions to strike will be denied.
(b)
Lead and Liaison Counsel
Pursuant to the PSLRA, the lead plaintiffs have the right to select class counsel, "subject to the approval of the Court." 15 U.S.C. § 78u-4(a)(3)(B)(v). The Movants have selected and retained the Milberg Weiss and the Savett Frutkin law firms as lead counsel. They have also selected and retained Charles J. Piven, Esq. as liaison counsel. On the record here, this Court concludes that the Movants have chosen competent and experienced lead and liaison counsel. As disclosed by the record, the attorneys selected have extensive experience in class action securities cases like the pending one. Accordingly, the Court will approve the selection of lead and liaison counsel made by the Movants.
The defendants challenge the Movants' selection of two separate law firms as lead counsel. However, the PSLRA does not explicitly restrict lead counsel to one law firm. Microstrategy, 110 F.Supp.2d at 440. Indeed, there are instances in which a class is well served by having two or more law firms combine to direct the litigation. Id. Various courts have held that multiple law firms could share lead counsel duties so long as there are assurances from the firms that they can work together and serve the best interests of members of the class. Id.[9]
In this case, the Court is satisfied that the law firms of Milberg Weiss and Savett Frutkin can work together efficiently and without unnecessary duplication of services. *569 Dual lead counsel is particularly appropriate here since there are two groups of defendants, with each group being represented by separate law firms.[10] Multiple claims have been asserted by plaintiffs against USEC as the issuer and against the other defendants as the underwriters. No increase in litigation costs will result, inasmuch as the PLSRA places restrictions on the payment of attorneys' fees and expenses. See 15 U.S.C. § 77z-1(a)(6).
The Court will further approve the Movants' selection of Charles J. Piven, Esq. as liaison counsel. Mr. Piven has considerable experience in class action securities cases, has an office in Baltimore and has served as liaison counsel in many similar cases filed in this Court.
V
Conclusion
For all the reasons stated, the Cohen and Wren motion for appointment of lead plaintiff and for approval of their selection of lead and liaison counsel will be granted. Defendants' motions to strike class allegations will be denied. An appropriate Order will be entered by the Court.
NOTES
[1] The individual defendants are William H. Timbers, Jr. (President and Chief Executive Officer of USEC), Henry Z. Shelton (Vice President and Chief Financial Officer) and J. William Bennett (Vice President, Advanced Technology).
[2] The "Underwriter Defendants" include Morgan Stanley Dean Witter & Co. Inc., Merril Lynch & Co., Janney Montgomery Scott Inc., Lehman Brothers, Prudential Securities Inc., Salomon Smith Barney, and M.R. Beal and Co.
[3] The motion, as filed in the United States District Court for the Western District of Kentucky, requested that McMurry & Talbott, a Kentucky firm, be appointed liaison counsel. Since the case has now been transferred to the District of Maryland, the motion has been orally amended to include the request that Charles J. Piven, Esq., a Baltimore attorney, be appointed liaison counsel.
[4] That action was later docketed in this Court as Spirgel, et al. v. USEC, Inc., et al., Civil No. H-01-1858.
[5] USEC was a federally-chartered corporation created by the Energy Policy Act of 1992. In 1996, Congress enacted the USEC Privatization Act, 42 U.S.C. § 2297h, which ordered USEC to privatize itself by incorporating a non-governmental corporation with which it would merge. Common stock in this private corporation was sold to the public pursuant to the IPO.
[6] In 1993, the United States had agreed to buy enriched uranium from the Russian Federation at prices set until at least 2001. The uranium was removed from Russian warheads, with the aim of reducing Russia's nuclear arsenal. USEC, under its federal and now private charter, is the Executive Agent for the government in this matter. USEC undertook to resell the enriched uranium in the ordinary course of its business.
[7] USEC currently uses the Gaseous Diffusion method for enriching uranium. The new laser-based enrichment technology, called Atomic Vapor Laser Isotope Separation ("ALVIS"), would theoretically consume far less power, thereby reducing the major part of USEC's production costs.
[8] No certifications at all were attached to a number of the complaints. The certifications of all plaintiffs have now been filed. Pursuant to Rule 15(a), F.R.Civ.P., plaintiffs were entitled to amend their complaints before responsive pleadings were served by filing adequate certifications, and such amendments would relate back to the date of the original pleadings.
[9] The Milberg Weiss firm was appointed colead counsel in the Microstrategy case. See 110 F.Supp. at 440-41.
[10] Skadden Arps Slate Meagher & Flom represent USEC and its officers while Cravath Swaine & Moore and Crowell & Moring represent the underwriters.
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IN THE
TENTH COURT OF APPEALS
No. 10-01-270-CV
GERTIE MARLENE BROOKS
AND SAM ROLAND BROOKS,
Appellants
v.
FIRST ASSEMBLY OF GOD
CHURCH OF CLEBURNE,
Appellee
From the 249th District Court
Johnson County, Texas
Trial Court # C199900285
DISSENTING OPINION
The majority has determined that what was filed as a no-evidence motion for summary
judgment is not because it referenced summary judgment evidence. They have determined that
it is a traditional motion for summary judgment. The majority thus reviews the motion under the
standard of review applicable to a traditional motion for summary judgment.
No useful purpose would be served by me going through an analysis to determine the result
if this case was reviewed under the proper standard of review for a no-evidence motion for
summary judgment. For the reasons expressed in my dissenting opinion in Jacobo v. Binur, I
believe the majority has applied the wrong standard of review. Jacobo v. Binur, 70 S.W.3d 330,
339-44 (Tex. App.—Waco 2002, no pet. h.)(Gray, J. dissenting). Until the precedential value of
Jacobo is established I will continue to note my disagreement with the majority's method of
analysis of this type motion for summary judgment. Accordingly, I respectfully dissent.
TOM GRAY
Justice
Dissenting opinion delivered and filed September 4, 2002
Publish
wooden
bridge with three three-foot culverts under County Road 309, the county had denied his cattle
access from his forty-acre tract of land on the west side of the road to his eighty-acre tract of land
on the east side of the road. Van Zandt sought damages for his loss of use of the eighty-acre tract
and for the greater expense in feeding his cattle because they had no reasonable access to the
eighty-acre tract. The county answered and filed a motion for summary judgment, which was
denied by the court in May 1989. On August 6, 1991, Van Zandt filed an amended petition,
arguing that the implied dedication of the road to the public did not extend to the existing use of
the passage under the bridge. His amended petition also added a cause of action for loss of water
available to his cattle as a result of the county's modification to the bridge.
On January 7, 1993, the county filed a second motion for summary judgment arguing that,
as a matter of law, Van Zandt was not entitled to access under the bridge because the dedication
of the road to public use extended to as much of the surface or subsurface as was reasonably
necessary for the public right-of-way. The county's motion for summary judgment, however, did
not address the loss-of-water issue raised by Van Zandt's amended petition.
On February 10, 1993, the court held a hearing on the county's second motion for summary
judgment. The court's order granting the motion disposed of all issues except Van Zandt's
allegation that the reduction in water flow caused by the bridge modification resulted in a loss of
water available to his cattle. A summary judgment that fails to dispose expressly of all parties and
issues in the pending suit is interlocutory and not appealable unless a severance of that phase of
the case is ordered by the trial court; in the absence of an order of severance, the party against
whom an interlocutory summary judgment has been rendered has his right of appeal when, and
not before, the partial summary judgment is merged in a final judgment disposing of all parties
and issues.
Because Johnson County did not move for summary judgment on the loss-of-water cause of
action, the summary judgment disposes of only the loss-of-use and loss-of-access causes of action.
The summary judgment is, therefore, interlocutory. As a result, we are without jurisdiction to
consider Van Zandt's points of error.
The appeal is dismissed.
BOBBY L. CUMMINGS
Justice
Before Chief Justice Thomas,
Justice Cummings, and
Justice Vance
Dismissed
Order issued and filed December 1, 1993
Do not publish
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the ineffective assistance of appellate counsel. Because the district court
order does not resolve all claims raised below, it is not a final order, and
we lack jurisdiction. 1 Therefore, we
ORDER this appeal DISMISSED.
Hardesty
J.
cc: Hon. Scott N. Freeman, District Judge
Karla K. Butko
Attorney General/Carson City
Washoe County District Attorney
Washoe District Court Clerk
1 We also note that although the district court orders disposed of the
remaining claims either specifically or through implication, several of
these dispositions are not properly supported by factual findings. See
NRS 34.830(1). Specifically, the orders do not contain sufficient factual
findings supporting denial of appellant's claims that counsel was
ineffective for encouraging the court to consider inadmissible evidence at
sentencing and failing to (1) move to withdraw the guilty plea as
requested, (2) object to prosecutorial misconduct during sentencing, (3)
correct factual errors in the presentence investigation report, and (4)
investigate prior to the plea.
SUPREME COURT
OF
NEVADA
2
(0) 1947A
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760 N.W.2d 16 (2009)
STATE of Minnesota, Appellant,
v.
Kendall Lee KAIL, Respondent.
No. A08-1081.
Court of Appeals of Minnesota.
February 3, 2009.
*17 Lori Swanson, Attorney General, and Katrina E. Joseph, Martin J. Costello, Hughes & Costello, St. Paul, MN, for appellant.
Benjamin S. Houge, Benjamin S. Houge Law Offices, Stillwater, MN, for respondent.
Considered and decided by CONNOLLY, Presiding Judge; ROSS, Judge; and BJORKMAN, Judge.
OPINION
ROSS, Judge.
This appeal requires us to decide whether the state must provide an interpreter to assist during the arrest of, and implied consent advisory discussion with, a suspected drunk driver who cannot hear and speak but who can read and write. After the state charged Kendall Lee Kail with driving while impaired, Kail moved to suppress evidence related to his arrest and to his consent to take a breath test, arguing that the officer's failure to obtain a sign-language interpreter violated his statutory and constitutional rights. The district court granted the motion on statutory grounds and dismissed the charges. Because the interpreter statute does not require assigning an interpreter to a person whose speech-and-hearing disability does not prevent him from fully understanding the arrest and the advisory discussion, we reverse and remand.
FACTS
In the early-morning hours of June 1, 2007, Saint Anthony Police Officer Daniel Johnson watched an Oldsmobile weave within its own lane and follow another car *18 too closely. He also noticed that the car's windows were unlawfully tinted.
Officer Johnson stopped and approached the car and asked the driver for his license and proof of insurance. He quickly discovered that the driver, Kendall Lee Kail, cannot hear or speak. Officer Johnson communicated with Kail initially through gestures, but soon through handwritten notes. Kail smelled of alcoholic beverages and had watery and bloodshot eyes, so Officer Johnson directed Kail with specific written instructions to perform field sobriety tests. Because Kail failed the tests, Officer Johnson arrested him for impaired driving, informing Kail in writing. Officer Johnson offered Kail the opportunity to contact a friend to assist him. Despite attempts by pager, Kail found no one to help.
Officer Johnson took Kail to the Saint Anthony police station to administer the implied consent advisory and, potentially, a breath test. Officer Johnson and Kail continued to communicate through writing at the police station. Throughout the process, Officer Johnson repeatedly asked Kail in writing if he understood what was being asked of him, and Kail consistently replied that he did.
Officer Johnson directed Kail to read the implied consent advisory. Kail read it. Officer Johnson instructed Kail to indicate that he understood the advisory by initialing its relevant passages. Kail did so, and he wrote that he wished to contact an attorney. When Officer Johnson wrote asking if Kail knew how to contact an attorney, Kail responded in writing that he did, and he identified the attorney whom he wanted to contact. Officer Johnson offered to assist Kail by speaking to the attorney by telephone, but he wrote that Kail had "to pick the attorney and dial the number." After several attempts, they were unable to reach Kail's attorney by text messages or by directly dialing. They waited 15 minutes for Kail's selected attorney to respond, but he did not. Kail then gave his written consent, and Officer Johnson administered the breath test. The test reflected an alcohol concentration of.09. The state later charged Kail with fourth-degree driving while impaired. Minn.Stat. § 169A.20, subd. 1(1), (5) (2006).
Kail successfully moved the district court to suppress all evidence because Officer Johnson did not provide him with an interpreter to accommodate his speech-and-hearing impairment. The district court found that Kail is unable "to hear the spoken word or to speak English and his primary mode of communication is American Sign Language." But it also found that Kail "is able to read and write in English" and noted that "[w]ritten communication is a way to communicate with a deaf person, provid[ed] that the deaf person knows English ... and can read." The district court wondered, "How does a deaf person speak to a lawyer on the phone?" It therefore concluded that Officer Johnson's failure to secure a sign-language interpreter violated Kail's rights under Minnesota Statutes section 611.32. It suppressed all evidence and dismissed the impaired-driving complaint.
The state appeals.
ISSUE
Is a person who can communicate by reading and writing during a proceeding conducted in writing entitled to a sign-language interpreter under Minnesota Statutes section 611.32?
ANALYSIS
The state challenges the district court's order suppressing the evidence obtained from the traffic stop and breath *19 test. When the state appeals a pretrial suppression order, it must prove that the suppression has a critical impact on the prosecution before we will consider whether the decision to suppress the evidence was erroneous. State v. Scott, 584 N.W.2d 412, 416 (Minn.1998). To establish a critical impact, the state must show unequivocally that suppression "reduces the likelihood of a successful prosecution." Id. (quotation omitted). The state does not directly argue that the suppression had a critical impact on Kail's prosecution, but the district court suppressed the evidence and dismissed the charges simultaneously, stating that the parties had stipulated that suppression "should also result in the dismissal of the charges." Although the state disputes this characterization of its position, it is apparent from the district court's order that the suppression prevented Kail's prosecution. The suppression therefore had a critical impact on the state's ability to prosecute.
This court reviews pretrial orders suppressing evidence de novo to determine whether the district court reached the correct conclusion as a matter of law. State v. Harris, 590 N.W.2d 90, 98 (Minn.1999). We therefore independently review the facts. Id. The district court concluded that "[t]he failure of the arresting officer to attempt to comply with the clear mandates of [Minnesota Statutes section 611.32] require that those communications obtained after the violation be suppressed pursuant to the Court's supervisory responsibility." The state contends that the district court suppressed the evidence erroneously, arguing that an interpreter was statutorily unnecessary and that Officer Johnson did not otherwise violate Kail's rights.
I
Minnesota's policy is to protect the rights of persons disabled in communications. Minn.Stat. §§ 611.30-.34 (2006). Under the controlling statutes, an interpreter must be appointed when persons disabled in communications are arrested or are the subjects of certain judicial proceedings. Minn.Stat. § 611.32. One is disabled in communications when,
(a) because of a hearing, speech, or other communication disorder, or (b) because of difficulty in speaking or comprehending the English language, [the person] cannot fully understand the proceedings or any charges made against the person, or the seizure of the person's property, or is incapable of presenting or assisting in the presentation of a defense.
Minn.Stat. § 611.31. Implicit in the district court's conclusion that Officer Johnson violated section 611.32 is that Kail is a "person disabled in communications" entitled to an interpreter under the statute. The premise is incorrect.
Section 611.31 establishes that entitlement to an interpreter depends not merely on whether the individual suffers a disability, but on whether a communication disorder or language barrier prevents that person from fully understanding the proceedings. One who fully understands the arrest and postarrest implied consent proceeding despite having hearing and speech deficiencies is not a "person disabled in communication" and is therefore not entitled to an interpreter.
This court has previously indicated that section 611.32 does not guarantee the assigning of an interpreter for deaf motorists arrested for drunken driving. Warner v. Comm'r of Pub. Safety, 498 N.W.2d 285, 288 (Minn.App.1993), review denied (Minn. May 28, 1993). In Warner, a deaf driver challenged his license revocation after an implied consent proceeding. Id. at 286-87. The officer in that case had communicated *20 with the driver through writing, gestures, and lip reading. Id. This court concluded that the interpreter statute does not apply when a driver's license is revoked after an implied consent proceeding because an implied consent proceeding is civil in nature. Id. at 288. But despite the distinction regarding the criminal nature of this case, the Warner court also emphasized that the defendant, "while having a hearing impairment, could read well." Id. We noted that the driver "understood the field sobriety tests," and he "understood and consented to take the breath test." Id. Our discussion in Warner highlighted that the statute requires an interpreter when a person is actually disabled in communications because he cannot understand the proceeding.
This court's treatment of bilingual defendants claiming rights under section 611.32 is instructive. In State v. Perez, for example, we held that a Spanish-speaking defendant was not disabled in communication when he also "demonstrated sufficient command of the English language." 404 N.W.2d 834, 839 (Minn.App.1987), review denied (Minn. May 20, 1987). We concluded that when the bilingual defendant did not indicate that he misunderstood and "responded appropriately to questions and commands," and when arresting officers "had no reason to believe he did not understand them," an interpreter was not required for the defendant to effectively waive his Miranda rights. Id.
The district court found that Kail can read and write English, and the record supports the finding. Kail's written responses congruently tracked Officer Johnson's written statements and questions, and when Kail occasionally sought clarification, it reflects no breakdown in communication or a misunderstanding occasioned by Kail's disability. The notes between Officer Johnson and Kail capture only a brief moment of confusion, which Officer Johnson's written response dispelled without an interpreter. The record of their written conversation demonstrates that Officer Johnson communicated with a significant degree of care and concern to assure Kail's understanding, surpassing the clarity that one might expect in an oral discussion between two similarly situated hearing persons in a more typical impaired-driving arrest. Because Kail can and did communicate in writing, the opportunity for precision afforded by written English permitted Officer Johnson to express clearly and directly to Kail without translation through American Sign Language. See Michele La Vigne & McCay Vernon, An Interpreter Isn't Enough: Deafness, Language, and Due Process, 2003 Wis. L.Rev. 843, 876, 874-78 (discussing differences between English and ASL). The extensive written exchange of communication in the record establishes to our satisfaction that Kail has a clear command of written English and fully understood Officer Johnson's careful communication to him regarding the arrest, his rights, and all particulars related to the alcohol-concentration testing.
The district court's findings contradict its legal conclusion that Kail met the statutory definition of "person disabled in communication." Despite finding that Kail can read and write English and that "[w]ritten communication is a way to communicate with a deaf person, providing that the deaf person knows English ... and can read," the district court impliedly concluded that Kail could not fully understand the proceedings or charges. The district court noted that "[b]ecause English may be a second language for many deaf persons, some have limited competence in writing and reading English." (Emphasis added.) But the district court did not find that Kail was among that class of impaired persons *21 with limited competence in the written word, and in fact, it found the opposite.
The statute does not contemplate a per se requirement that any person unable to speak and hear, even if fully competent in written English, is entitled to a sign-language interpreter; rather, it conditions the requirement on the person's capacity to understand. Kail repeatedly and consistently stated in writing that he understood, and he demonstrated his understanding. He gave the arresting officer, and he gives us, no reason to suspect that his inability to speak and hear prevented him from fully understanding every detail communicated to him. Because Kail demonstrated that he fully understood all communication exchanged during his arrest and his implied-consent decision, he was not entitled to an interpreter as a "person disabled in communication" under sections 611.31 and 611.32.
II
Although the interpreter statute did not require Officer Johnson to obtain an interpreter for Kail, suppression might still be warranted if the failure to do so violated Kail's constitutional rights. The state argues convincingly that Officer Johnson did not violate Kail's constitutional rights.
A driver has a limited right to counsel under article I, section 6, of the Minnesota Constitution when deciding whether to submit to a breath test. Linde v. Comm'r of Pub. Safety, 586 N.W.2d 807, 809 (Minn.App.1998), review denied (Minn. Feb. 18, 1999). The right is satisfied if the driver has a reasonable opportunity and time to contact an attorney. Id. After a reasonable time, "the driver must make an independent decision regarding testing." Id. A police officer may help a deaf driver to contact an attorney by speaking to the driver's attorney by telephone and transcribing the oral communications to the driver. Warner, 498 N.W.2d at 288. Whether the opportunity to confer with counsel is reasonable is a question of law. Linde, 586 N.W.2d at 809.
Officer Johnson's effort to contact an attorney on Kail's behalf did not offend Kail's constitutional rights. Kail identified his preferred attorney and provided Officer Johnson the telephone number. Kail and Officer Johnson attempted to reach Kail's attorney by telephone through a direct call, text messages, and a voicemail message. When Kail's attorney had not responded after 15 minutes, Kail acknowledged that he did not expect to hear from him.
We do not share the district court's concern that Kail's failure to contact an attorney resulted from the absence of a sign-language interpreter. The district court was troubled by Officer Johnson's effort and rhetorically questioned, "How does a deaf person speak to a lawyer on the phone?" But the relevant question is, how would a deaf person's requests for a response from his lawyer be any more meaningful if made through a sign-language interpreter rather than through a police officer? We see no difference. Getting no response from the attorney, Officer Johnson stated in writing, "[W]e will move on with the process," to which Kail answered, "ok." An interpreter presumably would have translated and relayed the request for a reply phone call in the same manner and gotten the same result. The manner in which a sign-language interpreter might have learned of the request from Kail is immaterial. When completing the implied consent advisory, Kail stated that he did not want to make trouble by refusing the breath test. This accentuates our conclusion that he made an independent decision to submit to the breath test after he was given a reasonable opportunityunaffected by his speech-and-hearing impairment *22 or by the lack of an interpreterto contact an attorney. Kail's constitutional rights were not violated.
DECISION
Because Kail was not impaired in communication he was not entitled to an interpreter. Because neither the interpreter statute nor Kail's right to an attorney was offended, we reverse the district court's decision to suppress the evidence and its dismissal of charges, and we remand for further proceedings.
Reversed and remanded.
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October 22, 2015
JUDGMENT
The Fourteenth Court of Appeals
ROGELIO MORA, Appellant
NO. 14-14-00449-CR V.
THE STATE OF TEXAS, Appellee
________________________________
This cause was heard on the transcript of the record of the court below.
Having considered the record, this Court holds that there was no error in the
judgment. The Court orders the judgment AFFIRMED.
We further order appellant pay all costs expended in the appeal.
We further order this decision certified below for observance.
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977 F.2d 592
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Anthony R. FORD, Defendant-Appellant.
No. 92-10097.
United States Court of Appeals, Ninth Circuit.
Submitted Aug. 27, 1992.*Decided Oct. 8, 1992.
Before CHOY, SNEED and SKOPIL, Circuit Judges.
1
MEMORANDUM**
2
Appellant Anthony Ford is challenging his classification by the district court as a career offender under the United States Sentencing Guidelines. Mr. Ford claims that the two convictions used to classify him as a career offender in the sentencing phase of the present armed robbery conviction should be considered related, and therefore do not support career offender status.
3
We affirm the district court's classification.
I.
FACTS AND PROCEEDINGS BELOW
4
Appellant Anthony Ford entered a guilty plea to one count of armed bank robbery pursuant to a written plea agreement. In the Presentencing Report, the probation officer concluded that the appellant's two 1981 convictions for robbery with the use of a firearm qualified Mr. Ford for career offender status under the United States Sentencing Guidelines. Appellant challenged this classification with two motions filed with the district court.
5
In the sentencing hearing, the district court found that the appellant was a career offender under the Sentencing Guidelines, denied the appellant's motions, and sentenced the appellant to 210 months of imprisonment, to be followed by five years of supervised release. The appellant timely filed a notice of appeal.
6
Appellant's classification as a career offender turns on his two 1981 convictions for armed robbery. On May 20, 1981, he was convicted of four counts of robbery with the use of a firearm and one count of assault with a deadly weapon in Contra Costa County. This conviction was the result of Mr. Ford's arrest on February 10, 1981 and was based on a six count Information filed on March 17, 1981 in the Contra Costa County Superior Court. The appellant was sentenced to nine years and eight months in state prison.
7
While the appellant was serving this sentence, he was returned to Alameda County to face charges pending there. On July 21, 1981, the defendant pleaded no contest to one count of robbery with the use of a firearm and was sentenced to five years imprisonment, to run concurrently with the sentence he was serving under the Contra Costa County conviction. Appellant was arrested for the Alameda County offense on January 11, 1981, and a two count Information was filed in Alameda County Court on March 2, 1981.
II.
JURISDICTION AND STANDARDS OF REVIEW
8
The district court's jurisdiction was based on 18 U.S.C. § 3231. This court has jurisdiction to review the sentence imposed pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742. Appellant timely filed his notice of appeal.
9
The district court's interpretation of the Sentencing Guidelines is reviewed de novo. United States v. Blaize, 959 F.2d 850, 851 (9th Cir.), cert. denied, 112 S.Ct. 2954 (1992). Application of the Sentencing Guidelines is also given de novo review. United States v. Lawrence, 916 F.2d 553, 554 (9th Cir.1990). Any findings of fact underlying the sentencing are reviewed for clear error. United States v. Chapnick, 963 F.2d 224, 226 (9th Cir.1992).
III.
DISCUSSION
A. The Issue on Appeal
10
The basic dispute here concerns the appellant's classification as a career offender under section 4B1.1 of the Sentencing Guidelines. The appellant argues that the two prior convictions used by the state to qualify him as a career offender are related and therefore do not support such a classification. If the appellant was not classified as a career offender, his maximum sentence would be 137 months compared to the 210 months he is presently serving. The district court found that the two 1981 convictions were unrelated, and thus a sound basis existed for establishing the appellant's status as a career offender.
11
The Sentencing Guideline at issue here, Section 4B1.1, Career Offender, states
12
"A defendant is a career offender if (1) the defendant was at least eighteen years old at the time of the instant offense, (2) the instant offense of conviction is a felony that is either a crime of violence or a controlled substance offense, and (3) the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense."
13
Appellant only disputes the third element. He contends that his two 1981 convictions for armed robbery, while crimes of violence, are related, and therefore should not be counted as two separate felonies under Section 4B1.1.
14
Section 4A1.2(a) of the Sentencing Guidelines states that sentences in related cases should not be counted separately,
15
"Prior sentences imposed in unrelated cases are to be counted separately. Prior sentences in related cases are to be treated as one sentence for purposes of criminal history."
16
Application Note 3 to Sentencing Guideline Section 4A1.2 gives three alternative definitions of related cases,
17
"Cases are considered related if they (1) occurred on a single occasion, (2) were part of a single common scheme or plan, or (3) were consolidated for trial or sentencing."
B. Cases not Related
18
Appellant contends that the two 1981 robbery convictions qualify as related either under the second prong, part of a common scheme or under plan, or the third prong, effectively consolidated sentencings.
1. Common Scheme or Plan
19
Appellant's first argument is that the two 1981 robberies were part of a common scheme or plan. United States v. Chapnick, 963 F.2d at 226 (9th Cir.1992), reiterated four factors that should be considered when determining whether there was such a scheme: (1) whether the crimes were committed within a short period of time, (2) whether the crimes involved the same victim, (3) whether the defendant was arrested by the same law enforcement agency for both crimes, and (4) when the arrests occurred and whether both crimes were solved during the course of one investigation. The similarity in the crimes is also to be examined. Id.
20
The facts of this case do not show a common plan even though the crimes were committed within four weeks of each other. Admittedly this is within the span of time other courts have considered within a short period of time. See United States v. Houser, 929 F.2d 1369 (9th Cir.1990) (drug sales to the same government agent separated by six weeks held related). But this fact alone does not establish a satisfactory link between the crimes so that they could be considered related. In Chapnick, the two crimes occurred within two weeks of each other, but this was not enough to classify them as related. 963 F.2d at 227. Furthermore, the crimes did not involve the same victim.
21
Nor does the record support the appellant's contentions that he was arrested for both crimes by the same law enforcement agency or that his arrest was the product of a single investigation. The facts in the record only indicate that the appellant was returned to be charged with the offenses in Alameda County after the appellant was serving time for his offense in Contra Costa County. The Presentencing Report gives the date of arrest for the Contra Costa County crime as February 10, 1981 and January 11, 1981 for the Alameda County arrest.
22
Similarly, the record contains no information on the similarity of the offenses. Both crimes were armed robberies, but the particular circumstances of the robberies were not discussed. Even if the circumstances were known, United States v. Davis, 922 F.2d 1385, 1391 (9th Cir.1991), held that a common modus operandi alone is not enough to establish that the cases are related.
23
The appellant also claims that the robberies were related because he committed both to support himself. A motive, however, is not the equivalent of a common scheme or plan. The claim that the two 1981 robberies were the product of a single common scheme or plan is not persuasive.
2. Consolidation
24
The appellant's other argument is that the sentencing was effectively consolidated when the Alameda County court imposed a five year sentence to run concurrently with the nine year sentence of the Contra Costa County court. The Davis case gives some guidance in determining when cases have been consolidated for sentencing. In that case consolidated sentencing was not found where the defendant had been sentenced (1) on the same day (2) in separate courts (3) for two separate offenses (4) pursuant to a single plea agreement (5) where the cases did not share a single docket number and (6) concurrent sentences were imposed. Davis, 922 F.2d at 1390-91; see Chapnick, 963 F.2d at 228 (analyzing Davis ).
25
The two sentences in Davis were more closely linked for sentencing than the two sentences in this case. Here, the sentences were imposed by different courts. The Contra Costa County Superior Court imposed the nine year, eight month sentence, while the Alameda County Superior Court imposed the five year sentence. The sentences were also imposed at different times. The Contra Costa County Superior Court imposed its sentence on June 24, 1991, and the Alameda County Superior Court imposed its sentence on July 21, 1981. The appellant was tried on different charging instruments. As stated above, the sentences he did receive were for different periods of time. There was no single plea agreement in this case. The only fact weighing in the appellant's favor is that the second sentence was to run concurrently with the first. Davis stated that this fact alone is not dispositive. 922 F.2d at 1390. Appellant's cases were not effectively consolidated for sentencing.
26
AFFIRMED.
*
The panel finds this case appropriate for submission without argument pursuant to 9th Cir.R. 34-4 and Fed.R.App.P. 34(a)
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1419
KA 10-02138
PRESENT: SCUDDER, P.J., CENTRA, GREEN, GORSKI, AND MARTOCHE, JJ.
THE PEOPLE OF THE STATE OF NEW YORK, RESPONDENT,
V ORDER
THOMAS J. PREEDOM, ALSO KNOWN AS THOMAS PREEDOM,
DEFENDANT-APPELLANT.
KATHLEEN P. REARDON, ROCHESTER, FOR DEFENDANT-APPELLANT.
LAWRENCE FRIEDMAN, DISTRICT ATTORNEY, BATAVIA (WILLIAM G. ZICKL OF
COUNSEL), FOR RESPONDENT.
Appeal from a judgment of the Genesee County Court (Robert C.
Noonan, J.), rendered January 13, 2010. The judgment convicted
defendant, upon his plea of guilty, of rape in the second degree and
attempted escape in the second degree.
It is hereby ORDERED that the judgment so appealed from is
unanimously affirmed.
Entered: December 23, 2011 Frances E. Cafarell
Clerk of the Court
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841 F.2d 1125
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Jesse B. DAVIS and Richard Lorence Harris, Plaintiffs-Appellants,v.TEAMSTERS LOCAL 299; Trenton Resins Credit Union; andMichael Newmarker, Defendants-Appellees.
No. 87-1131.
United States Court of Appeals, Sixth Circuit.
March 2, 1988.
Before BOYCE F. MARTIN, Jr., NATHANIEL R. JONES, and ALAN E. NORRIS, Circuit Judges.
PER CURIAM.
1
Jesse B. Davis and Richard L. Harris appeal the district court's decision to grant summary judgment in favor of the Trenton Resins Credit Union. Davis and Harris alleged that the Credit Union's lending practices were racially discriminatory.
2
As employees of the Monsanto Chemical Company, Davis and Harris were members of the Trenton Resins Credit Union. The Credit Union has promulgated a specific loan policy. Under this policy, in order to be granted a loan, a loan applicant must either be a member of the Credit Union for at least one year or have an approved co-signor. The only exception to this requirement is for share-covered loans. In deciding whether to grant a particular loan application, the Credit Union's Credit Committee also examines other criteria: the applicant's total debt load; the applicant's credit history; and whether specific collateral exists to secure the loan.
3
Harris became employed with Monsanto in August 1981. Within six months of becoming eligible for a loan, Harris had been approved for three loans totaling over $4,700. Only one loan application filed by Harris prior to February 1983 was rejected, and it was denied because he had not yet satisfied the one-year waiting requirement. From March 1983 to December 1984, Harris applied for six loans; two applications were approved and four applications were rejected. The purported reasons for denying those four loan requests included insufficient collateral, excessive monetary obligations, and Harris' violations of previous security agreements. Apparently, Harris had sold a boat which was collateral on several outstanding loans without the Credit Union's approval, and he never bought a walk-in cooler which was to have served as collateral for a loan he received expressly in order to purchase the cooler.
4
Also, Harris once spoke with John Morrison, a Credit Union loan officer, about Harris' need to borrow $370 to pay an overdue utility bill. Harris claims that Morrison told him that he, Morrison, would arrange for the loan, but the Credit Union denies that Morrison made such a promise. When Harris went to the Credit Union the next day, Morrison was on vacation and Harris did not receive the loan. But Harris never filled out a loan application, and he has admitted that he never knew of any member who had received a loan without filling out an application.
5
Davis began working for Monsanto in September 1979. He received a small loan before he had been a Credit Union member for one year because he pledged shares as collateral. Between May 1980 and August 1982, three of his applications for small loans were approved, and two applications for large loans were rejected. The latter two requests were denied because he purportedly had excessive obligations, inadequate collateral, and a poor credit history. In fact, Davis requested the two large loans so that he could consolidate his other outstanding obligations.
6
On August 30, 1985, Harris and Davis individually filed suit against the Credit Union, Monsanto, Teamsters Local 299, and Michael Newmarker, a Monsanto supervisor. In January 1986, their cases were consolidated, and, in September 1986, their claims against the Credit Union were severed from the claims against the other defendants.
7
During the discovery period, Davis and Harris were permitted to select the credit files of seven other members. They chose to examine the files of five white males, one black male, and one white female. Davis and Harris were unable to offer any statistical evidence that the white members were treated more favorably than they or the black member had been treated. Moreover, two other black employees testified that they had suffered no racial discrimination.
8
In challenging the district court's decision to grant the Credit Union's summary judgment motion, Davis and Harris essentially advance two arguments. First, they argue that they set forth sufficient facts to create a genuine issue of fact for trial. Second, they contend that the district court improperly restricted their right to adequate discovery: they claim that, by limiting their investigation of the Credit Union's records to only seven files, they were prevented from making any meaningful statistical comparisons. These arguments are without merit.
9
In order to survive a summary judgment motion, the motion's opponent must set forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e). Here, the Credit Union has offered proof of legitimate, non-discriminatory reasons for all of the decisions which Davis and Harris alleged were racially-motivated. In response, Davis and Harris have failed to refute these reasons by citing any specific intances of disparate treatment or any evidence of disparate impact. Rather, they have merely repeated their conclusory allegations. As the district court properly recognized, Davis and Harris cannot defeat a summary judgment motion merely by resting on their pleadings. Therefore, summary judgment in favor of the Credit Union was proper.
10
The argument about inadequate discovery is similarly unavailing. Davis and Harris asked the district court to compel the Credit Union to produce all loan applications made by Credit Union members since 1978 and all documents relating to those applications. The court, however, only permitted them to examine the files of seven Credit Union members. In light of the fact that Davis and Harris were able to select which seven files they wanted to examine, we believe the court's decision was not an abuse of its discretionary power to manage pre-trial discovery. This limitation on document production prevented the possible harassment of the Credit Union and minimized the chance that confidential financial information would be unnecessarily disclosed.
11
Accordingly, summary judgment for the Trenton Resins Credit Union is hereby affirmed.
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27 So.3d 635 (2008)
M.V.
v.
STATE.
No. CR-07-1760.
Court of Criminal Appeals of Alabama.
September 16, 2008.
Decision of the Alabama Court of Criminal Appeal Without Published Opinion Transferred to Morgan Cir. Ct.
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647 S.E.2d 651 (2007)
HOSPICE AT GREENSBORO, INC. d/b/a Hospice and Palliative Care of Greensboro and Hospice of the Piedmont, Inc., Petitioner,
v.
NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES DIVISION OF FACILITY SERVICES, Licensure and Certification Section and North Carolina Department of Health and Human Services, Division of Facility Services, Certificate of Need Section Respondents, and
Liberty Home Care, LLC, Respondent-Intervenor.
No. COA06-1204.
Court of Appeals of North Carolina.
August 7, 2007.
*653 Wyrick Robbins Yates & Ponton, LLP by K. Edward Greene, Raleigh, for Respondent-Intervenor Liberty Home Care, LLC.
Smith Moore, LLP by Maureen Demarest Murray and Susan M. Fradenburg, Greensboro, for Petitioner Hospice at Greensboro, Inc. d/b/a Hospice and Palliative Care of Greensboro's and Hospice of the Piedmont, Inc.
Attorney General Roy A. Cooper, III by Assistant Attorney General June S. Ferrell for Respondent-Appellee N.C. Dept. Of Health and Human Services.
Bode Call & Stroupe, L.L.P. by Matthew A. Fisher, Raleigh, for Amicus Community CarePartners, Inc.
Maupin Taylor, P.A. by Marcus C. Hewitt, Raleigh, for Amicus Community Home Care of Johnston County, Inc., Carrolton Home Care, Inc., and Community Home Care of Vance County, Inc.
Parker Poe Adams & Bernstein by Renee J. Montgomery, Susan L. Dunathan, and Robert A. Leandro, Raleigh, for Amicus Hospice & Palliative Care Charlotte Region d/b/a Hospice at Charlotte.
Johnston, Allison & Hord, P.A. by Patrick E. Kelly, Charlotte, for Amicus The Carolinas Center for Hospice and End of Life Care.
STROUD, Judge.
Respondent-intervenor Liberty Home Care, L.L.C. appeals from the final agency decision entered by the North Carolina Department of Health and Human Services [DHHS], Division of Facility Services [DFS] in a contested case. Petitioner Hospice at Greensboro, Inc. [HGI] contested the DHHS, DFS Certificate of Need Section's [CON Section] issuance of a "No Review" letter to Liberty, which authorized Liberty to open a hospice office in Greensboro, North Carolina without first obtaining a Certificate of Need [CON] from the department. The final DHHS agency decision granted summary judgment in favor of HGI based upon the agency's conclusions that Liberty's Greensboro hospice office was a "new institutional health service" for which Liberty was required to obtain a CON and that HGI was "substantially prejudiced" by the CON Section's actions.
This Court must resolve three issues on appeal: (1) whether N.C. Gen.Stat. § 131E-188 (2005) authorizes Liberty to appeal the final DHHS agency decision directly to this Court, (2) whether Liberty established a "new institutional health service" in Guilford County for which it was required to obtain a CON, and (3) whether HGI has shown "substantial prejudice" resulting from the CON Section's actions. We affirm.
I. Factual Background
On 21 February 2005, Liberty's Executive Director Anthony Zizzamia, Jr. sent a letter of intent to CON Section Chief Lee Hoffman, requesting permission to open "branch locations" to its "existing licensed and certified hospices" without first obtaining CONs. In the letter, Zizzamia expressed Liberty's "understanding that the branch extension of existing hospice offices is exempt from [CON] review"; thus, Zizzamia sought a "No Review" letter from the CON section. Liberty proposed "branch office locations" in four additional counties based on its "existing licensed and certified" Fayetteville hospice and in nine additional counties based on its "existing licensed and certified" Raeford hospice.
On 7 March 2005, the CON Section responded to Liberty's letter of intent and informed Liberty that "[e]stablishment of each branch office is a separate determination that requires a separate request." The CON section further explained that Liberty "must demonstrate the need for each branch office based on the provision of hospice services to patients who reside in that county from the home office that will support the branch office."
On 30 March 2005, Hoffman sent a letter to Zizzamia requesting additional information and responding to his inquiries "as to whether a certificate of need is required prior to opening the branch offices" that Liberty proposed. Hoffman stated that Liberty must document that the proposed offices would be "located in" Liberty's "`current service area,'" explaining "documentation must be submitted to show that the proposed branch *654 offices will be located in a county in which at least one patient is currently served by one of your existing licensed hospice agencies." (Emphasis added.) According to Hoffman, Liberty's "current service area" included any county in which Liberty served at least one patient from its existing, licensed hospices. [hereinafter one patient rule]. An attachment to Hoffman's letter set forth a sample format for providing the requested information. The attachment was titled "RE: Exempt from review/ branch office of Medicare Provider."
Thereafter, Liberty made a separate request for each proposed hospice office and submitted documentation to show the proposed hospice offices complied with the one patient rule. In particular, on 30 June 2005, Liberty informed the CON section that it had "recently admitted a hospice patient in Guilford County, North Carolina," who was "being served by [Liberty's] Hospice providing services from our Fayetteville location." Liberty requested that the CON section "provide [it] with a letter of `[N]o [R]eview' with respect to this [Greensboro] branch office."
As documentation, Liberty attached a Home Health Certification and Plan of Care[1] identifying one patient, S.H., in Greensboro, North Carolina. The form listed S.H.'s "start of care date" as 21 June 2005. It also listed authorized prescription medications for S.H. and set forth a plan for S.H's care, which included the use of oxygen, wound care, pain management, and "short term therapy management of terminal illness." Liberty received the Plan of Care on 27 June 2005 and the form was signed by S.H.'s attending physician on 28 June 2005; however, S.H. died on 24 June 2005. Notwithstanding S.H.'s death, Liberty attached the Plan of Care to its 30 June 2005 request for a "No Review" letter as documentation of its "current service area." The Plan of Care for S.H. is the only documentation of current service area that Liberty provided to the CON section.
On 7 July 2005, the CON Section responded to Liberty's 30 June 2005 request for "No Review." The response provided, in part:
Based on the CON law in effect on the date of this letter, the proposal described in your correspondence is not governed by, and therefore, does not currently require a certificate of need. . . . Further, it should be noted that this determination is binding only for the facts represented by you. Consequently, if changes are made in the project or in the facts provided in the correspondence referenced above, a new determination as to whether a certificate of need is required would need to be made by the Certificate of Need Section.
[Hereinafter "No Review" letter.]
The CON Section relied entirely upon Liberty's 30 June 2005 representations and made no further inquiry before issuing this "No Review" letter to Liberty.
On 15 July 2005, based upon the "No Review" letter, Liberty applied for a license from DHHS DFS License and Certification Section to operate a "branch office" in Guilford County, which the Section granted. The license, which became effective 19 July 2005 and expired "[m]idnight, December 31, 2005," authorized Liberty to "operate a hospice known as Liberty Home Care and Hospice located at 2307 West Cone Blvd., Suite 150, City of Greensboro, North Carolina Guilford County."
On 5 August 2005, HGI filed a petition for a contested case hearing, requesting review of the CON Section's decision to approve Liberty's request for a "No Review" letter and the decision of the License and Certification Section, to issue a license to Liberty for the Greensboro hospice office. Liberty intervened in the contested case on 18 August 2005.
On 2 December 2005, HGI filed motions for summary judgment, entry of a stay of the CON Section's 7 July 2005 "No Review" letter to Liberty, and entry of a stay of the *655 hospice license issued to Liberty on 19 July 2005 for the Greensboro hospice office. HGI argued that Liberty's Greensboro hospice office is a "new institutional health service" for which Liberty was required to obtain a CON. On 9 December 2005, Liberty filed a motion for summary judgment arguing that HGI was not an "aggrieved party" because the issuance of a "No Review" letter to Liberty did not "substantially prejudice[]" HGI's rights.
Depositions and affidavits submitted for the purpose of summary judgment established that Liberty first hired employees for its Greensboro hospice office in April or May of 2005. Thereafter, Liberty provided hospice services to one patient named S.H. for four days, from 21 to 24 June 2005. Before coming into Liberty's care, S.H. was a resident in Oakhurst nursing facility. A representative of Oakhurst contacted Liberty to inform Liberty that Oakhurst had a patient who needed hospice services. At that time, Liberty was "actively looking for hospice patients to serve" so that it could "establish [its] hospice unit" in Greensboro. As of 26 September 2005, Liberty had not provided hospice services to any patient in Greensboro other than S.H. Liberty did not obtain a CON for its Greensboro hospice office, but received a license for this office based upon the CON Section's issuance of a "No Review" letter.
The "No Review" process is not set forth in statute or rule, but is a practice DHHS developed over time based on its understanding of this Court's decision in In re Total Care. In In re Total Care, this Court held that "the opening of branch offices by an established home health agency within its current service area is not the construction, development, or other establishment of a new health service facility" for which a CON was required. In re Total Care, 99 N.C.App. 517, 522, 393 S.E.2d 338, 342 (1990). When determining whether a proposed branch office is within a health service provider's current service area the CON section considered only whether the applicant hospice had recently "provided hospice services in the county in which they want to open a branch." Here, the CON Section relied entirely upon Liberty's representations to make this determination.
Administrative Law Judge Agustus B. Elkins, II entered a recommended decision granting HGI's motion for summary judgment on 25 January 2006. DFS Director Robert J. Fitzgerald reviewed the recommended decision, considered written exceptions, and heard oral argument on 21 April 2006. Fitzgerald entered a final agency decision on 12 June 2006, adopting most of Judge Elkin's findings and granting HGI's motion for summary judgment. Liberty appealed the final agency decision to this Court.
II. Jurisdiction
HGI asks this Court to dismiss Liberty's appeal, arguing that appeal from a final DHHS agency decision concerning a "No Review" letter must be filed in Superior Court, Wake County pursuant to section 150B-45 of the North Carolina Administrative Procedure Act. N.C. Gen.Stat. § 150B-45 (2005). Liberty agrees with HGI that section 150B-45 controls but asks this Court to grant certiorari review pursuant to Rule 21 of the North Carolina Rules of Appellate Procedure. N.C. R.App. P. 21 (2005). In their briefs, both parties acknowledge that N.C. Gen.Stat. § 131E-188(a) (2005) permits "any affected person" to contest the CON Section's decision to "issue, deny, or withdraw a certificate of need or exemption" and that N.C. Gen.Stat. § 131E-188(b) (2005) provides a direct appeal to this Court from "all or any portion" of any final DHHS agency decision resolving a contested case filed under this section. However, the parties conclude that section 131E-188 does not authorize immediate appeal to this Court from the final DHHS agency decision resolving petitioner's challenge to the CON section's issuance of a "No Review" letter because a "No Review" letter is not an "exemption."
We disagree with both parties and hold that the CON section's issuance of a "No Review" letter is the issuance of an "exemption" for purposes of section 131E-188(a). Accordingly, we conclude that section *656 131E-188(b) confers jurisdiction on this Court to hear Liberty's appeal.[2]
"Any person affected,"[3] by the CON Section's "decision to issue . . . a certificate of need or exemption" is "entitled to a contested case hearing under Article 3 of Chapter 150B of the General Statutes." N.C. Gen. Stat. § 131E-188 (2005). Chapter 150B of the North Carolina General Statutes is commonly known as the Administrative Procedure Act and Article 3 of that Chapter sets forth the procedures governing administrative hearings in contested cases. A "contested case" is "an administrative proceeding . . . to resolve a dispute between an agency and another person that involves the person's rights, duties, or privileges." N.C. Gen.Stat. § 150B-2(2) (2005). Generally, "to obtain judicial review of a final decision" entered pursuant to Article 3 of Chapter 150B, "the person seeking review must file a petition in the Superior Court of Wake County or in the superior court of the county where the person resides." N.C. Gen.Stat. § 150B-45 (2005). However, when the final agency decision resolves a contested case filed pursuant to section 131E-188, appeal may be taken to this Court as of right. N.C. Gen.Stat. § 131E-188(b); N.C. Gen.Stat. § 7A-29(a) (2005).
HGI contests the CON Section's issuance of a "No Review" letter to Liberty. If the "No Review" letter represents an "exemption," then section 131E-188(b) confers jurisdiction on this Court to consider Liberty's appeal from the final DHHS decision resolving the contested case. If not, then appellate jurisdiction lies in Superior Court, Wake County or in the superior court of the county where Liberty resides.
The term "exemption" is not defined by N.C. Gen.Stat. § 131E-176 (2005), which provides definitions for many terms of art used throughout Chapter 131E. Although N.C. Gen.Stat. § 131E-184 (2005) lists circumstances in which DHHS "shall exempt . . . a new institutional health service" from certificate of need review, that section does not define the term "exemption." Finding no express definition of the term "exemption" in Chapter 131E, we "presume[] the General Assembly intended the word[] it used to have the meaning [it has] in ordinary speech." Nelson v. Battle Forest Friends Meeting, 335 N.C. 133, 136, 436 S.E.2d 122, 124 (1993); see also Correll v. Division of Social Services, 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992) (stating that "[s]tatutory interpretation properly begins with an examination of the plain words of the statute.").
To be "exempt" ordinarily means to be "free from an obligation or liability to which others are subject" or to be "released from or not subject to, an obligation, liability, etc." Random House Webster's College Dictionary, 467 (1st ed.1991); Black's Law Dictionary 612 (8th ed.2004) (defining "exempt" as "free or released from a duty or liability to which others are held"); Ballentine's Law Dictionary, 435 (3rd ed.1969) (defining "exempt" as "free of an obligation which is binding on others").
With respect to health service providers, N.C. Gen.Stat. § 131E-178(a) (2005) states, "No person shall offer or develop a new institutional health service without first obtaining a certificate of need" from DHHS. The plain language of section 131E-178(a) places an affirmative duty on any person seeking to "offer or develop a new institutional health service" to apply for and receive a CON first. Here, the CON Section released Liberty from the obligation to obtain a CON for its Greensboro hospice office by issuing the "No Review" letter. Thus, the CON section's issuance of a "No Review" letter is an "exemption" which HGI was entitled to contest pursuant to section 131E-188(a). *657 [4]See also In re Wilkesboro, Ltd., 55 N.C.App. 313, 317, 285 S.E.2d 626, 628 (1982) (similarly concluding under prior law that the CON Section's issuance of a "letter relieving Wilkesboro, Limited of the requirement to apply for a certificate of need" was "[an] approval, an approval with conditions, or [a] denial of an application for a certificate of need" which the petitioner was entitled to contest).
For the reasons stated above, we hold that the CON Section's issuance of a "No Review" letter is the issuance of an "exemption" for purposes of section 131E-188(a). Accordingly, we conclude that section 131E-188(b) confers jurisdiction on this Court to hear the incident direct appeal.
III. Summary Judgment
Liberty argues that DHHS erred by granting petitioner's motion for summary judgment. In particular, Liberty assigns error to the agency's conclusions that (1) "Liberty's proposal to open a new hospice office in Guilford County constitutes the establishment of a new hospice agency which required a Certificate of Need" and (2) "[HGI is] substantially prejudiced as a matter of law by [the CON Section's] actions." Citing In re Total Care, 99 N.C.App. 517, 393 S.E.2d 338 (1990), Liberty concludes that it was not required to obtain a CON before opening the Greensboro office because the office (1) is located within the "service area" of its existing Fayetteville hospice and (2) is a "branch office" of the Fayetteville hospice. Citing N.C. Gen.Stat. § 150B-23 (2005) and Bio-Medical Applications of N.C., Inc. v. N.C. Dep't of Health and Human Servs., 173 N.C.App 641, 619 S.E.2d 593 (2005) (unpublished), Liberty concludes HGI failed to show that the CON Section's issuance of the "No Review" letter substantially prejudiced its rights because HGI's claims of prejudice are speculative and because HGI does not have a right to be free from competition. These are questions of law which this Court reviews de novo. Craven Reg'l Medical Authority v. N.C. Dep't of Health and Human Servs., 176 N.C.App. 46, 51, 625 S.E.2d 837, 840 (2006). We disagree with Liberty and affirm the final DHHS agency decision.
A. New Institutional Health Service
N.C. Gen.Stat. § 131E-178 provides that "No person shall offer or develop a new institutional health service without first obtaining a certificate of need" from DHHS. (Emphasis added.) "`New institutional health service' means," in part, "[t]he construction, development, or other establishment of a hospice." N.C. Gen.Stat. § 131E-176(16)(n) (2005). Therefore, any person seeking to construct, develop, or otherwise establish a hospice must first obtain a CON from DHHS.
In 1990, this Court considered whether an existing home health agency must obtain a CON before opening a branch office within its service area. See In re Total Care, 99 N.C.App. 517, 393 S.E.2d 338. At that time, section 131E-176 defined "new institutional health service" to mean, in part, "[t]he construction, development, or other establishment of a new health service facility." N.C. Gen.Stat. § 131E-176(16) (1989). New "health service facility" was defined, in part, as a "home health agency." Id. Considering these statutory definitions, together with the statutory definition of home health agency,[5] this Court held that "the opening of branch offices by an established home health agency within its current service area is not the construction, development, or other establishment of a new health service facility" for *658 which a CON was required. In re Total Care, 99 N.C.App. at 522, 393 S.E.2d at 342. In so doing, the Court reasoned that a home health agency's opening of a second office inside its current service area did not "transform" it into two separate agencies. Id. at 520, 393 S.E.2d at 340. The Court noted that "if the legislature had intended to require a CON for each office used by the home health agency in providing home health services it could have specified this in the statute," and specifically in the statutory definition of "new health service facility."[6]
We conclude that the reasoning and rule of In re Total Care govern the case sub judice. An existing hospice's opening of a second office within its current service area does not transform it into two separate hospices. Correspondingly, if the legislature had intended to require a CON for each office used by a hospice then it could have specified this in the statutory definition of "new institutional health service."[7] Therefore, the opening of branch offices by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required.[8] Our conclusion applies only to the statutory definition of "new institutional health service" in effect in July 2005, at the time the CON Section issued the "No Review" letter for Liberty's proposed Greensboro hospice office.
Having concluded that the rule of In re Total Care is applicable to hospice branch offices opened within an existing hospice's service area, this Court must consider whether Greensboro is within the "service area" of Liberty's Fayetteville hospice. In so doing, we emphasize that this Court's decision in In re Total Care was "premised on [the] undisputed fact" that the plaintiff "inten[ded] to open additional offices only in its existing geographical service area." In re Total Care, 99 N.C.App. at 522, 393 S.E.2d at 342. Thus, whether the home health care office proposed by the plaintiff home health care agency in In re Total Care was actually located within the plaintiff's "service area" was not an issue on appeal and was not addressed in the Court's opinion.
1. Service Area
A "service area" is "the area of the State, as defined in the State Medical Facilities Plan or in the rules adopted by [DHHS] which receives services from a health services facility." N.C. Gen.Stat. § 131E-176(24a) (2005). The 2005 State Medical Facilities Plan [SMFP] defines a "hospice's service area" as "the hospice planning area in which the hospice is located." N.C. Dep't of Health and Human Servs., 2005 State Medical Facilities Plan 252 (2005). "Each of the 100 counties in the State is a separate hospice planning area." Id. Thus, the North Carolina General Statutes define a hospice's "service area" as the county in which it is located.
As explained above, this Court did not consider whether the home health care office proposed by the plaintiff home health care agency in In re Total Care was actually located within the plaintiff's service area. In fact, the plaintiff in In re Total Care established *659 its home health agency in 1978, which is before the effective date of the CON act. Because the plaintiff "was granted a license under the grandfather provisions of the CON law when the law was enacted," it operated without a CON in approximately fourteen counties, including four in which it had offices. For purposes of that appeal, the Court treated the fourteen counties in which the plaintiff operated as "equivalent to a geographic service area under a CON," citing the SMFP in effect at that time.[9] Thus, when stating its holding, this Court used the term "service area" as the term was defined in the SMFP. The Court did not create a new definition for this term or consider whether the plaintiff's "service area" actually complied with the SMFP definition. The definition of "service area" was not at issue in that case.
Applying In Re Total Care to the case sub judice, we hold that the opening of branch offices by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. Service area means "the hospice planning area in which the hospice is located." Liberty holds a CON for its hospice located in Fayetteville, North Carolina. The planning area and, therefore, the service area for this hospice is Cumberland County. Because Liberty seeks to open a hospice office in Greensboro, North Carolina, which is located in a county outside the service area of its existing hospice, Liberty has not met the requirements set forth in In re Total Care.
Liberty urges this Court to ignore the statutory definition of "service area," arguing that the home health care office proposed by the plaintiff home health care agency in In re Total Care did not meet the statutory definition of "service area"; the CON Section has interpreted In re Total Care to create a new definition of service area, such that a health service provider's service area is any area in which it has recently served at least one patient; and the statutory definition of "service area" is used only to determine whether there is a need for a "new institutional health service." We are not persuaded.
First, this Court's opinion in In re Total Care was "premised on [the] undisputed fact" that the plaintiff "inten[ded] to open additional offices only in its existing geographical service area." In re Total Care, 99 N.C.App. at 522, 393 S.E.2d at 342. Again, whether the proposed home health care offices were actually located within the plaintiff home health care agency's existing service area was "undisputed" and not at issue on appeal.
Second, we agree with Liberty that an agency's interpretation of a statutory term is entitled to deference when the term is ambiguous and the agency's interpretation is based on a "permissible construction of the statute." County of Durham v. N.C. Dep't of Env't and Natural Res., 131 N.C.App. 395, 396-97, 507 S.E.2d 310, 311 (1998). However, we conclude that the statutory term "service area" is not ambiguous and that the CON Section's interpretation of this term is not based on "construction of the statute"; rather, it is based on an erroneous reading of this Court's decision in In re Total Care.
CON Section Chief Lee Hoffman testified at a deposition taken in preparation for the hearing in this contested case. When asked how the CON Section defined the term "current service area," Hoffman explained that the Section considered a "current service area" to be any county where "there was a patient being served at about that time" or "there had been a pattern and practice of services provided to that county, even if there wasn't a patient currently being served in the most recent past." Hoffman also repeatedly testified that the CON Section gleaned this definition from this Court's decision in In re Total Care and nowhere else.
DHHS is not entitled to judicial deference to its misinterpretation of In re Total Care. In fact, by implementing a one patient rule, DHHS has encouraged a practice that this Court disavowed in that case: "[the] offering . . . and opening [of] offices in leapfrog *660 fashion across the State without obtaining a CON for such services and offices." In re Total Care, 99 N.C.App. at 522, 393 S.E.2d at 342. This Court expressly "premised" its ruling "on [the] undisputed fact" that the plaintiff home health agency intended "to open additional offices only in its existing geographical service area" and explained that its decision in In re Total Care was "limited to the facts of [that] particular appeal" to prevent such an interpretation. Id.
Moreover, DHHS is not entitled to deference for a policy that is contrary to the plain language of section 131E-176(24a), which defines a hospice's service area as the county in which the hospice is located by statutorily adopting the definition of service area set forth in the SMFP. The one patient rule further frustrates the General Assembly's express purpose to prevent "[t]he proliferation of unnecessary health service facilities" by permitting hospice providers to open facilities in "leapfrog fashion" without a determination that such facilities are needed. N.C. Gen.Stat. § 131E-175(4) (2005). The General Assembly has determined that "unnecessary health service facilities result[] in costly duplication and underuse of facilities," as well as "unnecessary use of expensive resources" and "an enormous economic burden on the public who pay for the construction and operation of these facilities as patients, health insurance subscribers, health plan contributors, and taxpayers," which the CON process is designed to prevent. N.C. Gen.Stat. § 131E-175(4), (6) (2005).
Third, Liberty argues that the statutory definition of "service area" is used only to determine the need for a "new institutional health service," and should not be used to determine whether its proposed Greensboro hospice office meets the definition of "new institutional health service." In essence, Liberty asks this Court to determine that its proposed Greensboro office is not subject to the requirements of the CON law because the proposed office is inside Liberty's service area and that the proposed office is inside Liberty's service area because the CON law (specifically the statutory definition of service area) does not apply. We reject this circular argument.
2. Extension of In re Total Care
This Court limited its holding in In re Total Care as follows:
[T]his opinion is limited to the facts of this particular appeal and does not determine the question whether extension of home health services to patients in counties outside an agency's current service area, or the expansion of branch offices of an established home health agency outside the agency's current service area would trigger the CON requirement under N.C. Gen. Stat. § 131E-176.
In re Total Care, 99 N.C.App. at 522-23, 393 S.E.2d at 342 (emphasis added). Having concluded that Liberty's Greensboro hospice office is located outside the service area of its Fayetteville hospice, we must answer the question left unresolved by In re Total Care: whether an existing hospice care provider must obtain a CON before opening an office outside its service area. We conclude that it must.
Because a branch hospice office is necessarily supported by an existing certified "parent" hospice, it is also necessarily subject to the limitations imposed on the "parent" hospice by the CON law. See In re Total Care, 99 N.C.App. at 520, 393 S.E.2d at 340. (reasoning that a branch home health office and parent home health agency comprise a single agency). Every CON is issued for a finite "service area." See N.C. Gen.Stat. § 131E-181(a) (entitled "Nature of a Certificate of Need") (stating "[a] certificate of need shall be valid only for the defined scope, physical location, and person named in the application)." It is well established that an existing institutional health service must obtain a new CON to relocate outside this service area. N.C. Gen.Stat. § 131E-176(16)(q). This is because "the relocation of a health service facility from one service area to another" establishes a "new institutional health service." Id.; But see Christenbury Surgery Center v. N.C. Dep't of Health, 138 N.C.App. 309, 531 S.E.2d 219 (2000). Similarly, we hold that an existing institutional health service must obtain a new CON to open a "branch office" outside its service *661 area.[10] Such an office, regardless of the label affixed by its developer, is a "new institutional health service" for which a CON is required.
3. Conclusion
For the reasons stated above, we hold that the opening of a branch office by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. This holding is applicable only to Chapter 131E as it existed in July 2005. We further hold that the Greensboro hospice office proposed by Liberty is not located within its current service area; therefore, the proposed office is a "new institutional health service" for which Liberty was required to obtain a CON. Accordingly, this assignment of error is overruled.
B. Substantial Prejudice
Liberty assigns error to DHHS's denial of its motion for summary judgment. In support of its argument, Liberty contends that HGI failed to allege in its petition for a contested case hearing that the CON Section "substantially prejudiced" its rights and failed to forecast evidence of "substantial prejudice" as required by N.C. Gen.Stat. § 150B-23(a) (2005). We disagree and hold that the issuance of a "No Review" letter, which results in the establishment of "a new institutional health service" without a prior determination of need, substantially prejudices a licensed, pre-existing competing health service provider as a matter of law.
N.C. Gen.Stat. § 150B-23(a) provides, in part, that a petition for a contested case hearing "shall state facts tending to establish that the agency named as the respondent has deprived the petitioner of property, has ordered the petitioner to pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner's rights." Here, HGI alleges only that the CON Section's issuance of a "No Review" letter to Liberty has "substantially prejudiced" its rights. In support of this allegation, HGI forecast evidence regarding the potential for loss of patients, patient confusion, and impairment of fund-raising for non-profit hospices. Because we resolve this issue as a matter of law, we do not consider the sufficiency of the evidence forecast by HGI.
HGI is a hospice care provider that has been operating licensed hospices in Guilford County since 1978 and has a significant interest in ensuring that unnecessary and duplicative hospice services are not opened in its service area. Because an applicant for a CON must "demonstrate that the proposed project will not result in unnecessary duplication of existing or approved health service capabilities or facilities," this interest (which the General Assembly has also determined to be a public interest) is vetted during the CON application process. Competing hospice providers, like HGI, may participate in the CON application process by filing "written comments and exhibits concerning a proposal [for a new institutional health service] under review with the Department." N.C. Gen.Stat. § 131E-185(a1) (2005). Such comments may include
a. Facts relating to the service area proposed in the application;
b. Facts relating to the representations made by the applicant in its application, and its ability to perform or fulfill the representations made;
c. Discussion and argument regarding whether, in light of the material contained in the application and other relevant factual material, the application complies with relevant review criteria, plans, and standards.
Id.
Here, HGI was denied any opportunity to comment on the CON application, because there was no CON process. In fact, the CON Section's issuance of a "No Review" letter to Liberty effectively prevented any *662 existing health service provider or other prospective applicant from challenging Liberty's proposal at the agency level, except by filing a petition for a contested case. We hold that the issuance of a "No Review" letter, which resulted in the establishment of a "new institutional health service" in HGI's service area without a prior determination of need was prejudicial as a matter of law. Cf. In re Wilkesboro, Ltd., 55 N.C.App. 313, 285 S.E.2d 626 (decided under prior law, holding that the petitioner was entitled to a contested case hearing, and concluding that the petitioner, who was a competitor of the respondent, had "a substantial stake in the outcome of the controversy," such that the Court could, "in fact, think of no better person to assure complete review of this issue").
IV. Conclusion
For the reasons stated above, we hold that the CON Section's issuance of a "No Review" letter is the issuance of an "exemption" for purposes of section 131E-188(a). Accordingly, we conclude that section 131E-188(b) confers jurisdiction on this Court to hear the incident appeal.
Additionally, we hold that the opening of a branch office by an established hospice within its current service area is not the construction, development, or other establishment of a new institutional health service for which a CON is required. As explained above, this holding is applicable only to Chapter 131E as it existed in July 2005. We further hold that the Greensboro hospice office proposed by Liberty is not located within the current service area of its Fayetteville hospice; therefore, the proposed office is a "new institutional health service" for which Liberty must obtain a CON.
Finally, we hold that the issuance of a "No Review" letter, which results in the establishment of "a new institutional health service" without a prior determination of need, substantially prejudices a licensed, pre-existing competing health service provider as a matter of law.
Accordingly we affirm the final agency decision entered on or about 12 June 2006 by DHHS, DFS Director Robert J. Fitzgerald awarding summary judgment to HGI.
AFFIRMED.
Judges McCULLOUGH and CALABRIA concur.
NOTES
[1] Although the letter from Liberty stated that a "signed Hospice Plan of Care identifying the location of this patient is attached," the form actually attached was a Home Health Certification and Plan of Care, which is DHHS Health Care Financing Administration Form 4-485, not a hospice care plan.
[2] Additionally, we note that Rule 21 of the North Carolina Rules of Appellate Procedure authorizes this Court to grant certiorari review only "when the right to prosecute an appeal has been lost by failure to take timely action, or when no right to appeal from an interlocutory order exists, or for review pursuant to N.C. Gen.Stat. § 15A-1422(c)(3) of an order of the trial court denying a motion for appropriate relief." N.C. R.App. P. 21(a)(1) (2005). None of these circumstances are present in the case sub judice.
[3] N.C. Gen.Stat. § 131E-188(c) (2005) defines an "affected person" as "the applicant . . . [and] any person who provides services, similar to the services under review, to individuals residing within the service area or the geographic area proposed to be served by the applicant."
[4] This interpretation of section 131E-188 is consistent with the CON section's own understanding of "No Review" letters. The CON section itself described the "No Review" process as an "exemption" in the attachment to its 30 March 2005 letter to Liberty. In that letter, the CON section explained what information it needed to consider Liberty's request for "No Review." The attachment contained the following template for the title of Liberty's "No Review" request: "RE: Exempt from review / branch office of Medicare Provider." (Emphasis added.) The final DHHS agency decision also states that appeal lies to this Court pursuant to section 131E-188.
[5] At that time, section 131E-176(12) defined a "home health agency" as "a private organization or public agency, whether owned or operated by one or more persons or legal entities, which furnishes or offers to furnish home health services." N.C. Gen.Stat. § 131E-176(12) (1989).
[6] Thereafter, the North Carolina General Assembly amended the statutory definition of "new institutional health service" to include "[t]he opening of an additional office by an existing home health agency within its service area as defined by rules adopted by the Department; or the opening of any office by an existing home health agency outside its service area as defined by rules adopted by the Department." 1991 N.C. Sess. Laws 2222.
[7] Recently, the General Assembly further amended the statutory definition of "new institutional health service" to include "the opening of an additional office by an existing . . . hospice within its service area . . . or outside its service area." 2005 N.C. Sess. Laws 1179. Although this session law was ratified by the General Assembly on 16 August 2005 and signed by the Governor on 26 August 2005, it did not "become[] effective for hospices and hospice offices" until 31 December 2005. 2005 N.C. Sess. Laws 1184. Liberty requested a "No Review" letter for its proposed Greensboro office in March 2005, shortly before the original Bill was filed in the Senate. S. 740, 2005 Gen. Assem., Reg. Sess. (N.C.2005).
[8] Our holding is consistent with a 15 February 2004 declaratory ruling entered by DFS Director John M Syria, who determined that an existing, licensed hospice did not need to obtain a CON to open a "branch office" within its "existing service area."
[9] At that time, the SMFP stated that "[a] proposed service area (for home health services) may also consist of a grouping of contiguous counties." N.C. Dep't of Health and Human Servs., 1989 State Medical Facilities Plan 27 (1989).
[10] We note that Total Care did not define "branch office" as it was undisputed in that case that the new home health office was a "branch office." The CON law contains no formal definition of a "branch office." For purposes of this opinion reviewing summary judgment, we assume that Liberty's Greensboro office is a "branch office." However, this opinion also does not define "branch office" as such a holding is not necessary.
| {
"pile_set_name": "FreeLaw"
} |
270 Wis. 561 (1955)
ENDEAVOR-OXFORD UNION FREE HIGH SCHOOL DISTRICT, Appellant,
vs.
WALTERS, Respondent.
Supreme Court of Wisconsin.
September 13, 1955.
October 11, 1955.
*566 For the appellant there was a brief by Nikolay, Jensen & Nikolay of Abbotsford, and oral argument by Frank L. Nikolay.
For the respondent there was a brief by John A. Conant of Westfield, attorney, and Rogers & Owens of Portage of counsel, and oral argument by Mr. Conant.
STEINLE, J.
Appellant maintains that the trial court failed to observe proper procedure in the appeal from the order of the joint committee, and that as a consequence, substantial rights of the appellant were prejudiced. It contends *567 that under valid procedure, the petitioners, after filing the notice of appeal, were obliged to file a complaint alleging particulars upon which the appeal was based and to which response could have been interposed by the joint committee, the appellants, or others interested. It urges that procedure identical with that employed in School Dist. v. Callahan (1941), 237 Wis. 560, 297 N. W. 407, where a complaint was filed and opportunity to demur or answer was afforded, ought to have been required in the instant case.
Sec. 40.03 (5), Stats., provides in part:
"Any person aggrieved by an order may appeal therefrom to the circuit court of any county in which territory the proposed district lies, by serving written notice of such appeal upon the secretary of the committee or committees and filing such notice with the clerk of the court both within thirty days after the recording of the order. The order shall be stayed pending determination of the appeal. . . . The court shall not remand the proceeding, but shall issue its own order. . . ."
The statute contains no directions as to procedure in such appeals. In the present situation a precise detailed statement of the error charged in the joint committee's action and order was contained in the notice of appeal. Any writing labeled a complaint could not have described with greater accuracy the petitioners' claim upon the appeal. Objection by way of law or fact could readily have been interposed. Previous to the reception of evidence, the court announced (for the benefit of the participating parties) the issue that it considered itself called upon to determine. No objection was made to the issue as framed by the court. From the record it is apparent that the participating parties understood the issue and were willing and prepared to have the court determine it at the time. They were afforded full opportunity to present evidence and examine witnesses concerning it. The notice of appeal and the accompanying statement had been served upon the *568 joint committee more than twenty days before the court called the matter for hearing. The joint committee has not objected to the court's order and has not appealed from it. The various county school committees which constituted the joint committee were given opportunity to be represented by the district attorneys of their own counties who, under provision of sec. 59.47, Stats., represent them. While the procedure which was employed and approved in School Dist. v. Callahan, supra, is adequate in protecting the rights of interested persons in appeals to the court from county school committee orders, nevertheless it is not to be treated as an exclusive method for proceeding in such appeals. Since the joint committee had been served with notice of the appeal as required by statute and had without objection participated in the proceedings before the court, and had acquiesed with respect to the issue as it was framed and considered, it was not entitled to notice other than that which was given with respect to the claim of the petitioners and in regard to the call of the case for hearing in court.
The appellant school district contends that had the court required the filing of a complaint, appellant then would have been apprised of the petitioners' position and could have participated in the court hearing, and could have advanced its own position with reference to the issue raised. Appellant complains that it has been denied due process of law. The statute, however, does not provide that affected school districts be served with notices of appeal to courts from orders of county school committees. Had there been prepared and filed a pleading denominated a complaint, the petitioners would have been under no obligation to serve the school district with same. It is impossible to perceive how appellant may have had greater notice of petitioners' position had a complaint been filed than under these circumstances where a statement of particulars was included in the notice of appeal. We find no merit to appellant's objection in this regard.
*569 Appellant points out that the appeal permitted in sec. 40.03 (5), Stats., does not imply a trial de novo, and that the court was limited to a consideration of whether the joint committee had acted in excess of its power or in the unlawful abuse of its power. It contends that the record indicates that the joint committee was not wanting in jurisdiction and that it did not abuse its discretion.
The court determined that the joint committee through error or mistake had rendered an improper order. Abuse of discretion on the part of the joint committee is implied in the court's order. A ruling made upon grounds and for reasons clearly untenable constitutes abuse of discretion. See Weinberg v. Weinberg (1946), 208 S. C. 157, 162, 37 S. E. (2d) 507. Abuse of discretion does not necessarily mean ulterior motive, arbitrary conduct, or wilful disregard of the rights of a litigant, but it may mean a failure to apply principles of law applicable to a situation if prejudice results. State v. Shafer (1942), 71 Ohio App. 1, 47 N. E. (2d) 669. It was within the jurisdiction of the court to inquire as to whether the ruling of the joint committee was erroneous and therefore an abuse of discretion, and to make determination of the matter. There was no improper interference by the court with the joint committee's determination.
Appellant strenuously contends that since the joint committee determined by its own rule, based upon the advice of the assistant superintendent of schools, that the vote of a majority of the 18 members of the committee was essential to carry a motion, the trial court erred in its determination that the 15 members present at the meeting constituted a quorum, and that the vote of the majority of the quorum was controlling.
At common law a majority of the membership of a board or a committee constitutes a quorum for the transaction of business, and a majority vote of the quorum is decisive.
*570 Where the legislature confers powers upon a board to be exercised by it without providing as to the number of members necessary to act in concert to exercise the power or powers conferred on the board by the statute, then the common-law rule prevails that a majority of the board constituting a quorum may lawfully act. Oakland v. Board of Conservation and Development (1923), 98 N. J. L. 806, 816, 122 Atl. 311.
In Seiler v. O'Maley (1921), 190 Ky. 190, 192, 227 S. W. 141, it was held that under the common-law rule, a majority of the authorized membership of a representative body consisting of a definite number of members constitutes a quorum for the purpose of transacting business, but it is competent for the statutes or the constitution creating the body to prescribe the number of members necessary to constitute a quorum or to delegate to the creative body the authority to so prescribe.
In Ex parte Willcocks (N. Y. 1827), 7 Cow. 402, 409, 17 Am. Dec. 525, the court said that the general rule is that to make a quorum of a select and definite body of men possessing the power to elect, a majority, at least, must be present, and then a majority of the quorum may decide.
In the absence of other controlling provision, the commonlaw rule that a majority of a whole body is necessary to constitute a quorum, applies. Gaskin v. Jones (1941), 198 S. C. 508, 18 S. E. (2d) 454.
In 37 Am. Jur., Municipal Corporations, p. 671, sec. 57, it is said:
"It is well settled that at common law a majority of the duly elected members of a municipal council constitute a quorum, in the absence of special statutory or constitutional provision to the contrary, and a council has no implied power to adopt a rule that a greater or less number shall constitute a quorum."
In State ex rel. Burdick v. Tyrrell (1914), 158 Wis. 425, 434, 149 N. W. 280, this court said:
*571 "There is no provision in the written law requiring a majority of the council to elect, hence the common-law rule applies. Under the charter two thirds of the aldermen, being four, constitutes a quorum for the transaction of business. The election or appointment of a city attorney was `transaction of business,' and a majority of a quorum, in the absence of any statute to the contrary, was sufficient to elect."
Under these common-law principles, it is plain that since the legislature did not prescribe the number of votes required for the passage of a matter before a county school committee or joint committee, a majority of the committee constitutes a quorum, and a majority of the quorum may decide the matter. The committee has no implied power to adopt a rule that a greater or lesser number shall constitute a quorum. In the instant situation the joint committee by its action required a greater vote for approval of the petition than is provided by common law. Such requirement was erroneous. It was within the jurisdiction of the court to issue an order correcting the committee's error on the basis that such error constituted an abuse of discretion.
Lastly, appellant maintains that the court erred in issuing a retroactive order with respect to the effective date of the reorganization of the school districts. We concur in that view.
Sec. 40.03 (1), Stats., provides in part that "orders of the committee providing for the reorganization of school districts shall not take effect until July 1 following the recording of the order." In sec. 40.03 (5) there is provision that "the court shall not remand the proceeding, but shall issue its own order." The joint committee's order did not provide for the reorganization of the school districts and ordinarily that order would have become effective when properly filed pursuant to sec. 40.03 (3). The order was stayed pending the determination of the appeal as provided in sec. 40.03 (5). The order of the court affirmed the vote of the joint committee but changed the committee's conclusion with respect *572 to the effect of that vote. Until the court's order was issued, the corrected conclusion had no force. The court's order nullified the effect of the committee's order which had been recorded. The committee's voting action and the proper conclusion thereon as determined by the court had no force until the order of the court was issued and recorded. Hence, the order could not have become effective earlier than July 1, 1955. The court's direction that July 1, 1954, be the effective date of the reorganization of the school districts, was error. The order of the court shall be modified so as to provide that the detachment of the territory in question from the one school district and its attachment to the other shall be effective as of July 1, 1955.
By the Court.The order appealed from is modified so as to provide that the effective date for the detachment of sections 19, 20, 30, and 31 of the township of Packwaukee, Marquette county, from Endeavor-Oxford Union Free High School District and the attachment of said territory to West-field Union Free High School District for high-school purposes only, be July 1, 1955. In all other respects the order appealed from is affirmed. Cause remanded with directions to modify the order in accordance with this opinion.
CURRIE, J., took no part.
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29 N.J. Super. 204 (1954)
102 A.2d 68
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
CHARLES R. LAMOREAUX, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Argued November 30, 1953.
Decided January 6, 1954.
*205 Before Judges JAYNE, FRANCIS and FREUND.
Mr. Benjamin Asbell, First Assistant Prosecutor of Camden County, argued the cause for the plaintiff-respondent (Mr. Mitchell H. Cohen, prosecutor).
Mr. Walter S. Keown argued the cause for the defendant-appellant.
The opinion of the court was delivered by FRANCIS, J.A.D.
Appellant appeals from his third conviction on an indictment charging the crime of false pretenses. The two previous convictions were reversed by the Appellate Division. 13 N.J. Super. 99 (1951); 20 N.J. Super. 65 (1952); 26 N.J. Super. 41 (1953).
The indictment charges that appellant
"* * * unlawfully, knowingly and designedly did falsely pretend to one Alexander Sabo that he, the said Charles R. Lamoreaux, would immediately commence construction of a home on a certain lot, and that he had sufficient finances, materials and labor available to do so * * *."
as the result of which Sabo gave Lamoreaux the sum of $1100
*206 "* * * which sum the said Charles R. Lamoreaux did then and there unlawfully, knowingly and designedly receive and obtain from the said Alexander Sabo by means of the false representations and pretenses as aforesaid, and with intent to cheat and defraud the said Alexander Sabo of the same; whereas in truth and in fact he, the said Charles R. Lamoreaux did not commence construction on the aforesaid dwelling house on a certain lot, and he did not have sufficient finances, materials or labor available to do so as he, the said Charles R. Lamoreaux then and there well knew * * *." (Emphasis supplied)
On the first appeal, the Appellate Division declared that "the alleged wilfully false representation charged to Lamoreaux in this indictment, that he `would immediately commence construction,' * * * does not charge a crime" because it was promissory in character. (13 N.J. Super. 99, 103). However, the indictment was expressly declared valid. Judge (now Justice) Brennan said:
"* * * The allegation that he knowingly misrepresented that he had sufficient finances, materials and labor to build the house does, however, charge designed misrepresentation of existing facts or conditions and alleges the crime of false pretense." (p. 103)
And of decisive importance in connection with the present review, the court also said:
"* * * The critical inquiry, then, is whether the State's proofs sustained the State's burden to show that Lamoreaux in fact lacked finances, materials or labor at the time he represented he had them." (p. 103; emphasis supplied)
At this trial the State did not undertake to prove that Lamoreaux lacked finances, materials or labor on the days he allegedly falsely pretended that he had them. Instead, it undertook to demonstrate that the New Era Construction Company, a New Jersey corporation, of which Lamoreaux was president, treasurer and manager, did not have sufficient finances at such times to commence construction of a house immediately for Sabo. No proof was offered as to Lamoreaux's personal financial condition.
The testimony with respect to the financial state of the corporation was objected to on the ground that under the indictment the false pretenses of financial capacity related *207 to Lamoreaux personally, that is, they were made by him with respect to his own situation. And it was urged that the financial condition of the corporation, even though he was its active manager and the largest holder of stock among a number of stockholders, was not relevant against him to show his status from an asset standpoint at the crucial time. Furthermore, at the close of the State's case and again at the conclusion of the defense, a motion for dismissal was made on the ground of absence of evidence to support the allegation of the indictment that Lamoreaux falsely pretended he had sufficient finances to begin construction of the house. All of the objections and motions were overruled.
The theory of the State, which the trial court adopted, was that the corporation was the "alter ego" of appellant. Assuming this to be true and that the evidence tended to establish that Lamoreaux was engaged in construction work through the corporation, it cannot be said that the financial incapacity of the corporation proved or tended to prove that at the time in question he did not have sufficient finances to commence construction of a house. The record is barren of any proof that Lamoreaux's interest in the corporation was his only financial asset. Consequently it is evident that the evidence submitted varies from and does not support the false pretenses alleged in the indictment.
It is undoubtedly the rule that in false pretense cases the indictment must state the facts of the crime with as much certainty as the nature of the case will reasonably admit, and that it should negative the pretenses by such specific allegations as will give the defendant notice of what he must prepare to defend. State v. Luxton, 65 N.J.L. 605 (E. & A. 1901); Fowler v. State, 58 N.J.L. 423 (Sup. Ct. 1896), affirmed 59 N.J.L. 585 (E. & A. 1896); 2 Wharton, Criminal Law (12th ed. 1932), § 1482. In our judgment, this requirement has not been qualified by R.R. 3:4-3, directing that an indictment shall be a written statement of the essential facts constituting the offense charged.
As already indicated, the indictment informed Lamoreaux of the "critical inquiry" that he must be prepared to defend. *208 That inquiry was not pursued at the trial by proof that the corporation was in monetary straits.
A principle no less firmly settled than that relating to the requirements of a valid indictment is that the proof must conform to the allegations of the indictment and that a material variance is fatal. Wharton, supra, § 1483.
For example, in Sharp v. State, 53 N.J.L. 511 (Sup. Ct. 1891), the indictment charged that the defendant persuaded the complainant to endorse his note by falsely pretending that his property was not encumbered by any lien. The conversation proved at the trial was that complainant had asked defendant whether he owned his personal property, to which defendant answered, "I do not owe a dollar to any man."
The Supreme Court reversed the conviction, saying:
"* * * The indictment charged a particular false pretense. It will not be supported by proof or general statement, though the latter be false. There was therefore a substantial variance between the allegations and the proof."
The charge of the trial court was to the effect that if the jury believed the accused obtained the complainant's signature to the note by false representations, knowing that he could not fulfill the promise, they should convict. This was declared to be error also:
"This instruction * * * permitted the jury to convict upon any false representation proved to have been made, although that alleged in the indictment was not proved."
Cf. State v. Hoffman, 9 N.J. Misc. 270 (Sup. Ct. 1931); State v. London, 1 N.J. Misc. 89 (Sup. Ct. 1923); State v. Barone, 98 N.J.L. 9 (Sup. Ct. 1922); State v. Lentz, 92 N.J.L. 17 (Sup. Ct. 1918).
A case of striking analogy is State v. Dowless, 217 N.C. 589, 9 S.E.2d 18 (Sup. Ct. 1940), where a conviction was reversed because of a variance between the complaint and the proof. The pertinent language follows:
"The warrant, upon which the defendant was tried and convicted, charged that defendant W.B. Dowless did issue and deliver a worthless check, knowing that he did not have sufficient funds *209 or credit with the bank with which to pay same, whereas the proof shows a check issued by a corporation of which defendant Dowless was executive head, together with oral evidence that the corporation did not have sufficient funds or credit with the bank to pay same.
While the terms of the statute (Public Laws 1927, Chap. 62) are broad enough to cover the utterance and delivery of the check of a corporation by an officer thereof with knowledge of the falsity of the check and the insufficiency of the funds or credit of the maker, here the charge is that W.B. Dowless, individually, issued the check with knowledge that he (Dowless) did not have sufficient funds or credit with the bank to pay the check. The proof does not conform to the charge contained in the warrant. There is a variance between allegation and proof."
For the reasons expressed, the judgment is reversed.
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34 A.3d 222 (2011)
IN INT. OF MILLER;
APPEAL OF MILLER.
No. 1937 MDA 2010.
Superior Court of Pennsylvania.
September 12, 2011.
Affirmed.
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247 Ga. 678 (1981)
279 S.E.2d 430
HOLLOWELL
v.
JOVE et al.
37008.
Supreme Court of Georgia.
Decided June 16, 1981.
Johnson, Ward, Stanfield, Lanham & Carr, James C. Carr, Jr., Lee J. Dunn, Jr., for appellant.
Doster, Allen & Young, Hunter S. Allen, Jr., Samuel F. Doster, Jr., Lorraine D. Hess, for appellees.
Jones, Bird & Howell, Jack Spalding Schroder, Jr., Scott R. Owens, amicus curiae.
SMITH, Justice.
Pursuant to Rule 36 of this court, the U. S. Court of Appeals, Fifth Circuit, has certified questions arising in the above-styled case, on appeal from the U. S. District Court for the Northern District of Georgia.
The basic facts of this case, set forth in Hollowell v. Jove, 628 F2d 513 (5th Cir. 1980), are as follows: "On December 11, 1973, Hazel Bachelor Dickens, the Appellant's decedent, a resident of DeKalb County, Georgia, was admitted to the Appellee DeKalb General Hospital, with a diagnosis of transcervical fracture of the hip. During her hospital stay, Ms. Dickens was attended by the Appellee Julio Jove, M.D. On December 27, 1973, she was released from the Hospital, but was returned to its emergency room five hours later and pronounced dead on arrival. An autopsy indicated that she had died of a pulmonary embolism.
"The decedent's daughter, Sheila Hollowell, brought this action in the United States District Court for the Northern District of Georgia, Atlanta Division, on December 26, 1975, alleging that Dr. Jove failed to undertake prophylactic measures to prevent the formation of blood clots in the decedent's legs and was, therefore, negligent. The Appellant further alleged that the hospital was negligent in allowing Dr. Jove to treat patients when it knew or should have known that he lacked the necessary skill, training and experience to treat patients suffering from the condition for which the decedent was hospitalized. (R. 6-7).
"In its present posture, this case involves a discovery dispute between the parties. On April 2, 1976, Appellant filed First Continuing Interrogatories to Dr. Jove (R. 33-52). On May 6, 1976, Appellant filed First Continuing Interrogatories to the Hospital (R. 53-76), followed by Appellant's Second Continuing Interrogatories to the Hospital (R. 77-79) on May 10, 1976. On October 5, 1976, Appellant's counsel took the deposition of Dr. Jove. The discovery dispute arose because certain of the interrogatories propounded to the Appellees and certain questions propounded to Dr. Jove at the time of his deposition sought to discover whether any hearings or proceedings were conducted by hospital committees concerning the care provided by Dr. Jove to the decedent or to any other patient whom he had treated in the hospital. The Appellees objected to these questions on the grounds that the information sought was made absolutely privileged, confidential and nondiscoverable by virtue of the provisions of Ga. Code Ann. § 88-3201, et seq. (R. 87-88, 100 and 102).
*679 "On November 3, 1976, Appellant filed a Motion to Compel Discovery requesting that the defendants be required to admit if any hospital committee hearings had ever taken place concerning the care rendered by Dr. Jove to the decedent or any other patient, and to divulge the names of those who participated in and/or were present at such meetings or hearings (R. 131-163). Both sides filed several briefs setting forth their positions with regard to Appellant's Motion to Compel Discovery (R. 164-167, 168-178, 179-183, 184-200), and, on April 11, 1977, the Court issued an order directing that the Hospital produce certain documents for the Court's in camera inspection, and denying the plaintiff's motion in all other respects (R. 201-203). The Appellant filed a Motion for Certification of the Court's Order (R. 204-209), which was denied (R. 222-226). Upon reviewing the documents produced for in camera inspection, the Court initially required the Hospital to produce the documents noting that none of the documents which were not disclosed relate to any investigation of the incident which is the subject matter of the instant action.
"Subsequently, the Hospital filed a Motion for Reconsideration concerning certain of the documents which the Court had ordered it to produce (R. 216-221). Upon reconsideration, the Court declined to compel production of documents relating to the decision by one of the Hospital committees to restrict Dr. Jove's privileges with respect to the performance of anterior cervical fusion operations. (R. 225). The Court, however, did require the Hospital to produce all documents in Dr. Jove's personnel file relating to his initial appointment to the medical staff and documents relating to his periodic reappointment (R. 226).
"As a result of the various orders of the District Court, the Appellant was unable to obtain any records generated by the Hospital's peer review committees, whether or not the committees actually considered care rendered to the decedent or care rendered to other patients (R. 226). The Appellant's position is that, by virtue of the Court's various orders, she was prevented from developing any admissible evidence from persons who may have been present at any meetings of the Hospital's Quality Assurance Committee the `original sources' specifically exempted by Ga. Code Ann. § 88-3204.
"On July 19, 1977, the Appellant submitted a Motion for Reconsideration (R. 236-240), which was subsequently denied (R. 288). Discovery progressed with Appellant filing her Third Continuing Interrogatories to the Hospital on September 27, 1977 (R. 245-247), and Fourth Continuing Interrogatories to the Hospital on October 19, 1977 (R. 251-254). ...
"The trial of the case commenced on January 8, 1978, and lasted *680 until January 17, 1978, on which date the jury found in favor of the Appellees."
Questions Certified
"(1) Does the legislation relating to records of Medical Review Committees contained in Georgia Code Annotated § 88-3201, et seq., apply to records of Medical Review Committee activity engaged in before these statutes were enacted?
"(2) If the answer to question (1) is yes, does such application violate the prohibition on retro-active laws, now codified as Georgia Code Annotated § 2-107, or any other provision of the Georgia Constitution?
"(3) What is the proper breadth of application of such legislation in medical malpractice matters, i.e., does it cover records relating to care of patients other than plaintiff or the decedent whose estate or interests are represented by plaintiff, does it cover information related to the defendant physician's general competence, his competence to treat the condition from which the decedent suffered as evidenced by his treatment of other similarly afflicted patients, or competence to perform medical procedures other than those specifically involved in the subject litigation, does it cover information such as whether any Medical Review Committee meetings related to the care of the decedent whose interests are represented by plaintiff were held or who attended such meetings, does it cover information generated or maintained by entities other than `Medical Review Committees' as defined in the legislation."
"[T]he purpose for the enactment of Code Ann. § 88-3204 is to foster the delivery of quality medical services by preserving the candor necessary for the effective functioning of hospital medical review committees." Eubanks v. Ferrier, 245 Ga. 763, 766 (267 SE2d 230) (1980). The statute legislatively approves the view that "[c]onstructive professional criticism cannot occur in an atmosphere of apprehension that one doctor's suggestion will be used as a denunciation of a colleague's conduct in a malpractice suit." Bredice v. Doctors Hospital, Inc., 50 FRD 249, 250 (D.D.C. 1970). "It embraces the goal of medical staff candor at the cost of impairing plaintiffs' access to evidence." Schulz v. Superior Court for County of Yolo, 66 Cal. App. 3d, 440, 445-446 (136 Cal. Rptr. 67) (1977). Given this underlying purpose, we do not believe the legislature intended that Code Ann. § 88-3204 should apply to medical review committee activity engaged in before its effective date even though a discovery request is made after such time. No one who participated in a medical review committee proceeding prior to the effective date of Code Ann. § 88-3204 could have been influenced by the protections afforded thereunder. The harm occasioned by the non-existence of Code Ann. *681 § 88-3204 (i.e., less candid medical review committee proceedings) is an unalterable fact. Accordingly, the first certified question must be answered in the negative.
As the second certified question is expressly conditioned upon an affirmative response to the first, we shall proceed to the final certified question.
"`It is, of course, fundamental that "the cardinal rule to guide the construction of laws is, first, to ascertain the legislative intent and purpose in enacting the law, and then to give it that construction which will effectuate the legislative intent and purpose." Ford Motor Co. v. Abercrombie, 207 Ga. 464, 467 (62 SE2d 209) ...' City of Jesup v. Bennett, 226 Ga. 606, 608 (176 SE2d 81) (1970)." Wall v. Board of Elections of Chatham County, 242 Ga. 566, 573-574 (250 SE2d 408) (1978). Although "the legislative intent prevails over the literal import of words" (Drake v. Thyer Mfg. Corp., 105 Ga. App. 20, 22 (123 SE2d 457) (1961)), "where a constitutional provision or statute is plain and susceptible of but one natural and reasonable construction, the court has no authority to place a different construction upon it, but must construe it according to its terms. [Cits.]" Rayle Electric Membership Corp. v. Cook, 195 Ga. 734, 735 (25 SE2d 574) (1943). "In other words the language being plain, and not leading to absurd or wholly impracticable consequences, it is the sole evidence of the ultimate legislative intent." Caminetti v. United States, 242 U. S. 470, 490 (37 SC 192, 61 LE 442) (1917); Samuelson v. Susen, 576 F2d 546, 552 (3d Cir. 1978).
In addition to the above rules of construction, we must also consider that Code Ann. § 88-3204 is in derogation of the general policy in favor of the discovery and admissibility of probative evidence. See CPA § 26(b)(1) (Code Ann. 81A-126(b)(1); Elkins v. United States, 364 U. S. 206, 234 (80 SC 1437, 4 LE2d 1669) (1960). "Evidentiary privileges operate to exclude relevant information from the fact finder and thus are not favored." Robinson v. Magovern, 83 FRD 79, 85 (W.D. Pa. 1979). "Whatever their origins, these exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth." United States v. Nixon, 418 U. S. 683, 710 (94 SC 3090, 41 LE2d 1039) (1974); Davison v. St. Paul Fire & Marine Ins. Co., 75 Wis. 2d 190 (248 NW2d 433) (1977).
With the above principles in mind, we shall answer the specific inquiries of the Fifth Circuit regarding the proper scope of application of Code Ann. § 88-3201 et seq.
a) Code Ann. § 88-3204 provides in part: "The proceedings and records of committees as described in the foregoing provisions of this Chapter shall not be subject to discovery or introduction into *682 evidence in any civil action against a provider of professional health services arising out of the matters which are the subject of evaluation and review by such committee, and no person who was in attendance at a meeting of such committee shall be permitted or required to testify in any such civil action as to any evidence or other matters produced or presented during the proceedings of such committee or as to any findings, recommendations, evaluations, opinions, or other actions of such committee or any members thereof." In our view, the term "proceedings and records" includes records of a medical review committee relating to care of patients other than the plaintiff or the decedent whose estate or interests are represented by the plaintiff. Such a broad range exclusion is necessary to promote the underlying purpose of the section and is clearly authorized by the statutory language. It is apparent that a candid evaluation of a physician's performance will likely necessitate a discussion of services rendered to patients other than the plaintiff or his decedent.
b) It follows from what has just been said that Code Ann. § 88-3204 applies to information generated in the course of medical review committee proceedings which relates to the physician's general competence, his competence to treat the condition from which the decedent suffered as evidenced by his treatment of other similarly afflicted patients and his competence to perform medical procedures other than those specifically involved in the subject litigation. We must note, however, that "information, documents, or records otherwise available from original sources are not to be construed as immune from discovery or use in any such civil action merely because they were presented during proceedings of such committee." Code Ann. § 88-3204.
c) The discovery of whether any medical review committee meetings relating to the care of the decedent were held and who attended the meetings necessitate an intrusion into the "proceedings" of the committee. We therefore conclude that such information is nondiscoverable under Code Ann. § 88-3204.
d) Code Ann. § 88-3201 defines the term "medical review committee" as a "committee of a State or local professional society or of a medical staff or a licensed hospital, nursing home, medical foundation or peer review committee, provided the medical staff operates pursuant to written bylaws that have been approved by the governing board of the hospital or nursing home, which is formed to evaluate and improve the quality of health care rendered by providers of health service or to determine that health services rendered were professionally indicated or were performed in compliance with the applicable standard of care or that the cost of health care rendered was considered reasonable by the providers of *683 professional health services in the area."
In order for the information generated or maintained by a committee exercising review functions to be subject to the provisions of Code Ann. § 88-3201 et seq., the committee must meet the qualifications set forth in Code Ann. § 88-3201. The legislature could have defined a "medical review committee" more broadly than it did. See 63 Pa. Stat. Ann., § 425.2 (Purdon). We must presume that its failure to do so was a matter of considered choice.
First question answered in the negative; second question not decided; third question answered: a) Yes b) Yes c) Yes d) No. All the Justices concur, except Jordan, C. J., who concurs specially.
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535 U.S. 940
WEBBv.UNITED STATES.
No. 01-7885.
Supreme Court of the United States.
March 18, 2002.
1
C. A. 4th Cir. Certiorari denied. Reported below: 20 Fed. Appx. 182.
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Order Michigan Supreme Court
Lansing, Michigan
December 22, 2015 Robert P. Young, Jr.,
Chief Justice
Stephen J. Markman
Brian K. Zahra
150903 & (18) Bridget M. McCormack
David F. Viviano
Richard H. Bernstein
Joan L. Larsen,
PEOPLE OF THE STATE OF MICHIGAN, Justices
Plaintiff-Appellee,
v SC: 150903
COA: 323954
St. Clair CC: 73-120528-FC
WILLIE EARL BANKSTON,
Defendant-Appellant.
_________________________________________/
On order of the Court, the motion to add new grounds for consideration is
GRANTED. The application for leave to appeal the December 11, 2014 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).
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.
December 22, 2015
s1214
Clerk
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953 F.2d 687
293 U.S.App.D.C. 291, 60 USLW 2512,1992 O.S.H.D. (CCH) P 29,593
NOTICE: D.C. Circuit Local Rule 11(c) states that unpublished orders, judgments, and explanatory memoranda may not be cited as precedents, but counsel may refer to unpublished dispositions when the binding or preclusive effect of the disposition, rather than its quality as precedent, is relevant.ACTION ON SMOKING AND HEALTH, Petitioner,v.OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION and UnitedStates Department of Labor, Respondents.ACTION ON SMOKING AND HEALTH, Petitioner,v.OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION and UnitedStates Department of Labor, Respondents.
Nos. 91-1037, 91-1038.
United States Court of Appeals, District of Columbia Circuit.
Jan. 29, 1992.
Before MIKVA, Chief Judge and RUTH BADER GINSBURG and BUCKLEY, Circuit Judges.
ORDER
PER CURIAM
1
Upon consideration of the motions to dismiss, the responses thereto and the replies; the motions for leave to file a response; the motions for consideration by a single panel and the responses thereto; the motions to correct omission from the record and the responses thereto; the motions to defer proceedings and the responses thereto; and the response to the court's order for further submissions and the reply, it is
2
ORDERED that the motions to dismiss the petitions for review be granted to the extent that the petitions seek review of non-final agency orders. Neither the November 30, 1990, letter from the Occupational Safety and Health Administration ("OSHA") to petitioner, nor the December 14, 1991, OSHA status report filed in No. 89-1656, represents final agency action relating to the regulation of tobacco smoke in the workplace. It is
3
FURTHER ORDERED that these petitions for review, to the extent they seek a writ of mandamus to compel agency action, be denied. The agency's delay is not so egregious as to warrant the extraordinary remedy of a writ of mandamus. See Telecommunications Research and Action Center v. FCC, 750 F.2d 70, 80 (D.C.Cir.1984). We are satisfied by OSHA's representation that it will decide whether and how to regulate exposure to tobacco smoke in the workplace as soon as possible following analysis of the comments it receives in response to the September 20, 1991, Request for Information on Occupational Exposure to Indoor Air Pollutants. See 56 Fed.Reg. 47892 (1991). This order is without prejudice to renewal of petitioner's request in the event that OSHA unreasonably delays resolution of this matter following receipt of comments. It is
4
FURTHER ORDERED that the remaining motions be dismissed as moot.
5
The Clerk is directed to withhold issuance of the mandates herein until seven days after disposition of any timely petition for rehearing.
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591 So.2d 505 (1991)
BOARD OF ADJUSTMENT OF the CITY OF MOBILE, et al.
v.
Roberta G. MURPHY, et al.
2900228.
Court of Civil Appeals of Alabama.
July 26, 1991.
Rehearing Denied September 13, 1991.
Certiorari Denied December 13, 1991.
*506 Royce A. Ray III of Finkbohner, Lawler & Olen, Mobile, for appellants.
Ross Diamond III of Diamond, Hasser & Frost, Mobile, for appellees.
Alabama Supreme Court 1901960.
ROBERTSON, Presiding Judge.
Following a jury verdict, which granted appellees a use variance for certain property, and the denial of a motion for new trial, the Board of Adjustment of the City of Mobile (Board) appealed to this court. The appellees consist of the owners of the parcel of property, Roberta Murphy, Lee Shearer, Robert Bush, Lucy Beaven and the estate of Fletcher Gordon (owners), and the prospective purchasers of the property, Ross Diamond III, James Hasser, Jr., and James Frost (prospective purchasers).
On October 22, 1989, the prospective purchasers agreed to buy the property, contingent upon their ability to obtain a use variance. The property was zoned for residential use and the prospective purchasers, three attorneys, wanted to locate their law offices on the property, which would require that the property be zoned "buffer business."
Application for a use variance was made with the City of Mobile in 1990 by both the owners and prospective purchasers. The city denied the request, so the owners and prospective purchasers applied for a use variance with the Board. The Board denied the request, and the owners and prospective purchasers timely appealed to circuit court for a trial de novo, pursuant to § 11-52-81, Code 1975.
Following a proceeding at which evidence was presented ore tenus, the jury returned a verdict in favor of the owners and prospective purchasers and granted their request for a use variance to build commercial law offices on the property.
The property in question, which is zoned residential, is a vacant lot on the corner of Dauphin and Julia Streets in Mobile, Alabama. At one time, the property had a residence on it; however, the residence was condemned by the city and torn down. The owners of the property are the descendants of the original owners of the home and lot.
Testimony was offered that the property has been on the market for most of the 30 years it had belonged to the present owners, without any serious inquiries or offers. An expert also testified that, as a practical matter, there was no market value for this lot within the present zoning. Surrounding the lot are buildings that are a mixture of business and professional offices, as well as historic residential structures. Evidence was also presented that the proposed law offices will be built in a manner that makes them architecturally harmonious with the surrounding residential properties and that no significant change in traffic would occur.
The dispositive issues on appeal are whether the trial court erred in denying the Board's motion for directed verdict and its motion for a new trial.
*507 A board of adjustment, as well as the circuit court on appeal for trial de novo, is authorized to grant a variance from a zoning ordinance if the variance "will not be contrary to the public interest, where, owing to special conditions, a literal enforcement of the provisions of the ordinance will result in unnecessary hardship and so that the spirit of the ordinance shall be observed and substantial justice done." Section 11-52-80(d)(3), Code 1975; Lawless v. Smith, 481 So.2d 1144 (Ala.Civ.App. 1985).
Our supreme court, in defining "unnecessary hardship" has stated that no one factor is dispositive of what constitutes practical difficulty or unnecessary hardship. City of Mobile v. Sorrell, 271 Ala. 468, 471, 124 So.2d 463 (Ala.1960). Instead, all relevant factors, when taken together, must demonstrate that the problems of the property are unique in that it cannot be put reasonably to a conforming use due to the property's zoning classification. Sorrell.
Further, whether "unnecessary hardship" exists is a factual question and, as such, it should be decided by a jury. Board of Adjustment of City of Mobile v. Pierce, 512 So.2d 107 (Ala.Civ.App.1987). Prior to the enactment of § 12-21-12, Code 1975, "even the smallest scintilla of evidence presented in support of an issue prevent[ed] the court from issuing a directed verdict." Pierce. However, since the enactment of § 12-21-12(a), Code 1975, proof by substantial evidence is required to prevent the court from issuing a directed verdict.
We have examined the record and find that sufficient facts were presented, which satisfied the substantial evidence rule and required submission of the case to the jury. The particular facts, as recited above, were, essentially, that "the desirability of the area for a family home [had] greatly waned," which is shown by the fact that this lot has failed to sell in approximately thirty years on the open market. Mareno v. Board of Adjustment of Mobile, 495 So.2d 1109 (Ala.Civ.App.1985); Board of Adjustment of Mobile v. Sigler, 518 So.2d 725 (Ala.Civ.App.1987). In short, this property is simply not useable in its present classification. Likewise, the public interest is protected by the fact that the offices will not contribute to a traffic problem, nor will they detract from the character of the neighborhood.
Next, the Board contends its motion for a new trial should have been granted because, it asserts, the owners and prospective purchasers failed to prove by clear and convincing evidence that unnecessary hardship existed.
The evidence in this case clearly shows that the ordinance, as applied, would constitute an "unnecessary hardship." This piece of property suffers a unique problem in that, for an extended period of time, no use has been found for it within its present classification. Further, the evidence indicated that the public interest is not so adversely affected as to justify a denial of the variance.
"Jury verdicts are presumed to be correct in Alabama. This presumption of correctness is further strengthened by the trial court's denial of a motion for new trial." Ashbee v. Brock, 510 So.2d 214 (Ala.1987). Whether a trial court grants or denies a motion for a new trial is a decision committed to its sound discretion, and this court will not reverse on appeal absent a showing of an abuse of that discretion. Franklin v. Cannon, 565 So.2d 119 (Ala. 1990).
Having carefully examined the aforementioned evidence and applying the appropriate presumptions, we find that the denial of the motion for a new trial was not in error. The judgment of the trial court is due to be affirmed.
AFFIRMED.
THIGPEN and RUSSELL, JJ., concur.
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989 F.2d 1202
NOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.MOSINEE PAPER CORPORATION, Plaintiff/Cross-Appellant,v.JAMES RIVER CORPORATION OF VIRGINIA, Defendant-Appellant.
Nos. 92-1272, 92-1295, 92-1442 and 92-1455.
United States Court of Appeals, Federal Circuit.
Feb. 8, 1993.
Before ARCHER, MAYER and RADER, Circuit Judges:
Judgment
PER CURIAM.
1
AFFIRMED. Fed.Cir.R. 36.
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543 U.S. 867
OSTRANDERv.MASSACHUSETTS.
No. 03-11081.
Supreme Court of United States.
October 4, 2004.
1
Sup. Jud. Ct. Mass. Certiorari denied. Reported below: 441 Mass. 344, 805 N. E. 2d 497.
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750 P.2d 942 (1988)
HONOLULU, LIMITED and HRT, Ltd., Plaintiffs-Appellees,
v.
James C. BLACKWELL, Virginia R. Blackwell, Michael S. Seemann, Love-Seemann Properties, First Interstate Bank of Hawaii, Stephen Love, Janet S. Lent-Koop, Richard D. Nelson and American City Bank, Defendants,
v.
SPECIALTY SURFACING CO. OF HAWAII, INC.; Case, Kay & Lynch, Intervenors, and
Robert O. Lippi, Intervenor-Appellant.
Nos. 11674, 11754.
Intermediate Court of Appeals of Hawaii.
February 23, 1988.
*944 Allen S. Chock (T. Irving Chang and Jo Ann M. Uchida with him, on the briefs; Chang, Mui, Chang & Chock, of counsel), Honolulu, for intervenor-appellant Robert O. Lippi.
Glenn M. Miyajima (Reuben S.F. Wong and Wayne H. Mukaida with him, on the briefs; Law Offices of Reuben S.F. Wong, of counsel), Honolulu, for plaintiffs-appellees Honolulu, Ltd., and HRT, Ltd.
Before BURNS, C.J., and HEEN and TANAKA, JJ.
HEEN, Judge.
In this foreclosure action Intervenor-Appellant Robert O. Lippi, Trustee appointed by the bankruptcy court (Trustee) for Defendant Love-Seemann Properties (Properties), a California partnership, contends that the lower court committed error when it authorized the commissioner to make excessive interest and late charge payments to Plaintiffs Honolulu, Limited (Honolulu), and HRT, Ltd. (HRT)[1] (where appropriate hereinafter Honolulu and HRT will be referred to collectively as Plaintiffs), out of the foreclosure sale proceeds. We vacate that portion of the June 3, 1986 Order Granting Motion For Confirmation Of Commissioner's Sale (Order) which authorized the interest and late charge payments and remand for further proceedings.
I.
Under a single agreement of sale (Agreement) dated May 5, 1978, Honolulu sold two adjoining pieces of real property in Hanalei, Kauai, to Defendants James C. Blackwell and Virginia R. Blackwell (hereinafter the Blackwells) for $475,000. The Agreement provided for a down payment of $25,000, monthly payments of interest only at the rate of 6% per annum, and payment of the full principal balance, together with interest, on May 22, 1983. Shortly thereafter, the Blackwells sold the two properties separately to Defendant Michael Seemann (Seemann) under two sub-agreements of sale (Sub-Agreements) in the amounts of $220,000 and $400,000. Seemann made down payments reducing the balances due to $200,000 and $360,000, respectively, which were to be paid in full on May 22, 1983, together with interest at 6% per annum.[2] Meanwhile, Seemann was required to make semi-annual interest payments. Seemann assigned all of his right, title and interest in the Sub-Agreements to Properties, a California partnership, in which Seemann and Defendant Stephen Love (Love) were general partners.
On May 18, 1982, the Blackwells assigned 15.179% of their interest in the Sub-Agreements to HRT, and, shortly thereafter assigned to HRT the interest payments already accrued and owing to the Blackwells under the Sub-Agreements. The Blackwells and Properties defaulted on the Agreement and Sub-Agreements by failing to pay their respective balances on May 22, 1983.
On June 20, 1983, Plaintiffs filed the action below against the Blackwells, Love, Seemann, Properties, and the other named defendants who it is alleged may claim interests in the property.[3] Plaintiffs sought cancellation of the Agreement and judgment against the Blackwells for the balance due together with interest and late charges or, alternatively, sale of the property and a deficiency judgment. Although the complaint alleged the particulars of the Sub-Agreements and the assignments from the Blackwells to HRT, Plaintiffs did not request foreclosure of the Sub-Agreements and HRT was alleged to have joined the complaint as a "necessary party."[4]*945 The complaint did request, however, that any sale bar all the defendants and persons claiming under them from all interest in the property.[5]
On October 19, 1983, Plaintiffs moved for summary judgment (Motion for Summary Judgment) and for appointment of a commissioner to sell the property. Properties moved for a continuance of the hearing on the Motion for Summary Judgment arguing that since the complaint did not ask for foreclosure of the Sub-Agreements, the motion was improper. The court continued the hearing on the Motion for Summary Judgment, ordered Plaintiffs to file another amended complaint, and held that interest on the Agreement was to be paid at 12% from May 22, 1983.
On December 6, 1983, Plaintiffs filed their second amended complaint seeking foreclosure of the Agreement and the Sub-Agreements, and for judgment against Properties in an amount representing 15.179% of the balance due on the Sub-Agreements "together with interest as allowed by law."[6] On February 22, 1984, the lower court entered findings that the Blackwells were in default on the Agreement, granted summary judgment, ordered the sale of the property at public auction, and appointed a commissioner. No findings were made on the Sub-Agreements. Properties neither filed affidavits in opposition to the Motion for Summary Judgment nor answered the second amended complaint.
On April 18, 1984, one day prior to the scheduled auction sale, Properties filed a petition for reorganization under Chapter 11 of the Bankruptcy Code. 11 U.S.C. § 101 et seq. The bankruptcy code's automatic stay, 11 U.S.C. § 362(a), was subsequently lifted by the bankruptcy court on Honolulu's motion and the proceedings resumed. On January 7, 1986, Trustee was appointed by the bankruptcy court.
After the original public auction was held, at which a high bid of $900,000 was received, the lower court received a petition to entertain a higher bid and conducted a further auction in the courtroom. The property was sold for $1.3 million, and the Order was entered. The Order confirmed the sale and authorized the commissioner to make the following payments, inter alia:
a) To Plaintiff HONOLULU, LIMITED
(1) Principal, interest and late
charges (to April 21, 1986) $657,875.00
(2) Per diem after April 21,
1986 to closing 156.16/day
b) To Plaintiff HRT, LTD.
(1) Principal, interest and late
charges (to April 21, 1986) 135,157.26
(2) Per diem after April 21,
1986 to closing 27.95/day
On June 20, 1986, Properties filed a motion asking the lower court to reconsider the late charges authorization, claiming that the amount was calculated on the entire principal balance due rather than on the overdue semi-annual payments as provided in the Sub-Agreements. Properties' motion was denied as untimely on July 21, 1986.
On July 28, 1986, Trustee was allowed to intervene, and on July 31, 1986, the commissioner filed his final report showing that the sale was closed on June 17, 1986, and from the sale proceeds he had paid $666,776.12 to Honolulu and $136,750.41 to HRT, and had deposited a balance of $393,484.80 with the clerk of the court. On August 20, 1986, Plaintiffs filed a motion under Rule 54(b), Hawaii Rules of Civil Procedure (HRCP) (1981), asking for certification of the Order as a final judgment.
Also on August 20, 1986, Trustee filed a motion under Rule 60, HRCP (Rule 60 Motion), for partial relief from the Order, claiming that the Order erroneously authorized the commissioner to pay interest to Plaintiffs at the rate of 12% and Honolulu and HRT were overpaid in the amounts of $56,671.16 and $27,577.02, respectively. Trustee requested that Honolulu and HRT be ordered to refund the excess payments *946 to him. The Rule 60 Motion was denied and Trustee filed a notice of appeal on October 1, 1986 (Supreme Court No. 11674). When Plaintiffs' motion for Rule 54(b) certification was granted on October 10, 1986, Trustee filed another notice of appeal (Supreme Court No. 11754). After joint oral argument we entered an order consolidating the two appeals.
On appeal Trustee asserts that the lower court erred in (1) authorizing any disbursements to HRT; (2) authorizing the assessment of late charges against the entire principal balances due under the Agreement and Sub-Agreements and interest at 12%; and (3) denying his Rule 60 Motion. Plaintiffs do not deny that the late charges are assessed against the entire unpaid balances and that the interest payments are calculated at 12%. However, they contend that (1) Trustee has no standing to question the disbursements made to Honolulu, (2) Trustee is estopped from attacking the payments made to HRT, and (3) the Agreement and Sub-Agreements provide for the 12% interest on the unpaid balance.
II.
A.
Trustee argues that the lower court erred in confirming any disbursements to HRT, contending that the Sub-Agreements were never properly placed before the lower court for adjudication and the lower court never determined whether they were valid, whether they were in default, or whether any amounts were due under them.
However, Trustee did not raise that issue in the lower court and he cannot raise it now. Hong v. Kong, 5 Haw. App. 174, 683 P.2d 833 (1984). Trustee's Rule 60 motion challenged only the combined late charges and interest payments. The motion did not challenge the foreclosure of the Sub-Agreements.
B.
Trustee contends that the Agreement and the Sub-Agreements do not provide for the late payment charges to be assessed against the entire unpaid balance, or for interest on the unpaid balances to be assessed at 12%. We agree.
The provisions of the Agreement and the Sub-Agreements regarding interest are identical. Moreover, they are clear and unambiguous. They provide for interest on the unpaid balance at 6% per annum. In addition, the late charges provisions in the Agreement and Sub-Agreements uniformly provide that "if any installment is paid more than ten days after the date on which it is due, Purchaser shall pay in addition a late charge of 4% of the payment due[.]" (Emphasis added.) Those provisions provide for neither 12% interest nor a late charge on the entire balance due.
Plaintiffs argue, however, that Paragraph 17[7] of the instruments allows assessment of the 12% interest rate, and that it was the intent of the parties to require that interest rate on the unpaid balance.[8] Plaintiffs' argument is entirely groundless.
The 12% interest rate under Paragraph 17 is applicable only to monetary out-of-pocket expenses incurred by the seller for the purpose of protecting the seller's interest against any threats occasioned by *947 the buyer's failure to observe any covenant or condition of the Agreement. Paragraph 17 cannot be construed as increasing the interest in the event of default.
C.
In view of the above, we hold that the court abused its discretion in denying Trustee's Rule 60 motion for partial relief. 11C. Wright and A. Miller, Federal Practice and Procedure, Civil § 2857 (1973). Under the circumstances of this case, Trustee was entitled to relief in the form of a redetermination of the proper rate to be assessed for interest and late charges.
III.
A.
Plaintiffs argue that Properties, not being privy to the Agreement, has no standing to object to the payments made to Honolulu, and since Trustee merely stands in the shoes of Properties he, too, has no standing to object. In the reply brief Trustee responds that he is not concerned with the disbursements to Honolulu, but only with the payments to HRT under the Sub-Agreements. We disagree with Plaintiffs but, in view of Trustee's duties and functions, and since in the opening brief and in his motion for partial relief Trustee did question the payment to Honolulu, we are at a loss to understand Trustee's statement in the reply brief.
Under a reorganization petition a new entity is created which is different from the pre-petition entity. Shopmen's Local Union No. 455 v. Kevin Steel Products, Inc., 519 F.2d 698 (2d Cir.1975). A reorganization trustee has all the power of an ordinary trustee and of a receiver in equity.[9]Central Hanover Bank and Trust Co. v. President and Directors of Manhattan Co., 105 F.2d 130 (2d Cir.1939). The reorganization trustee is a fiduciary of each creditor of the estate, and "has a duty to treat all creditors fairly and to exercise that measure of care and diligence that an ordinarily prudent person under similar circumstances would exercise," In re Cochise College Park, Inc., 703 F.2d 1339, 1357 (9th Cir.1983), and may intervene in a state proceeding in order to claim the surplus and thereby protect the interest of the bankruptcy estate. See Matter of Buchman, 600 F.2d 160 (8th Cir.1979). Trustee does not merely stand in Properties' shoes. Shopmen's Local Union No. 455 v. Kevin Steel Products, Inc., supra.
In view of the above principles, Trustee's position that he is not interested in the payments to Honolulu is untenable. All surplus funds after Honolulu is paid its just due should be used for expenses and to satisfy the claims of the other parties in this case, including Trustee. See Powers v. Ellis, 56 Haw. 587, 545 P.2d 1173 (1976); see HRS § 667-3. If Honolulu was in fact overpaid, Trustee and the other defendants have been deprived of monies due them. It follows that, although Trustee is not privy to the Agreement, he is definitely concerned whether the residual fund has received a proper share of the proceeds, and whether Plaintiffs' claims were improper. 11 U.S.C. § 704(5).[10] In our view, Trustee indeed has both standing, see Akamine & Sons, Ltd. v. Hawaii National Bank, Honolulu, 54 Haw. 107, 503 P.2d 424 (1972), and a legal duty to attack the payments to Honolulu, and we will treat the matter as though Trustee has done so.
Plaintiffs' reliance on Powers v. Ellis, supra, is misplaced. Powers merely holds that the liens of junior creditors need not be adjudicated before the lien of the first mortgage may be foreclosed. Powers does not preclude the junior lienors from questioning the propriety of the amounts paid to the preferred lienor.
B.
Plaintiffs assert that at no stage of the proceedings below did Properties voice any *948 objection to the 12% interest rate and, in fact, at the hearing on Properties' motion to continue the summary judgment hearing, Properties' attorney stipulated in open court that his clients were "willing to begin to pay interest at 12% which I understand is called for under the Agreement of Sale. They are willing to do that immediately." Plaintiffs contend that since Properties raised no objections below to the 12% interest rate, it is barred from contesting the interest award in this appeal.[11] The same bar, Plaintiffs contend, operates against Trustee since he merely stands in the shoes of Properties. We disagree.
First, we note that foreclosure is an equitable action, Honolulu Plantation Co. v. Tsunoda, 27 Haw. 835 (1924), and the function of the foreclosure court is to ascertain the precise amount due under the mortgage. Id. We have already found that the lower court erred in its determination of the interest and late charges due to Plaintiffs and that Trustee does not merely stand in Properties' shoes. It would be inequitable and unconscionable to allow Plaintiffs to keep the funds to which they are not legally entitled, and we will not permit Plaintiffs to use such a technical argument to protect themselves. See Hustace v. Kapuni, 6 Haw. App. ___, 718 P.2d 1109 (1986). Courts of equity have the power to mold their decrees to conserve the equities of the parties under the circumstances of the case. Hawaiian Electric Co. v. Pacific Laundry Co., 2 Haw. App. 228, 629 P.2d 641 (1981).
Second, the court's order of continuance of the summary judgment hearing set the 12% interest rate on the Agreement only; it did not mention the Sub-Agreements or set their interest rates. Since Properties was not privy to the Agreement, its "stipulation" was irrelevant and could not have been used as a basis for the court's order. Consequently, whether or not the stipulation was a valid one the interest portion of the order did not apply to Properties.
Finally, Trustee raised the interest rate issue in his Rule 60 Motion.[12] In our view, that was sufficient to preserve the question for review. Plaintiffs' argument that Trustee's Rule 60 Motion was filed in bad faith and was an attempt to overcome the fact that Properties' motion to reconsider the Order was untimely under Rule 59(b) is without merit. The timeliness of Properties' motion to reconsider is not before us. Suffice it to say that Trustee represents a separate entity from Properties, and Trustee's motion was timely under Rule 60.[13]
C.
Although Plaintiffs also contend that they would be prejudiced if they were required to refund any excess payments, they have not pointed to anything to show that prejudice in fact would result. The record shows nothing that would overcome the inequity of allowing Honolulu and HRT to keep payments to which they were not entitled.
IV.
We vacate the awards of interest and late charges to Plaintiffs and remand to *949 the lower court with instructions to (1) recalculate the interest and late charges due Plaintiffs under the pertinent provisions of the Agreement and Sub-Agreements, and (2) order Plaintiffs to pay any excess funds received by them under the June 3, 1986 Order, together with interest at the contract rate of 6%, into the trust fund established by the court in this case. In all other respects, the Order is affirmed.
NOTES
[1] Honolulu, Limited, and HRT, Ltd. (HRT), are both Hawaii corporations.
[2] Hereinafter the two properties will be referred to jointly as the property.
[3] Specialty Surfacing Co. of Hawaii, Inc., was allowed to intervene on its claim for money owed to it by the Blackwells for construction of a tennis court on the property. Case, Kay & Lynch were allowed to intervene to enforce a judgment against the Blackwells.
[4] Hawaii Revised Statutes § 667-2 (1985) requires that in a foreclosure proceeding all prior and subsequent mortgage creditors that are or can be discovered by the party foreclosing the mortgage shall be made parties in the action.
[5] Plaintiffs subsequently filed a first amended complaint. Those amendments are not relevant to this opinion.
[6] Plaintiffs alleged that the 15.179% represents the relationship between $85,000 owed to HRT by James C. Blackwell on certain leases, and the balances owed to the Blackwells by Seemann on the two Sub-Agreements.
[7] Paragraph 17 provides:
17. ADVANCES BY SELLER. Upon any failure of the Purchaser to observe or perform any covenant or condition of this Agreement, or if any suit, proceeding or other contingency shall arise or be threatened relating to the property, the Seller may make any advances or incur such expenses or otherwise act as may in the Seller's judgment seem advisable to protect its interest hereunder (without impeachment for the invalidity of any tax, assessment, rate, encumbrance or charge paid in such behalf by the Seller). The Purchaser shall reimburse the Seller on demand for costs or expenses which it may pay or incur under any provision of this instrument for the protection of the premises or any of the rights of the Seller in connection with the property or this Agreement, and such sums shall bear interest at the rate of twelve percent (12%) per annum from the date of demand until paid.
[8] Plaintiffs also argue that paragraph 17 is evidence that the parties contemplated that 12% interest would be charged upon default. The provision simply does not lend itself to the interpretation advanced by Plaintiffs.
[9] Under 11 U.S.C. § 1106 the reorganization trustee is required to perform the duties of a trustee as specified in, inter alia, 11 U.S.C. § 704(5). 11 U.S.C. § 704(5) provides: "(5) if a purpose would be served, examine proofs of claims and object to the allowance of any claim that is improper."
[10] See footnote 9, supra.
[11] In the answering brief Plaintiffs claim Trustee is barred by principles of "judicial estoppel," "entry of judgment by consent," "law of the case," and the prejudice that will result from setting aside the stipulation quoted above. Under the analysis in this Part III, Plaintiffs' claim is insupportable.
[12] The pertinent provisions of Rule 60 are as follows:
RULE 60. RELIEF FROM JUDGMENT OR ORDER.
* * * * * *
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, Etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:
* * * * * *
(6) any other reason justifying relief from the operation of the judgment.
[13] Under Rule 60 the motion must be made within a reasonable time, except that a motion based upon mistake, newly discovered evidence and fraud must be made within one year after the judgment. In the instant case, the Rule 60 Motion was filed only 2 months and 17 days after the Order.
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68 So.3d 362 (2011)
FLORIDA DEPARTMENT OF REVENUE and Bobbie S. Weaver, Appellants,
v.
Gerald T. FREDEKING, Appellee.
No. 1D11-112.
District Court of Appeal of Florida, First District.
August 23, 2011.
*363 Pamela Jo Bondi, Attorney General, and Toni C. Bernstein, Senior Assistant Attorney General, Tallahassee, for Appellants.
Gerald T. Fredeking, pro se, Appellee.
PER CURIAM.
In this appeal from a proceeding to enforce an administrative support order, the Department of Revenue claims the circuit court erred in entering a superseding order prospectively reducing appellee's child support obligation in the absence of any pleadings requesting a superseding order on child support. We agree and reverse.
"It is well settled that an order adjudicating issues not presented by the pleadings, noticed to the parties, or litigated below denies fundamental due process." Neumann v. Neumann, 857 So.2d 372, 373 (Fla. 1st DCA 2003). The circuit court could not enter a superseding order prospectively reducing appellee's child support obligation where such an issue was not presented by the pleadings, noticed for hearing, or litigated by the parties. See State, Dep't of Revenue ex rel. Arnold v. Collins, 727 So.2d 1099, 1100 (Fla. 2d DCA 1999); Moody v. Moody, 721 So.2d 731, 734 (Fla. 1st DCA 1998); Hammond v. Hammond, 492 So.2d 837, 838 (Fla. 5th DCA 1986); Lourcey v. Lourcey, 256 So.2d 25, 26 (Fla. 1st DCA 1971).
Although the circuit court found it inequitable to enforce the administrative support order based on a new child support determination, appellee did not object to the enforcement of the order, and there is no authority for the circuit court to revisit child support calculations in an enforcement proceeding pursuant to section 409.2563(10)(b), Florida Statutes. Accordingly, we reverse the superseding order and remand the case for the entry of an order enforcing the administrative support order. This is without prejudice to appellee seeking administrative modification of the order pursuant to section 409.2563(12), Florida Statutes, or seeking a superseding order by filing a civil action in circuit court to determine parental support obligations pursuant to section 409.2563(2)(d), Florida Statutes.
REVERSED and REMANDED.
THOMAS, WETHERELL, and SWANSON, JJ., concur.
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656 F.2d 108
108 L.R.R.M. (BNA) 2534
Paul E. SCOTT, et al., Plaintiffs-Appellees,v.Bill MOORE, et al., Defendants,Laborers International Union of North America, Local # 870,et al., Defendants-Appellants,International Union of Operating Engineers, etc., AFL-CIO,Local 450, Defendant-Appellant.
No. 79-1196.
United States Court of Appeals,Fifth Circuit.
Aug. 31, 1981.
Martin W. Dies, Orange, Tex., William N. Wheat, Paul F. Waldner, Houston, Tex., for defendant-appellant.
Robert Q. Keith, Arthur R. Almquist, Beaumont, Tex., for plaintiffs-appellees.
ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC
(Opinion March 26, 1981, 5 Cir., 1981, 640 F.2d 708).
Before GODBOLD, Chief Judge, BROWN, AINSWORTH, CHARLES CLARK, RONEY, GEE, TJOFLAT, HILL, FAY, RUBIN, VANCE, KRAVITCH, FRANK M. JOHNSON, Jr., GARZA, HENDERSON, REAVLEY, POLITZ, HATCHETT, ANDERSON, RANDALL, TATE, SAM D. JOHNSON, THOMAS A. CLARK and WILLIAMS, Circuit Judges.
BY THE COURT:
1
A member of the Court in active service having requested a poll on the application for rehearing en banc and a majority of the judges in active service having voted in favor of granting a rehearing en banc,
2
IT IS ORDERED that the cause shall be reheard by the Court en banc with oral argument on a date hereafter to be fixed. The Clerk will specify a briefing schedule for the filing of supplemental briefs.
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85 Cal.App.2d 545 (1948)
DICKA KLEIN, as Administratrix, etc., Plaintiff and Appellant,
v.
FLORENCE M. FARMER, Defendant and Appellant.
Civ. No. 13530.
California Court of Appeals. First Dist., Div. Two.
May 19, 1948.
John L. McVey and Jess H. Miller for Plaintiff and Appellant.
Augustin Donovan, Louis B. De Avila and Rode, Burnhill & Rode for Defendant and Appellant.
GOODELL, J.
The decree in this case quiets the title of the plaintiff, as administratrix of the estate of William Otto Emerson, to 400 shares of Pacific Gas and Electric Company stock and 12 shares of American Telephone and Telegraph Company stock, all valued at $14,289 as of the time of decedent's death, and orders the defendant to deliver to the plaintiff the certificates evidencing the stock. At the same time it *547 awards the defendant a money judgment for $8,855 against the estate, less an offset of $928 representing dividends collected by her. Both sides have appealed, and it will avoid confusion to refer to the appellant administratrix as the plaintiff, and to the appellant Florence M. Farmer as the defendant.
At the time of decedent's death the certificates evidencing the 412 shares, endorsed to defendant in decedent's handwriting and contained in a sealed envelope, were in the defendant's safe deposit box where they had been for almost seven years, and they have been in the defendant's (or the county clerk's) possession throughout this litigation. The same envelope contained a deed, signed and acknowledged by decedent, conveying to defendant that portion of decedent's real property near Hayward on which his home stood. It also contained a letter from decedent to defendant dated April 9, 1934.
After decedent's funeral defendant opened the envelope, recorded the deed, and had the stock transferred into her own name. It was while it stood in her name that the dividends amounting to $928 were paid to her.
Soon after decedent's death Dicka Klein, as the grantee of her mother (who was decedent's sister and sole heir at law) sued this defendant and George A. Gray (defendant's former husband) to quiet title to the home place near Hayward. Defendant asserted title to the parcel described in her said deed. The court held that there had not been a sufficient legal delivery of the deed and entered a decree quieting the plaintiff's title, which was affirmed on appeal in Klein v. Farmer, 57 Cal.App.2d 542 [135 P.2d 21].
The present case, which deals only with the stock, has been tried twice. On the first trial the court decided in plaintiff's favor, but the judgment was reversed in Klein v. Farmer, 70 Cal.App.2d 51 [160 P.2d 30].
Decedent died on December 24, 1940, at the age of about 85 years. He had been badly crippled for many years and walked with great difficulty. He had never married. He and his mother had lived at the home place, and when she died in 1927 that property and the stock in question (and other property) went to him. He had never engaged in any gainful occupation. Ornithology was apparently his chief interest and he did some writing on that subject. He did some painting and sketching as well. *548
Defendant had been a close friend of decedent and his mother for some years. In 1932, when decedent was about 77 and living alone, he asked her to keep house for him. For some years she had been a real estate broker, notary public and public stenographer, with an office in her home. She agreed to work for him from 10 a. m. to 4 p. m. five days a week, for which he paid her $40 a month. This arrangement enabled her to continue with her business to a limited extent, before 10 and after 4, and some of her own work was done in decedent's home.
On April 9, 1934, a more definite arrangement was made. Defendant then agreed to work from 9 a. m. to 5 p. m. five days a week and to give up her business, and she did give it up at once. Decedent on that day and in defendant's presence placed the endorsed certificates and the deed in the envelope and sealed it with some stickers containing his name and address. Defendant testified that she knew at the time that the certificates were for these 412 shares, but did not know what they were worth, except that decedent told her they would yield about $600 a year.
Defendant testified that many times before April 9, 1934, decedent had said to her:
"Florence, if you will give up the business completely and give me your full time from nine to five and what time I might need you after five, I will give you a deed to part of my property,--the home; and I will also give you 400 shares of P. G. & E. and 12 shares of the telephone stock; that will give you an income of around $50.00 a month; and you will have the home; ... I will make out a deed to the property and I will also sign the stock to you and give it into your possession--." She testified that decedent had offered her the deed in 1933 and that in April, 1934, when he finally handed her the envelope containing the stock and the deed he said: " 'You take this envelope and put it in your safe deposit box__________' he said, 'it is yours.' He said, 'I am going to keep my part of the bargain, if you keep yours and as long as you stay with me it is yours.' He says, 'If you ever leave me, why, you are to return it to me in the same condition__________' and on the front of the envelope was written, 'To be opened at my death and put of record immediately.' " She put the envelope in her safe deposit box and there it remained until after decedent's death.
In July, 1939, the arrangement was changed so that the defendant should devote practically all her time to decedent. *549 A room for her was added to the home, and she lived there night and day except Sundays, which she spent with her married children. When this full-time arrangement was made the monthly payment was increased from $40 to $65 but the arrangement made in April, 1934, as to the stock and the deed was not disturbed.
The services which defendant rendered from April, 1934, to the time of decedent's death were about as follows: she did the housework; cooked and served decedent's meals; bathed him, shaved him, and cut his hair; dressed injuries on his body which were draining; drove him in his automobile wherever he wanted to go, helping him in and out; when he visited art galleries or such places, she helped him from the automobile into his wheel- chair and wheeled him around in it; when he wanted to sketch or paint she drove him into the hills. She handled his correspondence; typed his articles on technical subjects; catalogued his books and papers. Several witnesses testified that he often expressed himself as highly pleased with her services, and had said that whenever she was away he missed her and did not know what to do without her help, and that he was very fond of her.
Defendant's children on numerous occasions urged her to quit her employment because the work was too heavy and because she did not have to work anyway. Her reply invariably was that decedent had turned over the stock and deed to her, thereby performing his part of the bargain, and she proposed to carry out her part, and would not go back on her word however arduous and unpleasant the work might be.
It so happened that at the time of decedent's death and for three or four days before, defendant was ill and confined to her own home. The record, with this one exception, shows no interruption in defendant's services and no inattention or neglect on her part over the entire period. Even when she suffered a sprained ankle, and at another time a broken arm, she kept on with her duties.
None of defendant's testimony respecting the foregoing matters is contradicted and most of it is corroborated. Practically the only dispute in the case arose out of the following circumstances: when defendant opened the envelope she found within it, according to her testimony, a letter reading as follows: "April 9, 1934, to Florence M. Farmer. Dear: All my household furniture, books, pictures, curiosities and everything contained in my home are hereby given to you *550 and are to be under your full control, to be disposed of as you may see fit. This gift is in appreciation of your care and kindness to myself and my mother. It is to be understood that I am to have the use of these personal belongings during my lifetime. W. O. Emerson." While the property mentioned therein is not now involved, the letter is pertinent because it helps to fix the time of the turning over of the stock to defendant and shows the decedent's high regard for her. Mr. McVey, plaintiff's attorney, testified that he telephoned to defendant shortly after the funeral to inquire whether she had a will and that she replied in the affirmative and added that she had received it in the mail but she did not know the person by whom it had been mailed. This the defendant flatly denied. Her version was that she told him she found a letter (not a will) in the envelope and that he could examine it. He later examined it at the office of her attorneys, who supplied him with a copy. There is no other conflict of any importance in the whole record. With respect to this conflict the court found that "Nothing contained in the foregoing findings is intended as a finding that the testimony of John L. McVey, ... was untruthful in any respect; and said testimony was believed by the Court to be true in every respect."
The complaint alleges that at the time of decedent's death he was the owner of the 412 shares but that defendant claimed them as her own. In her answer defendant, in addition to denying plaintiff's title, alleges ultimate facts substantially in accord with the facts narrated above, concluding with the claim that "the attempt of plaintiff to deprive defendant of the said stock [is] a fraud upon the defendant," which is a plea of estoppel.
Defendant also set up an alternative cause of action based on a contingent creditor's claim against the estate, for the difference between the payments made to her each month and the full value of her services, on which she could rely in case of a judicial determination that she was not the owner of the stock.
On all the facts pleaded in the estoppel count the court found in defendant's favor but concluded that the plaintiff was "not precluded or estopped from asserting ownership of said stock ..." The court then gave judgment for $8,855 on said count for the reasonable value of defendant's services over and above the $40 a month which she received for 63 months and the $65 a month for 17 1/2 months. *551
The defendant contends that she is entitled to a favorable decision on her plea of estoppel and that the money judgment "only partially remedies the injustice of depriving her of that for which she worked." She invokes the rule, codified in section 1962, subdivision 3, Code of Civil Procedure, that "Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it." She relies also on the rule of Dickerson v. Colgrove, 100 U.S. 578, 580 [25 L.Ed. 618], (repeatedly quoted in the California cases) as follows: "The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both." To this the court added: "This remedy is always so applied as to promote the ends of justice. It is available only for protection, and cannot be used as a weapon of assault." It is sufficient to remark that here the estoppel is invoked purely defensively, in opposition to the estate's assertion of title to the stock.
[1] We are satisfied that this case comes within the rules just quoted and that it is not essentially different from Seymour v. Oelrichs, 156 Cal. 782 [106 P. 88, 134 Am.St.Rep. 154]. Because of the defendant's reliance on what the decedent said and did, the course of her life for almost seven years was substantially altered, and in our opinion she is entitled to the full measure of equitable relief under her plea of estoppel. In Seymour v. Oelrichs the plaintiff was a captain of police in San Francisco. Messrs. Fair and Oelrichs, representing the Fair estate, entered into negotiations with him looking to his employment under a 10-year contract at $300 a month. Fair and Oelrichs knew that by accepting this new position Seymour would lose his police pension rights, wherefore a written contract took on added importance. Fair was busy winding things up preparatory to a trip abroad and told Seymour "Now, in regard to this contract, you leave that stand until I get back, and I will give you the contract" and when Seymour pressed him for it before leaving, Fair told him not to be afraid, it would be all right. Oelrichs told him substantially the same thing. *552 They wanted him to start working at once. Relying on these promises he resigned and entered the employ of the Fair estate on June 1, 1902. Two months later Fair was accidentally killed in France and the contract was never drawn up. After two years Seymour was discharged and he sued for his salary for the remainder of the 10-year term, less his earnings elsewhere. The court held that the conduct and promises of the defendants, and Seymour's change of position in reliance thereon, estopped the Fair estate from pleading the statute of frauds; that if the court permitted them to take advantage thereof it would work a fraud on Seymour.
The estoppel just discussed was not based on the conventional representation or assurance as to an existing or past fact or state of things, but solely on the promises of Fair and Oelrichs to give Seymour a written contract in the future, with no consideration whatever moving from promisee to promisors.
In 3 Pomeroy's Equity Jurisprudence (5th ed.), section 808b this is said on the subject of "promissory estoppel":
"The general rule stated in a preceding section (sec. 808) that in order to furnish the basis of an estoppel, a representation or assurance must relate to some present or past fact or state of things, as distinguished from mere promises or expressions of opinion as to the future, must be qualified. There are numerous cases in which an estoppel has been predicated on promises or assurances as to future conduct. Thus an estoppel may arise from the making of a promise, even though without consideration, if it was intended that the promise be relied upon and in fact it was relied upon, and a refusal to enforce it would be virtually to sanction the perpetration of fraud or result in other injustice. The name 'promissory estoppel,' has been adopted as indicating that the basis of the doctrine is not so much one of contract, with a substitute for consideration, as an application of the general principle of estoppel to certain situations. On the other hand, it has been said by good authority that the doctrine of promissory estoppel has been adopted as the equivalent of consideration, or substitute for consideration. It is important to bear in mind that the doctrine is much older in its origin and applications than the terminology now employed to describe it. Illustrative cases abound in the reports, especially since the formal embodiment of the principle by the American Law Institute in the Restatement of the Law of Contracts, as follows:"
" 'A promise which the promisor should reasonably expect *553 to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise' ..."
Illustrative of the statement "that the doctrine is much older in its origin and application than the terminology now employed to describe it" are the cases cited inter alia by the editor, namely Dickerson v. Colgrove, supra, and Seymour v. Oelrichs, supra. Indeed 13 years before the Seymour case, our Supreme Court in Carpy v. Dowdell, 115 Cal. 677, 687 [47 P. 695] said: "... the principle of equitable estoppel does not rest upon a consideration moving to the party estopped" citing Van Syckel v. O'Hearn, 50 N.J.Eq. 173, 175 [24 A. 1024].
In the latter case the holder of a mortgage promised to withhold its enforcement for one year, on the strength of which O'Hearn purchased the property against which the mortgage lien stood. When foreclosure was commenced within the year the plaintiff was held to his promise. The chancellor, after conceding that ordinarily a consideration must be shown to support a promise, said: "But a court of equity will sometimes prevent parties from disregarding their promises, even when no consideration has accrued to them upon the making of such promise. If a party asking the aid of the court waive strict performance of his contract and makes promises to the defendant upon which the latter has acted and altered his position, and it should appear to the court to work a hardship to the defendant to allow the complainant to withdraw his waiver, a court of equity always applies the doctrine of estoppel. In such case, although no consideration or benefit accrues to the person making the promise, he is the author or promoter of the very condition of affairs which stands in his way; and when this plainly appears, it is most equitable that the court should say that they shall so stand. [Citations.]"
[2] Section 1962 (subd. 3), Code of Civil Procedure, supra, speaks of a declaration, an act, or an omission which leads "another to believe a particular thing true." In this case you have both a declaration and an act: " 'You take this envelope and put it in your safe deposit box ... it is yours ... I am going to keep my part of the bargain, if you keep yours and as long as you stay with me it is yours' ..." (Emphasis added.) Although this may not have constituted an absolute and unqualified legal delivery, equity, under the facts and circumstances shown by this record, should not permit the defendant's claim to this stock to be defeated. We agree *554 with defendant's statement that in handing the endorsed certificates to the defendant decedent "used language which, regardless of legal refinements as to the exact time when title was to pass, must necessarily have been calculated to convey to the defendant the impression that if she continued in his service until his death, she would be the unqualified owner of the stock. Believing that she had been provided for, and relying on that belief, the defendant carried out her part of the agreement by discontinuing her business and sacrificing the income she had derived from it, and by assuming for [almost] the ensuing seven years, the arduous and often unpleasant duties involved in the care of an aged and crippled person. In addition, during the latter part of the period, she gave up her normal home life, including the frequent visits that she had previously enjoyed with her children." Unlike most cases of estoppel the promisor in this case did everything he thought necessary to make good his promise.
[3] In examining the several reasons advanced by plaintiff why defendant has not made out a case of estoppel, it should be borne in mind that in this lawsuit plaintiff is the actor, suing to quiet title to the stock and to recover it for the estate. Plaintiff is out of possession of the certificates which evidence ownership; "paper title" is in defendant and the certificates are in her possession (or the court's). If plaintiff is to prevail she must establish a superior title in herself. Against plaintiff's claim of title defendant pleads estoppel purely as a shield, seeking to retain as her own, stock which the decedent admittedly endorsed and turned over to her and which he could never have conceivably recovered back as long as defendant continued (as she did) faithfully in his service.
1. One of plaintiff's principal contentions is that defendant has not shown an adequate consideration for decedent's promise, but it is already clear that in cases such as this consideration is not necessarily a factor. Moreover, defendant does not seek specific performance, hence plaintiff's authorities on that subject are not in point.
[4] 2. As to defendant's pleading: she alleged all the facts and circumstances on which she relies, and as long as the estoppel is pleaded "so that the opposite party may know its nature" (Burrow v. Carley, 210 Cal. 95, 103, 104 [290 P. 577]) that is sufficient.
[5] 3. Several arguments of plaintiff are predicated on something which never happened. Let it be assumed that it was part of the understanding between decedent and defendant *555 that if she did not remain with him until his death he would pay her (a) the full value of her services theretofore rendered, or (b) what she had lost in discontinuing her real estate business, or both. Plaintiff argues that this shows that she could be compensated in money, hence her case does not commend itself to a court of equity. The fact is that she remained to the very end, and the arrangement for money compensation (which at best was alternative and substitutional) was never, therefore, brought into operation.
[6] 4. Plaintiff also argues that although defendant claims stock of considerable value (over $14,000), she made no promise binding her to stay, and could have quit at any time. It makes no difference whether she made a bilateral promise to decedent to stay, in exchange for his promise, or whether the arrangement was purely unilateral. The fact remains, as just pointed out, that she did stay as long as decedent lived, which was precisely what was contemplated when the stock was turned over to her.
[7] 5. Plaintiff claims that defendant did not prove that she gave up something of substantial value in discontinuing her real estate business, and that a finding that she did so is conspicuous by its absence. She testified that her business had yielded her about $200 a month. Her former husband corroborated her testimony that she had had a going business, but even if all defendant's testimony on the subject remained uncorroborated it would still be sufficient evidence to prove the fact (Code Civ. Proc., 1844). There can be no question that defendant did give up her business about April 9, 1934. Wholly aside from that, however, her change of position in leaving her family, devoting herself entirely to decedent's service, and doing the kind of work she had to do for almost seven years, would alone suffice without any reliance at all on the giving up of her business. For this reason, if for no other, corroboration of what defendant's earnings had been in the real estate business is neither important nor material.
6. Plaintiff's contention that there is no "finding of substantial injury, or any reasonable evidence to sustain such finding" is difficult to understand or follow in view of the record in this case.
In the first case (Klein v. Farmer, 57 Cal.App.2d 542 [135 P.2d 21]) plaintiff sued as grantee of her mother (not as executrix) to quiet title to decedent's home place. Although defendant's deed and the stock certificates were in the same envelope, the issues there were much narrower than those in *556 this case, and defendant's claim under the deed came to an end by that decision.
In the present case the court awarded defendant $8,855 on her alternative claim, but she is dissatisfied with that judgment because it denies her the stock itself.
Plaintiff, also, is dissatisfied, and has appealed from that part of the judgment which awards the $8,855, contending (a) that defendant's demand is barred by the statute of limitations; (b) that the event which would mature such demand had not arrived; (c) that there was no competent evidence of the reasonable value of defendant's services and the court could not take judicial notice as to such value; (d) that certain offsets should have been allowed, and (e) that defendant failed to show a compliance with the Welfare and Institutions Code.
Our conclusion herein calls for a reversal of the judgment which quiets plaintiff's title to the stock and at the same time awards defendant the $8,855. It calls, also, for a judgment in defendant's favor on her defense of estoppel, thereby automatically eliminating her alternative money demand, for "she cannot enjoy both remedies" (Klein v. Farmer, 70 Cal.App.2d 51, 60 [160 P.2d 30]). It follows of course that there is no need to discuss any of the points, enumerated above, raised on plaintiff's appeal.
The findings closely follow defendant's pleading of estoppel in her fifth defense, and they are sufficient as far as they go. They conclude, however, that the plaintiff is "not precluded or estopped from asserting ownership of said stock..." As already indicated, the record in this case calls for a finding or conclusion that the plaintiff is so precluded and estopped. The trial court is directed, therefore, to change the findings in that respect and in any other respect which it may deem proper, not inconsistent with this opinion; likewise, of course, to change the conclusions of law accordingly, and thereupon to enter a decree quieting defendant's title to the stock, awarding her the dividends accrued thereon since decedent's death, and her costs.
The judgment is reversed (on defendant's appeal) with the directions just stated. Defendant to recover her costs on appeal.
Nourse, P. J., and Dooling, J., concurred.
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Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-15-00127-CV
EL CABALLERO RANCH, INC. and Laredo Marine, L.L.C.,
Appellants
v.
Grace River Ranch, County of La Salle, as third-
GRACE RIVER RANCH, LLC,
Appellee
From the 218th Judicial District Court, La Salle County, Texas
Trial Court No. 13-04-00108-CVL
Honorable Stella Saxon, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Karen Angelini, Justice
Rebeca C. Martinez, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: October 21, 2015
MOTION TO DISMISS GRANTED; DISMISSED FOR LACK OF JURISDICTION
The appellants, El Caballero Ranch, Inc., and Laredo Marine, L.L.C., bring this
interlocutory appeal under section 51.014(a)(4) of the Texas Civil Practice and Remedies Code,
which authorizes an appeal from an order that “grants or refuses a temporary injunction.” See TEX.
CIV. PRAC. & REM. CODE ANN. § 51.014(a)(4) (West 2015). The appellee, Grace River Ranch,
LLC, has filed a first amended motion to dismiss this appeal, arguing that this court lacks
jurisdiction over this appeal because the challenged order grants a permanent, not a temporary,
injunction. We conclude that the challenged order is a permanent injunction but the order does not
04-15-00127-CV
dispose of all claims. Therefore, we grant the motion to dismiss, and dismiss this appeal for lack
of jurisdiction.
BACKGROUND
The parties to this appeal are property owners in La Salle County, Texas. El Caballero
Ranch owns a ranch consisting of approximately 9,220 acres. Laredo Marine owns a ranch known
as the 7C’s Ranch consisting of approximately 30,074 acres. Grace River owns a ranch consisting
of approximately 6,779 acres.
Grace River claims it owns easements on property owned by El Caballero and Laredo
Marine. In April 2013, Grace River Ranch filed a declaratory judgment action to determine the
existence and validity of the easements. El Caballero was named as a defendant in the suit. El
Caballero answered the suit, denying Grace River’s claim that it owned easements on its property
and asserting various defenses. Subsequently, Laredo Marine intervened as a defendant in the suit.
Like El Caballero, it denied Grace River’s claims and asserted various defenses.
In July 2013, before Laredo Marine appeared in the suit, Grace River moved for traditional
and no-evidence summary judgment. El Caballero responded to the summary judgment motion
and filed an amended answer raising additional defenses. The trial court granted partial summary
judgment in favor of Grace River. The trial court found that Grace River had a valid and subsisting
easement across El Caballero Ranch for vehicular and pedestrian access as well as the right to use
and maintain the road thereon, including any culverts, low water crossings, or bridges along the
easement. In its order granting the partial summary judgment, the trial court acknowledged that it
did not adjudicate any defenses or claims made after the summary judgment motion. Nevertheless,
the trial court ordered that “[p]ending adjudication of these claims, Grace River shall have the use
of and ability to maintain the [] [e]asement...” The order became effective ten days after it was
signed by the trial court.
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04-15-00127-CV
El Caballero challenged the partial summary judgment in a mandamus petition filed in this
court. The issue presented was whether Grace River was entitled to immediate use of and the
ability to maintain the claimed easement on the basis of the partial summary judgment before all
claims and defenses regarding the easement had been fully litigated and adjudicated by the trial
court, and possibly, on appeal. In re El Caballero Ranch, No. 04-14-00584-CV, 2014 WL
6687242, at *2 (Tex. App.—San Antonio Nov. 26, 2014, orig. proceeding). We agreed with El
Caballero that the trial court’s order allowing immediate access to the easement denied it the right
to suspend enforcement of an adverse judgment as provided by the Texas Rules of Civil Procedure.
Id., at *3. We conditionally granted mandamus relief, and directed the trial court to withdraw the
portion of its order granting Grace River immediate use of and the ability to maintain the easement.
Id.
Thereafter, Grace River filed a second motion for traditional and no-evidence summary
judgment, addressing the additional defenses raised by El Caballero and Laredo Marine. El
Caballero and Laredo Marine filed responses to the summary judgment motion. On December 17,
2014, the trial court advised the parties by letter that it was granting the second summary judgment
motion; however, it did not immediately sign an order granting the summary judgment. Grace
River filed a motion for entry of the partial summary judgment. Attached to the motion was a
proposed order granting partial summary judgment, which included language granting injunctive
relief.
On March 3, 2015, the trial court held a hearing on Grace River’s motion for entry of the
partial summary judgment. At the hearing, Grace River asked the trial court to sign the proposed
order granting partial summary judgment. El Caballero and Laredo Marine objected to the portion
of the order granting injunctive relief, arguing that injunctive relief was inappropriate because the
order was interlocutory, the status quo for “12, 13, 14 years” was that “there are fences across the
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04-15-00127-CV
road” and a “locked gate,” and irreparable injury had not been established. In response, Grace
River argued that the injunction was appropriate under the circumstances. Specifically, Grace
River’s counsel stated,
With respect to the injunction, I think that [counsel for El Caballero and Laredo
Marine] mistakes the law on injunctions with respect to easements. We are [] not
in a situation here where a suit has been filed to enforce an easement and the court
has yet [to] rule[] on the validity and existence of the easement. We are not there at
all. And those are the cases [counsel] is relying on. What we have here is the [c]ourt
has already ruled on the existence, the continuity, the extent of the easement. So a
temporary [sic] injunction is very appropriate to enforce the right to use that
easement. Because everything necessary to determine the existence of the easement
has already occurred in this case. The only reason that this is a partial summary
judgment is we have not yet determined the legal issue of damages to Grace River,
if any …. And lastly, the issue of attorney’s fees under the Declaratory Judgment
Act, we have not yet reached that issue.
Later, Grace River’s counsel stated,
So it’s very clear from the case law—[a]nd I have briefed that for the [c]ourt that—
the cases that have some heartburn about issuing a temporary injunction with an
easement all have to do with a case where there is no up or down determination by
the court yet of the existence of the easements. But even if that were true, then a
temporary injunction would be appropriate, according to the cases, if there is some
showing of a reasonable likelihood of success on establishing the easement. But we
don’t even have that here because we’ve already established the easement.
(emphasis added). After additional argument from counsel, the trial court stated, “I’m going to go
ahead and sign a [] partial summary judgment granting the relief requested. I’m going to give you
your injunctive relief.” The trial court then signed the partial summary judgment order attached to
the motion for entry of partial summary judgment.
In the partial summary judgment order, the trial court ordered, adjudged, and decreed that
Grace River had valid and subsisting easements across El Caballero Ranch, 7 C’s Ranch, and the
Nueces River Crossing with the right to use and maintain the road thereon and any culverts, low
water crossings, or bridges along the easements. It further ordered, adjudged, and decreed that El
Caballero and Laredo Marine were enjoined from (1) erecting or maintaining any barriers, fences
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04-15-00127-CV
or gates of any kind that would interfere with or obstruct the free flow of pedestrian access on,
over, or across the Grace River Easements other than gates already located on the ranches; (2)
maintaining any gate or barrier along or across the Grace River Easements without providing all
necessary keys, combinations, or codes to Grace River; (3) taking any action to prevent Grace
River from freely opening and closing any gates in the Grace River Easements without assistance;
and (4) preventing or obstructing Grace River from using, having access across, or undertaking
the maintenance or repair of the roadway, bridges, low water crossings, culverts, grades, and
trimming along the Grace River Easements and the Nueces River Crossing. The order also stated
it did not adjudicate Grace River’s claims for damages sustained by virtue of disruption or blocking
of the easements or all claims for attorney’s fees and costs. Finally, the order stated it would take
effect ten days after it was signed.
El Caballero and Laredo Marine filed a notice of appeal and a motion to stay in this court.
We granted the motion to stay. El Caballero and Laredo Marine also filed a mandamus petition
challenging the trial court’s order. The petition was denied. 1 In re El Caballero Ranch, Inc., No.
04-15-00138-CV, 2015 WL 1244705, at *1 (Tex. App.—San Antonio March 18, 2015, orig.
proceeding).
DISCUSSION
As a general rule, appeals may be taken only from final judgments. See Lehmann v. Har-
Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A judgment is final for purposes of appeal if it
disposes of all pending parties and claims. Id. There are some exceptions to this rule. For example,
an appeal may be taken from an interlocutory order that grants a temporary injunction. TEX. CIV.
1
In their mandamus petition, El Caballero and Laredo Marine characterized the challenged order as a temporary
injunction, thereby indicating that they had an adequate remedy by appeal. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 51.014(a)(4) (West 2015).
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04-15-00127-CV
PRAC. & REM. CODE ANN. § 51.014(4). However, a summary judgment that fails to dispose of all
claims, even if it grants a permanent injunction, falls under the general rule, and is interlocutory
and unappealable. Young v. Golfing Green Homeowners Ass’n, Inc., No. 05-12-00651-CV, 2012
WL 6685472, at *1 (Tex. App.—Dallas December 21, 2012, no pet.).
Here, the partial summary judgment order signed by the trial court is not a final, appealable
order. Thus, the only way we have jurisdiction over this appeal is if the trial court granted a
temporary injunction. To determine whether an order is an immediately appealable temporary
injunction, we look to its character and function. Qwest Commc’n Corp. v. AT&T Corp., 24 S.W.3d
334, 336 (Tex. 2000). Whether an injunction is to be classified as temporary or permanent is
determined by looking at the substance of the order. Gensco, Inc. v. Thomas, 609 S.W.2d 650, 651
(Tex. Civ. App.—San Antonio 1980, no writ). The purpose of a temporary injunction is to preserve
the status quo pending a final hearing on the merits. Id. On the other hand, “[a] permanent
injunction is not dependent on any further action by the trial court and is characterized by the fact
that it grants all of the relief which the trial court intends to grant in that case.” Id.
In the present case, the injunction was granted at a hearing on a motion to enter a partial
summary judgment, not at a temporary injunction hearing. Before the hearing, the trial court
advised the parties by letter that it was granting the partial summary judgment motion, which asked
the trial court to determine the merits of Grace River’s claim concerning the validity of the
easements. When the trial court signed the partial summary judgment containing the injunction, it
had already made its final determination on the merits of Grace River’s claim. The partial summary
judgment order expressly states that it adjudicates “all claims of the Parties relating to the validity,
continuity, and extent of the Grace River Easements.” Therefore, in granting the partial summary
judgment, the trial court granted all the relief it intended to grant concerning the validity of the
easements. As previously stated, the purpose of a temporary injunction is to preserve the status
-6-
04-15-00127-CV
quo pending a final hearing on the merits. Unlike a temporary injunction, the purpose of the
injunction in this case was to implement the trial court’s ultimate determination on the merits of
the claims regarding the validity of the easements. 2 Given the character and function of the
injunction contained in the partial summary judgment, we conclude that it is a permanent
injunction. See Young, 2012 WL 6685472, at *2 (holding an injunction was permanent in nature
when it followed a hearing on a summary judgment motion and was not based on pleadings seeking
temporary injunctive relief).
El Caballero and Laredo Marine have filed a response to Grace River’s motion to dismiss,
asserting that we have jurisdiction over this appeal because the injunction is temporary, not
permanent. El Caballero and Laredo Marine again contend the injunction is temporary because
Grace River requested a temporary injunction at the hearing and the trial court granted this request.
We disagree. The record of this hearing shows that counsel for El Caballero and Laredo Marine
objected to the injunctive relief in the partial summary judgment order. In arguing their objection,
counsel for El Caballero and Laredo Marine characterized the relief sought as a temporary
injunction and asserted that the temporary injunction standard had not been met. In responding to
opposing counsel’s objection, Grace River made reference to temporary injunctions and temporary
injunction cases. However, despite these references, the essence of counsel’s argument was that
Grace River was entitled to an injunction because it had already prevailed on the merits of its claim
concerning the validity of the easements. El Caballero and Laredo Marine also contend this court’s
opinion denying their second petition for writ of mandamus “implies” that the injunction was
2
Grace River had pled for injunctive relief in its petition. Furthermore, in its second summary judgment motion, Grace
River argued “no material issue of fact or of law prevents the entry of summary judgment herein declaring that the
Grace River Easements (as herein defined) and the public road(s) along the path of the Northerly Grace River
Easement (as herein defined) are valid and subsisting” and urged the court to “enjoin any further interference or
obstruction thereof by Defendants ….”
-7-
04-15-00127-CV
temporary, not permanent. Again, we disagree. The mandamus petition filed by El Caballero did
not ask us to determine the nature of the injunctive relief ordered by the trial court, and nothing in
our opinion and order denying mandamus relief indicates that we made such a determination. See
El Caballero Ranch, 2015 WL 1244705, at *1.
CONCLUSION
We hold the order challenged in this appeal is a permanent, not a temporary, injunction.
Because the challenged order grants a permanent injunction but fails to dispose of all claims before
the trial court, it is not final and therefore is unappealable. See BCH Dev., LLC v. Lakeview Heights
Addition Prop. Owners Ass’n, No. 05-15-00274-CV, 2015 WL 4456237, at *1-2 (Tex. App.—
Dallas July 21, 2015, no pet.) (dismissing for lack of jurisdiction an appeal from an order granting
partial summary judgment and granting a permanent injunction); Young, 2012 WL 6685472, at *2
(same). We grant Grace River’s first amended motion to dismiss this appeal, and dismiss this
appeal for lack of jurisdiction. We lift our order staying enforcement of the injunctive relief granted
in the trial court’s partial summary judgment order.
Karen Angelini, Justice
-8-
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-6916
DENNIS RAY GRAVES,
Plaintiff - Appellant,
versus
RAY W. GRUBBS, Judge,
Defendant - Appellee.
Appeal from the United States District Court for the Western Dis-
trict of Virginia, at Roanoke. James C. Turk, District Judge.
(CA-99-MC-54-7)
Submitted: September 28, 1999 Decided: October 5, 1999
Before MURNAGHAN and WILLIAMS, Circuit Judges, and PHILLIPS, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Dennis Ray Graves, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Dennis Ray Graves appeals the district court’s order dismiss-
ing without prejudice his “motion for review of state court deci-
sion with request for injunction order or other.” We have reviewed
the record and the district court’s opinion and find no reversible
error. Accordingly, we grant Graves’ motion for leave to proceed
in forma pauperis and affirm on the reasoning of the district
court. See Graves v. Grubbs, No. CA-99-MC-54-7 (W.D. Va. June 21,
1999).*
We further construe Graves’ letter of August 23, 1999, as a
motion to stay state proceedings pending this appeal and deny such
motion as moot. To the extent that Graves seeks to have this Court
direct an action or outcome in state court, federal courts have no
general power to compel action by state officials. See Davis v.
Lansing, 851 F.2d 72, 74 (2d Cir. 1988); Gurley v. Superior Court
of Mecklenburg County, 411 F.2d 586, 587 (4th Cir. 1969). We
dispense with oral argument because the facts and legal contentions
*
Although the district court’s order is marked as “filed” on
June 17, 1999, the district court’s records show that it was
entered on the docket sheet on June 21, 1999. Pursuant to Rules 58
and 79(a) of the Federal Rules of Civil Procedure, it is the date
that the order was entered on the docket sheet that we take as the
effective date of the district court’s decision. See Wilson v.
Murray, 806 F.2d 1232, 1234-35 (4th Cir. 1986).
2
are adequately presented in the materials before the court and
argument would not aid the decisional process.
AFFIRMED
3
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T.C. Memo. 2013-147
UNITED STATES TAX COURT
JAMES F. DALY AND CANDACE H. DALY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23850-10. Filed June 6, 2013.
Eric D. Froisland, for petitioners.
Inga C. Plucinski, for respondent.
MEMORANDUM OPINION
KERRIGAN, Judge: Respondent determined deficiencies and penalties as
follows:
-2-
Penalty
[*2] Year Deficiency sec. 6662(a)
2006 $26,253 $5,251
2007 17,051 3,410
2008 20,958 4,192
After concessions tax year 2006 is not in issue. The only issue remaining
for our consideration is whether petitioner husband was a qualified individual for
purposes of section 911(a) for tax years 2007 and 2008 (years in issue).
Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure. All monetary amounts have been
rounded to the nearest dollar.
Background
This case was fully stipulated under Rule 122. The stipulated facts are
incorporated in our findings by this reference. Petitioners resided in Utah when
they filed the petition.
Petitioner husband is a U.S. citizen. He began working for L3
Communications (L3) in April 1982 as a full-time employee and remained there
until June 1989. Between June 1986 and October 1987 petitioner husband
-3-
[*3] worked for L3 in Honduras. He was physically present in Honduras during
that time and maintained a residence there.
Petitioner husband returned to work for L3 in November 1994 as a full-time
employee. He remained with L3 until April 1999. During that time petitioner
husband did not work overseas. Petitioner husband returned to L3 in August 2006
as a full-time employee. He was employed by L3 during the years in issue.
During the years in issue L3 maintained its principal place of business in
Salt Lake City, Utah. L3 contracted with the Department of Defense. Part of
petitioner’s work for L3 involved L3’s contract with the Department of Defense.
During the years in issue petitioner husband performed services for L3 in
Afghanistan and Iraq. L3 compensated petitioner husband for those services.
When petitioner husband was working overseas, he was unable to choose where
he would be working or for how long he would be there. He was informed of his
departure date only one month in advance. He was informed of his return date
only two weeks in advance. Petitioner husband, however, was aware in advance
that his assignments in Afghanistan and/or Iraq would last approximately three
months. The Department of the Air Force provided L3 with an official travel
authorization for petitioner husband for travel from August 10, 2007, to August
31, 2008.
-4-
[*4] Petitioner husband was in Afghanistan or Iraq from August 29 through
December 12, 2007, and January 25 to April 28, 2008.1 While petitioner husband
was in Afghanistan, he lived and worked on the Kandahar Air Base. While
petitioner husband was in Iraq, he lived and worked on the Ballard Air Base. The
U.S. Air Force transported petitioner husband to and from Iraq and Afghanistan.
The U.S. military did not permit petitioner husband to leave the military base on
which he was working and living. The U.S. military also did not permit petitioner
husband’s family to live with him on either military base.
While in Iraq and Afghanistan petitioner husband worked 12-hour shifts
seven days a week. L3 deposited petitioner husband’s wages electronically into
his bank account. He had access to these funds while he was in Iraq and
Afghanistan.
During the years in issue petitioner husband worked in Utah. L3 also
required that he travel to California, Nevada, and Germany. While in Utah,
California, and Nevada, petitioner husband worked three days of 12-hour shifts
followed by four days off, then four days of 12-hour shifts followed by three days
off.
1
According to the opening briefs of both petitioners and respondent, the
parties stipulated the incorrect dates and that petitioner husband lived in
Afghanistan and/or Iraq sometime between August 29 and December 12, 2007.
-5-
[*5] During the years in issue petitioner wife was self-employed as a lobbyist.
Her business was in Utah. The parties agree that petitioner wife earned and
received all of the self-employment income generated by her business, as
calculated by the parties in their stipulation of settled issues, for tax years 2006,
2007, and 2008.
Petitioners timely filed a Form 1040, U.S. Individual Income Tax Return,
for tax year 2007. They excluded $24,888 in wages that L3 had paid to petitioner
husband. Petitioners attached a Form 2555-EZ, Foreign Earned Income
Exclusion, to their tax return. On the Form 2555-EZ petitioners listed Utah as
their tax home. Petitioners also attached a letter requesting a waiver of “foreign
earned income tax 330 day requirement” (2007 request for waiver) to their tax
return. Petitioner husband signed the 2007 request for waiver.
In the 2007 request for waiver petitioner husband requested a “prorated
foreign earned income excludable amount of $24,888.00” because he was
“deployed under government orders to a combat zone in Iraq” for 106 days in tax
year 2007 (from August 29 to December 12). Petitioner husband noted that the
foreign earned income exclusion amount for that year was $85,700, or
approximately $235 per day. He concluded that “106 days times $234.79 per day
deployed in the combat zone equates to a prorated foreign earned income
-6-
[*6] excludable amount of $24,888.00.” Petitioner husband wrote: “I was not
armed, equipped, or trained to operate in a combat environment therefore I was not
able to safely stay the required 330 days in Iraq.”
Petitioners filed a Form 1040 for tax year 2008 in June 2009. Petitioners
excluded $22,259 in wages that L3 had paid to petitioner husband. Petitioners
attached a Form 2555-EZ to their tax return and listed Utah as their tax home.
Petitioners also attached a letter requesting a waiver of “foreign earned income tax
330 day requirement” (2008 request for waiver) to their tax return. Petitioner
husband signed the 2008 request for waiver.
In the 2008 request for waiver petitioner requested a “prorated foreign
earned income excludable amount of $22,258.62” because he was “deployed
under Government orders, to a combat zones [sic] in Iraq” for 93 days in tax year
2008 (from January 27 to April 26). Petitioner husband noted that the foreign
earned income exclusion amount for that year was $87,600, or approximately $239
per day. He concluded that “93 days times $239.34 per day equates to a prorated
foreign earned income excludable amount of $22,258.62.” Petitioner husband
-7-
[*7] wrote: “I was not armed, equipped, or trained to operate in a combat
environment therefore I was not able to safely stay the required 330 days in Iraq.”
Respondent disallowed the foreign earned income tax exclusions that
petitioners claimed for the years in issue.
Discussion
Generally, a taxpayer bears the burden of proving the Commissioner’s
determinations in a notice of deficiency are erroneous. Rule 142(a)(1); Welch v.
Helvering, 290 U.S. 111, 115 (1933). Pursuant to section 7491(a), the taxpayer
may shift the burden of proof to the Commissioner in certain circumstances.
Petitioners have not claimed or shown that they meet the specifications of section
7491(a) to shift the burden of proof to respondent as to any relevant factual issue.
Section 61(a) provides that gross income means all income from whatever
source derived. Citizens of the United States are generally taxed on income
earned outside of the United States unless a specific exclusion applies. Specking
v. Commissioner, 117 T.C. 95, 101-102 (2001), aff’d sub nom. Haessly v.
Commissioner, 68 Fed. Appx. 44 (9th Cir. 2003), and aff’d sub nom. Umbach v.
Commissioner, 357 F.3d 1108 (10th Cir. 2003). Exclusions from income are
construed narrowly; taxpayers must bring themselves within the clear scope of the
exclusion. Id. at 101.
-8-
[*8] Section 911(a) provides in relevant part that a qualified individual may elect
to exclude his or her foreign earned income from gross income. The exclusion
amount for calendar years 2002 and thereafter is limited to $80,000 per year,
indexed for inflation. Sec. 911(b)(2)(D)(i) and (ii). Section 911(b)(1)(A) defines
the phrase “foreign earned income” as “the amount received by such individual
from sources within a foreign country * * * which constitute earned income
attributable to services performed by such individual”. Section 911(d)(1) defines
the phrase “qualified individual” as follows:
(1) Qualified individual.--The term “qualified individual”
means an individual whose tax home is in a foreign country and who
is--
(A) a citizen of the United States and establishes to the
satisfaction of the Secretary that he has been a bona fide
resident of a foreign country or countries for an uninterrupted
period which includes an entire taxable year, or
(B) a citizen or resident of the United States and who,
during any period of 12 consecutive months, is present in a
foreign country or countries during at least 330 full days in
such period.
Thus, a taxpayer must both (1) maintain a tax home in a foreign country and (2)
either (a) establish a bona fide residency for an entire taxable year or (b) be
present in a foreign country during at least 330 full days in a 12-month period.
-9-
[*9] An individual who fails to meet the 330-day physical presence test of
section 911(d)(1)(B) shall be treated as a qualified individual if he or she is
eligible for a waiver of period of stay in a foreign country pursuant to section
911(d)(4). Section 911(d)(4) provides in pertinent part:
(4) Waiver of period of stay in foreign country.--
Notwithstanding paragraph (1), an individual who--
(A) is a bona fide resident of, or is present in, a foreign
country for any period,
(B) leaves such foreign country after August 31, 1978--
(i) during any period during which the Secretary
determines, after consultation with the Secretary of State
or his delegate, that individuals were required to leave
such foreign country because of war, civil unrest, or
similar adverse conditions in such foreign country which
precluded the normal conduct of business by such
individuals, and
(ii) before meeting the requirements of such
paragraph (1), and
(C) establishes to the satisfaction of the Secretary that
such individual could reasonably have been expected to have
met such requirements but for the conditions referred to in
clause (i) of subparagraph (B),
shall be treated as a qualified individual with respect to the period
* * * during which he was a bona fide resident of, or was present in,
the foreign country * * *
- 10 -
[*10] Section 911(d)(3) defines the term “tax home” as the individual’s home for
purposes of section 162(a)(2) (relating to travel expenses while away from home).
Section 162(a)(2) provides for a deduction for ordinary and necessary expenses
paid during the taxable year in carrying on a trade or business, including travel
expenses incurred while away from home in the pursuit of a trade or business. See
also Commissioner v. Flowers, 326 U.S. 465, 470 (1946). For purposes of section
162(a)(2), an individual’s tax home is “the vicinity of the taxpayer’s principal
place of employment and not where his or her personal residence is located.”
Mitchell v. Commissioner, 74 T.C. 578, 581 (1980); see also Rev. Rul. 75-432,
1975-2 C.B. 60. If an individual is engaged in a trade or business at more than
one location during the tax year, the individual’s tax home is located at his or her
regular place of business or, if the individual has more than one regular place of
business, at his or her principal place of business. See sec. 1.911-2(b), Income
Tax Regs. If an individual has no regular or principal place of business because of
the nature of the business, then the individual’s tax home is his or her place of
abode in a real and substantial sense. Id.
An individual, however, shall not be treated as having a tax home in a
foreign country for any period during which his or her abode is within the United
States. Sec. 911(d)(3); see also Harrington v. Commissioner, 93 T.C. 297, 307
- 11 -
[*11] (1989). Temporary presence of the individual in the United States does not
necessarily mean that the individual’s abode is in the United States. Sec. 1.911-
2(b), Income Tax Regs.
In prior section 911 cases, we have examined and contrasted the taxpayer’s
domestic ties (i.e., his or her familial, economic, and personal ties to the foreign
country in which he or she claims a tax home) in order to determine whether his or
her abode was in the United States during a particular period. Harrington v.
Commissioner, 93 T.C. at 307-308; see also Struck v. Commissioner, T.C. Memo.
2007-42; Moudy v. Commissioner, T.C. Memo. 1989-216; Benham v.
Commissioner, T.C. Memo. 1989-215; Bosarge v. Commissioner, T.C. Memo.
1989-15; Hummer v. Commissioner, T.C. Memo. 1988-528; Lemay v.
Commissioner, T.C. Memo. 1987-256, aff’d, 837 F.2d 681 (5th Cir. 1988); Bujol
v. Commissioner, T.C. Memo. 1987-230, aff’d without published opinion, 842
F.2d 328 (5th Cir. 1988). Even though a taxpayer may have some limited ties to a
foreign country, if the taxpayer’s ties to the United States remain strong, we have
held that his or her abode remained in the United States, especially when his or her
ties to the foreign country were transitory or limited. Harrington v. Commissioner,
93 T.C. at 308.
- 12 -
[*12] The taxpayer husband in Harrington resided in Texas with his family before
he went to Angola as part of his work for a company. We found that the taxpayer
husband maintained strong ties to the United States while he was in Angola: he
maintained a bank account in Texas and a Texas driver’s license and had two
vehicles registered in Texas. Id. at 309. In contrast, we found that the taxpayer
husband’s ties to Angola were almost nonexistent: he did not own land or
vehicles, he did not travel, he did not bring his family with him (they were
prohibited from accompanying him or staying with him), and he did not maintain a
bank account in Angola. Id. We determined that the taxpayer husband’s ties to
Angola were “severely limited and transitory”, and we held that the taxpayer
husband’s abode for purposes of section 911 remained in the United States. Id.
The same types of factors that supported the holding in Harrington apply
here. Petitioner husband maintained strong ties to his home in Utah. He lived on
U.S. Air Force bases when he was in Iraq and Afghanistan and was not allowed to
leave the bases. His family did not go with him, and he did not travel. He did not
open a bank account in Iraq or Afghanistan. Like the taxpayer husband in
Harrington, petitioner husband had ties to Iraq and Afghanistan that were severely
limited and transitory during the years in issue.
- 13 -
[*13] Petitioners contend that even if petitioner wife had been allowed to join
petitioner husband in Iraq or Afghanistan, she nevertheless would have been
unable to go because of her separate career. Petitioners also contend that
petitioner husband maintained a residence in Utah because of petitioner wife’s
business. Even if these contentions were true, they would not outweigh petitioner
husband’s limited ties to Iraq and Afghanistan.
We find that petitioner husband’s abode was in the United States during the
years in issue. Therefore, petitioners’ tax home was in the Untied States (and not
in a foreign country) for the purposes of section 911(d)(1) during the years in
issue.
Petitioners contend that petitioner husband’s residence was in Iraq or
Afghanistan or both during the years in issue. They claim that his primary place of
business was in Afghanistan and/or Iraq because he was “ordered to be present in
these countries for an entire 12 months”. Petitioners refer to the travel
authorization that L3 received from the Department of the Air Force, which
authorized petitioner husband to travel from August 2007 to August 2008. Travel
authorization alone is not proof that petitioner husband’s primary place of
business (and therefore tax home) was in a foreign country. Petitioner husband’s
temporary location in Afghanistan and Iraq does not change the fact that
- 14 -
[*14] petitioners’ tax home was in the United States. Petitioners have failed to
show that petitioner husband established a residence in a real or substantial sense
in Afghanistan and/or Iraq in the years in issue.
Petitioners contend that even if we found that petitioner husband’s primary
place of business was not in Iraq or Afghanistan, his tax home was still located in
those countries “because that is where he resided for most of these tax years”.
There is nothing in the record that shows that petitioner husband resided in
Afghanistan and/or Iraq for most of the years in issue. For tax year 2007
petitioner husband worked in Afghanistan and/or Iraq for no more than 106 days.
For tax year 2008 petitioner husband worked in Iraq and/or Afghanistan for no
more than 93 days. Less than half of his income was derived from services
performed in Afghanistan and/or Iraq.
Petitioner husband’s employer, L3, had its principal place of business in
Salt Lake City, Utah, during the years in issue. Petitioners maintained a residence
in Utah. The parties stipulated that petitioner husband worked in Utah during the
years in issue. When petitioner husband was in the country, he worked either at
his Utah residence or at L3’s Salt Lake City office. Petitioners contend that
petitioner husband worked in California, Nevada, and Germany during the years in
issue; however, petitioners have provided no evidence regarding how many days
- 15 -
[*15] he worked in those locations. Moreover, the address on petitioners’ tax
returns for the years in issue was in Utah, and petitioners wrote on their Forms
2555-EZ that their tax home was in Utah during those years.
We thus find that petitioners’ tax home was in the United States during the
years in issue. Because we have determined that petitioners’ tax home was in the
United States, we do not need to determine whether petitioner husband was a bona
fide resident of Afghanistan and/or Iraq or met the 330-day physical presence test
pursuant to section 911(d)(1)(A) and (B). See Stright v. Commissioner, T.C.
Memo. 1993-576. We note, however, that petitioners also failed to meet the
specifications in section 911(d)(1)(A) and (B). Petitioners did not argue that
petitioner husband was a bona fide resident in either country, and petitioner
husband was not in Afghanistan and/or Iraq for 330 full days during any 12-month
period in the years in issue. Moreover, petitioner husband’s time in Germany fails
to get him over the 330-day hurdle because petitioners failed to provide any proof
regarding how long he was in Germany.
Petitioners likewise failed to meet the requirements for a waiver of period of
stay in a foreign country, pursuant to section 911(d)(4). The test for the waiver of
period of stay in a foreign country is conjunctive: a taxpayer must meet all three
requirements set forth in section 911(d)(4)(A)-(C).
- 16 -
[*16] Petitioners failed to meet the requirements under section 911(d)(4)(B)
because they failed to show that the Secretary determined that individuals were
required to leave Afghanistan and/or Iraq because of war, civil unrest, or similar
adverse conditions. The Secretary publishes a list of foreign countries where war,
civil unrest, or similar adverse conditions exist for purposes of section
911(d)(4)(B). Sec. 1.911-2(f), Income Tax Regs. No list was published for 2007.
The list that was published for 2008 does not include Iraq or Afghanistan. See
Rev. Proc. 2009-22, sec. 2.04, 2009-16 I.R.B. 862, 863.
We thus find that petitioner husband was not a qualified individual under
section 911(d)(1) during the years in issue. Accordingly, we hold that petitioners
failed to meet the criteria to exclude foreign earned income pursuant to section
911(a) for the years in issue.
Contentions we have not addressed are irrelevant, moot, or meritless.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3733-17T2
LAKEVIEW LOAN
SERVICING, LLC,
Plaintiff-Respondent,
v.
ERWIN L. HILTON
and DHRUWA HILTON,
Defendants-Appellants.
Submitted March 27, 2019 – Decided May 9, 2019
Before Judges Koblitz and Currier.
On appeal from Superior Court of New Jersey,
Chancery Division, Union County, Docket No. F-
049107-14.
Erwin L. Hilton and Dhruwa Hilton, appellants pro se.
Mc Cabe Weisberg & Conway, LLC, attorneys for
respondent (James A. French, of counsel and on the
brief).
PER CURIAM
In this residential foreclosure action, defendants Erwin L. Hilton and
Dhruwa Hilton appeal from the March 2, 2018 order denying their motion to
vacate the sheriff's sale of their property. After a review of defendants'
contentions in light of the record and applicable legal principles, we affirm.
In 2013, defendants executed a note to Discover Home Loans, Inc.
(Discover), which was secured by a mortgage to Mortgage Electronic
Registration Systems, Inc. (MERS) on defendants' residential property. In 2014,
MERS assigned the mortgage to Sun West Mortgage Company, Inc. (Sun West),
which in turned assigned the mortgage to plaintiff Lakeview Loan Servicing,
LLC in 2015.
Defendants defaulted on the note and mortgage in May 2014. Sun West
filed a complaint for foreclosure in November 2014. After defendants failed to
file a responsive pleading, default was entered in February 2015. In January
2016, the trial court permitted Lakeview to substitute in as plaintiff.
Plaintiff's uncontested final judgment motion was granted in December
2016, and the court issued a writ of execution directing the sale of the property.
Plaintiff purchased the property at the sheriff's sale in February 2018.
Thereafter, defendants moved to vacate the sale, alleging the sale price was
inadequate and plaintiff lacked standing to bring the property to a sheriff's sale.
A-3733-17T2
2
In an oral decision and accompanying order of March 2, 2018, the judge
denied defendants' motion, finding plaintiff had standing to bring the foreclosure
action and the sale was properly conducted.
On appeal, defendants contend: 1) the mortgage was not properly
recorded; 2) the trial court did not have in personam jurisdiction over
defendants; 3) plaintiff's counsel violated the Rules of Professional Conduct by
not correcting the trial judge after he misspoke during a hearing; 4) defendan ts
were fraudulently induced into executing the mortgage; 5) plaintiff lacked
standing to bring the foreclosure action as their assignment did not predate the
complaint; 6) defendants did not receive proper notice of the sheriff's sale; and
7) the sheriff's sale was unconstitutional because it was a government taking that
did not provide defendants with just compensation. We are unpersuaded by
these arguments.
We will set aside the denial of a motion to vacate a sheriff's sale only when
a clear abuse of discretion by the trial court has been shown. R. 4:65–5; U.S. v.
Scurry, 193 N.J. 492, 503 (2008). We will not substitute our judgment or
discretion for that of the trial court, unless the trial court has made a decision
"without a rational explanation, inexplicably departed from established policies,
A-3733-17T2
3
or rested on an impermissible basis." Scurry, 193 N.J. at 504 (quoting Flagg v.
Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).
It is well-established that in order to have standing in a foreclosure action,
the "party seeking to foreclose a mortgage must own or control the underlying
debt." Wells Fargo Bank, N.A. v. Ford, 418 N.J. Super. 592, 597 (App. Div.
2011) (quoting Bank of N.Y. v. Raftogianis, 418 N.J. Super. 323, 327–28 (Ch.
Div. 2010)). Standing is conferred by "either possession of the note or an
assignment of the mortgage that predated the original complaint." Deutsche
Bank Tr. Co. Ams. v. Angeles, 428 N.J. Super. 315, 318 (App. Div. 2012) (citing
Deutsche Bank Nat'l Tr. Co. v. Mitchell, 422 N.J. Super. 214, 216, 225 (App.
Div. 2011)).
Here, we are satisfied plaintiff established a prima facie case for
foreclosure. Sun West clearly demonstrated its standing to foreclose on the
property because the assignment of the mortgage from MERS to Sun West
predated the filing of the foreclosure complaint. Upon that assignment, and
underlying transfer of possession, Sun West became the holder of the
instrument.
The substitution of Lakeview as plaintiff under Rule 4:34-3 did not nullify
its standing to pursue the foreclosure action. See R. 4:34-3 ("In case of any
A-3733-17T2
4
transfer of interest, the action may be continued by . . . the person to whom the
interest is transferred."). Defendants have not demonstrated a clear abuse of
discretion by the trial court in its determination to deny the motion to vacate the
sheriff's sale.
Defendants' remaining arguments lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-3733-17T2
5
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEONARD MICHAEL MARELLA,
Plaintiff-Appellant,
v.
C. A. TERHUNE, Director of the
California Department of
Corrections; R. M. HOUSTON, Chief
Deputy Warden, Calipatria; C. G.
BUTLER, Captain, Calipatria; No. 07-55006
DENISE EDWARDS, Appeals
Coordinator, CCII, Calipatria; D.C. No.
CV-03-00660-RTB
HARRIET FASOLO, Appeals
OPINION
Coordinator, CCII, Calipatria; A.
TERHUNE, Correctional Counselor
II, (A) Calipatria State Prison,
Facility “B”; M. K. ORMAND,
Correctional Counselor I,
Calipatria State Prison Facility
“B”,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Roger T. Benitez, District Judge, Presiding
Argued and Submitted
January 16, 2009—San Francisco, California
Filed April 14, 2009
Before: J. Clifford Wallace, Jerome Farris and
M. Margaret McKeown, Circuit Judges.
4315
4316 MARELLA v. TERHUNE
Per Curiam Opinion
MARELLA v. TERHUNE 4317
COUNSEL
Jeffrey T. Renz, Director, Montana Defender Project, Univer-
sity of Montana School of Law, Missoula, Montana, Attorney
4318 MARELLA v. TERHUNE
for the appellant; Zachary Strong, Law Student, Missoula,
Montana, argued the case for the appellant; Sabrina Hansen,
Law Student, Missoula, Montana, was on the briefs for the
appellant.
Edmund G. Brown Jr., Attorney General, David S. Chaney,
Chief Assistant Attorney General, Frances T. Grunder, Senior
Assistant Attorney General, Michelle Des Jardins, Supervis-
ing Deputy Attorney General, Phillip Lindsay, Deputy Attor-
ney General, San Diego, California; Attorney for the
appellees.
OPINION
PER CURIAM:
Marella appeals from the district court’s dismissal of his
civil rights action for failure to exhaust administrative reme-
dies, as required by the Prison Litigation Reform Act (PLRA),
42 U.S.C. § 1997e(a). The district court had jurisdiction pur-
suant to 28 U.S.C. §§ 1331, 1343 and 1367. We have jurisdic-
tion under 28 U.S.C. § 1291, and we reverse and remand.
Marella, a prisoner at the Calipatria State Prison, filed a
complaint against prison officials under 42 U.S.C. § 1983,
alleging violations of his constitutional rights stemming from
a knife attack by his fellow inmates. Prison officials filed a
motion for summary judgment on grounds unrelated to
exhaustion of administrative remedies. The magistrate judge
(MJ) notified Marella under Rand v. Rowland, 154 F.3d 952
(9th Cir. 1998) (en banc), that he was required to oppose the
motion with evidence. While the motion for summary judg-
ment was pending, the MJ requested that prison officials sup-
plement their motion with information regarding whether
Marella exhausted administrative remedies. The prison offi-
cials took the position that Marella had not exhausted admin-
MARELLA v. TERHUNE 4319
istrative remedies because his first formal grievance was
untimely filed.
Prior to filing his complaint in federal court, Marella had
filed a grievance within the prison system, which the prison
rejected on procedural grounds. The history of Marella’s
appeal within the prison system is key to whether he
exhausted his administrative remedies, as required by the
PLRA. Following the knife attack, Marella spent two days in
the hospital, subsequently moved to the infirmary, and finally,
was placed in administrative segregation. He contends that he
was unable to acquire and complete a grievance form during
that time. Following his release, thirty-three days after the
knife attack, he filed his grievance regarding the knife attack
with the prison. This grievance was filed at the first formal
level of review. The grievance was denied as untimely, and
the grievance form stated that he may only appeal the denial
if the reason for the denial was inaccurate. Marella neverthe-
less appealed the denial to the Director of Corrections (the
third and final level of review within the California prison
system), and was informed that his appeal was rejected
because he did not first complete a second level of review.
In the federal court proceeding, the MJ concluded that
Marella had not exhausted administrative remedies because
his initial grievance was untimely filed, and determined that
there are no exceptions to the timely filing requirement. The
district court adopted the MJ’s Report and Recommendations,
and also held that Marella failed to exhaust administrative
remedies because he failed to appeal his grievance properly
through the third and final level of the prison grievance sys-
tem. The district court dismissed Marella’s complaint without
prejudice.
[1] The MJ and the district court (through its adoption of
the MJ’s Report and Recommendation) erred in concluding
that, as a matter of law, no exceptions to the timely filing
requirement exist. Marella contends that he was unable to file
4320 MARELLA v. TERHUNE
his grievance timely because he did not have access to the
necessary forms and he did not have the ability to complete
them during the fifteen-day filing period; therefore, no rem-
edy was available for him to exhaust properly. Marella was
required to “complete the administrative review process in
accordance with the applicable procedural rules, including
deadlines, as a precondition to bringing suit in federal court.”
Woodford v. Ngo, 548 U.S. 81, 88 (2006). The California
prison system’s requirements “define the boundaries of proper
exhaustion.” See Jones v. Bock, 549 U.S. 199, 218 (2007).
The California Code of Regulations provides that an inmate
must submit an appeal within fifteen working days of the
event or decision being appealed, but the appeals coordinator
is only permitted to reject an appeal if “[t]ime limits for sub-
mitting the appeal are exceeded and the appellant had the
opportunity to file within the prescribed time constraints.”
Cal. Code Regs. tit. 15 §§ 3084.6(c) and 3084.3(c)(6) (empha-
sis added). The California Department of Corrections and
Rehabilitation Operating Manual directs the appeals coordina-
tor to “ensure that the inmate or parolee had, in fact, the
opportunity to file in a timely manner.” Section 54100.8.1.
Thus, the prison’s regulations explicitly create an exception to
the timely filing requirement. If Marella was unable to file
within the fifteen-day filing period, his failure to file timely
does not defeat his claim. The MJ found that Marella was
only in the hospital for two nights, but the MJ did not make
factual findings as to whether Marella had access to the neces-
sary forms and whether he had the ability to file during his
stay in the hospital and prison infirmary, or during the admin-
istrative lockdown. On remand, the district court should con-
sider whether Marella had the opportunity to file within
fifteen days following the assault.
[2] The district court also erred in dismissing Marella’s
complaint for failure to exhaust his administrative remedies
beyond the second level of the prison appeals system because
Marella had been informed that the appeals process was
unavailable to him. See Brown v. Valoff, 422 F.3d 926, 935
MARELLA v. TERHUNE 4321
(9th Cir. 2005) (the PLRA “does not require exhaustion when
no pertinent relief can be obtained through the internal pro-
cess”). Marella was not required to “exhaust further levels of
review once he [had] . . . been reliably informed by an admin-
istrator that no remedies are available.” See id. After Marella
filed his first level appeal, he received a form rejecting the
appeal because it was not timely filed and there was “no
explanation of why [he] did not, or could not, file in a timely
manner.” The form also stated that “[t]his screening action
may not be appealed unless you allege that the above reason
is inaccurate.” Marella did not dispute that his appeal was
untimely, and he did not dispute that he had not explained
why he was unable to file in a timely manner. Thus, according
to the form, he was not permitted to appeal the decision.
Therefore, we reverse the district court’s dismissal of the case
for failure to appeal properly because the appeals process was
unavailable to him.
[3] Although Marella received a proper Rand notice earlier
(see Rand, 154 F.3d at 960-61), the question is whether a sec-
ond Rand notice was required following the order requesting
supplemental briefing as to whether Woodford requires him to
provide evidentiary support to rebut defendants’ claim that he
had not exhausted administrative remedies. The question is
close, but we conclude fair notice requires more. The order
for supplemental briefing “inject[ed] renewed uncertainty and
complexity into the summary judgment procedure,” therefore,
the previously issued Rand notice did not effectively give
Marella fair notice that he should have submitted evidence
regarding exhaustion of remedies. See Wyatt v. Terhune, 315
F.3d 1108, 1115 (9th Cir. 2003). On remand, Marella should
be allowed to submit evidence regarding exhaustion of reme-
dies.
REVERSED AND REMANDED.
1> PRINTED FOR L>ADMINISTRATIVE OFFICE—U.S. COURTS L>BY
THOMSON REUTERS/WEST—SAN FRANCISCO D6>
The summary, which does not constitute a part f the opinion of the court, is copyrighted
© 2009 omson Reuters/West.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
MAR 28 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
CHRISTIAN N. DAVIS,
Petitioner - Appellant,
No. 02-3203
v. (D.C. No. 99-CV-3385-RDR)
(D. Kansas)
MICHAEL A. LANSING, Commandant,
USDB; (NFN) (NMI) COMMANDANT,
USDB,
Respondents - Appellees.
ORDER AND JUDGMENT*
Before KELLY, BRISCOE, and LUCERO, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered
submitted without oral argument.
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Petitioner Christian Davis, a federal inmate appearing pro se, appeals the district
court’s dismissal of his 28 U.S.C. § 2241 habeas petition. We exercise jurisdiction
pursuant to 28 U.S.C. § 1291 and affirm.
Davis was convicted by general court martial of fraudulent enlistment, making a
false official statement, adultery, attempted premeditated murder, conspiracy to commit
premeditated murder, premeditated murder, and aggravated arson, and was sentenced to
confinement for life, forfeiture of all pay and allowances, reduction in rank, and a
dishonorable discharge. The Army Court of Criminal Appeals affirmed his convictions
and sentence, and the Court of Appeals for the Armed Forces affirmed the decision of the
Army Court. Davis’ request for habeas relief before the Army Court was denied, and on
review the Court of Appeals for the Armed Forces also denied relief.
In his amended § 2241 habeas petition, Davis contended (1) the court martial
lacked jurisdiction because the record of trial did not reflect compliance with Article 25,
U.C.M.J., 10 U.S.C. § 825; (2) he was denied effective assistance of trial counsel by
counsel failing to raise the jurisdiction claim; (3) the court martial lacked jurisdiction
because his term of enlistment expired prior to the court martial; (4) he was denied
effective assistance of trial counsel because there was no laboratory testing for gun
residue; (5) the victim’s diary in the possession of the prosecution contained exculpatory
evidence and was withheld from the defense; and (6) he was denied his statutory right to
have appellate defense counsel represent him before the United States Supreme Court.
-2-
The district court determined that Davis was not entitled to relief.
Our review of habeas claims in connection with military trials is extremely limited.
If the claims asserted in the petition were given “full and fair consideration” by the
military tribunals, the petition should be denied. See Lips v. Commandant, United States
Disciplinary Barracks, 997 F.2d 808, 811 (10th Cir. 1993). An issue is said to have been
given “full and fair consideration” if it has been briefed and argued, even if the military
tribunal summarily disposes of the matter. See Watson v. McCotter, 782 F.2d 143, 145
(10th Cir. 1986). Recognizing this standard of review, the district court dismissed the
petition. See Davis v. Lansing, 202 F. Supp. 2d 1245 (D. Kan. 2002).
On appeal, Davis raises a Brady claim and argues he was denied due process. The
district court determined the Brady claim was given the appropriate level of consideration
by the military tribunals and declined to address the merits of the claim. We also decline
to address the due process claim because there is no evidence the matter was presented to
either the district court or to any military tribunal. See Watson, 782 F.2d at 145 (noting
federal courts will not review a petitioner’s claim on the merits if it was not raised before
the military courts).
We AFFIRM the district court’s dismissal of Davis’ habeas petition. Davis’
motion to amend his appellate brief is DENIED. The mandate shall issue forthwith.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
-3-
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672 F.Supp. 1278 (1987)
In the Matter of ALAMEDA COUNTY ASSESSOR'S PARCEL NOS. 537-801-2-4 AND XXX-XXX-X, et al.
No. C-86-144 MISC. WHO.
United States District Court, N.D. California.
June 3, 1987.
*1279 Francis B. Boone, Asst. U.S. Atty., Land & Natural Resources Div., San Francisco, Cal., for applicants.
David M. Ivester, Washburn & Kemp, San Francisco, Cal., for petitioners.
ORRICK, District Judge.
Petitioners, the owners of a 286-acre farm in Newark, California, seek to quash an administrative warrant obtained by applicants, the United States Environmental Protection Agency ("EPA"), on August 20, 1986, for the purpose of entering petitioners' farm and determining what areas of the farm, if any, fall under the jurisdiction of the Federal Water Pollution Control Act of 1972, 33 U.S.C. § 1251 et seq., commonly referred to as the "Clean Water Act" ("CWA"). For the reasons following, the motion to quash the warrant is denied.
I
The actual owners of the farm, and the petitioners in this action, are Boyd C. Smith, Trustee for the Richard T. Peery 1976 Children Trusts; Louis B. Sullivan, Trustee for the John Arrillaga 1976 Children Trusts; and Frank Joseph Siri, Jr., Trustee for the Siri Family Trust. Petitioners' farm, located in the city of Newark, California, is bounded by various private farms to the north, a railroad track on the east, and the man-made Alameda County Flood Control District levees running along Mowry Slough to the south and to the west. Declaration of Veronica D. Reynolds, filed Aug. 20, 1986 (hereinafter "Reynolds Declaration"), at 3-4, ¶ 4, and attached maps. It is undisputed that much of petitioners' property has been farmed by lessee farmers for at least the past twentyfive years, and possibly longer.
The present controversy arose in late 1984 when the farmer leasing petitioners' farm disced certain fields on the farm that allegedly contain "wetlands," as they are defined under the CWA,[1] installed new culverts and tide gates, and expanded a drainage ditch network in the alleged wetlands area. An agent of the United States Fish and Wildlife Service ("USFWS"), Ecological Services Branch, observed these activities and informed the Army Corps of Engineers ("Corps") on November 9, 1984, of their occurrence. Declaration of David M. Ivester in Support of Motion to Quash Administrative Warrant, filed Sept. 9, 1986 (hereinafter "Ivester Declaration"), Exhibit D. On December 3, 1984, the Corps sent investigators to petitioners' property in order to examine the area of the activities and assess whether wetlands were being destroyed.
The investigators, Corps personnel, concluded that the farmer had engaged in "unauthorized activity involving the sidecasting of fill material associated with the construction of new ditches and [the] placement of tide gates to facilitate the drainage of a wetland located" on petitioners' property. *1280 Ivester Declaration, Exhibit B at 1 (Corps cease and desist letter dated Dec. 21, 1984, to petitioners (hereinafter "Corps letter")). Based on these findings, the San Francisco Office of the Corps concluded that "extensive damage has occurred to the wetlands on [the] property" and, therefore, issued a "cease and desist" letter to petitioners on December 21, 1984. Id. The letter informed petitioners that all of the farmer's activities were in violation of § 404 of the CWA, 33 U.S.C. § 1344,[2] and directed petitioners' to stop all actions in connection with the aforementioned activities. Id.
In response to the Corps letter, petitioners eventually admitted that the farmer had replaced a culvert and tide gate, enlarged a levee by placing fill material on top of it, and altered and expanded an existing drainage ditch. However, petitioners argued that these activities were permissible under the "farming exceptions" provided for under § 404(f), 33 U.S.C. § 1344(f), of the CWA.[3] Ivester Declaration, Exhibit H. Petitioners also argued that the alleged unlawful discing was something the lessee farmer "had done many times before, in order to prepare the land for seeding." See Petitioners' Memorandum of Points and Authorities in Support of Motion to Quash Administrative Warrant (hereinafter "Petitioners' Memorandum"), filed Sept. 15, 1986, at 4. The Corps maintained that all these activities were in violation of the CWA, and a long series of correspondence ensued between petitioners and the Corps.
After numerous communications, petitioners agreed that the Corps could enter the property for the limited purpose of investigating the contested activities. On March 24, 1986, the Corps conducted the planned visit, accompanied by David Ivester, attorney and representative for petitioners, and by representatives of the EPA, the USFWS, and the California Department of Fish and Game ("DFG"). During that visit, Ivester allowed the state and federal agencies' representatives to enter the farm and observe the area of the alleged violations outlined in the Corps letter, but refused to allow the agencies' representatives to collect soil samples or conduct tests in order to determine whether the property was a "wetland" under the provisions of the CWA.
The EPA representatives accompanied the Corps on the March 24 visit, at the Corps request, for the express purpose of providing "technical support and expertise in determining" the existence of wetlands on the property and determining "the extent of federal jurisdiction" over petitioners' property under the CWA. Declaration of Thomas G. Yocom, filed Aug. 20, 1986, (hereinafter "Yocom Declaration") at 6, ¶ 11. Representatives of the DFG and the USFWS accompanied the Corps and the EPA, at the Corps request, in order to render assistance in identifying "wetland plants and animal life on the site" that would indicate whether the area was a wetland under the provisions of the CWA. Id. at 7, ¶ 14. The Corps and the EPA wished to make the technical determination of the wetland status of petitioners' property in order to determine the existence and extent of petitioners' violations of the CWA, as well as to determine the federal jurisdiction *1281 over petitioners' property under the CWA. If wetlands existed on the property, the agencies wanted to ensure that wetland vegetation and habitat were not being destroyed in order to prepare for future development of the farm.
After viewing the site of the alleged violations of the CWA, but without being allowed to take soil samples or conduct tests, the agencies' representatives ended the March 24 visit and left petitioners' property. After the visit, the Corps again contacted the EPA, and "requested [the] EPA's assistance in obtaining access to the [petitioners'] property for purposes of making a final technical determination as to the extent and location" of wetlands on the property. Yocom Declaration at 7, ¶ 13. The EPA agreed, and the Corps and the EPA contacted petitioners again and informed them that they wished to have access to the property in order to conduct a "jurisdictional" determination of the wetland status of the property. Petitioners refused, and stated that they would oppose any efforts in the courts seeking to gain access to the property for such a determination.
Soon after this exchange, in May 1986, a representative of the Corps learned that a game warden of the DFG, Warden David Fox, had observed the lessee farmer dumping and spreading fill material in the fall of 1984 on the same potential wetland areas that the EPA and the Corps had examined in their March 24, 1986, visit. Reynolds Declaration at 9-10, ¶ 14. The DFG warden, who had monitored petitioners' property since 1981, stated that the farmer had "not disced or plowed [those particular fields] between the fall of 1981 and the fall of 1984." Declaration of David Fox, filed Aug. 20, 1986 (hereinafter "Fox Declaration"), at 2 ¶ 4. Rather than "merely plowing and discing" those areas for routine farming in the fall of 1984, as petitioners have claimed the farmer was doing, the game warden stated that he observed the farmer using "graders and a bulldozer ... to spread earthen fill ... brought onto the property and dumped from large earthmoving trailer trucks." Id. at 2, ¶ 5. In the eyes of the warden, "the fill was being spread to raise the elevation and to contour the surface of the low-lying areas" where there had previously been significant wetland vegetation. Id.
The warden stated that he had returned to the site a few weeks later, still in the fall of 1984, and had observed that the farmer had covered the wetland vegetation completely, contoured the property to drain away any standing water, altered and deepened the nearby drainage ditch, and removed vegetation from the drainage ditch. Id. at 2-3, ¶ 6. The purpose of these various activities apparently was to turn these potential wetland areas into nonwetland property.
Petitioners' have since claimed that the activity observed by DFG Warden Fox was merely the farmer fertilizing certain fields. Petitioners allege that the farmer was dumping manure transported by dump trucks stored on the property, and then spreading the manure for crop fertilization with a grader. Petitioners' Memorandum at 31. However, petitioners' have failed to convincingly address the warden's statement that he observed several large trailertrucks and graders dumping and spreading large amounts of fill on the property. Even more important, petitioners have failed to convincingly refute the warden's statement that a few weeks later the area had been extensively graded and contoured, significant amounts of wetland vegetation had been covered up or destroyed, and new drainage ditches had been constructed, all with the apparent purpose of draining existing wetlands.
The EPA and the Corps redoubled their efforts to gain access to petitioners' property after receiving notice of DFG Warden Fox's observations. Shortly thereafter, on August 15, 1986, the EPA received information that still another DFG warden had observed unusual activities on petitioners' property. This time, however, the activities had just taken place within the past few days. The second DFG warden, Paul Kelley, informed an EPA attorney assigned to matters arising under § 404 of the CWA that he had personally observed that the farmers were discing the potential wetland *1282 areas of petitioners' farm unseasonably early. Declaration of Ann S. Nutt, filed Sept. 19, 1986 (hereinafter "Nutt Declaration"), at 2-3, ¶¶ 2-3. Normally, the farmer disced his fields in October, not in mid-August. Id.; Declaration of George Cook, filed Sept. 9, 1986 (hereinafter "Cook Declaration") at 2, ¶ 3. The EPA feared that the discing might be an effort to destroy evidence of vegetation or other characteristics that would qualify areas on the property as "wetlands" for the purposes of the CWA. Therefore, the EPA and the Corps immediately prepared to apply for a search warrant allowing them access to the property in order to examine the farmer's activities and to make a jurisdictional determination of the wetland status of petitioners' property.
On August 20, 1986, the United States Attorney, acting on behalf of the EPA, applied ex parte for an administrative inspection or search warrant to enter petitioners' farm and determine if parts of the farm were "wetlands," thereby bringing petitioners' property under the jurisdiction of the CWA. The basis of the application for the warrant was the EPA's probable-cause belief that numerous violations of the CWA, under §§ 301,[4] 308,[5] and 404, 33 U.S.C. §§ 1311, 1318, and 1344, were occurring on the farm. The probable-cause belief was supported by affidavits certifying the observations of DFG Warden Fox from the fall of 1984, and the observations and knowledge of the EPA and Corps officials who had observed wetland vegetation on petitioners' property more recently, and were aware of the various unusual activities by the lessee farmer. See Ex Parte Application for Warrant, filed Aug. 20, 1986; Fox Declaration; Reynolds Declaration; Yocom Declaration; Declaration of James E. Broadway, filed Aug. 20, 1986. The warrant was issued by Magistrate Claudia Wilken on August 20, 1986. The EPA executed the warrant on August 25 and 26, and September 1, 1986, by entry on the property and the gathering of soil and vegetation samples for the purpose of determining jurisdiction over petitioners' property under § 404 of the CWA.
Thereafter, petitioners filed this motion to quash the warrant. Petitioners have asserted that all of the original "repair and maintenance" activities outlined in the Corps letter, which gave rise to this dispute, were lawful and routine farming activities, specifically exempted from the restrictions of the CWA under the "farming exceptions" of § 404(f). 33 U.S.C. § 1344(f). They have also claimed that they do not intend to develop the farm, and that they are willing to "concede" the Corps' jurisdiction over the property for the limited purpose of resolving the "repair and maintenance" activities. This is insufficient for the EPA; the EPA insists on being allowed to enter the property for the purpose of determining whether areas of the property are wetlands under the CWA, and whether significant unlawful fill dirt activities have occurred on the property with the intent and effect of destroying wetlands.
Although not clearly stated in the papers, it appears that the "maintenance and repair" activities that gave birth to this dispute have been settled to the satisfaction *1283 of the Corps and the EPA. However, the alleged unlawful fill dirt activities, including the alleged "fill dirt dumping and contouring" and the "unseasonably early discing," have not been resolved. The present dispute centers solely on whether the EPA has the power under the CWA to obtain an administrative search warrant for the purposes of determining if wetlands exist on petitioners' property, and for determining if unauthorized discharges of fill material have occurred on petitioners' property in violation of § 404 of the CWA.
II
Petitioners argue that the enforcement of § 404 of the CWA lies solely in the hands of the Corps, and that the EPA has no authority under § 404 to obtain a search warrant solely for the purposes of determining the wetland jurisdiction of a specific parcel of property. As a secondary matter, petitioners also challenge the warrant on the grounds that it was not based on probable cause, and that it is "overbroad." The EPA opposes the motion on the grounds that the warrant was issued with probable cause, that the EPA is authorized to obtain a search warrant in order to make a determination of the United States' jurisdiction under § 404, and that the EPA has a supervisory and independent role in the enforcement of § 404. The EPA also asserts that observations of the property during the March 24, 1986, visit indicated that there do in fact exist significant wetlands on the farm.
As a preliminary matter, the Court finds petitioners' argument that the EPA or the Corps should be able to make a jurisdictional determination of the property's wetland status with a "stroll" across the farm to be without merit. In order to determine if wetlands exist on a specific parcel of property, the EPA and the Corps routinely are required to take soil and vegetation samples, and to conduct various scientific tests of those samples. See Declarations of Reynolds and Yocom. Observations of vegetation, soil, and animal life in the course of investigating the property are useful factors in making a wetland determination, but they cannot be conclusive in light of the EPA and Corps regulations governing the definition of a "wetland" for purposes of the CWA. See 40 C.F.R. § 230.3(t); 33 C.F.R. § 323.2(c). It is beyond serious contention that for a thorough and conclusive determination of the wetland status of a piece of property under the CWA, the proper agency must be allowed to obtain numerous samples of soil and vegetation, and scientifically gather and analyze data about the property. See United States v. Tull, 615 F.Supp. 610 (E.D.Va.1983); United States v. Weisman, 489 F.Supp. 1331 (M.D.Fla.1980).
A. The Statutes.
Petitioners' motion centers on the argument that the EPA is without authority to conduct a jurisdictional determination of the wetland status of a specific parcel of property under § 404. Petitioners' argument is founded upon a textual analysis of §§ 308 and 404 of the CWA. Although both sections are detailed and lengthy provisions, their basic functions are clear.
The EPA is empowered under § 308 to police the discharge of pollutants into the Nation's waters, and may require the "owner or operator of any point source [discharging pollutants]" to keep records and sample "such effluents" as may be discharged on the property. 33 U.S.C. § 1318. Under § 308, the EPA has "a right of entry to, upon, or through any premises in which an effluent source is located ..., and [may] sample any effluents" covered by this section in order to enforce the restrictions of the CWA. 33 U.S.C. § 1318(a).
Under § 404, the Corps is empowered to "issue permits ... for the discharge of dredged or fill material into the navigable waters at specified disposal sites." 33 U.S. C. § 1344(a). The Corps is also empowered to make exceptions to the requirements of § 404, and to enforce violations of § 404. The Corps was thus given a special role under the CWA to enforce § 404, that section of the CWA concerning the use of fill dirt in the nation's waters. This role was in keeping with the Corps historic role in *1284 regulating the construction and maintenance of the nation's harbors, and the use of the nation's rivers. See River and Harbor Act of 1899 § 10, 33 U.S.C. § 403.
B The EPA's Role Under § 404.
The CWA provides that unless "otherwise expressly provided" in this statute, the EPA will administer the CWA. 33 U.S. C. § 1251(d). The EPA is thus vested with the final responsibility for the enforcement of the CWA, including § 404. Though the CWA envisions that the Corps will be the federal agency primarily involved with the administration and enforcement of § 404, the legislative structure of § 404 and of the CWA also contemplate that the EPA will assume a supervisory role in connection with the administration of § 404. Under § 404, the EPA "is authorized to [veto any permit issued by the Corps and] prohibit the specification ... of any defined area as a disposal site [by the Corps], ... whenever [the EPA] determines ... that the discharge ... will have an unacceptable adverse effect" on the environment. 33 U.S.C. § 1344(c). In addition, § 404 allows the EPA to transfer the fill dirt permit administration procedure to the individual states, and to regulate those state programs instituted under § 404. 33 U.S.C. §§ 1344(n), 1318(a).
The Corps itself recognizes the dual roles of the Corps and the EPA in the administration and enforcement of § 404. The Corps has a history of notifying the EPA of "controversial ... matters under Section 404," and of occasionally "request[ing the] EPA to give technical assistance in making final jurisdictional determinations under Section 404...." Reynolds Declaration at 2, ¶ 1(e). Indeed, the Corps "contacted EPA to request technical support and expertise in making a final jurisdictional determination as to the extent of wetlands on" petitioners' property in this very action. Id. at 10, ¶ 16. This relationship between the Corps and the EPA under § 404 disproves petitioners' contention that the Corps is the sole agency authorized to administer or enforce § 404. The Corps is not intended to be the sole and exclusive administrator and enforcer of § 404, but rather the "primary" administrator and enforcer whose decisions may be reviewed and reversed by the EPA. However, in order to determine the EPA's ability to make jurisdictional wetland determinations, and enforce the unlawful dumping of fill dirt on wetlands, a further examination of the CWA is required.
C. Fill Dirt is a Pollutant.
Petitioners next argue that the terms "pollutant" and "effluent," as used in §§ 308 and 301, were not intended to include the term "fill dirt," but rather that § 404 was drafted as the exclusive section in the CWA governing the discharge of fill dirt. Petitioners argue that the drafters of the CWA intended that only § 404 should govern the dumping of fill dirt into the nation's "waters," and the other provisions of the CWA administered by the EPA, including §§ 301 and 308, are not applicable to fill dirt.
Under § 301, the CWA prohibits the "discharge of [any] pollutants" from a "point source" into the nation's waters. The CWA defines "pollutant" to mean "dredged spoil, solid waste, ... rock, sand, cellar dirt ... and agricultural waste discharged into water." 33 U.S.C. § 1362(6). Despite petitioners' arguments to the contrary, numerous courts have determined that fill dirt is a "pollutant" under the terms of § 301. See Tull, 615 F.Supp. at 622; United States v. Bradshaw, 541 F.Supp. 880, 882-83 (D.Md.1981); Weisman, 489 F.Supp. at 1337. Accord Avoyelles Sportsmen's League, Inc. v. Marsh, 715 F.2d 897 (5th Cir.1983). The "discharge of a pollutant" under § 301 is defined as including "any addition of any pollutant to navigable waters from any point source." 33 U.S.C. § 1362(12) (emphasis added). The term "point source" has in turn been defined under the CWA as including "any discernable, confined and discrete conveyance, ... from which pollutants are or may be discharged." 33 U.S.C. § 1362(14). In situations where an individual has been unlawfully dumping fill dirt on wetlands, the courts have consistently found that dump trucks, trailer trucks, bulldozers, and earth graders all qualify as "point sources" for *1285 purposes of the CWA. See Avoyelles, 715 F.2d at 922; Tull, 615 F.Supp. at 622; Weisman, 489 F.Supp at 1337; United States v. Robinson, 570 F.Supp. 1157, 1163 (M.D.Fla.1983); United States v. Holland, 373 F.Supp. 665, 668 (M.D.Fla.1974).
Thus, when faced with factual scenarios identical to that presented in this action by the activities of the lessee farmer, the courts have concluded without exception that the unlawful dumping of fill dirt on wetlands without a permit under § 404 is a "discharge of a pollutant" in violation of § 301 under the CWA. See Avoyelles; Tull; Weisman; Robinson; Bradshaw; Holland. See also Track 12, Inc. v. District Engineer, United States Army Corps of Engineers, 618 F.Supp. 448 (D.Minn.1985); United States v. Lambert, 589 F.Supp. 366 (M.D.Fla.1984); United States v. Ciampitti, 583 F.Supp. 483 (D.N. J.1984).
D. Section 404 is an Exception to § 301.
Further refutation of petitioners' argument that § 301 does not apply to the dumping of fill dirt is found in the relationship of § 404 to § 301. It has been repeatedly noted, most recently by the Supreme Court, that the CWA is a comprehensive statute, intended to regulate and eliminate as soon as possible all pollution of "the Nation's waters." Riverside Bayview Homes, 106 S.Ct. at 462, citing CWA § 101, 33 U.S.C. § 1251. Although the CWA literally prohibits only discharges into "navigable waters," see 33 U.S.C. §§ 1311(a), 1344(a), 1362(12), the Supreme Court has stated that Congress intended the term to be construed broadly. Thus, "a definition of `waters of the United States' encompass[es] all wetlands adjacent to other bodies of waters over which" there is jurisdiction under the CWA, and the provisions of the CWA will apply with full force to wetlands as well as to other "waters." Riverside Bayview Homes, 106 S.Ct. at 463.
The "discharge of any pollutant by any person" into the waters of the United States is prohibited by § 301, "except as in compliance with this section and ... [among others, section] 1344 of this title [i.e., § 404]." 33 U.S.C. § 1311(a) (emphasis added). Under Riverside Bayview Homes, § 301 prohibits the discharge of any pollutant into the nation's wetlands, as well as into "navigable waters," unless pursuant to an exception specifically provided for in the CWA. By its very terms, § 404 is an exception to the prohibitions of § 301. See § 404(f)(1), § 1344(f)(1)]. In addition, the routine farming exceptions provided for in § 404(f) specifically note that these exceptions will relieve the actors from liability under the provisions of § 301, which is regulated by the EPA. The obvious meaning of the interaction of these two regulations is that those activities that do not fall under the permit or farming exceptions of § 404 will violate § 301, and thus fall under the enforcement power of the EPA. See Weisman, 489 F.Supp. at 1337.
III
Petitioners also argue that `the Corps is the sole agency vested with authority to make a jurisdictional determination under § 404 of the existence of "wetlands" and, therefore, the EPA is an improper agency for the issuance of the search warrant.
A. Jurisdictional Determinations.
As already explained above, the EPA plays a supervisory role in the administration and enforcement of § 404. In addition, the regulations promulgated pursuant to the CWA by both the Corps and the EPA governing the definition and determination of "wetlands" were drafted in conjunction, and contain virtually identical language. As applied, both agencies definitions and jurisdictional determinations will result in the same result. Avoyelles, 715 F.2d at 911 n. 27; compare 33 C.F.R. § 323.2(c) (1982) with 40 C.F.R. § 230.3(t), 230.41(a)(1) (1982).
Furthermore, the EPA, the Corps, and the Attorney General of the United States all agree that the EPA is the "ultimate administrative authority" in determining the existence of wetlands, or the "reach of the navigable waters for the purposes of § 404." 43 Op. Att'y Gen. No. 15 (1979); Avoyelles, 715 F.2d at 903 n. 12. Indeed, *1286 as noted earlier, the Corps even requests the EPA's assistance in these determinations from time to time, and notifies the EPA of "controversial" determinations. See Reynolds Declaration. A court should show great deference to the interpretation of a statute by the agency charged with its administration. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). If both the Corps and the EPA have agreed that the EPA is the "ultimate" authority for the determination of the "wetland" status of property, this Court is bound to give great weight to that conclusion. This Court finds that the EPA has authority under the CWA and § 404 to make a jurisdictional determination of the wetland status of petitioners' property.
In this action, the EPA must first determine if there are wetlands on the property in order to then determine if a violation of either §§ 301 or 404 has occurred. The EPA believes that violations of §§ 301 and 404 have occurred on petitioners' property. A violation of §§ 301 or 404 will occur on petitioners' property only if "navigable waters" exist on the property. As stated earlier, "navigable waters" under the CWA include wetlands. See Riverside Bayview Homes. Therefore, the only way to finally determine if violations of §§ 301 and/or 404 have occurred on petitioners' property is to make a technical "jurisdictional" determination of the wetland status of the property.
B. A § 308 Search Warrant.
Petitioners argue that the EPA has no authority to obtain an administrative search warrant under the CWA solely for the purpose of determining jurisdiction, i.e., whether the property contains wetlands. Neither side disputes the EPA's right of entry under the provisions of § 308. If the EPA has satisfied the restrictions governing its right of entry under § 308, then the EPA may enter petitioners' farm if entry under a § 308 warrant permits a jurisdictional determination under § 404.
A warrant under § 308 allows the EPA access to "any premises in which an effluent source is located." 33 U.S.C. § 1318(a)(B)(i). Although not immediately clear, it appears that the CWA uses the terms "effluent" and "pollutant" interchangeably. Under § 301, the terms "pollutant" and "effluent" are used without differentiation. For example, the title of the section is "effluent limitations," but the very first subsection concerns the "illegality of pollutant discharges." 33 U.S.C. § 1311(a). Other paragraphs throughout § 301 also address "pollutants" and "pollutant discharge".
More telling is the fact that although there is a specific and detailed definition of "pollutant" in the definition section of the CWA, there is no analogous definition for the word "effluent." See 33 U.S.C. § 1362(6). The only relevant definition addresses the term "effluent limitation," defined as any "restriction ... on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters." 33 U.S.C. § 1362(11). A point source is defined as that which discharges pollutants. See 33 U.S.C. § 1362(14). The Court finds that the term "effluent" is intended to include "pollutants," and the definition of "effluent limitation" is obviously broad enough to encompass the terms "pollutants" and "discharge of pollutants" as defined under the CWA. See 33 U.S.C. § 1362(6), (12).
Under the CWA, "fill dirt" is a pollutant as well as an "effluent." The Court finds that the EPA has good cause to believe that petitioners have unlawfully dumped fill dirt on wetlands and/or destroyed wetland vegetation in violation of § 301. See Avoyelles, 715 F.2d at 922-27. The dumping of fill dirt on wetlands is a discharge of a pollutant and/or an effluent, and the machines used to accomplish the dumping are "point sources" and/or "effluent sources." See II C., supra. Under § 308, the EPA "or his authorized representative" has the right of entry "to, upon, or through any premises in which an effluent source is located." 33 U.S.C. § 1318(a)(B)(i).
In this action, assuming the warrant was issued with due process, the EPA has authority under § 308 to obtain a warrant to enter petitioners' farm in order to investigate *1287 the potential "effluent sources" therein, and any potential violations of §§ 301 or 404. As explained earlier, the determination of a violation of § 301 in these circumstances will necessarily involve a jurisdictional determination under § 404 because there will be no unlawful discharge of fill dirt unless it is first determined that there exist "navigable waters" or wetlands, on petitioners' farm. The EPA is justified under the present circumstances in conducting a jurisdictional determination of the wetland status of petitioners' farm pursuant to an administrative search warrant granted under § 308.
IV
As a secondary matter, petitioners contest the factual and ex parte issuance of the warrant by the magistrate, and the warrant's permission for the entry of private individuals, not employed by the EPA, to assist the EPA in their jurisdictional determination of wetlands on petitioners' property.
A. The Warrant.
Petitioners attack the ex parte issuance of the warrant by the magistrate, and the EPA's factual justification for the warrant. First, the EPA is not required to give advance notice of an application for a search warrant, but may proceed ex parte where appropriate. Under the CWA and § 308, the EPA has the authority to seek an ex parte administrative search warrant. See Bunker Hill Co. Lead & Zinc Smelter v. U.S. Environmental Protection Agency, 658 F.2d 1280, 1285 (9th Cir.1981). Second, the grant of an administrative search warrant is governed by lesser standards than the "probable cause" standard in criminal law. The agency may be entitled to a warrant if "`reasonable legislative or administrative standards for conducting an ... inspection are satisfied with respect to a particular [establishment],'" as well as if "probable cause ... [is] based ... on specific evidence of an existing violation." Marshall v. Barlow's, Inc., 436 U.S. 307, 320, 98 S.Ct. 1816, 1824, 56 L.Ed.2d 305 (1978).
In this action, the EPA has produced more than sufficient evidence justifying the issuance of the warrant. See Declarations of Fox, Reynolds, and Yocom. At the time of the issuance of the warrant, the EPA had, and still has, good reason to believe that certain areas on petitioners' property are wetlands, and that wetlands are being destroyed by the lessee farmer.
In addition to the observations of the USFWS agent in November 1984 (see Ivester Declaration, Exhibit D), the EPA official in charge of the EPA's responsibilities under § 404 of the CWA has twice observed, on separate occasions prior to the March 24 visit, vegetation and other characteristics of wetlands on petitioners' property. Yocom Declaration at 3-4, ¶¶ 4-6, 5-6 at ¶¶ 9-10. He concluded, based on his observations, that wetlands very likely do exist on petitioners' property. Id. The EPA and Corps agents who visited petitioners' property on March 24, 1986, themselves observed what they believed to be significant and convincing evidence of wetland soil and vegetation, and concluded that it is very likely that wetlands do exist on the property. Reynolds Declaration at 6-7, ¶¶ 10-11. In addition, the observations of DFG Wardens Fox and Kelley raise strong and well-founded suspicions that the lessee farmer is systematically destroying potential wetlands on petitioners' property. The Court finds that the application for the warrant was supported by competent and sufficient evidence, and was providently granted by the magistrate.
B. Private Individuals.
Under the authority of Bunker Hill, supra, the Court finds that "authorized representatives" for the purpose of § 308 include private contractors and experts necessary for the EPA to make jurisdictional and violation determinations. Although the legislative history of § 308 refers to "full-time employees," S.Rep., Public Works Committee, No. 92-414 (Oct. 28, 1971), reprinted in 1972 U.S.Code Cong. & Admin.News 3729, the Court finds that the phrase "authorized representative" as used in the actual language of § 308 was meant to include a wider range of individuals. In *1288 Bunker Hill, the Ninth Circuit interpreted the analogous provisions in the Clean Air Act to include private contractors hired by the EPA to assist in the enforcement of the Act, despite the restrictive language of the legislative history that referred only to "employees" of the agency. Similarly, the Court here also interprets the apparently restrictive language of § 308 to include private contractors hired by the EPA to assist in the technical determinations necessary for the enforcement of the CWA. Petitioners' farm contains no "trade secrets," and the entry of the private experts solely for the purpose of assisting in the enforcement of the CWA will not unduly infringe on petitioners' rights of ownership or privacy in the 286-acre "open field" farm. See Bunker Hill, 658 F.2d at 1284-85. The EPA has used the same types of experts numerous times in the past for similar purposes, and has concluded that the use of these experts comports with the intent of Congress under § 308. The Court agrees. See Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).
V
For the reasons stated above, and good cause appearing therefor,
IT IS HEREBY ORDERED that petitioners' motion to quash is denied.
NOTES
[1] The objective of the CWA is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Pursuant to that goal, the CWA intends that "the discharge of pollutants into the navigable waters be eliminated." 33 U.S.C. § 1251(a)(1). The CWA defines "navigable waters" to mean "the waters of the United States." 33 U.S.C. § 1362(7). The Supreme Court has stated that a "definition of `waters of the United States [or the `Nation's waters'] encompass[es] all wetlands adjacent to other bodies of waters over which" there is jurisdiction under the CWA. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 106 S.Ct. 455, 463, 88 L.Ed.2d 419 (1985). Thus, if there exist wetlands on petitioners' property adjacent to "waters of the United States," the United States will have jurisdiction over any activities entered into in contravention of the CWA. The actual determination of the wetland status of a specific parcel of property will be governed by the regulations promulgated by the EPA and the Corps pursuant to their authority under the CWA. See 40 C.F.R. § 230.3(t), 33 C.F.R. § 323.2(c).
[2] Section 404 of the CWA, 33 U.S.C. § 1344, governs the issuance of permits for "dredged or fill material." The section is an extensive and comprehensive regulation of any activities involving the "discharge of dredged or fill materials into the navigable waters" of the United States. 33 U.S.C. § 1344(a). The section provides that the Secretary of the Army Corps of Engineers may issue permits allowing the discharge of fill dirt, among other substances, but that the permits are subject to the veto power of the Administrator of the EPA.
[3] Pursuant to § 404, there are certain activities that do not require a permit from the Corps in order to discharge fill dirt into navigable waters. 33 U.S.C. § 1344(f). Among these activities are a number of "repair, maintenance, and "cultivation" activities associated with "normal farming, silviculture, and ranching" operations. 33 U.S.C. § 1344(f)(1). If the lessee farmer on petitioners' property was engaged in these type of activities, and the activities comported with the intent of § 404's farming exception in the eyes of the Corp and the EPA, then the lessee farmer is not required to obtain a permit under 33 U.S.C. § 1344(l), and the activities would not constitute a violation of the Act.
[4] Section 301, 33 U.S.C. § 1311, states that "[e]xcept as in compliance with this section and sections 1312, 1316, 1317, 1328, 1342, 1344 of this title [or Act], the discharge of any pollutant by any person shall be unlawful." 33 U.S.C. § 1311(a). The remainder of this lengthy section concerns the creation of standards for the discharge of pollutants, the timetables for compliance with the standards, the EPA's power to make individual exceptions to the standards or the timetables, and the procedures and requirements for the issuance of permits for the discharge of certain pollutants.
[5] Section 308, 33 U.S.C. § 1318, allows the EPA to require the "owner or operator of any point source," [i.e., any "conveyance ... from which pollutants are or may be discharged, see 33 U.S.C. § 1362(14)] to "(i) establish and maintain such records, (ii) make such reports, (iii) install ... such monitoring equipment ..., (iv) sample such effluents, and (v) provide such other information as he may reasonably require." 33 U.S.C. § 1318(a)(4)(A). The section also provides that the EPA "shall have right of entry to, upon, or through any premises in which an effluent source is located." 33 U.S.C. § 1318(a)(4)(B). Along with 33 U.S.C. § 1319, this section is the primary means of investigation and enforcement available to the EPA under the CWA.
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28 F.3d 108
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Robert E. BEDFORD, Defendant-Appellant.
No. 93-10145.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 13, 1994.Decided June 13, 1994.
1
Before: FLETCHER and TROTT, Circuit Judges, and KING,* District Judge.
2
MEMORANDUM**
3
Robert Bedford appeals his conviction of possession of at least 100 kilograms of marijuana with intent to distribute, 21 U.S.C. Secs. 841(a)(1), (b)(1)(B)(vii). The district court denied Bedford's motion to suppress the fruits of the investigatory stop which ultimately led to his conviction. Bedford appeals, arguing that law enforcement officers did not have the requisite "reasonable suspicion" to justify stopping him. We affirm.
FACTS
I. Pre-Stop Facts
4
On July 6, 1992, DEA Special Agent Michael J. Ferguson received an anonymous telephone call from a male "tipster." The tipster claimed to know two persons, "Bob Bedford" and "David Sullivan," who were distributing large amounts of marijuana. The tipster stated that Bedford was 5'9" tall, heavy-set, and in his forties. He said that Bedford lived in Scottsdale, Arizona, near Shea and Cactus roads, and that Bedford's phone number was 483-7591. The tipster further stated that Sullivan lived in Tucson, and that his number was 325-5008.
5
In the next few days, according to the tipster, Bedford would drive his motor home to Tucson, meet Sullivan, load 300-500 lbs. of marijuana into the vehicle, and ultimately drive the marijuana to Virginia. The tipster, in describing the motor home, said he could remember only the color tan on it, and indicated he thought it was a Ford. In response to Agent Ferguson's question, the tipster claimed to be making the call because he and a friend of his in Virginia did not like Bedford.
6
Ferguson checked the phone numbers and found that 483-7591 was listed to Robert Bedford, of 6701 East Paradise Drive, Scottsdale, Arizona. Ferguson verified that the address was indeed in the vicinity of Shea and Cactus roads. Ferguson also found that the other phone number was listed to Marsha Willy, of 5102 East Fort Lowell Road, Tucson Arizona.1 Ferguson then drove to 6701 East Paradise Drive, and observed a white motor home with tan trim parked in the driveway, along with a silver Mercury station wagon. As the motor home's license plate was not visible, Ferguson ran a check on the Mercury's plate, and discovered it was registered to Robert Bedford, who had an Arizona driver's license. Bedford's license identified him as a forty-five year old male, 5'10"' in height, and weighing 190. Ferguson also checked Bedford's police record, and found he had twice been arrested for marijuana related offenses, in 1975 and 1977.
7
On the basis of this information, DEA agents began "spot" surveillance on Bedford's home, and also had a Tucson DEA agent do a "drive by" surveillance of 5102 East Fort Lowell Road. The surveillance revealed:
8
July 7 5:45 pm: Motor home no longer in Bedford's driveway
9
10:00 pm: Motor home not in Bedford's driveway
11:30 pm: No motor home at Tucson address
10
July 8 8:10 am: No motor home in Bedford's driveway
8:30 am: No motor home at Tucson address
11
5:00 pm: Motor home parked in Bedford's driveway
12
When the motor home was noticed back in Bedford's driveway, DEA agents began a continuous surveillance of his home. At 9:10 am on July 9, a man fitting Bedford's description emerged from the house and appeared to be inspecting the outside of the motor home and checking that its external lights were functioning. A few minutes later, a woman and two children emerged from the house. The man hugged the two children and hugged the woman three times, got in the motor home, exchanged goodbye waves, and departed. The time was approximately 9:25 am.
13
Once on the road, the driver stopped briefly at the Scottsdale Lock and Safe Shop, bought gas at a Chevron station, and entered highway I-17 heading North. The agents could now see that the motor home had a Virginia license plate; a computer check revealed that the license was registered to Robert and Robin Bedford of Burke, Virginia. North of the city, about 130 miles south of the point where I-17 intersects a major east-west route, I-40, the DEA and local police stopped the motor home.
II. Post-Stop Facts and Procedural History
14
Bedford gave the agents a Virginia driver's license, and denied having an Arizona license. He claimed to have been staying with friends in Tempe and Scottsdale. He denied having a residence or family in Arizona. He similarly denied having any drugs in the motor home. When an agent told the man he wanted to frisk him, having noticed a "bulge" in his pocket, the man reached into his pocket, pulled out a white substance, and put it into his mouth. When an agent tried to stop him, he struck the agent and fled. He was apprehended and placed under arrest. Shortly thereafter, a narcotics detection dog, "Rudy," alerted to drugs in the rear exterior storage area of the motor home.
15
The motor home was then taken back to Phoenix and searched. Agents found about 432 pounds of marijuana in a specially designed compartment, behind a false wall in the closet of the motor home. Cocaine residue was recovered from Bedford's mouth.
16
Bedford was charged with possession of at least 100 kilograms of marijuana with intent to distribute, possession of cocaine, and assault of a federal officer. He successfully moved to sever the cocaine and assault charges from the marijuana offense. His motion to suppress all evidence on the grounds that the initial investigatory stop was not based on the requisite reasonable suspicion was denied. The district court found that the anonymous tip was sufficiently corroborated by the DEA agents' observations and research prior to the stop. Order of Nov. 13, 1992, at 2-3. Bedford entered into a plea agreement under which he pled guilty to the marijuana charge, and the other charges were dismissed. He reserved the right to appeal the district court's denial of his motion to suppress. He was sentenced to the statutory minimum prison term of 60 months.
DISCUSSION
17
In Terry v. Ohio, 392 U.S. 1 (1968), the U.S. Supreme Court held that police could conduct a brief, investigatory stop based upon evidence not rising to the level of probable cause. See also Wilson v. Porter, 361 F.2d 412, 415 (9th Cir.1966) (in order to effect a "brief detention of citizens under circumstances not justifying an arrest, for purposes of limited inquiry in the course of routine police investigations.... [a] founded suspicion is all that is necessary"). In evaluating an investigatory stop, we look at the totality of the circumstances and determine "whether the detaining officers had a particularized objective basis for suspecting the particular person of criminal activity." United States v. Alvarez, 899 F.2d 833, 836 (9th Cir.1990) (citing United States v. Cortez, 449 U.S. 411, 417-418 (1981)), cert. denied, 498 U.S. 1024 (1991). This is a mixed issue of law and fact, which we review de novo. Id.
18
Here, the cornerstone of the DEA's suspicion was the anonymous tip. The Supreme Court has held in no uncertain terms that an anonymous tip, standing alone, "would not 'warrant a man of reasonable caution in the belief' that [a stop] was appropriate." Alabama v. White, 496 U.S. 325, 329 (1990) (quoting Terry, 392 U.S. at 22). If, however, an anonymous tip is corroborated, even in details which do not themselves suggest criminal activity, then it may constitute the requisite reasonable suspicion. Id. at 329-31; Alvarez, 899 F.2d at 837 (" '[w]hen law enforcement officials corroborate the details of an anonymous informant's tip, the tip can give rise to a reasonable articulable suspicion' ") (quoting United States v. Rodriquez, 835 F.2d 1090, 1092 (5th Cir.1988)).
19
The tip in Bedford's case was corroborated by the following facts:
20
1. The tip sufficiently described Bedford, his residence, and his motor home.
21
2. The motor home was gone from Bedford's house during the time the tipster said it would be in Tucson, loading drugs.
22
3. Bedford had a prior record of marijuana-related arrests.2
23
4. Bedford appeared to be inspecting the motor home and saying goodbye to his family, as if in preparation for a long trip.
24
5. Bedford drove a route consistent with a final destination of Virginia, and his motor home was registered in Virginia.
25
This degree of corroboration rises to the level found sufficient in White and Alvarez. Bedford's case is similar to White, where it was found sufficient that the police corroborated the tipster's description of the defendant's person, vehicle, and destination. And in Alvarez, it was sufficient that police verified the tipster's description of defendant and his car, as well as its presence at the Bank.
26
Bedford points to the fact that there was absolutely no corroboration for the tipster's claims about "Sullivan" and the alleged Tucson pick-up of 300-500 pounds of marijuana. He also claims the tipster did not accurately describe Bedford's motor home. Finally, he claims that agents had no corroboration of the tipster's claim that Bedford would be heading to Virginia with the marijuana. We find these arguments meritless.
27
While it is quite true that agents never corroborated the Sullivan side of the story, neither did they find it to be false. A phone check revealed "Sullivan's" phone number to be registered to a woman, and two drive-by observations failed to pick up a motor home at the residence attached to that phone number. In sum, the tipster's information about Sullivan was neither verified nor disproved at the time of the stop. This is not fatal to the tip's reliability. In White, for instance, the Supreme Court found a tip sufficiently reliable to justify an investigatory stop, even though one of the tipster's major assertions (that defendant would be carrying a brown attache case with the drugs inside) turned out to be wrong. 496 U.S. at 327, 331-32 (the attache case was already in the car when officers arrived); see also Gates, 462 U.S. at 245 n. 14 (not fatal to tipster's reliability that he was mistaken about itinerary of one of the two defendants).
28
As for the tipster's identification of Bedford's motor home, Bedford seeks to hold the tipster to too high a standard. Even in the probable cause context, tipsters do not have to be "infallable" to be considered reliable. Gates, 462 U.S. at 245 n. 14 ("[w]e have never required that informants used by the police be infallible"). Here the tipster gave a generally accurate description of the motor home, including one of its colors.
29
Finally, police did indeed corroborate the tipster's statement that Bedford would be heading to Virginia. When Bedford was pulled over, he was heading out of town on a major highway, I-17. His direction was consistent with someone who planned to take I-17 to I-40 and then head east to Virginia. And most telling, agents spotted a Virginia license plate on the motor home, registered to Bedford at a Virginia address.3
30
In sum, the anonymous tip was sufficiently corroborated by subsequent police surveillance. When the police pulled Bedford over, their suspicion had a particularized, objective basis, and was thus reasonable.
31
AFFIRMED.
*
Honorable Samuel P. King, Senior United States District Judge for the District of Hawaii, sitting by designation
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
1
Only after the investigatory stop in question did Ferguson discover that David Sullivan lived at 5102 East Fort Lowell Road
2
See Beck v. Ohio, 379 U.S. 89, 96 (1964) (suspect's prior record relevant but not dispositive in establishing probable cause)
3
The defendant in White was stopped prior to reaching her destination, Dobey's Motel. 496 U.S. at 327. She had, however, followed the most direct route from her apartment to the motel, and was stopped "just short" of it. Id
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
November 23, 2009
No. 08-60248 Charles R. Fulbruge III
Summary Calendar Clerk
HARRY L. JACKSON
Petitioner - Appellant
v.
MISSISSIPPI DEPARTMENT OF CORRECTIONS; MARGARET
BINGHAM; JACKIE PARKER; JIM HOOD
Respondents - Appellees
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:05-CV-239
Before DAVIS, SMITH, and DENNIS, Circuit Judges.
PER CURIAM:*
Petitioner Harry L. Jackson appeals from the district court’s denial of his
petition for a writ of habeas corpus made pursuant to 28 U.S.C. § 2254. Jackson
was convicted in 2003 following a jury trial in a Mississippi state court of the
sale of a Schedule II controlled substance, and subsequently sentenced to a term
of twenty years imprisonment, with the final five years served on post-release
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-60248
supervision in lieu of incarceration. After unsuccessfully pursuing his direct
appeals, Jackson filed the instant petition for a writ of habeas corpus on April
11, 2005. The district court denied Jackson’s petition, dismissed it with
prejudice, and thereafter denied his request for a certificate of appealability. We
granted Jackson a certificate of appealability as to only one issue: whether there
was insufficient evidence to support his conviction, resulting in a violation of his
constitutional right to due process as interpreted by the United States Supreme
Court in Jackson v. Virginia, 443 U.S. 307 (1979). For the reasons set forth
below, we affirm the judgment of the district court.
I. BACKGROUND
On February 11, 2003, petitioner was convicted following a jury trial of a
single count of Sale of a Schedule II Controlled Substance (cocaine), in violation
of Miss. Code Ann. § 41-29-139. The magistrate judge’s report and
recommendation, as adopted by the district court, summarized the background
facts of petitioner’s trial:
Petitioner’s arrest, indictment and conviction arose out of an
undercover drug sting operation executed by agents of the
Mississippi Bureau of Narcotics (MBN). At trial, the testimony of
Sheldon Jolliff and Jason Powell, two of the agents, established the
following. On April 2, 2001, several MBN agents, including Powell,
Jolliff, and Tim Wroten, met with a confidential informant (the CI)
in Amite County and prepared for a purchase of narcotics from
Reginald Graves. The CI and Powell, who was wired, drove to
Graves’ home in the CI’s truck; Agent Jolliff followed in a separate
unmarked vehicle and monitored the others’ activities via the
wireless transmission from Powell. When Powell and the CI arrived
at Graves’ residence, Graves informed them that he did not have
any drugs. He then entered the truck with Powell and the CI and
directed them to a location on Ash Street in Gloster, Mississippi for
the purchase. When they arrived, Graves exited the car and talked
with several individuals. He then returned to the truck, saying that
the individuals had the drugs but had not weighed them yet. Powell,
the CI and Graves drove around the area for a few minutes and then
returned to Ash Street. Graves again got out of the car, spoke with
2
No. 08-60248
some of the individuals and then returned to the truck. Graves
informed Powell and the CI that they needed to drive around a few
minutes while the drugs were being weighed. They drove to the
parking lot of an auto parts store in Gloster and waited. A short
while later, a car passed, and Graves commented that the drugs
which they were to purchase were in the passing car. Returning to
the Ash Street location for the third time, they pulled in behind the
car that had passed them earlier. Graves once again exited the car;
after he had done so, Powell radioed in the tag number of the car
and learned that it was registered to Petitioner. Powell and the CI
watched while Graves approached two men standing about ten
yards away from the truck and apart from the other individuals at
the scene. Graves walked back to the truck and requested the
purchase money, eight-hundred and fifty dollars, from Powell.
Powell gave Graves the cash, which had been provided to Powell by
Jolliff, and Graves returned to the two men. Powell saw the three
men and Graves exchange something with their hands. Graves
returned to the truck with a bag of cocaine. Powell and the CI then
left the scene; Graves remained. After rendezvousing with Jolliff
and the other agents, Powell, using photographs, identified the two
men as Murphy Sanders and Harry Jackson.
Graves testified for the defense. He maintained that Jackson
was not present or involved in any way with the sale; rather he
claimed that the second individual who participated in the sale
along with Sanders was Graves’ cousin, Navaree Green. He
explained that Green was driving Jackson’s car because Green was
in the process of purchasing it from Jackson. According to Graves,
Powell was drinking beer during the operation. Murphy Sanders
also testified on behalf of Jackson. He admitted being present at the
scene but said he did not see Jackson there. He also stated that he
did not know Navaree Green and did not know if Green had been
present. Sanders denied any knowledge of or participation in a drug
sale at the Ash Street location on the evening in question.
The defense called Nekiesha Simmons, a former girlfriend of
Jackson, as an alibi witness. After Simmons invoked her Fifth
Amendment right against self-incrimination and refused to testify,
the court determined her to be unavailable and allowed prior sworn
testimony given by her to be admitted into evidence. In that
testimony, Simmons stated Jackson had flown to Massachusetts to
3
No. 08-60248
visit her for two weeks in the beginning of April of 2001 and
therefore could not have been present in Amite County on April 2,
2001. Simmons explained that Jackson’s sister worked for
Continental Airlines and that Jackson flew Continental because his
sister could provide him with inexpensive tickets.
The prosecution called as a rebuttal witness Denise Locke, a
supervisor of ticket documentation with Continental Airlines. She
testified that Jackson flew to the northeast in April of 2001, but not
until April 20. Her documentation also showed that Jackson
returned on April 23. The state then introduced flight documents
obtained from the defense which showed that Jackson had departed
on March 31. The witness noted that all of the flight information on
the documents other than the departure date matched her official
records. She concluded that the document showing a March 31
departure date was forged.
Agent Tim Wroten testified for the state in rebuttal. He stated
that Murphy Sanders had told him that Jackson had given Sanders
one hundred dollars for his participation in the sale.
Jackson v. Miss. Dep’t of Corrections, Report and Recommendation, 3:05-CV-239-
HTW-JCS, at slip op. at 2-5 (S.D. Miss. Apr. 4, 2007). The trial court sentenced
petitioner to a twenty-year term of imprisonment, with the last five years
suspended, and an additional five-year term of supervised release.
II. STANDARD OF REVIEW
“In a habeas corpus appeal, we review the district court’s findings of fact
for clear error and review its conclusions of law de novo, applying the same
standard of review to the state court’s decision as the district court.” Thompson
v. Cain, 161 F.3d 802, 805 (5th Cir. 1998); see also Beazley v. Johnson, 242 F.3d
248, 255 (5th Cir. 2001).
III. DISCUSSION
The Due Process Clause of the Fourteenth Amendment protects a criminal
defendant against conviction “except upon sufficient proof—defined as evidence
necessary to convince a trier of fact beyond a reasonable doubt of the existence
4
No. 08-60248
of every element of the offense.” Jackson v. Virginia, 443 U.S. 307, 315 (1979).
In applying this standard, “the relevant question is whether, 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. As a federal habeas court, “we must defer to the factual findings in the state
court proceedings” and “respect the ability of the fact-finder to evaluate the
credibility of the witnesses.” Knox v. Butler, 884 F.2d 849, 851 (5th Cir. 1989).
Under 28 U.S.C. § 2254(a), the federal courts have jurisdiction to hear a
petition for a writ of habeas corpus made on behalf of a person in custody
pursuant to the judgment of a state court. That jurisdiction may be exercised
only for the purpose of determining whether that person is “in custody in
violation of the Constitution or laws or treaties of the United States.” 28 U.S.C.
§ 2254(a). The court's power to grant habeas relief is limited by AEDPA, as
codified at 28 U.S.C. § 2254(d). Section 2254(d) provides:
An application for a writ of habeas corpus on behalf of a
person in custody pursuant to the judgment of a State court shall
not be granted with respect to any claim that was adjudicated on
the merits in State court proceedings unless the adjudication of the
claim–
(1) resulted in a decision that was contrary to, or involved an
unreasonable application of, clearly established Federal law, as
determined by the Supreme Court of the United States; or
(2) resulted in a decision that was based on an unreasonable
determination of the facts in light of the evidence presented in the
State court proceeding.
28 U.S.C. § 2254(d). The phrase “clearly established Federal law[] as
determined by the Supreme Court of the United States” means “the holdings, as
opposed to the dicta, of [the Supreme Court's] decisions as of the time of the
relevant state-court decision.” Williams v. Taylor, 529 U.S. 362, 412 (2000).
5
No. 08-60248
State law supplies the substantive elements of the offense. Jackson, 443
U.S. at 324 n.16. Mississippi law provides that it is illegal to “knowingly or
intentionally . . . sell, barter, transfer, manufacture, distribute, dispense or
possess with intent to sell, barter, transfer, manufacture, distribute or dispense,
a controlled substance.” Dunlap v. State, 956 So.2d 1088, 1091 (Miss. App. 2007)
(citing Miss. Code Ann. § 41-29-139). Mississippi courts have explained the level
of involvement that must be proved for a defendant to be found guilty of sale of
a controlled substance. “To prove sale of a controlled substance, the State need
not prove that the defendant personally placed the substance in the hands of the
buyer or that the defendant personally profited from its sale.” Spann v. State,
970 So. 2d 135, 137-38 (Miss. 2007). Rather, the State need only prove
“substantial knowing participation in the consummation of a sale or in arranging
for the sale.” Williams v. State, 463 So. 2d 1064, 1066 (Miss.1985). Thus, “[a]ny
person who is present at the commission of a criminal offense and aids, counsels,
or encourages another in the commission of that offense is an ‘aider and abettor’
and is equally guilty with the principal offender,” provided that the proper jury
instructions are given. Spann, 197 So. 2d at 138 (internal quotation marks and
citation omitted). Stated differently, “only a minimal involvement in an illegal
drug transaction is sufficient to support a criminal conviction for drug
trafficking.” Flowers v. State, 726 So. 2d 185, 187 (Miss. App. 1998).
Petitioner argues that there was insufficient evidence that he “sold” the
controlled substance, resulting in a violation of the Due Process Clause of the
Fourteenth Amendment. Specifically, petitioner contends that the State
introduced no evidence that he “knowingly participated” in the sale; instead, he
argues, the State only offered evidence that he was at the scene of the
transaction. The Mississippi Court of Appeals considered and rejected this
argument on direct appeal, concluding that there was sufficient evidence to
support the conviction. See Jackson v. State, 885 So.2d 723, 728-29 (Miss. Ct.
6
No. 08-60248
App. 2004). This was not an unreasonable application of the Supreme Court’s
decision in Jackson v. Virginia because there was sufficient evidence for the jury
to conclude that petitioner had “minimal involvement” in the illegal drug
transaction. Aside from providing substantial evidence that petitioner was
present at the transaction, Agent Powell also testified that petitioner was one
of the two men who gave Graves cocaine in exchange for cash. And the two men
arrived at the transaction in a car belonging to petitioner, which Graves had
previously described as containing the cocaine. The jury was entitled to credit
this evidence to find that petitioner had “substantial knowing participation in
the consummation of a sale or in arranging for the sale.” Williams, 463 So. 2d
at 1066. Accordingly, we conclude the state court’s ruling was not contrary to,
nor did it involve an unreasonable application of Supreme Court precedent, nor
was it based on an unreasonable determination of the facts. See 28 U.S.C. §
2254(d).
IV. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court.
7
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 99-7128
DAVID HAWKINS,
Petitioner - Appellant,
versus
RONALD ANGELONE,
Respondent - Appellee.
Appeal from the United States District Court for the Eastern Dis-
trict of Virginia, at Alexandria. Gerald Bruce Lee, District Judge.
(CA-99-961-AM)
Submitted: December 16, 1999 Decided: December 29, 1999
Before MURNAGHAN and MOTZ, Circuit Judges, and BUTZNER, Senior Cir-
cuit Judge.
Dismissed by unpublished per curiam opinion.
David Hawkins, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
David Hawkins seeks to appeal the district court’s order
denying relief on his petition filed under 28 U.S.C.A. § 2254 (West
1994 & Supp. 1999). We have reviewed the record and the district
court’s opinion and find no reversible error. Accordingly, we deny
a certificate of appealability, deny the motion to proceed in forma
pauperis, and dismiss the appeal on the reasoning of the district
court. See Hawkins v. Angelone, No. CA-99-961-AM (E.D. Va. Aug. 6,
1999).* We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
DISMISSED
*
Although the district court’s order is marked as “filed” on
August 5, 1999, the district court’s records show that it was
entered on the docket sheet on August 6, 1999. Pursuant to Rules
58 and 79(a) of the Federal Rules of Civil Procedure, it is the
date that the order was entered on the docket sheet that we take as
the effective date of the district court’s decision. See Wilson v.
Murray, 806 F.2d 1232, 1234-35 (4th Cir. 1986).
2
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-30115
Summary Calendar
SHELBY WILLIAMS,
Plaintiff-Appellant,
versus
KENNETH S. APFEL, COMMISSIONER OF
SOCIAL SECURITY,
Defendant-Appellee.
----------------------------------------------------------
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 98-CV-2119
----------------------------------------------------------
October 6, 2000
Before EMILIO M. GARZA, STEWART and PARKER, Circuit Judges:
PER CURIAM:*
Shelby Williams appeals from the district court’s denial of his petition seeking review of the
Commissioner of Social Security’s decision denying supplemental security income and disability
insurance benefits. He contends that the Administrative Law Judge ("ALJ") erred by determining that
he has the residual functional capacity to perform his past relevant work as a welder/pipefitter and
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
erred by failing to order a further consultative mental examination to more fully develop the record
on the effect his intermittent explosive disorder has on his ability to work.
Substantial evidence supports the ALJ's determination that Williams retained the residual
functional capacity to perform a wide range of medium work and in particular to perform the physical
and mental demands of his past relevant work. See Leggett v. Chater, 67 F.3d 558, 564-65 (5th Cir.
1995). Since the ALJ's determination was based on Williams's description of his past work as he
actually performed it, the testimony of a vocational expert was unnecessary. See Villa v. Sullivan,
895 F.2d 1019, 1022 (5th Cir. 1990). Even if Williams's past work was a "composite job" having
significant elements of sedentary, light, and medium work, the available documentation was sufficient
to determine how his job was usually performed, and it was therefore unnecessary to obtain expert
vocational testimony. See Social Security Ruling 82-61 (1982).
Williams has not shown that an additional consultative mental examination was necessary or
that the ALJ abused her discretion in denying his request for an examination. See Pierre v. Sullivan,
884 F.2d 799, 802 (5th Cir. 1989).
Because the ALJ’s conclusion that Williams was not disabled is supported by substantial
evidence and resulted from the application of proper legal standards, the district court’s judgment
denying Williams's petition is AFFIRMED.
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979 F.2d 60
24 Fed.R.Serv.3d 453, 25 U.S.P.Q.2d 1212
CJC HOLDINGS, INC., d/b/a ArtCarved, Plaintiff-Appellee,v.WRIGHT & LATO, INC., Defendant-Appellant.
No. 92-8032.
United States Court of Appeals,Fifth Circuit.
Dec. 15, 1992.
William D. Raman, William G. Barber, Amber L. Hatfield, Arnold, White & Durkee, Austin, Tex., for defendant-appellant.
Christina Carlson Dodds, Rick Harrison, Jones, Day Reavis & Pogue, Austin, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Western District of Texas.
Before GOLDBERG, SMITH, and EMILIO M. GARZA, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
I.
1
Since 1955, CJC Holdings, Inc. (CJC), d/b/a ArtCarved, has produced its Lyric wedding ring, which consists of a white gold shell inlaid with a separate yellow gold band covered with a floral design. The ring has no copyright or patent protection. Wright & Lato (W & L) copied the ring using a direct mold technique and began selling the ring; W & L puts its own trademark on the inside band of the ring and does not advertise the ring as a 'Lyric' ring.
2
ArtCarved sent W & L several letters telling it to cease producing the ring or risk suit. W & L responded but did not agree to stop producing the ring. W & L has sold only one copy of the ring that was received in Texas, and ArtCarved solicited that sale through a jewelry store.
II.
3
CJC sued W & L, claiming it had copied and marketed CJC's 'Lyric' ring and asserting six claims: (1) trade dress infringement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (2) common law unfair competition; (3) injury to business reputation and dilution of distinctive quality under the Texas Anti-Dilution Statute, Tex.Bus. & Com.Code Ann. § 16.29; (4) conversion; (5) tortious interference with prospective contractual relations and prospective economic advantage; and (6) declaratory judgment under 28 U.S.C. §§ 2201-2202 and Tex.Civ.Prac. & Rem.Code Ann. ch. 37. CJC sought numerous forms of relief, including injunctions against further violations; impoundment of infringing items during pendency of the action; destruction of infringing items; accounting of sales and profits; an award of all profits; actual damages, including lost profits; exemplary damages; treble damages under the Lanham Act; declaratory relief; reasonable attorney fees; and costs.
4
After W & L failed to file a timely response, the district court clerk entered default. A chronological list best describes the events leading to W & L's default:1989: CJC discovered that W & L had copied and marketed the Lyric ring.
5
3/9/90: CJC sent a letter to W & L, asking it to stop.
6
3/26/90: W & L responded but did not agree to stop.
7
4/9/90: CJC sent another letter, asking W & L to stop.
8
4/16/90: W & L responded, saying it would not stop.
9
6/20/90: CJC filed its complaint.
10
6/22/90: CJC effected substituted service through the Texas Secretary of State. This made W & L's answer due on 7/16/90.
11
6/26/90: W & L signed a certified mail receipt acknowledging that it had received the summons and complaint from the Secretary of State. Also on this day, W & L's attorney received a courtesy copy of the complaint--but not the summons--from CJC's attorney. CJC's attorney explained that the suit had been filed but did not say that service had been made. W & L's attorney phoned W & L's president, Greg Clapper, and told him to watch for the complaint and summons.
12
6/29/90: W & L closed its doors for its annual corporate vacation. No one worked at W & L's office during this vacation.
13
7/16/90: W & L opened its doors. Its answer was due on this day.
14
7/17/90: Clapper went to Washington, D.C., on business.
15
7/19/90: Clapper went to Kansas City on business.
16
7/21/90: Clapper went to a trade show in New York. While there, he approached CJC's president and inquired about the suit. Clapper said W & L had not been served, but CJC's president said that W & L had been served.
17
7/26/90: Clapper returned from the trade show and discovered the complaint and summons.
18
7/30/90: W & L's attorney asked CJC for an extension on the deadline so it could defend the suit.
19
7/31/90: CJC denied the request and filed a motion for entry of default.
20
8/1/90: The court clerk entered default.
21
8/6/90: W & L filed a motion to set aside the default.
22
8/15/90: W & L filed a motion to dismiss based upon no trade dress protection, no personal jurisdiction, improper venue, and insufficient service of process under Fed.R.Civ.P. 12(b).
23
4/15/91: CJC filed a motion for default judgment.
24
5/30/91: Court denied W & L's motion to set aside default and took CJC's motion for entry of default judgment under advisement.
25
6/20/91: W & L filed a motion for reconsideration of court's ruling refusing to set aside default, or in the alternative, relief from such ruling under Fed.R.Civ.P. 60(b)(1).
26
11/20/91: Court entered order denying W & L's motion for reconsideration and granting CJC's motion for default judgment.
27
12/9/91: Court entered final judgment.
28
The final judgment granted CJC an injunction requiring W & L to label its rings so as to avoid public confusion, but the court found no evidence to support an award of damages. The court did award CJC $115,000 in attorneys' fees, plus interest and costs.
III.
29
W & L argues that the district court should have set aside the default judgment. We review a district court's refusal to set aside an entry of default under Fed.R.Civ.P. 55(c) or to set aside a default judgment under Fed.R.Civ.P. 60(b) under an abuse of discretion standard. Federal Sav. & Loan Ins. Corp. v. Kroenke, 858 F.2d 1067, 1069 (5th Cir.1988).1
30
Under either rule, we examine the same factors: whether the default was willful, whether setting it aside would prejudice the adversary, and whether a meritorious defense is presented. United States v. One Parcel of Real Property, 763 F.2d 181, 183 (5th Cir.1985) (citing Meehan v. Snow, 652 F.2d 274, 277 (2d Cir.1981)). These factors are not "talismanic," and we will consider others. Dierschke v. O'Cheskey (In re Dierschke), 975 F.2d 181, 184 (5th Cir.1992). The ultimate inquiry remains whether the defendant shows "good cause" to set aside the default. Id. The district court need not consider all of these factors. Id.
31
Here, the district court based its decision upon W & L's willful failure to answer the complaint. Because willfulness is a finding of fact, we review that finding under a clearly erroneous standard. Id.
32
Our prior cases use the term 'willful' when considering the culpability of the defendant's actions. See, e.g., One Parcel of Real Property, 763 F.2d at 183. Other cases, echoing the "excusable neglect" language of rule 60(b), speak of neglect or culpable conduct on the part of the defaulting party. E.g., Kroenke, 858 F.2d at 1069-70 ("justifiable neglect" and "culpability of the defendant's conduct"); United States v. One 1978 Piper Navajo PA-31 Aircraft, 748 F.2d 316, 318 (5th Cir.1984) ("justifiable neglect" and "excusable neglect"). We conclude that the latter view is more consistent with rule 60(b) and our recent opinion in Dierschke. Here, the district court held that W & L's default was willful, a finding which, if upheld, would certainly not constitute excusable neglect. We therefore review the district court's determination of willfulness, but we suggest that district courts should use the less subjective excusable neglect standard in the future.
33
W & L relies upon several important facts in arguing that its default was not willful. W & L's president, Clapper, and W & L's outside counsel claim they were not aware they had been served until after the answer was due. Clapper claims he received the registered letter and sent it to the accounting department, thinking it pertained to a collection proceeding. Several days later, the entire company went on vacation for two weeks, pursuant to industry custom.
34
Following the vacation, Clapper attended several trade shows, at one of which Clapper sought out ArtCarved's President, Sullivan, to inquire about the suit. Clapper stated that W & L had not been served, while Sullivan claimed service had been made. After Clapper returned, he immediately called counsel, who requested an extension of time; this occurred fourteen days after the answer was due. W & L blames CJC for the confusion, because CJC sent W & L's counsel a copy of the complaint but not the summons.
35
We cannot say that the district court's finding was clearly erroneous. CJC's counsel sent W & L's counsel a copy of the complaint as a courtesy; this put W & L on notice it would soon be served with process. W & L seems to suggest that, by sending only the complaint, CJC tricked it into believing it would not be served. We find no merit in this argument. The federal rules did not require CJC to send W & L the complaint; CJC did so out of courtesy.
36
W & L's position implies it was less likely to be alert for service of process than if CJC had sent nothing. We think W & L should have expected service of process. W & L received the certified letter three days before its company-wide vacation. We do not find it unreasonable to expect companies to read certified letters in three days. If the rule were otherwise, service by certified mail would rarely be effective. Based upon these facts, the district court's finding on willfulness was not clearly erroneous, and we cannot say the district court abused its discretion in refusing to set aside the default judgment.
IV.
37
We next must address W & L's claim that the district court improperly awarded attorneys' fees to CJC. The Lanham Act allows a court to award attorneys' fees in exceptional cases. 15 U.S.C. § 1117(a) (West Supp.1992). We recently declined the opportunity to define the term 'exceptional,' Taco Cabana Int'l v. Two Pesos Inc., 932 F.2d 1113, 1127 (5th Cir.1991), aff'd, --- U.S. ----, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992), so we define that term here. A district court should decide whether a case is exceptional by examining all the facts and circumstances. See Machinery Corp. of Am. v. Gullfiber AB, 774 F.2d 467, 472-73 (Fed.Cir.1985) (in determining whether patent case is exceptional, court should consider all the facts and circumstances).
38
Congress established a statutory basis for awarding attorneys' fees in trade dress cases in 15 U.S.C.A. § 1117(a) (West Supp.1992), which provides in part, "The court in exceptional cases may award reasonable attorney fees to the prevailing party." Congress used the same language in 35 U.S.C.A. § 285 (West 1984), which governs attorneys' fees in patent infringement actions. Given the parallel language, we infer that Congress meant courts to apply similar standards in both patent and trade dress cases.2
39
These standards necessarily will differ from the more liberal approach taken in copyright actions, in which the court need not find the case 'exceptional' to award fees. 17 U.S.C. § 505 (1988). In fact, attorneys' fees in copyright actions are "the rule rather than the exception." Micromanipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir.1985).
40
Under our judicial system, the prevailing party normally may not recover attorneys' fees absent statutory authority. Gullfiber, 774 F.2d at 471 (citing Alyeska Pipeline Serv. Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975)). Thus, a party is not penalized for defending or prosecuting a lawsuit when that party has a good faith belief in its position. Gullfiber, 774 F.2d at 471 (citing Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 1406, 18 L.Ed.2d 475 (1967)).
41
Given the general rule against awarding fees, and Congress's directive that a case must be 'exceptional' to award fees in trade dress cases, we agree with the Federal Circuit that the prevailing party must demonstrate the exceptional nature of a case by clear and convincing evidence before a district court should decide whether to make the award. Gullfiber, 774 F.2d at 471 (citing Reactive Metals & Alloys Corp. v. ESM, Inc., 769 F.2d 1578, 1582 (Fed.Cir.1985)). After the prevailing party has made such a showing, a district court, in its discretion, may award attorneys' fees, and we will review that determination for abuse of discretion. Texas Pig Stands v. Hard Rock Cafe Int'l, 951 F.2d 684 (5th Cir.1992). We review the district court's factual findings that make the case 'exceptional' under the clearly erroneous standard. Id.
42
CJC argues for a rule that deliberate copying by the defendant of the plaintiff's trade dress makes a case per se exceptional. CJC further asserts we adopted such a rule in Taco Cabana. We reject both contentions. In Taco Cabana, we merely held that the district court did not abuse its discretion in awarding fees, because Two Pesos deliberately copied Taco Cabana's trade dress with the intention of reducing its sales. 932 F.2d at 1127-28. In other words, Two Pesos deliberately copied with the intention of preying on Taco Cabana's unique trade dress and drawing business away from Taco Cabana by making customers believe the restaurants were related. We did not adopt a per se rule that copying trade dress makes a case exceptional, nor do we conclude that such a rule would be appropriate.
43
CJC's ring was not protected by patent or copyright. Under those circumstances, a corporation normally has a right to make 'knock-off' copies.3 W & L did not use the trademark "Lyric" either in advertising or on the ring itself. It may have copied the ring in order to compete with CJC, not because it believed it could fool customers into thinking CJC made the rings. See Moore Business Forms v. Ryu, 960 F.2d 486, 492 (5th Cir.1992) (no attorneys' fees where defendant did not try to gain benefit or advantage by using plaintiff's trademark). Moreover, CJC did not prove any damages. Id. (lack of damages is an important fact to consider in determining whether a case is exceptional). Considering these and other circumstances, the district court legitimately could find the case unexceptional, despite deliberate copying.
44
We decline to adopt a per se rule for another reason. A district court normally should not find a case exceptional where the party presents what it in good faith believes may be a legitimate defense. Gustafson, Inc. v. Intersystems Indus. Prods., 897 F.2d 508, 511 (Fed.Cir.1990). Here, W & L stresses that it felt it had a right to copy the ring and that CJC's claimed trade dress may not be entitled to protection because it is functional.4 The district court commented that it doubted whether CJC could establish a trade dress claim at trial. W & L may well have had a good faith argument that it was perfectly in its rights to copy CJC's ring. Indeed, had W & L not defaulted, it might have established a functionality defense at trial.
45
We need not decide the ultimate issue of whether the district court properly awarded fees in this case, because the district court did not make findings of fact as to why this case is exceptional. We agree with W & L that the district court must state its basis for finding the case exceptional to allow us to determine whether the court abused its discretion. Here, the absence of such findings "frustrates appellate review." Bandag, Inc. v. Al Bolser's Tire Stores, 750 F.2d 903, 921 (Fed.Cir.1984). So, we vacate the award of attorneys' fees and remand for a determination of whether this case is exceptional.
46
If the district court were to find this case exceptional and exercise its discretion to award attorneys' fees, the court should reexamine the amount of the fees. W & L contends that the court awarded fees that CJC admitted it is not entitled to receive. Because the district court might not award fees on remand, we need not concern ourselves with this issue.
V.
47
In summary, we AFFIRM the district courts denial of W & L's motion to set aside the default judgment. We VACATE the award of attorney fees and REMAND for further proceedings in accordance with this opinion.
1
Because of the seriousness of a default judgment, and although the standard of review is abuse of discretion, "even a slight abuse [of discretion] may justify reversal." Williams v. New Orleans Pub. Serv., 728 F.2d 730, 734 (5th Cir.1984) (quoting Seven Elves, Inc. v. Eskenazi, 635 F.2d 396, 402 (5th Cir. Unit A Jan. 1981)). W & L argues that the standard for relief from entry of default is more lenient than the standard for relief from a default judgment, but W & L does not suggest how our standard of review would be different under the two rules. We leave this issue for another day. See Kroenke, 858 F.2d at 1069
2
Although the district court should consider factors similar to those considered in patent cases, it may well weigh certain factors more or less heavily in the trade dress area. The court should keep in mind that a patent provides a written description of the scope of coverage, while in the trade dress area, we deal with a less certain scope of protection
3
The parties use the term 'knock-off' to refer to copies nearly identical to the original. Here, W & L used a direct mold of CJC's ring
4
If CJC's trade dress indeed were functional, CJC would not be entitled to a default judgement, as the pleadings would not establish a cause of action as a matter of law. Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir.1975). We need not decide whether CJC's trade dress is functional, as W & L does not ask us to set aside the default judgment on the ground that CJC was not entitled to judgment as a matter of law
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766 F.2d 856
UNITED STATES of America, Appellee,v.Carlos Ricardo HILL, Appellant.
No. 83-5230.
United States Court of Appeals,Fourth Circuit.
Argued Feb. 4, 1985.Decided July 3, 1985.
Richard Neuworth, Baltimore, Md. (Leslie L. Gladstone, Baltimore, Md. on brief), for appellant.
Ty Cobb, Asst. U.S. Atty., Baltimore, Md. (J. Frederick Motz, U.S. Atty., Baltimore, Md., on brief), for appellee.
Before WIDENER and WILKINSON, Circuit Judges, and MacKENZIE, Chief Judge, United States District Court for the Eastern District of Virginia, sitting by designation.
WIDENER, Circuit Judge:
1
Carlos Ricardo Hill was tried before a jury and convicted of kidnapping Pamela Mae Shipman and transporting her in interstate commerce in violation of 18 U.S.C. Secs. 1201(a)(1) and 2; kidnapping Miss Shipman within the special territorial jurisdiction of the United States in violation of 18 U.S.C. Secs. 1201(a)(2), 7 and 2; and murdering Miss Shipman in the second degree within the special territorial jurisdiction of the United States in violation of 18 U.S.C. Secs. 1111, 7 and 2. He was sentenced to 60 years' imprisonment on each count, each sentence to run concurrently.
2
In early 1982, the apartment of Sherrie Lynn Webb burned. Miss Webb suspected that Miss Shipman was responsible for starting the fire. Shortly thereafter, Miss Webb, her boyfriend Champ,1 and the defendant discussed injuring or even killing Miss Shipman for what she had done. Later that same day, Webb, Champ, and the defendant injected heroin and proceeded to find Miss Shipman. After locating Miss Shipman in the District of Columbia, Champ and the defendant grabbed her and dragged her into the back seat of Webb's car. Champ got into the front seat of the car with Miss Webb. The defendant remained in the back seat with Miss Shipman, and struck Miss Shipman repeatedly while seated beside her. Miss Webb drove the car toward the Baltimore-Washington Parkway.
3
Miss Webb pulled the car to the side of the road while on the Parkway. Miss Shipman was pulled from the car by the defendant and Champ and dragged down a hill and into the nearby woods. Several minutes later, Champ returned up the hill and asked Miss Webb if she had anything in the trunk. Miss Webb took the tire jack from the trunk of her car and gave it to Champ, and the two of them joined the defendant and Miss Shipman. At this point, Miss Shipman was lying, partly clothed, on the ground, apparently having been raped by the defendant. Miss Webb then beat Miss Shipman several times in the head with the tire jack. The three then went back to the car and drove back to the District of Columbia. Miss Shipman's body was discovered some days later.
4
On appeal, the defendant claims error in the trial court's limiting his cross-examination of Miss Webb2 and two other witnesses for the prosecution, Charles Tatum and Maria Armstrong. We have reviewed these claims and find that the district court did not abuse its discretion so as to commit reversible error in limiting cross-examination.
5
Defendant next contends that the trial judge at sentencing improperly considered testimony of Charles Tatum regarding discussions Tatum had with the defendant with respect to two contract killings. That testimony was given outside the jury's presence, and the witness was admonished not to make reference to any contract killings in the presence of the jury. The witness made no such reference. The jury did not consider such testimony in its deliberations, for it did not know of it. The trial judge did consider the testimony, however, when sentencing the defendant to sixty years' imprisonment.
6
We find no error in the trial court's consideration of the testimony in sentencing the defendant. We reject the contention of the defendant that the testimony must be ignored because he was not allowed contemporaneously to cross-examine Tatum regarding the killings. (Of course he did not wish to cross-examine at that time because the court excluded the evidence.) Defendant was not foreclosed from attacking that testimony at sentencing and in fact he did challenge it. He stated at his sentencing hearing that he did not even know Tatum, and he likewise challenged that part of the presentence report that dealt with Tatum's testimony. The district court's consideration of this evidence was consistent with its role in sentencing and we do not find that it overstepped legal bounds. See United States v. Lee, 540 F.2d 1205 (4th Cir.1976); Fed.R.Crim.Proc. 32.
7
At oral argument, the defendant claims that the district court violated FRCrP 32(c)(3)(D) in that it did not make a finding with respect to the matter of the discussion of the contract killings and attach a written report of that finding to the presentence investigation report so that it would be available to the Bureau of Prisons or the Parole Commission.
8
The 1983 amendment to the criminal rules added Rule 32(c)(3)(D).3 That rule requires, as pertinent here, that, if the defendant contends there is any factual inaccuracy in the presentence report, as to such controverted matter the court will make a finding as to the allegation or a determination that no such finding is necessary because the matter will not be taken into account in sentencing. The rule further provides that "a written record of such findings and determinations shall be appended to and accompany any copy of the presentence investigation report thereafter made available to the Bureau of Prisons or the Parole Commission." When the information in the transcript and in the presentence report concerning the matter of the contract killing was controverted, the district court did make a finding with respect to it. That finding was as follows:
9
"During the course of the trial and the related proceedings there were at least two references to the fact that you were involved in some kind of professional criminal activity relating to inflicting harm on other individuals. There was testimony that your brother has said that you were involved in such activity. In addition, Tatum testified at the hearing outside of the presence of the jury that you were talking with him about the possibility of his joining you in such activity. Again, I do not know for sure whether you are engaged--were engaged in such activities or not, but it seems to me that where there is smoke there is fire and there were two independent references to your having engaged in such activities during the course of this proceeding, and that is a factor which I appropriately can and should consider in this case."
10
We are of opinion the finding of the district court which we have just quoted is a compliance with Rule 32(c)(3)(D) as that Rule requires the district court to "make ... a finding as to the allegation." The Advisory Committee's Notes on the amendment disclose that it is entirely new and that for matters controverted the district court should either make a finding "as to the accuracy of the challenged factual proposition" or a determination "that no reliance will be placed on that proposition at the time of sentencing." The same Note provides that Rule (c)(3)(D) "is intended to assure that a record is made as to what resolution occurred as to controverted matter."
11
Reading the wording of the rule together with the Advisory Committee Notes, we have come to the conclusion that for any such controverted factual matter the district court should state on the record how it has treated the matter. It is not necessary for the district court in each case to make a finding that the controverted fact is either true or not true, but it is necessary for the district court to say how it treats the controverted fact in sentencing. This the district court did in this case. It found that there were two references in the record by witnesses that Carlos Hill may have been "involved in some kind of professional criminal activity relating to inflicting harm on other individuals" and, while it did not say whether or not that fact was true, it thought that the fact that there was evidence of such should be given consideration in sentencing. Its finding is borne out by its further finding, which is justified by the record, that Carlos Hill had no other motive to participate in the killing of Miss Shipman. And the district court also justifiably found out, further than just doing a job, Carlos Hill gratuitously beat and raped Miss Shipman. The killing of Miss Shipman was a deliberate, intentional act accomplished and participated in by Hill at the instance of Miss Webb who also participated. The rape and beating of Miss Shipman by Carlos Hill was entirely gratuitous. We think the district court did not err when it took into account that statements had been made by witnesses in the case that Carlos Hill was somehow or another connected with contract or punitive killings. We do not think it was required of the district court to make a finding as to whether or not the statements were true so long as the record disclosed how it treated them, which it did.
12
We are also of opinion the written transcript of the sentencing hearing is a compliance with Rule 32(c)(3)(D)'s requirement of a "written record of such findings," and that the action of the district court was within the requirements of Townsend v. Burke, 334 U.S. 736, 68 S.Ct. 1252, 92 L.Ed. 1690 (1948), which vacated on due process grounds a sentence on a "foundation ... extensively and materially false" (334 U.S. at 741, 68 S.Ct. at 1255) whether by "carelessness or design" (334 U.S. at 741, 68 S.Ct. at 1255).
13
We are further told at oral argument that no copy of such finding has been attached to the presentence investigation report so that the matter will come to the attention of the Bureau of Prisons or the Parole Commission if that report may find its way into their hands. This is somewhat of a ministerial matter, which in many events would not call for the vacation of a sentence or resentencing, as it does not here where the import of the finding is unfavorable to the defendant. We are confident the district court will cause that part of the transcript which we have quoted to be attached to the presentence investigation report.
14
We have considered the case of United States v. Velasquez, 748 F.2d 972 (5th Cir.1984), in which the district court made no response to the defendant's objection to a factual matter in the presentence report, and are of opinion that Velasquez is not inconsistent with our decision here. In Velasquez the district court made no finding; here it did. Because the court here did rely on the challenged information to some extent, the facts of this case make the case of United States v. Ibarra, 737 F.2d 825 (9th Cir.1984), also relied upon by the defendant, entirely inapposite.
15
We have considered the remaining assignments of error and are of opinion they are without merit.
The judgment of conviction is accordingly
16
AFFIRMED.
1
Champ's real name is Gilbert M. Hill. He is the defendant's brother. His conviction was affirmed in United States v. Hill, 729 F.2d 1455 (4th Cir.1984)
2
Miss Webb testified for the government pursuant to a plea agreement under which she received a sentence of 25 years' imprisonment
3
(D) If the comments of the defendant and his counsel or testimony or other information introduced by them allege any factual inaccuracy in the presentence investigation report or the summary of the report or part thereof, the court shall, as to each matter controverted, make (i) a finding as to the allegation, or (ii) a determination that no such finding is necessary because the matter controverted will not be taken into account in sentencing. A written record of such findings and determinations shall be appended to and accompany any copy of the presentence investigation report thereafter made available to the Bureau of Prisons or the Parole Commission
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448 F.2d 186
Elmer Glenn MILLER, Petitioner-Appellant,v.Harold J. CARDWELL, Warden, Ohio Penitentiary, Respondent-Appellee.
No. 21011.
United States Court of Appeals, Sixth Circuit.
September 10, 1971.
Elwood B. Hain, Jr., Detroit, Mich. (Court Appointed), for appellant.
Leo J. Conway, Asst. Atty. Gen., Columbus, Ohio, William J. Brown, Atty. Gen. of Ohio, Columbus, Ohio, on the brief, for appellee.
Before EDWARDS and MILLER, Circuit Judges, and McALLISTER, Senior Circuit Judge.
McALLISTER, Senior Circuit Judge.
1
This is an appeal from an order denying a writ of habeas corpus by the District Court.
2
On May 5, 1963, Emma Austing, a widow past seventy-six years of age, lived, and had been living for many years, on her farm near Loveland, in Hamilton County, Ohio. Her husband, Joe Austing, had died about twenty-five years before.
3
Although she managed her farm, employed help, made plans to reconstruct buildings on the farm and supervised such work, sold property and collected rentals, — meeting many different people in the course of her business — she was mortally fearful of being alone at night and took unusual precautions for her safety. In her bedroom she kept a German police dog, and a large Shepherd dog, vicious toward strangers. Mrs. Austing also kept a loaded pistol on her dining-room table for protection against anyone who might break into the house at night.
4
On the night of May 5, 1963, the fears that had so long assailed this active, capable and intelligent elderly woman became a terrible reality.
5
On the next morning of May 6, 1963, Mr. Isham Ward, who worked for Mrs. Austing, arrived at the farm to milk the cows. As he went by the house, he noticed the doors of the sun porch were standing open. He stopped, glanced into the main part of the house and saw a disarray of overturned furniture, drawers pulled out, and rugs thrown back. He immediately returned home, asked his wife to call the police and to inform Mr. Reuben Chambers, who also worked for Mrs. Austing. Mr. Ward then returned to the scene and when Mr. Chambers arrived, they entered the house. They saw blood on the floor of the living room, and blood on the wall near the telephone, as well as blood on the telephone itself. There was blood in the east bedroom and in the west bedroom, and in the bathroom. Both of the watchdogs had been badly beaten and lay on the floor.
6
In one of the bedrooms, Mr. Ward and Mr. Chambers could see a form on the bed under the bed clothes, and when Mr. Chambers drew them back, they then saw Mrs. Austing. Her face and body down to her waist, were covered with blood. Her left eye was swollen shut. There was a big "knot" on her left forehead. In the blood on her chest was the mark of a heel and sole of a shoe. She was still alive but could not speak. She had put up a brave and terrible struggle against her assailants. Battered and bloody, she had fought them off, trying to get to the telephone to summon help, finally getting the telephone in her hands — all to no avail because somebody had cut the telephone wires on the outside of the house.
7
Deputy Sheriff Schulte, who arrived in a police cruiser shortly afterward, said that when he looked at Mrs. Austing, he could hardly tell that she was a human being. Her face looked like a piece of raw beefsteak. An ambulance soon arrived and Mrs. Austing was placed on a stretcher and rushed to Our Lady of Mercy Hospital, where it became evident that her throat was swollen to such an extent that an emergency tracheotomy became necessary. Two weeks later, she died of a massive pulmonary embolism. The state's proofs showed that the beating received by Mrs. Austing on the night of May 5, 1963, was the cause of her death.
8
As soon as the police started to investigate, immediately after Mrs. Austing was taken to the hospital, they made some important discoveries. They learned that about six o'clock on the evening of the day on which Mrs. Austing was fatally beaten, she had two visitors — both men. Mrs. Anna Ward, who worked for Mrs. Austing performing such services as preparing her noonday meals, as well as general cooking and housework, had been asked to come with her husband and children for Sunday dinner about 1:30, which they had done. Mrs. Ward remained with her for the afternoon, and about 6:00 or 6:30 in the evening, appellant Elmer Glenn Miller, whom she knew, and another man, whom she did not know, came to the door and asked if Mrs. Austing were at home. Mrs. Ward told him to wait a moment but, when she turned and went in to ask Mrs. Austing whether she wanted to see them, appellant Miller and the other man followed her into the living room. When she told Mrs. Austing that Miller wanted to see her, she said, "Well, all right."
9
Appellant Miller started talking to Mrs. Austing and he argued with her about buying a house from her. His voice kept getting louder. He said he wanted to pay her $500 in cash. The other man sat in a chair saying nothing. Some of the points of the argument of appellant Miller and Mrs. Austing are unclear, but she replied to this statement that he had $500 in cash to pay her, by saying: "I got a permit to get the property fixed up." Whereupon, Miller said in a voice getting louder and louder, "Well, I don't believe you." Mrs. Ward then intervened and said, "Well, she has got the permits because my husband went and got them." Miller then said to Mrs. Ward, "Why don't you shut your goddam mouth? It is none of your business." Mrs. Ward replied, "Well, she is an old lady." At that time the telephone rang and Mrs. Ward went to answer it. Appellant Miller still remained in the living room, talking so loud that it interfered with Mrs. Ward's conversation. When she had to end it, because she couldn't hear, Miller and the other man were leaving and, as they went out, Miller was mumbling to himself.
10
Mrs. Ward left Mrs. Austing's home about 7:30 in the evening. Mrs. Ward was later asked whether she knew that Mrs. Austing had a safe, and she replied that she did, and that it was kept in the closet of her bedroom. Mrs. Ward also testified that she had known appellant Miller previously, because he had lived near the Wards for about two years, and she had seen him often; but she had never before seen the man who came that day to Mrs. Austing's house with Miller, and who afterward proved to be Lester Swiger.
11
Some days after the fatal beating of Mrs. Austing, the police received word that a safe had been located in a ravine on Ibold Road, some distance from Mrs. Austing's home. They found the safe in the ravine, together with a pair of wooden shoes that had been taken from the Austing house. They also found a wedge. The safe had been charred by fire.
12
Addison Crofton testified that about midnight on May 5, 1963, appellant Miller, whom he knew, came to his home on Newton Road, knocked on the door, woke him up, and Crofton then led him into the house. Miller told him he wanted to borrow a sledge hammer and a couple of wedges. Crofton had these tools for splitting logs when he worked in the woods. Miller told him that he wanted the sledge and the wedges for "some chunks he wanted to bust up." Crofton had them in a little building; he went out, got them, and let Miller have them, telling him that he might start back cutting wood and logs again, and to be sure not to lose them. Miller told Crofton he would bring them back the next day; but Crofton never got them back. The wedge that the police found in the ravine with the safe was identified by Crofton as one of the wedges Miller borrowed from him that night.
13
Appellant Miller took the witness stand in his own defense on the charge of murder of Mrs. Austing in his trial in the Common Pleas Court of Hamilton County, Ohio. He testified that on May 5, 1963, the day of the fatal beating of Mrs. Austing, he was with Lester Swiger the entire day. He stated that he drove his car over to Mrs. Austing's that afternoon; that Swiger was with him; that Mrs. Ward came to the door when he knocked; that he and Swiger went into the house; that he had a talk with Mrs. Austing about buying a little house nearby, and that Mrs. Austing told him she would consider what he offered for the place and would let him know in a few days. Appellant Miller testified that after this conversation with Mrs. Austing, he and Swiger left, and he drove back toward Milford; that, later, after dark, he saw Curtis Bellamy in Milford; that Bellamy got into the car; and that Miller, driving his car with Swiger and Bellamy, drove back to Mrs. Austing's house.
14
Appellant Miller further testified that Swiger had seen a number of saddles when he and Swiger first went to the Austing house; that, at the time, Mr. Ward was carrying them into the barn; that Mrs. Austing had the saddles for the ponies and horses in a corral, where people could come and ride; that Swiger wanted to steal the saddles; that they drove the car down to a trailer where the saddles were; that at the time they went to the Austing house, appellant had the idea that they were going to take the saddles; that they were going to steal them; that appellant, himself, "grabbed the saddles, maybe two or three bridles or halters," and threw them on the back floor or the seat; that Swiger and Bellamy went inside the Austing house while appellant Miller remained outside; that later appellant saw the safe of Mrs. Austing just outside the door of her house; that appellant then helped Swiger and Bellamy move the safe over to his car, and helped lift the safe into the back of the car. Appellant said he then drove back on the highway with the safe in the back end of the car. The safe, he said, was later rolled out of the car into a ravine. One of the other two men with appellant thought he knew somebody who might have a blow torch. As appellant testified: "Well, the party he thought had the torch, didn't have the torch, so the next thing was to come up with something to open the safe." Appellant then drove over to Newtown where he knew Addison Crofton, and he got a sledge hammer and two wedges from him. Then they drove back to where they had left the safe. The safe had cast iron hinges. Appellant said he and Swiger changed off, one holding the wedge and the other, swinging the sledge hammer. It was easy to knock off the hinges. He finally knocked off the door of the safe. Bellamy, Swiger and appellant then went through the safe, and found about twenty-four to twenty-five hundred dollars. They "supposedly" split it three ways. The first counted out was $700, which apparently was given to Bellamy. Before they left the safe in the ravine, they poured gasoline or kerosene over it, and left it flaming. When appellant was asked whether the gasoline was poured on the safe and ignited so that "it would take any fingerprints off of the safe," he answered: "It wasn't an idea of mine to do it." Appellant stated he "couldn't say" whether the gasoline had come from the tank of his automobile, but "I did have a can in the car." He said that as he was "pulling away," he saw the flames; and he then drove out of town with Bellamy and Swiger in his automobile. However, when they had driven some distance, Bellamy said he wanted to get out and go back to Milford, and so appellant stopped the car and let Bellamy out. Appellant and Swiger then drove on, and got to Chillicothe the next day, and spent some time drinking there. From Chillicothe, they drove across the river into West Virginia that evening. They had the saddles and a rifle and pistol which they had stolen from the Austing home, in the back of the car.
15
Appellant had kinfolk in West Virginia, and they sold the saddles there. Appellant testified that he hid the pistol which they took from the Austing house, in the woods belonging to one of his relatives; and that Swiger bought a gun from one of his relatives for $10.00. Appellant and Swiger then drove into the State of Virginia, near Washington, D. C.; then through Baltimore and to Philadelphia, where they headed west on the Pennsylvania Turnpike, arriving about two weeks later in California, where they were arrested on a routine check-up by the Los Angeles Police Force. Appellant claimed he was not in Mrs. Austing's house at the time of the robbery, and had no knowledge of what took place inside the house at that time.
16
On cross-examination, appellant admitted he knew Mrs. Austing before the fatal night; that he had lived in one of her cottages and had worked for her in 1960, 1961, and 1962, shingling two houses for her, and helping to tear down two other houses, and working as a carpenter for her during those years. Appellant claims that, although he drove the car on the fatal night, accompanied by Swiger and Bellamy, he was so drunk that he was not aware of anything except taking the saddles, then falling asleep and, afterward, waking up, helping lift the safe into the car, going to get the sledge hammer and wedges, knocking the door off the safe, getting the money in the safe, dividing it, and then driving to Chillicothe where he and Swiger continued drinking.
17
Appellant Miller's entire contention that he did not know anything about the fatal beating of Mrs. Austing was based on the claim that he was so drunk he could not recall every incident and "had no business driving that car." It is here to be observed that, regardless of his claimed stuporous drunkenness, appellant admitted that he had driven Swiger and Bellamy to Mrs. Austing's home; that he, together with the others, had intended to steal the saddles and did steal them; that he saw the safe on the concrete slab just outside the door of Mrs. Austing's house sometime before midnight; that he helped to lift the safe into the back of his car, and then drove with Swiger and Bellamy to the ravine where they left the safe; that he, alone, drove over to Addison Crofton's house about midnight to borrow a sledge hammer and wedges in order to smash the hinges of the safe door and break it open; that he drove back to the ravine where he and Swiger used the sledge hammer and wedges to break open the safe; that they got about $2,500 in cash from the safe; that they divided it among them; and that appellant and Swiger, after letting Bellamy out, drove to Chillicothe; that from Chillicothe they drove to West Virginia, where they sold the saddles, and then drove on eventually to the Pennsylvania Turnpike and to California.
18
Whether, in the light of the foregoing, appellant was so drunk that he did not know that Swiger and Bellamy made their way into Mrs. Austing's house near midnight, and did not know of, or hear of, anything that happened in the house during the fatal assault on Mrs. Austing, was, under the circumstances, a question for the members of the jury to determine, and a question that could well arouse their misgiving or disbelief.
19
In addition to appellant's own testimony, there was further evidence of the complicity of appellant and Swiger in the crime. After Swiger and appellant Miller had been arrested by the Los Angeles police, Lieutenant Herbert Vogel of the Sheriff's Office, and Detective Ernie Taylor of the Prosecutor's Office of Hamilton County, Ohio, went to Los Angeles, and, after an interview with Swiger and appellant Miller, which will be discussed hereafter, the officers brought Swiger and Miller back to Ohio. Lieutenant Vogel testified that when he and appellant Miller were en route from Los Angeles to Cincinnati, before changing planes in Chicago, appellant became quite talkative after their meal, and stated to Vogel that "he intended to get the money off this woman," but, he said, "I didn't want those guys to kill her." And he said, "What we got out of it, it wasn't worth taking this lady's life."
20
Lieutenant Vogel's testimony continued: "And I asked him how he got rid of the saddles so fast, and he said: `Well, they were all friends of mine up in West Virginia.' He said, `I just went to my cousin's house.' I think he said, `Orvie Powell's house; and he arranged for us to dispose of these saddles so that we could get the best price for them;' and he also stated that he thought they got $75.00 for one saddle and $50.00 for another; and then he said he was glad it was all over. It was on his mind. It was worrying him, and he told me how he was picked up in Los Angeles, what circumstances came about causing his arrest in Los Angeles.
21
"Q. That was on the plane?
22
"A. That was on the plane; yes, sir."
23
On arrival at headquarters in Hamilton County, Ohio, Lieutenant Vogel stated that he and Mr. Taylor from the Prosecutor's Office, had a conversation with appellant Miller, Swiger, and Bellamy. It was the first time appellant had seen Bellamy since the night of the robbery and fatal assault. On cross-examination, Lt. Vogel was asked:
24
"Q. And Miller said to Bellamy, `You might as well tell them. They know all about it' Or words to that effect?
25
"A. Or words to that effect."
26
In addition, Detective Jerry Taylor of the Office of the Prosecuting Attorney for Hamilton County, Ohio, testified that on May 31, 1963, he saw appellant Miller, Swiger and Bellamy at Police Headquarters in Ohio, on Hamilton Avenue; that he had a conversation with Miller about the saddles; that Miller stated he had gone to Kingswood, West Virginia, and sold some of the saddles there; that he also sold some of the saddles at Brewston Mills, and had left a 22-calibre revolver with Ray Everly at Ashburn, Virginia; that one of the saddles was left with Orvie Powell in Kingswood, and a saddle was sold to Ben Chidister; that there was a saddle and a rifle with a bayonet left at Roy Real's home in Auburn, Virginia. Detective Jerry Taylor then testified that he and Detective Ernest Taylor went to Kingswood, West Virginia, where they recovered a saddle from Orvie Powell, and another saddle from Ben Chidister; and that they then went to Brewston Mills and talked to Ray Everly, who gave them the rifle with a bayonet, which he had kept in his feed store. This rifle with bayonet was just like the one which had hung outside Mrs. Austing's kitchen door; that the two detectives then went to Ashburn, Virginia, where they talked to Roy Real, and he turned over to them a 22-calibre revolver. This 22-calibre revolver was the very gun which Mrs. Austing always kept on her dining-room table for protection against robbers. On June 4, 1963, when Detective Taylor saw appellant Miller, Swiger and Bellamy, he showed the items to all of them, and Miller identified two of the saddles and the hand gun as those sold to Ray Everly, as well as Mrs. Austing's gun which Miller had left at Roy Real's house in Ashburn, Virginia. In Miller's own testmony, he said that he had hid Mrs. Austing's gun in the woods near the home of one of his relatives.
27
We proceed, then, to the question upon which appellant most strongly relies. After Swiger and appellant Miller had been arrested by the Los Angeles police, Lt. Herbert Vogel of the Sheriff's Office, and Detective Ernie Taylor, of the Prosecutor's Office of Hamilton County, Ohio, went to Los Angeles and on May 29, 1963, interviewed both Swiger and appellant. It is this interview, the manner in which it was taken by recording, and its admission into evidence during his trial, that form the bases of appellant's claim that he was convicted in the court of Hamilton County, Ohio, by improperly admitted hearsay evidence and was deprived of his right, under the Sixth Amendment, to confront witnesses against him, and of his Fourteenth Amendment right to due process.
28
The recording was a statement, made in appellant's presence, by his co-defendant, Lester Swiger, (who was tried separately) to Lt. Vogel and Detective Taylor. Appellant had been advised of his right to maintain silence, and also that anything said by him could be used against him. However, the statement by Swiger was orally ratified by appellant, as appears from the recording. The trial of appellant, subsequent to the recorded statement, took place, and was concluded by his sentence on June 3, 1964. The rule relating to custodial interrogation in Escobedo v. Illinois, 378 U.S. 478, 84 S.Ct. 1758, 12 L.Ed.2d 977, applied to trials after June 22, 1964, and the rule in Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694, applied to trials after June 13, 1966; so that neither the standards in Escobedo nor Miranda are applicable to the instant case.
29
The following is the recording insofar as is pertinent to the issue raised by appellant:
30
"This is an interview being conducted on May 29, 1963, in the Los Angeles, California, Police Department.
31
"I am Ernest Taylor, Special Investigator for the Hamilton County, Ohio, Prosecutor's Office.
32
"Also present is Lt. Herb Vogel of the Hamilton County Sheriff's Office.
33
"Also present at the interview is:
34
"Taylor: Talk into the mike and tell us your name.
35
"Miller: Elmer Glen Miller.
36
"Taylor: How old are you, Mr. Miller?
37
"Miller: 46.
38
"Taylor: And where do you live?
39
"Miller: 8531 Wooster Pike.
40
"Taylor: And will you talk into the mike and tell us your name?
41
"Swiger: Lester Eugene Swiger.
42
"Taylor: And how old are you, Mr. Swiger?
43
"Swiger: 28 years old. R. R. 1, Batavia, Ohio.
44
"Taylor: I call your attention to an incident that occurred at the residence of Mrs. Emma Austing on or about May 5, 1963, at her residence. Will you tell us about that?
45
"Swiger: Yes. I went to drinking that morning and I went to this woman's house — I don't know her name — and, with Elmer Glen Miller, and he was talking about buying a cottage, and this woman wouldn't agree to it right there. So we went out and we got to drinking more and we picked up another boy and went back.
46
"Taylor: You say you picked up another boy?
47
"Swiger: Yes.
48
"Taylor: Where did you meet this other boy?
49
"Swiger: In Milford, Ohio.
50
"Taylor: What is his name?
51
"Swiger: Curt.
52
"Taylor: Do you know his last name?
53
"Swiger: No. Then we went back to the woman's house; we went into the woman's house and —
54
"Taylor: Why did you go back to the woman's house?
55
"Swiger: To get a safe.
56
"Taylor: Was this arranged? Did someone know about that safe?
57
"Swiger: Yes.
58
"Taylor: Who?
59
"Swiger: Elmer Miller knew the safe was there.
60
"Taylor: O. K. Go ahead.
61
"Swiger: Then we, me and Curt went in the house and Elmer stayed out of the house. We got in and then he come into the kitchen later on. And this Curt told me to tell the woman to lie down on the floor. I told her to lie down on the floor. She wouldn't do it, went screaming and fighting and ran running into the other room, and Curt grabbed her by the arm. The woman fell, I think; anyhow, I went on into the bedroom to find the safe. I found the safe and I come back out and this boy had a pistol. He told me he was trying to get the combination off this woman and she wouldn't give it to him. He slung her up against the wall and she hit the floor. I run back in, tried to get the safe out. I got it out of the closet, pushed it to the front room, and then I — the woman was lying there in the room; I carried her into the front room and laid her down. I pushed the safe on to the door and me and this other boy threw a rug over and pushed it to the door.
62
"Taylor: Did somebody try to tie her?
63
"Swiger: Yes, tried to wrap a rope around her. I did, and then I pushed the safe out, me and this Curt pushed the safe out to the door where Elmer helped us load it in the car and take the safe to the woods, and he went to borrow —
64
"Taylor: When you say `he' who do you mean?
65
"Swiger: Elmer Glen went to borrow a chisel and a hammer and we opened the safe and got the money out of it. We went on the road and split the money. We split the money on the roadway."
The recording concluded as follows:
66
"Taylor: * * * Mr. Miller, [appellant] this recording that you just heard Lester give us, is that all essentially true what he said?
67
"Miller: As far as I know, as drunk as I was that night. I will say it that way.
68
"Taylor: It is the truth?
69
"Miller: As far as I know as drunk as I was. I don't recall every little incident. No man would, and I was drunk and I had no business driving that car.
70
"Taylor: But, essentially, I mean, everything he said is the true statement?
71
"Miller: Yes."
72
Before proceeding to the discussion of the recorded statement of Lester Swiger, made in appellant's presence, which appellant claimed was improperly admitted hearsay evidence, and which resulted in his conviction of murder, in derogation of his rights under the Sixth Amendment to confront witnesses against him, and of his right to due process under the Fourteenth Amendment it should be emphasized that appellant was the chief witness in his own defense in his trial for murder in the Hamilton County Court of Common Pleas.
73
In reading and rereading the transcript of testimony, and considering the arguments of appellant and his counsel with regard to the claimed improper admission of hearsay evidence of the recording of Swiger's statement, and appellant's oral ratification of it, and appellant's contention that such improperly admitted hearsay evidence resulted in his conviction of murder in derogation of his constitutional right of confrontation of witnesses against him, and of deprivation of due process, a strange air of unreality seems to pervade the case. Upon reflection, one realizes that this air of unreality results from a seeming forgetfulness on the part of counsel that appellant had actually been a witness in the case, as well as a forgetfulness of what his testimony was. Let us, then, at this point, recapitulate what he said.
74
Appellant's testimony included the admission that he had known Mrs. Austing for some years; that he had lived in a cottage on her property; that he had worked for her as a carpenter for approximately three years — performing such work as shingling various houses for her, and "tearing down" other houses during approximately three years just prior to the robbery and fatal assault upon her; that he drove Swiger and Bellamy (who were also convicted of Mrs. Austing's murder) over to the Austing home sometime before midnight on May 5, 1963; that he further admitted he and the others intended to steal the saddles which he and Swiger had seen when they were at the Austing farm earlier the same day; that appellant took the saddles and threw them into the back seat of his car; that he helped remove the safe from the slab outside the door of Mrs. Austing's house; that he then helped to lift the safe into the back of the car; that he then drove the car, with Swiger and Bellamy beside him, over to a ravine where they left the safe; that appellant Miller, Swiger and Bellamy went to see a man that they thought had a blow torch, but they found the man did not have such a torch; that appellant then drove to Newtown about midnight, where he secured a sledge hammer and wedges from Addison Crofton on the pretense that he wanted to split some wood; that he brought the sledge hammer and wedges back to the ravine; that appellant and Swiger used the sledge hammer and wedges to knock off the hinges and break open the door of the safe; that appellant and the others ransacked the safe, finding approximately $2,500, which they divided; that they drove away, stopping to let Bellamy out; that they continued driving on to West Virginia where they sold the saddles; and then drove eventually to Los Angeles where they were arrested by the police.
75
We come, then, to the claimed error in the admission in evidence of the recorded statement of Lester Swiger made in the presence of appellant Miller and ratified by appellant.
76
Before the recording was admitted in evidence, the judge of the Court of Common Pleas hearing the case, after listening to the recording, instructed the jury as follows:
77
"THE COURT: The State alleges that the defendant, Swiger, who was first named in this indictment, together with the defendant now here on trial, Elmer Glenn Miller, made certain statements to the police officers which were recorded, these statements being statements against interest with respect to both these persons.
78
"Now, it appears that the defendant, codefendant here, Swiger, related this conversation or a great deal of it, so that his voice will be heard on this record.
79
"Now, you are instructed and cautioned that whatever this codefendant, Lester Swiger, said is not evidence in this case in any way and must not be considered as evidence in this case against this defendant, because Swiger is not on trial. This defendant is on trial.
80
"If you would take into consideration anything that Swiger said, standing alone, about what he or what this defendant did, that would be hearsay testimony and it is not competent testimony, and you would not consider it.
81
"However, it is further alleged by the State that this defendant in connection with this same conversation approved or adopted in some way in his conversation, whatever was said or portions of what may have been said by Swiger, as his own statements.
82
"Now, if you find that to be true, and I will instruct you further on this later on, that the law requires that I tell you now so that it is fresh in your memory, and you recognize the importance of it, if you find in any way as claimed by the State that Mr. Swiger did or that this defendant, Miller, did accept statements made at this time by Swiger as his own statements, approved of what Swiger said, or concurred in some way what Swiger said, so that you could find that he, himself, made those statements, then you have the right to accept it as evidence and give to it such weight as you feel it is entitled to receive at your hands when you come to consider this case with all the evidence before you, in determining finally whether this accused has been proven guilty beyond a reasonable doubt as the State contends.
83
"Now, with that explanation and that instruction, this record will be played to you now."
84
The recorded statement of Lester Swiger, which was played to the jury, and which has heretofore been set forth, is in accord with appellant's own subsequent testimony, except in two instances. Swiger in his statement, in answer to the question: "Did someone know about the safe?" answered: "Elmer Miller [appellant] knew the safe was there." Furthermore, Swiger, in telling how the robbers entered Mrs. Austing's house that night, said: "Then we, me [Swiger] and Curt [Bellamy] went in the house and Elmer [appellant] stayed out of the house. We got in and then he come into the kitchen later on." The kitchen was the first room, adjoining the sun porch, which one entered in going into the house.
85
When appellant Miller heard the recorded statement by Swiger, Miller was asked by Detective Taylor: "Mr. Miller, this recording that you just heard Lester give us, is that all essentially true what he said?" Miller's reply was: "As far as I know, as drunk as I was that night. I will say it that way."
86
"Taylor: It is the truth?
87
"Miller: As far as I know as drunk as I was. I don't recall every little incident. No man would, and I was drunk and I had no business driving that car.
88
"Taylor: But, essentially, I mean, everything he said is the true statement?
89
"Miller: Yes."
90
Later, Miller, in his testimony on his trial, stated that he did not know anything about Mrs. Austing's safe, or where it was; and that he did not go into the house that night, after Swiger and Bellamy had gone in.
91
Swiger's statements with regard to appellant's knowledge about the safe in Mrs. Austing's home and that Miller had entered the Austing house that night, were not matters, the facts of which were affected by drunkenness. He admitted to Detective Taylor that what Swiger said concerning his knowing about the safe in Mrs. Austing's house was true. He later said in his own testimony at the trial, that he did not know about the safe. This matter of the safe was not a detail that he could not remember because of drunkenness. To the same effect, was the question of appellant's entering the Austing house that night. As counsel for the State says: "Anyone who can understand our language must find adequate basis in the first three lines of this statement to make it clear that Swiger and Curt (Bellamy) went into the house and Elmer (Miller) stayed out of the house. After they (Swiger and Curt) got in then he (Elmer) came into the house. This is the only interpretation reasonably to be placed on these words." It was for the jury to determine the fact, which it did under proper instructions.
92
The trial court exercised unusual precautions that appellant's constitutional rights be safeguarded, and was guilty of no error in the admission of evidence. Much is made of the claim that appellant was deprived of his right to confront his co-defendant, Swiger. During his trial, appellant made no such contention, and this argument was raised for the first time on appeal before the Supreme Court of Ohio.
93
In this regard, that court said that the recording was a voluntary confession and, as such, there can be no question raised as to confrontation. Appellant, as the Supreme Court of Ohio said, never denied that the admissions used against him were voluntary.
94
In State v. Swiger, 5 Ohio St.2d 151, 160, 214 N.E.2d 417, 424, the court declared:
95
"The voluntary confession of an accomplice made in the immediate presence of an accused is admissible as evidence against the accused even though the accomplice and the accused were under arrest, if the accused ratifies the confession or adopts it as his own. Whether there is such an adoption or ratification is a question of fact for the jury to determine after proper instructions from the court. The record shows that such instructions were correctly given and there is no error in the introduction of recording No. 11 into the record. * * *
96
"At no time during any of the proceedings did any of the defendants deny that the admissions used against them had actually been made as represented by the recordings. At no time during any of the proceedings did any of the defendants deny that the admissions used against them had been made voluntarily."
97
The court concluded that the record indisputably supported the view that the confessions involved were in fact made voluntarily.
98
Appellant relies on Jackson v. Denno, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908, as governing the voluntariness of appellant's ratification (as a confession) of Swiger's statement. However, on the trial, appellant's counsel made no objection to it on the basis of voluntariness; and Jackson v. Denno applies only where the voluntariness of a confession is attacked; and the Supreme Court of Ohio in State v. Swiger, supra, held that appellant had voluntarily ratified or adopted the statement of Swiger as his own.
99
Appellant contended that the State has not met its burden in proving the purpose or intent required by Section 2901.01 Revised Code, which reads: "No person shall purposely * * * in perpetrating or attempting to perpetrate rape, arson, robbery or burglary, kill another." The Supreme Court of Ohio, in disposing of this contention, said:
100
"As an abstract proposition, it cannot be denied that intent is an essential element in a conviction for murder. However, `the intent of an accused person dwells in his mind. Not being ascertainable by the exercise of any or all of the senses, it can never be proved by the direct testimony of a third person and it need not be. It must be gathered from the surrounding facts and circumstances under proper instructions from the court.' State v. Huffman (1936), 131 Ohio St. 27, 1 N.E.2d 313, paragraph four of the syllabus.
101
"The requisite intent may be presumed from what is, in fact, done. It may be deduced from the surrounding circumstances. In these cases, the uncontradicted testimony and medical reports showed that deceased received a very severe beating around the head and chest, a beating that rendered a 76-year-old woman practically unrecognizable. A footprint was discernible in the blood on her chest. The severity of this beating belies any contention that it can be attributed to anything other than deliberate acts, and men are presumed by law to intend the reasonable and natural consequences of acts deliberately done. See State v. Farmer (1951), 156 Ohio St. 214, 102 N.E.2d 11.
102
"It cannot be said that death is not a natural consequence of such a beating as was inflicted herein on a 76-year-old woman. Therefore, this being an issue upon which reasonable minds could differ, the question of intent is one for the trier of facts. The severity of the beating administered is sufficient `other evidence,' as required by the Farmer case, supra, to warrant a finding by the triers of fact that defendants possessed the requisite intent. That such intent was found is obvious. Defendants' contention that the state failed in its burden of proof in this instance is without merit." State v. Swiger, 5 Ohio St.2d 151, 157, 214 N.E.2d 417, 423.
103
Section 1.17 of the Ohio Revised Code, provides:
104
"Any person who aids, abets, or procures another to commit an offense may be prosecuted and punished as if he were the principal offender."
105
Under the evidence, the jury could properly find appellant guilty as an aider or abettor.
106
One concluding observation should be made. It seems somewhat unusual that when witnesses are available, a recording of their prior statements should be used without further resort to their oral testimony in open court. The reason for this appears in the insistence of appellant's counsel on the point, and counsel for the State acceding to it. Counsel for appellant repeatedly objected to testimony by the officers present as to what Swiger said, on the ground that the recording constituted the best evidence. This was the reason the recording was used, rather than using as a witness the man who made the recording or any testimony by any of the officers about the recording and appellant's ratification of it.
107
We have repeatedly reviewed the copious transcript of 741 typewritten pages of the testimony in the trial court, the opinion of the Supreme Court of Ohio on the appeal of this case, the briefs of counsel on this appeal, and we conclude that there was no deprivation of any of appellant's constitutional rights; no error in the admission of the evidence on the trial, or in any proceedings of the trial court; and that there was overwhelming evidence of the guilt of appellant.
108
The District Court, in passing upon appellant's petition for a writ of habeas corpus, considered his claims that he was deprived of his federal constitutional rights in this trial, and that he was convicted on improperly admitted hearsay evidence. In a comprehensive opinion, the district judge found there was no merit to appellant's claims and we are in agreement with this finding.
109
We find the contention that the State's reference to appellant's 1935 conviction, which was brought out originally by defense counsel, deprived appellant of his rights under the Sixth and Fourteenth Amendments, is not meritorious.
110
In accordance with the foregoing, the order denying the petition for a writ of habeas corpus is affirmed for the reasons set forth in the opinion of Judge Joseph P. Kinneary.
Notes:
1
The recorded statement of Swiger, and appellant's ratification of it
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223 F.2d 626
LE JOHN MANUFACTURING COMPANY, Inc., Appellant,v.PHILLIPS TELEVISION AND APPLIANCES, Inc., Appellee.
No. 12397.
United States Court of Appeals District of Columbia Circuit.
Argued March 30, 1955.
Decided April 14, 1955.
Mr. Thomas B. Scott, Washington, D. C., with whom Mr. Lawrence J. Simmons, Washington, D. C., was on the brief, for appellant.
Mr. Leon M. Shinberg, Washington, D. C., for appellee.
Before EDGERTON, BAZELON and FAHY, Circuit Judges.
PER CURIAM.
1
By petition in the proceedings of the appellee bankrupt, appellant sought reclamation of certain merchandise on the ground that it delivered the merchandise in consignment transactions and thereby retained title. The referee in bankruptcy denied the petition upon a finding that "the transactions were no more than absolute sales with the privilege * * * to return any unsold merchandise." The District Court dismissed the petition for review of the referee's order and this appeal followed.
2
Appellant urges reversal on the ground that the above-mentioned finding is clearly erroneous. Some of the written evidence — purchase orders and invoices — tended to show that the transactions were sales. Other written and some oral evidence tended to show the transactions were consignments. Since the finding under attack does not "rest exclusively on the written evidence or the undisputed facts,"1 our review is "weighted by the trial court's assessment of credibility."2 So viewed, we cannot say that the finding is clearly erroneous.3
3
Affirmed.
Notes:
1
Orvis v. Higgins, 2 Cir., 1950, 180 F.2d 537, 539
2
Bishop v. United States, 96 U.S.App. D.C. ___, 223 F.2d 582, dissenting opinion, page 589, citing Dollar v. Land, 1950, 87 U.S.App.D.C. 214, 218, 184 F.2d 245. 249; and Orvis v. Higgins, supra
3
See United States v. United States Gypsum Co., 1948, 333 U.S. 364, 395, 68 S. Ct. 525, 92 L.Ed. 746. Rule 52(a), F.R. Civ.P., 28 U.S.C.A
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1 N.Y.3d 280 (2003)
803 N.E.2d 757
771 N.Y.S.2d 484
RUPERT BLAKE et al., Appellants,
v.
NEIGHBORHOOD HOUSING SERVICES OF NEW YORK CITY, INC., Respondent.
Court of Appeals of the State of New York.
Argued November 19, 2003.
Decided December 23, 2003.
*281 Kelner & Kelner, New York City (Gail S. Kelner of counsel), for appellants.
Carol R. Finocchio, New York City, Lisa M. Comeau and Law Office of Patrick Colligan for respondent.
*282 Andrew Zajac, Jericho, Michael J. Caulfield, Dawn C. DeSimone, Elizabeth Anne Bannon and Kathleen D. Foley for Defense Association of New York City, Inc., amicus curiae.
Sullivan Papain Block McGrath & Cannavo, New York City (Brian J. Shoot of counsel), and Nancy Kramer for New York State Trial Lawyers Association, amicus curiae.
Chief Judge KAYE and Judges G.B. SMITH, CIPARICK, GRAFFEO and READ concur.
*283 OPINION OF THE COURT
ROSENBLATT, J.
We are presented with the question whether a plaintiff who was injured while using a ladder may prevail in a Labor Law § 240 (1) action even when a jury finds that the ladder was so constructed and operated as to give him proper protection and he was the sole cause of his injury. In deciding the appeal, it is necessary for us to address the concept of strict (or absolute) liability and the predicates for its application under Labor Law § 240 (1).
At the time of the injury, plaintiff operated his own contracting company, and was working alone on a renovation job at a two-family house in the Bronx. Defendant Neighborhood Housing Services of New York City (NHS), a not-for-profit lender, provided low-interest financing to facilitate the project. Acting on the homeowner's application, NHS dispatched a rehabilitation specialist to the premises to assess the scope of the work and the amount of the loan. NHS prepared a work estimate and gave the homeowner a list of contractors, from which she chose plaintiff. At the job site, plaintiff set up an extension ladder, which he owned and used frequently. He acknowledged that the ladder was steady, had rubber shoes and was in proper working condition. When plaintiff began scraping rust from a window, however, the upper portion of the ladder retracted and he suffered an ankle injury.
Plaintiff sued the homeowner and NHS alleging a violation of Labor Law § 240 (1). All parties moved for summary judgment. Plaintiff contended that NHS was strictly liable as a statutory agent under the section for having failed to provide a proper workplace and mandated safety equipment. In his deposition, however, plaintiff stated that the ladder was securely placed and not broken or defective. He also said there was no need to have anyone hold the ladder while he was using or ascending it. NHS cross-moved, asserting it could not be liable because it was not a general contractor or agent within the meaning of the Labor Law and did not direct, control or supervise the method or manner of plaintiff's work. It challenged plaintiff's section 240 (1) claim as conclusory, citing the lack of any evidence as to the alleged deficiency of the ladder or work site. NHS also claimed that plaintiff's actions alone caused the injury. Owing to the *284 statutory exclusion,[1] Supreme Court granted the homeowner's motion but denied NHS summary judgment, concluding there were questions of fact as to whether NHS directed or controlled the work. The court also denied plaintiff's motion as to liability under Labor Law § 240 (1). The Appellate Division affirmed (262 AD2d 244 [1st Dept 1999]).
At trial, plaintiff again conceded that he could not identify a defect in the ladder, that it was stable and there was no reason to have it steadied during use. He also revealed that he was not sure if he had locked the extension clips in place before ascending the rungs. At the close of the case, the court asked the jury to indicate on the verdict sheet whether NHS had "the authority to direct, supervise and control Mr. Blake's work" at the residence. The jury answered yes. In response to the second inquiry ("Was the ladder being used by plaintiff Rupert Blake so constructed, operated as to give proper protection to plaintiff?"), the jury again said yes, leading to the inescapable conclusion that the accident happened not because the ladder malfunctioned or was defective or improperly placed, but solely because of plaintiff's own negligence in the way he used it.
The trial court denied plaintiff's motion to vacate the jury's verdict and direct one in his favor. The Appellate Division affirmed, stating that "a factual issue was posed as to whether plaintiff's injury was caused by some inadequacy of the ladder or was solely attributable to the manner in which plaintiff used the ladder" and that there were no grounds to disturb the jury's factual determinations (301 AD2d 366, 367 [2003]). We affirm.
Plaintiff claims that Labor Law § 240 (1) is a strict (or absolute) liability statute and that the court should have set aside the jury's verdict. In reviewing our scaffold law jurisprudence, several themes are relevant to this case, including the statute's history and purpose and plaintiff's claims relating to strict or absolute liability. We also address the issue of plaintiff's actions being the sole proximate cause of the accident and whether NHS can be held liable as an agent under the statute.
A. THE HISTORY AND PURPOSE OF LABOR LAW § 240 (1)
The first scaffold law, an ancestor of our Labor Law § 240 (1), was enacted 118 years ago, in response to the Legislature's *285 concern over unsafe conditions that beset employees who worked at heights (see L 1885, ch 314). In promulgating the statute, the lawmakers reacted to widespread accounts of deaths and injuries in the construction trades. Newspapers carried articles attesting to the frequency of injuries caused by rickety and defective scaffolds. In 1885 alone, there were several articles detailing both the extent of these accidents and the legislation directed at the problem.[2]
The lawmakers enacted the 1885 statute when personal injury suits of this type were based on common-law duties of a master to a servant (see e.g. Vosburgh v Lake Shore & Mich. S. Ry. Co., 94 NY 374 [1884]; Devlin v Smith, 89 NY 470 [1882]). For that reason, the Legislature aimed this first scaffold law ("AN ACT for the protection of life and limb") at "[a] person employing or directing another." (L 1885, ch 314, § 1.) Although the statute's wording has evolved, the original, core language is still with us. The Legislature eventually added other devices,[3] but the first statute contained the very words "scaffolding, hoists, stays, ladders" still found in Labor Law § 240 (1). Moreover, the law covered, as it does today, "erection, repairing, altering or painting" of structures. Most tellingly, the lawmakers fashioned this pioneer legislation to "give proper protection" to the worker. Those words are at the heart of the statute and have endured through every amendment.
Even though the first scaffold law exposed violators to civil and criminal responsibility, it fell short of the mark because the employer could escape liability by blaming the employee's coworkers (see e.g. Kimmer v Weber, 151 NY 417, 421 [1897]; Butler v Townsend, 126 NY 105, 111 [1891]). This was changed with an 1897 amendment to the scaffold law, as part of a larger Labor Law initiative dealing with factories, bakeries, tenement-made articles, and the employment of women and children (see L 1897, ch 415, § 18).[4] The amendment did two things: it placed the onus directly on the employer, and it prompted our Court to interpret the law as creating a presumption of employer liability *286 when a scaffold (or ladder) collapses. We recognized that sound scaffolds and ladders do not simply break apart (see Stewart v Ferguson, 164 NY 553 [1900]). The Legislature looked to employers (and later, contractors and owners) as the entities best able to control the workplace and provide for its safety, casting them in liability for their failure to obey the law.[5] The objective wasand still isto force owners and contractors to provide a safe workplace, under pain of damages.
The 1897 statute[6] was a giant step forward, but it still left employers free to invoke the plaintiff's contributory negligence (see Gombert v McKay, 201 NY 27, 31 [1911]; see also L 1910, ch 352). Indeed, throughout all the scaffold law's amendments, including the present section 240 (1), the statutory language has never explicitly barred contributory negligence as a defense. Our Court, however, did so in 1948, reasoning that the statute should be interpreted that way if it is to meet its objective (see Koenig v Patrick Constr. Corp., 298 NY 313, 316-317 [1948]). Since then we have steadfastly held that contributory negligence will not exonerate a defendant who has violated the statute and proximately caused a plaintiff's injury (see e.g. Zimmer v Chemung County Performing Arts, 65 NY2d 513, 521 [1985]; Stolt v General Foods Corp., 81 NY2d 918 [1993]). At no time, however, did the Court or the Legislature ever suggest that a defendant should be treated as an insurer after having furnished a safe workplace. The point of Labor Law § 240 (1) is to compel contractors and owners to comply with the law, not to penalize them when they have done so.
B. STRICT (OR ABSOLUTE) LIABILITY
Plaintiff asserts, in essence, that despite the jury's findings he is entitled to recover because Labor Law § 240 (1) provides for strict (or absolute) liability. In addressing this contention, we note that the words strict or absolute liability do not appear in Labor Law § 240 (1) or any of its predecessors. Indeed, it was the Courtand not the Legislaturethat began to use this *287 terminology in 1923 (under an earlier version of the statute [see L 1921, ch 50]), holding that employers had an "absolute duty" to furnish safe scaffolding and would be liable when they failed to do so and injury resulted (Maleeny v Standard Shipbuilding Corp., 237 NY 250, 253 [1923]; see also Amberg v Kinley, 214 NY 531, 545 [1915] [Collin, J., dissenting]). We used a similar phrase 25 years later in Koenig (298 NY at 318 [a duty "absolutely imposed"]). In Connors v Boorstein (4 NY2d 172, 175 [1958]) the Court, for the first time, worded the concept as "absolute liability" under section 240 (1). We did so again in Major v Waverly & Ogden (7 NY2d 332, 336 [1960] ["absolute statutory liability"]) and Duda v Rouse Constr. Corp. (32 NY2d 405, 408 [1973] ["absolute liability"]).
The Court has also described liability under Labor Law § 240 (1) as "absolute" in the sense that owners or contractors not actually involved in construction can be held liable (see Haimes v New York Tel. Co., 46 NY2d 132, 136 [1978]), regardless of whether they exercise supervision or control over the work (see Ross v Curtis-Palmer Hydro-Elec. Co., 81 NY2d 494, 500 [1993]). Intending the same meaning as absolute liability in Labor Law § 240 (1) contexts, the Court in 1990 introduced the term "strict liability" (Cannon v Putnam, 76 NY2d 644, 649 [1990]) and from that point on used the terms interchangeably.
Throughout our section 240 (1) jurisprudence we have stressed two points in applying the doctrine of strict (or absolute) liability. First, that liability is contingent on a statutory violation and proximate cause. As we said in Duda (32 NY2d at 410), "[v]iolation of the statute alone is not enough; plaintiff [is] obligated to show that the violation was a contributing cause of his fall,"[7] and second, that when those elements are established, contributory negligence cannot defeat the plaintiff's claim. Section 240 (1) is, therefore, an exception to CPLR 1411, which recognizes contributory negligence as a defense in personal injury actions (see Mullen v Zoebe, Inc., 86 NY2d 135, 143 [1995]; Bland v Manocherian, 66 NY2d 452, 461 [1985]).
It is imperative, therefore, to recognize that the phrase "strict (or absolute) liability" in the Labor Law § 240 (1) context is different from the use of the term elsewhere. Often, the term means "liability without fault" (see generally 3 Harper, James *288 and Gray, Torts § 14.1 et seq. [2d ed 1986]), as where a person is held automatically liable for causing injury even though the activity violates no law and is carried out with the utmost care. Illustrations include blasting activities (see Spano v Perini Corp., 25 NY2d 11, 15 [1969]), keeping wild animals (see Arbegast v Board of Educ., 65 NY2d 161, 164-165 [1985]) and discharging petroleum (see Navigation Law § 181 [1]; White v Long, 85 NY2d 564, 568 [1995]; State of New York v Green, 96 NY2d 403, 405 [2001]; see generally Prosser and Keeton, Torts § 78 [5th ed 1984]). We also refer to strict liability when discussing products liability arising out of a defective design or the failure to warn (see Sukljian v Charles Ross & Son Co., 69 NY2d 89, 94 [1986]; Sage v Fairchild-Swearingen Corp., 70 NY2d 579, 585 [1987]). In these instances, manufacturers of defective products may be held "strictly liable" for injury caused by those products, regardless of privity, foreseeability or reasonable care (see Sprung v MTR Ravensburg, 99 NY2d 468, 472 [2003]).
Courts also speak of strict liability in commercial settings, as where the Uniform Commercial Code fastens "strict liability" on a bank that charges against its customer's account any "item" that is not "properly payable" (UCC 4-401 [1]; Monreal v Fleet Bank, 95 NY2d 204, 207 [2000]).
Given the varying meanings of strict (or absolute) liability in these different settings, it is not surprising that the concept has generated a good deal of litigation under Labor Law § 240 (1). The terms may have given rise to the mistaken belief that a fall from a scaffold or ladder, in and of itself, results in an award of damages to the injured party. That is not the law, and we have never held or suggested otherwise. As we stated in Narducci v Manhasset Bay Assoc. (96 NY2d 259, 267 [2001]), "[n]ot every worker who falls at a construction site, and not any object that falls on a worker, gives rise to the extraordinary protections of Labor Law § 240 (1)." Also, the Appellate Division had recognized as much in Beesimer v Albany Ave./Rte. 9 Realty (216 AD2d 853, 854 [3d Dept 1995]), stating: "the mere fact that [a plaintiff] fell off the scaffolding surface is insufficient, in and of itself, to establish that the device did not provide proper protection" (see also Alava v City of New York, 246 AD2d 614, *289 615 [2d Dept 1998] ["a fall from a scaffold does not establish, in and of itself, that proper protection was not provided"]).[8]
Put differently, an accident alone does not establish a Labor Law § 240 (1) violation or causation. This Court has repeatedly explained that "strict" or "absolute" liability is necessarily contingent on a violation of section 240 (1). In Melber v 6333 Main St. (91 NY2d 759, 762 [1998]), we noted that "we have held that the statute establishes absolute liability for a breach which proximately causes an injury." In Zimmer (65 NY2d at 522), we found that "a violation of section 240 (1) . . . creates absolute liability" and that "[t]he failure to provide any safety devices is such a violation." Moreover, causation must also be established. As the Court held in Duda (32 NY2d at 410 [1973]), the "plaintiff was obligated to show that the violation [of section 240 (1)] was a contributing cause of his fall." Here, plaintiff has shown no violation of Labor Law § 240 (1).
In support of his claim, plaintiff argues that comparative negligence is not a defense to absolute liability under the statute. This is true (see Raquet v Braun, 90 NY2d 177, 184 [1997]; Bland v Manocherian, 66 NY2d 452, 461 [1985]). But we are not dealing here with comparative fault, by which a culpable defendant is able to reduce its responsibility upon a finding that the plaintiff was also at fault. That would be impermissible *290 under section 240 (1). Here, there is no comparative culpability. As the jury implicitly found, the fault was entirely plaintiff's. The ladder afforded him proper protection. Plaintiff's conduct (here, his negligence) was the sole proximate cause of the accident.
C. PLAINTIFF'S CONDUCT AS THE ACCIDENT'S SOLE PROXIMATE CAUSE
Plaintiff argues that he is entitled to recover in the face of a record that shows no violation and reveals that he was entirely responsible for his own injuries. There is no basis for this argument. Even when a worker is not "recalcitrant,"[9] we have held that there can be no liability under section 240 (1) when there is no violation and the worker's actions (here, his negligence) are the "sole proximate cause" of the accident. Extending the statute to impose liability in such a case would be inconsistent with statutory goals since the accident was not caused by the absence of (or defect in) any safety device, or in the way the safety device was placed.
In Weininger v Hagedorn & Co. (91 NY2d 958, 960 [1998]), we held that "Supreme Court erred . . . in directing a verdict in favor of plaintiff, at the close of his own case, on the issue of proximate cause" where "a reasonable jury could have concluded that plaintiff's actions were the sole proximate cause of his injuries, and consequently that liability under [section] 240 (1) did not attach." Contrary to plaintiff's claim, the Appellate Division has held (both before and after Weininger) that a defendant is not liable under Labor Law § 240 (1) where there is no evidence of violation and the proof reveals that the plaintiff's own negligence was the sole proximate cause of the accident. Under Labor Law § 240 (1) it is conceptually impossible for a statutory violation (which serves as a proximate cause for a plaintiff's injury) to occupy the same ground as a plaintiff's sole proximate cause for the injury. Thus, if a statutory violation is a proximate cause of an injury, the plaintiff cannot be solely to blame for it. Conversely, if the plaintiff is solely to blame for the injury, it necessarily means that there has been no statutory violation. That is what we held in Weininger, a holding the Appellate *291 Division has consistently understood and applied.[10] The Pattern Jury Instructions reflect a like-minded interpretation of Weininger (see PJI3d 2:217 [2003]).[11] We reaffirm that holding today.
As in Weininger, the record now before us fully supports the jury's findings that there was no statutory violation and that plaintiff alone, by negligently using the ladder with the extension clips unlocked, was fully responsible for his injury.
Plaintiff relies heavily on Bland v Manocherian (66 NY2d at 457). There, the jury found that the ladder in question was not "placed so as to give proper protection to the plaintiff" and that "improper placement of the ladder [was] a proximate cause of the accident" (id.). We held that "[t]he jury was clearly entitled to find that, under the circumstances, defendants failed to satisfy the responsibilities imposed by section 240 (1) in that they had not `erected' or `placed' the ladder from which plaintiff fell in such a manner, or with such safeguards, as necessary to provide plaintiff with `proper protection' while he was working on defendants' building" (id. at 460).
In reaching this conclusion, we noted the nature of the work the plaintiff had to perform while on the ladder and the conditions at the work site. "[P]ressure would have to be applied to *292 the sashes and, at the same time, the windows forcibly twisted loose, all while plaintiff was standing on a ladder" (id.). Further, and also in contrast to the case before us, there was testimony that "the floor upon which the ladder was placed was bare, highly polished and shiny" and that "no safety equipment, safety belts, hard hats, scaffolding or anything else, was used to protect plaintiff from falling through the fourth floor window or to secure the ladder to insure that it remained steady and erect while plaintiff was applying pressure to that window" (id.).
Bland, then, does not support plaintiff's position or stand for the proposition that regardless of the facts every ladder injury leads ineluctably to liability under section 240 (1). In Bland, there were affirmed findings of fact, supported by the evidence, from which the jury could find that defendants had failed to satisfy their section 240 (1) responsibilities. Here, in contrast, the affirmed findings of fact were supported by the record, enabling the jury to conclude that there was no violation of the Labor Law. The record in Bland fairly suggested that better safety devices could have prevented the accident. In our case, the ladder was undisputedly in proper working order, and no further devices were necessary.
To be sure, we have long held that "this statute is one for the protection of work[ers] from injury and undoubtedly is to be construed as liberally as may be for the accomplishment of the purpose for which it was thus framed" (Quigley v Thatcher, 207 NY 66, 68 [1912]). But to impose liability for a ladder injury even though all the proper safety precautions were met would not further the Legislature's purpose. It would, instead, be a sweeping and dramatic turnabout that the statute neither permits nor contemplates. As we recognized in a related context, the language of Labor Law § 240 (1) "must not be strained" to accomplish what the Legislature did not intend (Martinez v City of New York, 93 NY2d 322, 326 [1999]). If liability were to attach even though the proper safety devices were entirely sound and in place, the Legislature would have simply said so, or made owners and contractors into insurers. Instead, the Legislature has enacted no-fault workers' compensation to address workplace injuries where, as here, the worker is entirely at fault and there has been no Labor Law violation shown.
D. AGENCY UNDER SECTION 240 (1)
Lastly, this case presents the question whether defendant NHS could be liable as an agent of the owner under Labor Law *293 § 240 (1). That section imposes liability only on contractors, owners or their agents. NHS is clearly not a contractor or an owner. An agency relationship for purposes of section 240 (1) arises only when work is delegated to a third party who obtains the authority to supervise and control the job. Where responsibility for the activity surrounding an injury was not delegated to the third party, there is no agency liability under the statute (Russin v Picciano & Son, 54 NY2d 311, 318 [1981]).
NHS lacked the requisite indicia of agency. Although defendant here coordinated home repair work, it did not involve itself with the details of how individual contractors would perform their jobs. Instead, NHS acted as a lender: it is a nonprofit organization that provides low-interest loans. The homeowner retained primary control over decisions on how the renovation project would proceed. NHS did not supervise the contractor; it never instructed workers on how to undertake repairs, and it took only a de minimis role in ensuring that the contractor would complete the financed repairs.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
Order affirmed, with costs.
NOTES
[1] In 1980, the Legislature amended Labor Law § 240 (1) by excepting "owners of one and two-family dwellings who contract for but do not direct or control the work" (L 1980, ch 670, § 1; see generally Bartoo v Buell, 87 NY2d 362 [1996]; Mandelos v Karavasidis, 86 NY2d 767 [1995]).
[2] See generally Provisions of the Bills which have Now Become Laws, New York Times, May 26, 1885, at 5; Under the New Law, New York Times, July 2, 1885, at 8; The Employer Held Responsible, New York Times, July 7, 1885, at 8; Three Men Killed, New York Times, July 15, 1885, at 3; Carried Down with the Scaffold, New York Times, Sept. 1, 1885, at 8; Maimed by a Breaking Scaffold, New York Times, Nov. 29, 1885, at 3.
[3] See L 1921, ch 50, § 240.
[4] In the interim, the Legislature enacted additional requirements for scaffolds more than 20 feet from the ground (see L 1891, ch 214), and authorized police to inspect scaffolding, with misdemeanor consequences for violating the scaffold law (see L 1892, ch 517).
[5] In 1969, the Legislature amended section 240 (1) to place the responsibility on "[a]ll contractors and owners and their agents" in place of "[a] person employing or directing another to perform labor of any kind" (L 1969, ch 1108, § 1).
[6] Later reconstituted in Laws of 1909 (ch 36), as amended by Laws of 1911 (ch 693); and as Labor Law § 240 (1) by virtue of Laws of 1921 (ch 50), as amended by Laws of 1947 (ch 683).
[7] See also Panek v County of Albany (99 NY2d 452, 457 [2003] ["the section imposes absolute liability on owners, contractors and their agents for any breach of the statutory duty that proximately causes a plaintiff's injury"]).
[8] In cases involving ladders or scaffolds that collapse or malfunction for no apparent reason, we have (ever since Stewart v Ferguson, 164 NY 553 [1900], supra) continued to aid plaintiffs with a presumption that the ladder or scaffolding device was not good enough to afford proper protection. See Panek v County of Albany (99 NY2d 452, 458 [2003] [summary judgment appropriate for the plaintiff where it was uncontroverted that a ladder collapsed beneath him, causing the fall]); Styer v Walter Vita Constr. (174 AD2d 662 [2d Dept 1991]); Olson v Pyramid Crossgates Co. (291 AD2d 706 [3d Dept 2002]). Once the plaintiff makes a prima facie showing the burden then shifts to the defendant, who may defeat plaintiff's motion for summary judgment only if there is a plausible view of the evidenceenough to raise a fact question that there was no statutory violation and that plaintiff's own acts or omissions were the sole cause of the accident. If defendant's assertions in response fail to raise a fact question as to these issues, the plaintiff must be accorded summary judgment (see Klein v City of New York, 89 NY2d 833, 835 [1996]). On the other hand, defendant may be granted summary judgment if the record establishes conclusively that no Labor Law § 240 (1) violation was shown to have been a proximate cause of the accident and that the accident was therefore caused solely by plaintiff's conduct (see e.g. Stark v Eastman Kodak Co., 256 AD2d 1134 [4th Dept 1998]; Custer v Cortland Hous. Auth., 266 AD2d 619, 621 [3d Dept 1999]). Given the procedural posture of the case before us, we address neither the propriety of Supreme Court's denial of plaintiff's motion for summary judgment nor whether defendant should have been granted summary judgment or a directed verdict.
[9] Labor Law § 240 (1) does not extend to a "recalcitrant worker," meaning one whose refusal to use available safety devices results in injury (see Hagins v State of New York, 81 NY2d 921, 923 [1993]). Plaintiff was not a recalcitrant worker.
[10] See Meade v Rock-McGraw, Inc. (307 AD2d 156, 159 [1st Dept 2003] ["That the ladder was inadequately secured was due to plaintiff's improper use of it, which would not give rise to a Labor Law violation"]); Heffernan v Bais Corp. (294 AD2d 401, 403 [2d Dept 2002] [defendant raised a question of fact as to whether scaffold failure resulted solely from plaintiff's negligence]); Musselman v Charles A. Gaetano Constr. Corp. (277 AD2d 691, 692 [3d Dept 2000] ["although contributory negligence is not a defense to a valid Labor Law § 240 (1) claim . . . liability will not attach if the worker's action were the sole proximate cause of his or her injuries"]); Gomes v State of New York (272 AD2d 440 [2d Dept 2000] [affirming Court of Claims' dismissal after crediting the State's expert testimony that plaintiff's misuse of an extension ladder was responsible for his accident in which his arm became caught between the rungs when the ladder retracted downward]); Bahrman v Holtsville Fire Dist. (270 AD2d 438, 439 [2d Dept 2000] [question of fact as to whether plaintiff's fall occurred due to his own misuse of a safety device and whether such conduct was the sole proximate cause of his injuries]); Stark v Eastman Kodak Co. (256 AD2d 1134 [4th Dept 1998] [where ladder was not defective and did not move, plaintiff's actions were the sole proximate cause of his injury thus making summary judgment appropriate in favor of defendant, not plaintiff]); Vencebi v Waldorf Astoria Hotel Corp. (143 AD2d 1004, 1005 [2d Dept 1988] [jury question whether accident occurred because scaffold moved or because of plaintiff's method of climbing onto it]).
[11] "If you conclude that the plaintiff's action was the only substantial factor in bringing about the injury, you will find for the defendant on [section 240 (1) liability]."
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140 U.S. 586 (1891)
In re DELGADO, Petitioner.
No. 1648.
Supreme Court of United States.
Argued April 22, 1891.
Decided May 25, 1891.
APPEAL FROM THE SUPREME COURT OF THE TERRITORY OF NEW MEXICO.
Mr. William M. Springer and Mr. Thomas Smith for petitioner. Mr. C.H. Gildersleeve was also on the brief.
Mr. John H. Knaebal opposing. Mr. E.L. Bartlett, Solicitor General of New Mexico, was also on the brief.
MR. JUSTICE BREWER delivered the opinion of the court.
On the 13th of January, 1891, Abraham Staab, William H. Nesbitt and Juan Garcia filed in the District Court of the First Judicial District of the Territory of New Mexico, and presented to the judge thereof, their petition, in which they set forth certain facts, showing, as they claimed, that they had been elected, at the general election in November preceding, members of the board of county commissioners of Santa Fé County, in the Territory of New Mexico; and further alleged that on the 2d day of January, 1891, they had duly qualified as such commissioners; that at the same election Pedro Delgado *587 had been duly elected probate clerk of said county, and had qualified as such officer; that by virtue thereof he became and was the acting clerk of the board of county commissioners, and had possession of the records, books, files and papers of that office; that after their qualification as such board they demanded of him to produce the books, and to record their proceedings as such board; and that he refused so to do or to in any manner recognize them as the board of county commissioners. They prayed that a writ of mandamus might issue, commanding him to recognize them as the board of county commissioners; that he act with them as such board; and that he enter of record their proceedings as a board. Upon this petition an alternative writ was issued; and on the 15th day of January, in obedience to such writ, appellant appeared and filed his answer, alleging facts, which, as he claimed, showed that three other persons were at the November election elected county commissioners, and that the petitioners were not; and further averring that two of those other persons, on the 1st of January, 1891, duly qualified as members of the board of county commissioners, entered into possession and assumed the duties of such office, met on that day in the court-house of the county as the board of county commissioners, and proceeded to transact the business of the county; and that they were still in possession of their offices of county commissioners. He admitted that he refused to recognize the petitioners as a board of county commissioners, and alleged as his reason therefor that they were not the legally elected commissioners, and had never been in possession of such offices. On the same day, January 15, the matter came on to be heard on these pleadings, and a peremptory mandamus was ordered, commanding the appellant that he record on the records of the county the proceedings of the petitioners as the board of county commissioners of the county; and that in all things he recognize them as the only lawful county commissioners of the county. Disobeying the peremptory writ, he was brought up on an attachment for contempt, and committed to jail until he should purge himself thereof by obeying the writ. Instead of taking steps to review this judgment directly, by proceedings in error *588 in the Supreme Court of the Territory, appellant, on the 23d of January, filed in that court a petition for a writ of habeas corpus. On January 31 a hearing was had thereon, and it was denied; from which judgment this appeal has been taken to this court.
The attack upon the contempt proceedings is in a collateral way by habeas corpus, and the inquiry is one of jurisdiction. Ex parte Watkins, 3 Pet. 193, 203; Ex parte Parks, 93 U.S. 18; Ex parte Yarbrough, 110 U.S. 651; Cuddy, Petitioner, 131 U.S. 280, 285, 286; In re Wilson, ante, 575. In Ex parte Yarbrough one question was as to the conformity of the indictment to the provisions of the statute; and it was held that it "cannot be looked into on a writ of habeas corpus limited to an inquiry into the existence of jurisdiction on the part of that court."
This narrows the range of inquiry. It is objected that the peremptory writ was void, because ordered in vacation by the judge, and not after trial before a jury, in the court, in term time. Section 2005, Comp. Laws of the Territory, provides: "For the purpose of hearing application for and issuing writs of mandamus the District Court shall be regarded as open at all times wherever the judge of such court may be within the Territory." This section gives full authority for these proceedings. The original application was entitled "in the court," though addressed to the judge, as was proper. The hearing and judgment were by the court, and the peremptory mandamus was issued by direction of the court; and the power of the legislature to provide that the court shall always be open for certain purposes, cannot be doubted. A somewhat similar provision has been made for the Circuit Courts of the United States in respect to the supervision of elections. Rev. Stat. section 2013. While no jury was had, apparently, none was demanded; and the determination of the facts by a jury in a mandamus case is not a necessary preliminary to a valid judgment.
Again, it is objected that the punishment is different from that permissible in cases of mandamus, and section 2002 of the Compiled Laws is cited. That reads as follows: "Whenever *589 a peremptory mandamus is directed to a public officer, body or board, commanding the performance of any public duty specially enjoined by law, if it appears to the court that such officer or any member of such body or board, without just excuse, refuses or neglects to perform the duty so enjoined, the court may impose a fine not exceeding $250, upon every such officer or member of such body or board; such fine, when collected, shall be paid into the Territorial treasury, and the payment of such fine is a bar to an action for any penalty incurred by such officer, or member of such body or board, by reason of his refusal or neglect to perform the duty so enjoined." But that section provides for the wrong done by the party, in failing to discharge the duty imposed; and does not exclude the power of the court to punish for disobedience of the writ, or to compel obedience to the writ by imprisonment until compliance. The section quoted was taken from the legislation of the State of New York, 2 N.Y. Rev. Stat. 587, section 60; and the scope of that section was considered by the New York Court of Appeals in People ex rel. v. Railroad Company, 76 N.Y. 294. In that case the court thus interpreted the section: "We do not think that this provision was intended to prescribe the punishment for disobeying the writ, but that its object was to authorize the court to whom application should be made for a writ of mandamus against a public officer, body or board, to compel the performance of a public duty specially enjoined by law, to impose a fine upon the officer, etc., for past neglect of the duty, in addition to awarding a peremptory mandamus compelling its performance, providing no just excuse is shown for such past neglect. This power of the court granting the mandamus, to fine for past neglect, was intended to obviate the necessity of a criminal prosecution under the statute which constitutes such neglect a misdemeanor, and to enable the court awarding the mandamus to dispose of the whole matter in one proceeding. The offence for which the fine is authorized to be imposed, is not disobedience of the writ, but the unexcused neglect of duty of which the officer was guilty before the writ issued and which rendered the application necessary, and the fine may be imposed *590 at the time of issuing the peremptory writ. This is the clear import of the language of the section, and in the revisers' notes it is stated to be a new provision, intended for the purpose above indicated."
This brings us to the principal question in the case; and that is, that the real import of this proceeding was to try the title to office; that quo warranto is a plain, speedy and adequate, as well as the recognized remedy for trying the title to office; and that the familiar law in respect to mandamus, reinforced by statutory provisions in New Mexico, is that mandamus shall not issue in any case where there is a plain, speedy and adequate remedy at law. On this, the invalidity of the proceedings is asserted. But the obvious reply is, that this was not a proceeding to try the title to office. The direct purpose and object was to compel the defendant to discharge his duties as clerk, and to forbid him to assume to determine any contest between rival commissioners. It was enough in this case for the court to determine, and it must be assumed that the evidence placed before it was sufficient to authorize an adjudication, that the petitioners were commissioners de facto. As such, the clerk was bound to obey their commands and record their proceedings. It is true, the pleadings disclose the existence of a contest between these petitioners and other parties, and it is true that the answer would tend to show that the others were the commissioners de facto; but that was a question of fact to be determined by the court hearing this application, and it, as must be assumed from the decision, found that these petitioners rather than their contestants were the commissioners de facto. It was proper for it then to issue a mandamus to compel the defendant to recognize them as the commissioners of the county, and this, irrespective of the question whether or no the petitioners were also commissioners de jure. No one would for a moment contend that this adjudication could be pleaded as an estoppel in quo warranto proceedings between the several contestants. If that has not already been determined in a suit to which all the contestants are parties, it is still a matter open for judicial inquiry and determination. Who would doubt, if these petitioners were *591 the unquestioned commissioners of the county that mandamus would lie to compel the clerk to recognize them, and record on the county books their proceedings as such? Does the fact that certain parties are contesting their rights as commissioners oust the court of jurisdiction, or forbid it to compel other county officers to recognize them? Must the office of county commissioners remain practically vacant, and the affairs of the county unadministered, pending a trial of a right of office between contestants? Surely not; public interests forbid. They require that the office should be filled; and that when filled by parties under color of right, all other officers should recognize them as commissioners until their right to hold the office has been judicially determined adversely by proper quo warranto proceedings. It would be strange indeed if, when their title and possession of the office were unquestioned, the court had undoubted jurisdiction by mandamus to compel the clerk of the board to record their proceedings, and recognize them as officers, its jurisdiction to act was lost by a mere pleading on the part of the delinquent clerk asserting that some other parties were the rightful commissioners. This is not a suit by one party claiming to be clerk of the board, to compel by mandamus another party also claiming to be clerk of the board to transfer to him the records and papers of the office; nor by certain parties claiming to be commissioners, to compel other parties also claiming to be commissioners to surrender the office, and desist from interference with its duties; but it is a suit by certain parties showing themselves to be de facto commissioners, to compel the clerk of that board to respect their possession of the office, discharge his duties as clerk to the acting board, and not assume to himself judicial functions, and adjudicate against the validity of their title. The case of Putnam v. Langley, 133 Mass. 204, is in point. Plaintiff there claimed to have been elected one of the board of water commissioners of the town of Danvers. One Josiah Ross also claimed to have been elected, and there was a matter of disputed title between plaintiff and Ross. Langley and Richards were the other commissioners, whose title was apparently undisputed. It was held that mandamus was a proper *592 remedy to compel Langley and Richards to recognize, receive and act with the plaintiff as a member of the board. As sustaining the views we have expressed, though not exactly in point, see also Rex v. Harris, 3 Burrow, 1420; Page v. Hardin, 8 B. Mon. 648; State v. Mayor, 23 Vroom, (54 N.J. Law,) 332; Williams v. Clayton, Supreme Court of Utah, 21 Pac. Rep. 398.
Our conclusion, therefore, is that the District Court had jurisdiction, and that the merits of the controversy cannot be inquired into collaterally in this way. The judgment of the Supreme Court of the Territory of New Mexico is
Affirmed.
MR. JUSTICE BRADLEY was not present at the argument and took no part in the decision of this case.
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Court of Appeals
of the State of Georgia
ATLANTA,____________________
February 12, 2016
The Court of Appeals hereby passes the following order:
A16A0736. DAVIS v. THE STATE.
This appeal was docketed on December 22, 2015. On January 19, 2016, this
Court ordered appellant to file his brief and enumeration of errors within 10 days.
As of the date of this order, appellant has failed to file the brief and
enumeration of errors. Therefore, this appeal is DISMISSED. See Court of Appeals
Rules 13 and 23 (a).
TO THE DEFENDANT: Your appeal has been DISMISSED because your
attorney failed to file a brief and enumeration of errors. If you have decided you do
not want to appeal, you need not do anything more. However, if you still want to
appeal, you may have the right to an OUT-OF TIME APPEAL - but YOU MUST
TAKE ACTION to exercise that right by moving for an out-of-time appeal in the trial
court. If your motion for an out-of-time appeal is granted, the trial court should
appoint another attorney for you if you want one and cannot pay for one. If your
motion for an out-of-time appeal is denied you may appeal that denial to this court
within thirty (30) days of the trial court’s decision.
Court of Appeals of the State of Georgia
02/12/2016
Clerk’s Office, Atlanta,____________________
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.
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986 F.2d 1423
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.UNITED STATES of America, Plaintiff-Appellee,v.Barry FOSSEY, Defendant-Appellant.
No. 92-5115.
United States Court of Appeals, Sixth Circuit.
Feb. 3, 1993.
Before MERRITT, Chief Judge; RALPH B. GUY, JR. and DAVID A. NELSON, Circuit Judges.
ORDER
1
This cause having come on to be heard upon the record, the briefs and the oral argument of the parties, and upon due consideration thereof,
2
The court finds that no prejudicial error intervened in the judgment and proceedings in the district court, and it is therefore ORDERED that said judgment be and it hereby is affirmed.
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TEE ATJXHZNE~ GENERAL
OF TEXAS
AUETXN 1% ‘~-EXAH
GERAID C. MANN
AlTORNRY GW&RAl.
HorioPableGeorge Ii.SheDpaM
C6ikptrollerm~bf
Public Accounts
Austin, Texas
Dear Sir: Oplnlon No. O-1557
Re: Computatlon of occupation tax on
carbon black.
We received your letter of September 30;1939, in
which you request our opinion on the following question:
May a manufacturer of carbon black consolidate his
sales of carbon black sellln below 4 cents a pound with
those 6elIlng for more than & cents per pound and thus be
able to pay a tax on this average?
APtlcl& 7047, SectId 45, Stibdlvlslon(a), Revised
Civil Statutes of Texas, reads as follows:
"There Is hereby levied an ddcupatlon t&x
6n every peiisonIn this State manufacturing or
ptioducingcarbon black; sala tax to be one-
twelfth of one.cent,(1112 of I#) petipound on
all carbon black produced or manufactured where
the market value Is four cents (4#) per pound
or less and three per cent (3$)of the value of
all carbon~black proi%.zced
or manufactured where
the avera e market value Is 'Inexcels of four
7 per pound. The market value bf car-
cents ~(4#
bon black, as that term is herein used',shall
be the actual tirket value thereof plus any bonus
or pr6mlum br other thing of value paid ttierefdr,
of the actual value which carbon black does rea-
sonably bring In the due course of trade."
The act provlaes that the tax shall'be paid on all Car-
bon black produced or manufactured and the amount of the tax
Is to be based upon the market value thereof'"where the mar-
ket value is four cents (4d) per pound or less and three per
cent (3%) of thenvalue . ; 0 where the average market value Is
In ekc'essof four cents (4$) per pound." The provlsl6n "one“
twelfth of one cent (l/12 of I#) per pound 0 where the nmr-
ket value IS fouFcents (4#) pGr pound or~less'"'Is a fixed and
definite sum for all carbon black whose market value does not
Honorable Geo. H. Sheppard, page 2 o-1557
exceed this amount. In referring to more expensive grade of
carbon black the Legltilatureprovided "and three petident .(3$)
of the value of all carbon black . . .,wher& th.3average mar-
ket value Is In excess of four cents (4#) per pound".
It Is the apparent Intention of'the Legislature to
tax the average price of a particular grade and hot'tc, strike
an average price as between the several grades manufactured.
You are, therefore, advIsei that~In our opinion a~mati-
Ufacturer of carbbn.black should segregate his production and
pay a tax upon the actual market value of each separate black
produced.
Yours very truly
ATTORNEYGENERAL OF TXKAS
By s/C6bil C. Camniatik
Cecil'Ci~Cammack
Assistant
ccc:LM:wc
APPROVED~OCT 23, 1939
s/Gerald C. Mann
ATTORNEYGENERAL OF TEXAS
Approved Opinion Committee By s/ME! Chairman
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575 F.2d 896
97 L.R.R.M. (BNA) 3083, 188 U.S.App.D.C. 15,83 Lab.Cas. P 10,405
INTERNATIONAL ORGANIZATION OF MASTERS, MATES AND PILOTS,AFL-CIO, Petitioner,v.NATIONAL LABOR RELATIONS BOARD, Respondent,Cove Tankers Corporation District 2, Marine EngineersBeneficial Association-Associated MaritimeOfficers, AFL-CIO, Intervenors.
No. 76-1633.
United States Court of Appeals,District of Columbia Circuit.
Argued Sept. 29, 1977.Decided March 6, 1978.
Petition for Review and Cross-Application for Enforcement of Order of the National Labor Relations Board.
Jerry D. Anker, Washington, D. C., with whom Burton M. Epstein, New York City, and Robert E. Nagle, Washington, D. C., were on the brief, for petitioner.
Aileen Armstrong, Atty., N.L.R.B., Washington, D. C., with whom John S. Irving, Gen. Counsel, Carl L. Taylor, Associate Gen. Counsel, and Elliott Moore, Deputy Associate Gen. Counsel, Washington, D. C., were on the brief, for respondent.
Roger H. Briton, New York City, of the bar of the Supreme Court of New York, pro hac vice, by special leave of court, for intervenor, Cove Tankers Corporation. Andrew E. Zelman, Washington, D. C., was on the brief for intervenor, Cove Tankers Corp.
Richard H. Markowitz, New York City, was on the brief for intervenor, District 2, Marine Engineers Beneficial Association-Associated Maritime Officers, AFL-CIO.
Before BAZELON, Chief Judge, and TAMM and WILKEY, Circuit Judges.
Opinion for the court filed by Circuit Judge TAMM.
TAMM, Circuit Judge:
1
Petitioner International Organization of Masters, Mates and Pilots, AFL-CIO (IOMMP) seeks review of a final adjudication of the NLRB1 (the Board), and the Board cross-petitions for enforcement of its order.2 See 29 U.S.C. § 160(e)-(f) (1970). Based upon our review of the record and the applicable law, we conclude that the Board's order was supported by substantial evidence and that the Board applied the correct legal principles to the facts. Accordingly, we affirm the decision of the Board, and we grant the cross-petition for enforcement of its order.
2
* This is another in a series of cases growing out of the prolonged struggle between IOMMP and District 2, Marine Engineers Beneficial Association-Associated Maritime Officers, AFL-CIO (MEBA). Because a description of the conflict has been given so well by the Fifth Circuit in International Organization of Masters, Mates & Pilots v. NLRB (Westchester Marine Shipping Co.), 539 F.2d 554 (5th Cir. 1976), cert. denied, --- U.S. ----, 98 S.Ct. 106, 54 L.Ed.2d 86 (1977), we need not set out the full history once again. It suffices to say merely that IOMMP and MEBA each represents licensed deck officers, and that the two are in intense competition.
3
The facts giving rise to this appeal center upon IOMMP's3 picketing of, and filing an in rem action against, the Mount Explorer, owned at the time in question by intervenor Cove Tankers Corporation (Cove).4 Until early 1975, the Mount Explorer was called the William J. Fields. It was owned by the Syracuse Corporation, operated by the Texas City Tankers Corporation, and manned by licensed deck officers from IOMMP. The vessel was laid-up and sold to Cove, its IOMMP licensed deck officers having been compensated.
4
After a period of time in a Galveston, Texas, layberth, the vessel emerged as the Mount Explorer, manned with licensed deck officers from MEBA. In late April 1975, the Mount Explorer docked at Brady Island and the Crown Oil refinery, both of which are in or near the Port of Houston, Texas. At both facilities, the vessel was met with picket signs reading:WE HAVE A CURRENT COLLECTIVE BARGAINING AGREEMENT COVERING THIS SHIP. IT WAS FORMERLY NAMED THE S/S WILLIAM J. FIELDS. IT IS NOW CALLED THE S/S MOUNT EXPLORER. OUR COLLECTIVE BARGAINING AGREEMENTS WITH PLAZA SHIPPING COMPANY5 AND TEXAS CITY TANKERS CORP.6 COVER THIS VESSEL.
5
OFFSHORE DIVISION INTERNATIONAL ORGANIZATION OF MASTERS, MATES AND PILOTS.
6
The vessel received its cargo in spite of the picketing.
7
On April 25, 1975, while the vessel was still docked near Houston, an in rem action was filed in the United States District Court for the Southern District of Texas, Houston Division, on behalf of the IOMMP licensed deck officers who served under the contract with Texas City Tankers Corporation.7 See General Counsel's Exhibit (G.C. Exh.) 11, Appendix (App.) at 437. The lien was released after the filing of a $100,000.00 bond, and the Mount Explorer departed.
8
In June 1975, the vessel returned to the Port of Houston, and was again subjected to picketing. The signs read:
9
WE ARE NOT CLAIMING ANY RIGHT TO THE JOBS ON THE S/S MOUNT EXPLORER.8 AS A RESULT OF ITS HAVING BEEN OPERATED AS THE S/S WILLIAM J. FIELDS BY THE TEXAS CITY TANKER COMPANY WE DO CONTEND THAT PACK, KAHN AND BERKE9 THROUGH THEIR CONTROLLED CORPORATIONS AND AFFILIATES HAVE VIOLATED THEIR COMMON LAW CONTRACTUAL OBLIGATIONS WITH THE I O M M & P OFFSHORE DIVISION RELATING TO THE OPERATION OF THE S/S MOUNT EXPLORER. THIS VESSEL IS BEING OPERATED WITH SUBSTANDARD MANNING. WE HAVE NO DISPUTE WITH ANY OTHER VESSEL AT THIS FACILITY.
10
INTERNATIONAL ORGANIZATION10 OF MASTER MATES AND PILOTS OFFSHORE DIVISION.
11
In contrast to what happened in April 1975, the picketing managed to halt the loading of the ship. A temporary restraining order was obtained to halt the picketing.
12
The Board's general counsel brought unfair labor practice proceedings, charging that IOMMP's conduct had violated sections 8(b)(1)(B), 8(b)(4), and 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(b)(1)(B),11 (b) (4),12 (e)13 (1970). The Administrative Law Judge (ALJ) found for the general counsel, and, on appeal, the Board affirmed the sections 8(b)(1)(B) and 8(b)(4) violations, but dismissed the section 8(e) violation.
II
13
We perceive the principal issue as whether there is substantial evidence in the record as a whole to support the underlying findings of fact. 29 U.S.C. § 160(e)-(f) (1970). See generally 5 U.S.C. § 706(2)(E) (1976); NLRB v. Brown, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965); Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Insofar as relevant to the contentions raised by petitioner on this appeal, the Board adopted the ALJ's determinations that the picketing and the filing of the in rem action were directed toward (1) replacement of the MEBA officers with IOMMP members, (2) recognition of IOMMP by Cove, (3) adoption of the standard-form IOMMP collective bargaining agreement by Cove. 224 N.L.R.B. 1626, 1633-35 (1976).
14
Strong evidence supporting the findings of fact may be found in the wording of the first set of picket signs: "We have a current collective bargaining agreement covering this ship." The standard IOMMP collective bargaining agreement requires that IOMMP be recognized as the sole collective bargaining representative of the licensed deck officers, G.C. Exh. 7, § II(1), App. at 417, and that replacements be IOMMP members generally hired through IOMMP hiring halls. Id., § II, App. at 417-18; Transcript (Tr.) at 161, App. at 131. Thus, the assertion that there is a "current collective bargaining agreement covering this ship" has manifold significance. First, it is equivalent to a demand that IOMMP be recognized as the sole collective bargaining representative of the licensed deck officers, and, second, it implies that Cove violated the section II replacement procedures of the IOMMP contract. Thus, the assertion of a collective bargaining agreement is totally inconsistent with the theory now advanced by petitioner id est, that it was merely seeking wages.
15
It is clear that IOMMP employed a standard form collective bargaining agreement the so-called "Master Collective Bargaining Agreement" which, by its own description, covered all employers under contract with IOMMP. G.C. Exh. 7 at 1, App. at 417; see Tr. at 124-26, App. at 98-100; Tr. at 146-48, App. at 119-21. As noted above, adoption of the terms of the standard agreement by Cove would have required, inter alia, that IOMMP be recognized exclusively, and, by clear logical extension, that the MEBA officers be replaced.14 See Tr. at 164, App. at 133; Tr. at 173, App. at 140; Tr. at 205-10, App. at 158-63.
16
The evidence provided by the wording of the signs is, in our view, of particular qualitative value in that the wording was prepared in consultation with counsel. G.C. Exh. 2 at 4, App. at 373; Tr. at 74, App. at 59; Tr. at 76, App. at 61. In view of the holding of this court in International Organization of Masters, Mates & Pilots v. NLRB (Marine & Marketing International Corp.), 159 U.S.App.D.C. 11, 486 F.2d 1271 (1973) (per curiam), cert. denied, 416 U.S. 956, 94 S.Ct. 1970, 40 L.Ed.2d 306 (1974), to the effect that replacement picketing violates section 8(b)(1)(B), IOMMP acted perilously indeed by broadly asserting the existence of a current collective bargaining agreement. If IOMMP were in fact limiting itself to a claim for wages, it seems that, as a matter of common sense, this limited purpose would have been disclosed plainly by the picket signs. Neither set of picket signs reveals that IOMMP's intent was to limit itself to a claim for wages.15 See Tr. at 177-78; App. at 144-45. Captain Holdeman did not express the "fact" of IOMMP's limited objective to Cove, nor, to his knowledge,16 did anyone at IOMMP directly communicate this "fact" to Cove. Id. This continued failure to give Cove effective notification is quite persuasive evidence that IOMMP's true purpose did not change from April to June 1975.17
17
Another important piece of evidence is Captain Holdeman's newspaper article in the May 1975 issue of The Master, Mate & Pilot. G.C. Exh. 2 at 4, App. at 373. Captain Holdeman, a vice president of IOMMP's Offshore Division and port agent for Galveston, Tr. at 68, App. at 54, was, by his own admission, a prime mover in the decision to picket and in the picketing itself. See Tr. at 74, App. at 59; Tr. at 76, App. at 61; Tr. at 97-98, App. at 81-82.
18
The headline of the article is: "MM&P (IOMMP) to Fight for Jobs on Runaway Ship MOUNT EXPLORER." G.C. Exh. 2 at 4, App. at 373 (emphasis added). The body of the article states that the Mount Explorer "was then, before and always under contract to . . . MM&P (IOMMP) for the Master and Mates," and, therefore, IOMMP "was going to fight." Id. The author goes to express his general concern for IOMMP jobs in the face of MEBA "raids," and he specifically characterizes MEBA's actions with respect to the Mount Explorer as a "raid." Id. Captain Holdeman gives the same characterization in his oral testimony. Tr. at 140, App. at 114; see Tr. at 208, App. at 161. Taken together, this evidence provides substantial support for the finding that "an essential element of . . . (the) rivalry (between IOMMP and MEBA) is a battle over jobs a battle to determine whether the ships involved shall be manned by members of IOMMP dispatched from its hiring halls or by . . . MEBA members from that union's hiring halls." 224 N.L.R.B. at 1635.
19
Captain Holdeman goes on to render a description of the circumstances surrounding the filing of the in rem action:18
20
Now, it was becoming noticeable that we were faced with too many legal road blocks. A "hard" picket line would bring fast action from the courts in the form of an injunction. A "soft" picket line is ineffective and frustrating to the members. Something new had to be added.
21
Friday, the Legal Beagles came up with a suit against the vessel for the wages of the dispossed (sic ) Master and Mates from pay-off to the end of the contract. Since they were on the picket line, they were easy to get in touch with. All gave their permission and the Vice President of the Gulf authorized the suit in the name of the Organization.
22
The next step was to slap a lien on the vessel with a $100,000.00 bond. This was done at 15:10, Friday, the 25th (of April 1975).
23
G.C. Exh. 2 at 4, App. at 373. Thus, there is abundant evidence that the genesis of the in rem action was approximately contemporaneous with the first, relatively ineffectual picketing, that the idea for the in rem action flowed from the "Legal Beagles" to the plaintiffs in that action, that the go-ahead for the suit came from IOMMP, that it was related intimately to the ongoing picketing, and, indeed, that it was intended as a dramatic, tactical supplement to the picketing. This interpretation of these events is confirmed by the testimony of Captain Holdeman. See Tr. at 195-97, App. at 148-50. See also Tr. at 87-89, App. at 71-73; Tr. at 205-10, App. at 158-63. Thus, we conclude that substantial evidence supports the ALJ's conclusions that the wage claim in the lawsuit was "an afterthought, constituting a strategem to mask Respondent's (IOMMP's) real intent," 224 N.L.R.B. at 1634, and that the lawsuit was filed in furtherance of IOMMP's " 'larger objective,' " id. Both of these determinations were adopted expressly by the Board. Id. at 1626 n.2. Further, we do not disagree with the Board's own finding that "the filing of the lawsuit may not have been taken in complete good faith." Id.
24
In its brief, IOMMP contends that it was attempting scrupulously to conform its conduct to the law as established in Marine & Marketing International Corp. and Westchester Marine Shipping Co.19 See Brief for Petitioner at 29-34. IOMMP argues that its past violations are not highly probative in logic of the fact that it violated the law in this instance. We are inclined to agree. On the other hand, we must note that its past violations are not particularly persuasive evidence that IOMMP did not break the law in this instance, contrary to petitioner's argument. See Brief for Petitioner at 29-34. From our examination of the record evidence, we must conclude that the findings were supported by substantial evidence.
III
25
Insofar as is relevant here, section 8(b)(1)(B) makes it an unfair labor practice for a "labor organization" to "restrain or coerce . . . an employer in the selection of his representatives for the purpose( ) of . . . the adjustment of grievances." 29 U.S.C. § 158(b)(1)(B) (1970). Relying upon the decision of this court in Marine & Marketing International Corp. and its own prior decision in Westchester Marine Shipping Co.,20 the Board held that IOMMP violated section 8(b)(1)(B) by its picketing and its filing of an in rem action with the object of having Cove replace its MEBA crew, recognize IOMMP, and adopt IOMMP's terms. 224 N.L.R.B. at 1626, 1634-36.
26
Licensed deck officers are "supervisors" within the meaning of29 U.S.C. § 152(11) (1970). See Brief for Petitioner at 8. IOMMP, however, also represents a number of "employees" as defined by 29 U.S.C. § 152(3) (1970).21 The master and chief mate have grievance adjustment responsibility, 224 N.L.R.B. at 1632, and are "representatives" under 29 U.S.C. § 152(4) (1970) and section 8(b)(1)(B). Westchester Marine Shipping Co., 539 F.2d at 556. Because of its "employee" membership, IOMMP is a "labor organization" under 29 U.S.C. § 152(5) (1970), and therefore is subject to the restraints embodied in section 8(b)(1)(B). Westchester Marine Shipping Co., 539 F.2d at 559-60; Marine & Marketing International Corp., 486 F.2d at 1273-74.
27
Petitioner once again seeks to relitigate its contention that, as a matter of statutory interpretation, it is not subject to section 8(b)(1)(B) restraints when it is not acting on behalf of its "employee" membership. Brief for Petitioner at 35-51; Petitioner's Reply Brief at 2-12. Petitioner urges us to overrule the decision of this court in Marine & Marketing International Corp., arguing, inter alia, that it is undercut substantially by the Supreme Court's decision in Florida Power & Light Co. v. International Brotherhood of Electrical Workers, Local 641, 417 U.S. 790, 94 S.Ct. 2737, 41 L.Ed.2d 477 (1974). In rejecting petitioner's interpretation of section 8(b)(1)(B), we find that we are unable to improve upon the excellent reasoning of Judge Ainsworth in Westchester Marine Shipping Co., and therefore we adhere to it.
28
IOMMP, relying upon NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958), argues that this application of section 8(b)(1)(B)22 violates its constitutionally protected right of association. Brief for Petitioner at 51-53; Petitioner's Reply Brief at 7 n.4. We are unable to subscribe to petitioner's analysis. It has been held that the first amendment protection to the right of association applies to union membership, American Federation of State, County & Municipal Employees v. Woodward, 406 F.2d 137 (8th Cir. 1969); McLaughlin v. Tilendis, 398 F.2d 287 (7th Cir. 1968), and that a significant encroachment on first amendment rights will trigger the exacting analysis of NAACP v. Alabama, Buckley v. Valeo, 424 U.S. 1, 64, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam); accord, Elrod v. Burns, 427 U.S. 347, 362, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976) (principal opinion) (Brennan, J.); see NAACP v. Alabama ex rel. Patterson, 357 U.S. at 460-62, 78 S.Ct. 1163.
29
Because the petitioner has not "tendered record evidence of the sort proffered in NAACP v. Alabama," Buckley v. Valeo, 424 U.S. at 71, 96 S.Ct. at 660; see NAACP v. Alabama ex rel. Patterson, 357 U.S. at 462-63, 78 S.Ct. 1163, we think that "NAACP v. Alabama is inapposite," Buckley v. Valeo, 424 U.S. at 70, 96 S.Ct. 612. Based upon the reasons set forth in Westchester Marine Shipping Co., 539 F.2d at 559-61, and those in Marine & Marketing International Corp., 486 F.2d at 1274-75, we are of the view that the burdens on first amendment associational rights imposed by section 8(b) are outweighed by the countervailing governmental interests. Buckley v. Valeo, 424 U.S. at 71-72, 96 S.Ct. 612. See also Beasley v. Food Fair of North Carolina, Inc., 416 U.S. 653, 660-61, 94 S.Ct. 2023, 40 L.Ed.2d 443 (1974).
IV
30
The Board also found that petitioner's actions had violated section 8(b)(4), 29 U.S.C. § 158(b)(4) (1970). 224 N.L.R.B. at 1626. Section 8(b)(4) provides, in relevant part, that it is an unfair labor practice for a "labor organization"(i) . . . to induce or encourage any individual employed . . . in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment . . . to perform any services; or (ii) to threaten, coerce, or restrain any person engaged . . . in an industry affecting commerce, where in either case an object thereof is
31
(A) forcing or requiring any employer . . . to enter into any agreement which is prohibited by subsection (e) . . . .
32
29 U.S.C. § 158(b)(4) (1970).
33
Section 8(e) proscribes "hot cargo" agreements, defined in part as an agreement in which an employer agrees "to cease doing business with any other person . . . ." 29 U.S.C. § 158(e) (1970). The so-called "sales and transfers" clause23 of the standard IOMMP agreement is a "union signatory clause" and has been held to be a section 8(e) "hot cargo" clause. International Organization of Masters, Mates & Pilots (Seatrain Lines, Inc.), 220 N.L.R.B. 164, 171-73 (1975). See also Danielson v. International Organization of Masters, Mates & Pilots, 521 F.2d 747, 751-55 (2d Cir. 1975). The question, then, is whether the picketing and in rem action had an unlawful objective that is, attempting to force Cove to sign the standard contract of IOMMP.
34
We have found that the determination that IOMMP's actions were directed towards forcing the terms of IOMMP's contract upon Cove is supported by substantial evidence in the record. See text, supra at --- - --- of --- U.S.App.D.C., at 902-904 of 575 F.2d. IOMMP argues that, in order to make a finding of a violation of section 8(b)(4), there must be a showing that IOMMP's actions were directed specifically at forcing adoption of the "sales and transfers" clause by Cove that is, that IOMMP "would have continued to picket even if Cove had offered to reinstate all the former MMP (IOMMP) deck officers and to sign a contract containing all the terms of the standard MMP (IOMMP) contract except that particular provision." Brief for Petitioner at 60-61. We do not share this interpretation. Clearly, it is not necessary to find that the sole object of IOMMP's action was to force adoption of a clause proscribed by section 8(e). NLRB v. Denver Building & Construction Trades Council, 341 U.S. 675, 689, 71 S.Ct. 943, 95 L.Ed. 1284 (1951). "A strike or other coercive action to obtain a contract clause which is unlawful under section 8(e) is also an unfair labor practice under the express language of section 8(b)(4)(A)." NLRB v. Amalgamated Lithographers of America (Ind.), 309 F.2d 31, 42-43 (9th Cir. 1962), cert. denied, 372 U.S. 943, 83 S.Ct. 936, 9 L.Ed.2d 968 (1963). It is sufficient if any object is unlawful. Id. at 43. As noted above, there is substantial evidence supporting the finding that an object was to force adoption of the standard agreement, including the "sales and transfers" clause. We therefore uphold the Board's finding of a section 8(b)(4) violation.
V
35
IOMMP maintains that the Board should not have found the filing of an in rem action to be an unfair labor practice as such a finding would be inconsistent with the doctrine of Clyde Taylor Co., 127 N.L.R.B. 103 (1960). The principle relied on by petitioner is that the Board "should accommodate its enforcement of the Act to the right of all persons to litigate their claims in court, rather than condemn the exercise of such right as an unfair labor practice." Id. at 109; see Brief for Petitioner at 65; Petitioner's Reply Brief at 17.
36
The language relied upon by petitioner does not indicate that the filing of a lawsuit will never be regarded as an unfair labor practice, nor do we interpret it to have such a meaning. Rather, the language is, in our view, a mere expression of a general liberality in accommodating the filing of lawsuits. Where, as here, the lawsuit was coupled with a lien, and was intimately related to ongoing picketing for an unlawful objective, and "may not have been taken in complete good faith," 224 N.L.R.B. at 1626 n.2, we can see no inconsistency between Clyde Taylor Co. (and its progeny) and the Board's determination in this instance.
37
The doctrine, as subsequently developed in Television Wisconsin Inc.,224 N.L.R.B. 722, 722 n.2 (1976) ("We agree with the Administrative Law Judge's finding that the Union's action in filing a suit to enforce an unlawful union-security clause violated Sec. 8(b)(1)(A) of the Act not because of the Union's subjective intent, but because of the unlawful objective sought by the Union.") (emphasis added), would appear to contemplate a situation such as our own. Where, as here, a union files an in rem action with an unlawful objective, and "the filing of the lawsuit may not have been taken in complete good faith," we will not decline to affirm, on the basis of Clyde Taylor Co., the Board's determination that an unfair labor practice has occurred.
VI
38
We have examined the order of the Board and have found it to be tailored properly to the violation and to be in accordance with applicable law. See Westchester Marine Shipping Co., 539 F.2d at 561. IOMMP urges that the order should be modified so as to permit picketing for IOMMP's non-replacement objectives as presented here. We agree with the Fifth Circuit that "the practical effect of seeking these other objects is . . . tantamount to coercion of the employers in the selection of their licensed deck officers." Id.
39
Thus the cross-petition for enforcement is granted, and the petition for review is denied.
40
So ordered.
1
224 N.L.R.B. 1626 (1976)
2
Cove Tankers Corporation (Cove), the affected employer and the charging party in the administrative proceedings, and District 2, Marine Engineers Beneficial Association Associated Maritime Officers, AFL-CIO (MEBA), the intervenor in the administrative proceedings, intervened in this appeal on behalf of the NLRB. See Fed.R.App.P. 15(d)
3
The Administrative Law Judge (ALJ) concluded that IOMMP, and not merely its Offshore Division, was responsible for the alleged unfair labor practices. 224 N.L.R.B. at 1632. This finding was adopted by the three-member panel delegated by the NLRB to hear the case. Id. at 1626. See generally Int'l Org. of Masters, Mates & Pilots v. NLRB (Westchester Marine Shipping Co.), 539 F.2d 554, 558-59 (5th Cir. 1976), cert. denied, --- U.S. ----, 98 S.Ct. 106, 54 L.Ed.2d 86 (1977). Although the factual finding was not challenged explicitly on appeal, see Brief for Petitioner at 29-34, we have reviewed it nevertheless, and we have determined that it is supported by substantial evidence on the record. See 29 U.S.C. § 160(e)-(f) (1970)
4
Cove is a wholly-owned subsidiary of Lawrence Shipping Corporation. Lawrence is owned in equal parts by Herman Berke, Samuel Kahn, and Warren Pack
5
This is apparently an allegation that Cove was covered by the "subsidiary and affiliate" clause of the contract with Plaza. The relevant section provides as follows:
SECTION V. VESSELS BOUND BY THE AGREEMENT
1
Coverage of Agreement
a. Vessel Coverage. This Agreement covers the Licensed Deck Officers employed on oceangoing U.S.-flag vessels, owned, operated or bareboat chartered (both at present or at any time during the life of this Agreement) by the Company or any of its subsidiaries or affiliates (whether so at present or at any time during the life of this Agreement) as an owner, agent, operator or bareboat charterer.
b. Subsidiary and Affiliate. The term "subsidiary" or "affiliate" shall be deemed to include any business entity whether corporate, partnership, trust, individual, or otherwise, which is effectively controlled by or effectively controls the Company either directly or indirectly.
c. Requirement of Subsidiary or Affiliate to Execute the Collective Bargaining Agreement. The Organization may in its discretion at any time require that any such subsidiary or affiliate execute this Agreement and a refusal to do so will give the Organization the right, upon a ten (10) day written notice to the Company, to cancel this Agreement. The failure of the Organization to request a subsidiary or affiliate to sign this Agreement shall not in any way affect the obligation of the Company herein that this Agreement does cover and include all the Licensed Deck Officers on all the vessels described above whether owned or operated by the Company or any of its subsidiaries or affiliates.
2
Sales and Transfers
a. With regard to any sale, charter (but not including a vessel which the Company may be operating under a bareboat charter and the charter is terminated) or any manner of transfer (except sales to foreign flag) of the Company's vessel:
i. At least seventy-two (72) hours prior to the date of the effective transfer of the vessel, written notice must be given to the Organization by the Company.
ii. The execution by the purchaser, charterer or transferee of the Organization's collective bargaining agreement shall be a condition precedent to any sale, charter or transfer.
iii. If the Company violates subsection 2(a)(ii) above, the Arbitrator may include as part of his award, loss of wages and contributions to the various Organization Plans.
iv. A violation of subsection 2(a)(ii) above shall also permit the Organization to cancel the no-strike provisions of this Agreement.
General Counsel's Exhibit (G.C. Exh.) 7, Appendix (App.) at 419. Plaza Shipping, Inc. had been owned by Herman Berke and had used Mount Shipping Co. ("Old Mount") as its operating agent. Plaza had been an IOMMP signatory and had operated the Julie, but sold it in the spring of 1973. Plaza was subsequently dissolved.
6
The basis of the reference to the Texas City Tankers Corp. is not absolutely clear. IOMMP appears to maintain that the reference to Texas City Tankers Corp. was predicated upon the "subsidiary and affiliate" clause of the contract with Texas City Tankers Corp. See Brief for Petitioner at 16. The ALJ noted that IOMMP argued that the Lawrence group of companies was obligated under the "subsidiary and affiliate" clause. 224 N.L.R.B. at 1631. The ALJ found that Cove was not bound to IOMMP by this clause, id. at 1633, and noted the inconsistency between this assertion and the assertion that IOMMP was not seeking replacement of the MEBA deck officers. Id. at 1635. In its brief, petitioner appears to abandon its contention that Cove was bound under the "subsidiary and affiliate" clause, see Brief for Petitioner at 30 n.8, and maintains that IOMMP only desired expected wages. Id. at 29-34
7
At oral argument, counsel for petitioner did not disagree when it was pointed out that the standard contract of IOMMP would have called for replacement through IOMMP's hall, but not necessarily with the personnel who were plaintiffs in the in rem action
8
There existed some doubt as to whether there is a period here. Compare Brief on Behalf of Intervenor Cove Tankers Corporation at 10 with Brief for Petitioner at 15 and Brief for National Labor Relations Board at 12 and 224 N.L.R.B. at 1630
9
This is another reference to the "subsidiary and affiliate" clause of the contract. See notes 5 & 6 supra. For a more complete discussion, see 224 N.L.R.B. at 1631-35
10
There is some question as to whether this read "organization" or "order." See 224 N.L.R.B. at 1630 n.6. We cannot perceive any consequence in the difference
11
29 U.S.C. § 158(b)(1) (1970) provides in full:
(b) It shall be an unfair labor practice for a labor organization or its agents
(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 157 of this title: Provided, That this paragraph shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein; or (B) an employer in the selection of his representatives for the purposes of collective bargaining or the adjustment of grievances.
12
29 U.S.C. § 158(b)(4)(i) & (ii)(A) (1970) provides in full:
(b) It shall be an unfair labor practice for a labor organization or its agents
(4)(i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is
(A) forcing or requiring any employer or self-employed person to join any labor or employer organization or to enter into any agreement which is prohibited by subsection (e) of this section.
13
29 U.S.C. § 158(e) (1970) provides in full:
(e) It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforcible and void: Provided, That nothing in this subsection shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work: Provided further, That for the purposes of this subsection and subsection (b) of this section the terms "any employer", "any person engaged in commerce or an industry affecting commerce", and "any person" when used in relation to the terms "any other producer, processor, or manufacturer", "any other employer", or "any other person" shall not include persons in the relation of a jobber, manufacturer, contractor, or subcontractor working on the goods or premises of the jobber or manufacturer or performing parts of an integrated process of production in the apparel and clothing industry: Provided further, That nothing in this subchapter shall prohibit the enforcement of any agreement which is within the foregoing exception.
14
IOMMP contended that section II(2) of the standard form contract would not have required replacement under the circumstances presented. The ALJ rejected this argument, and we subscribe to his analysis. 224 N.L.R.B. at 1635
15
The second set of signs announced merely, "We are not claiming any right to the jobs . . . ." See text, supra at --- of --- U.S.App.D.C., at 901 of 575 F.2d
16
Captain Holdeman played a very active role in IOMMP activities with respect to Cove at this time. Transcript (Tr.) at 74, App. at 59; Tr. at 76, App. at 61; Tr. at 97-98, App. at 81-82
17
Further evidence is provided by the second set of picket signs. The claim that the Lawrence owners were bound by their "common-law contractual obligations" appears to be an attempt to enforce the "subsidiary and affiliate" clause. Such enforcement would appear to contemplate a claim for more than mere wages. 224 N.L.R.B. at 1633-34 & n.10
18
See G.C. Exh. 11, App. at 437-40
19
The ALJ's decision in Westchester Marine Shipping Co. came on January 17, 1975. 219 N.L.R.B. 26 (1975). The decision of the Board was issued on July 9, 1975, id., and the decision of the Fifth Circuit was given on September 27, 1976
20
The decision of the Fifth Circuit in Westchester Marine Shipping Co. was given on September 27, 1976. The decision of the Board in the instant case came on June 23, 1976
21
The "employee" members are, for the most part, deckhands and cooks on small vessels. See Brief for Petitioner at 9. See also Westchester Marine Shipping Co., 539 F.2d at 556 n.1
22
It is to be noted that the section 8(b) restraints are only a portion of a more complicated regulatory scheme. In addition to being relatively more restrained than unions without employees, IOMMP is also relatively more protected in that it gains certain protections offered under section 8(a), 29 U.S.C. § 158(a) (1970). See Westchester Marine Shipping Co., 539 F.2d at 556; Int'l Org. of Masters, Mates & Pilots v. NLRB (Marine & Marketing Int'l Corp.), 159 U.S.App.D.C. 11, 14, 486 F.2d 1271, 1274 (1973) (per curiam), cert. denied, 416 U.S. 956, 94 S.Ct. 1970, 40 L.Ed.2d 306 (1974)
23
See note 5 supra
| {
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} |
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MICHAEL BAILEY; JANE BAILEY; BILLY
BAILEY,
Plaintiffs-Appellees,
v. No. 02-1761
D. H. KENNEDY; D. B. WHITLEY;
MIKE CRISP; CITY OF HICKORY,
Defendants-Appellants.
MICHAEL BAILEY; JANE BAILEY; BILLY
BAILEY,
Plaintiffs-Appellants,
v. No. 02-1818
D. H. KENNEDY; D. B. WHITLEY;
MIKE CRISP; CITY OF HICKORY,
Defendants-Appellees.
Appeals from the United States District Court
for the Western District of North Carolina, at Statesville.
Carl Horn, III, Magistrate Judge.
(CA-00-8-5-H)
Argued: September 23, 2003
Decided: November 17, 2003
Before WILLIAMS and TRAXLER, Circuit Judges, and
HAMILTON, Senior Circuit Judge
2 BAILEY v. KENNEDY
Affirmed and remanded for further proceedings by published opinion.
Judge Williams wrote the opinion, in which Judge Traxler and Senior
Judge Hamilton joined.
COUNSEL
ARGUED: Robert Danny Mason, Jr., WOMBLE, CARLYLE, SAN-
DRIDGE & RICE, P.L.L.C., Winston-Salem, North Carolina, for
Appellants. Stephen Luke Largess, FERGUSON, STEIN, CHAM-
BERS, WALLAS, ADKINS, GRESHAM & SUMTER, P.A., Char-
lotte, North Carolina, for Appellees. ON BRIEF: James R. Morgan,
Jr., WOMBLE, CARLYLE, SANDRIDGE & RICE, P.L.L.C.,
Winston-Salem, North Carolina, for Appellants.
OPINION
WILLIAMS, Circuit Judge:
Officers D.H. Kennedy, D.B. Whitley, Mike Crisp, and the City of
Hickory appeal the district court’s denial of qualified immunity and
public officers’ immunity on several of Michael, Jane, and Billy Bai-
ley’s federal constitutional and state law claims. The Baileys’ claims
arose in connection with two separate incidents: the seizure of
Michael Bailey1 on May 27, 1998, inside the home of his parents,
Jane and Billy Bailey; and the arrest of Michael Bailey on September
3, 1998. As discussed below, accepting the facts as the district court2
viewed them in denying qualified immunity, the police officers vio-
lated clearly established federal law. In addition, under North Caro-
lina law, an officer of reasonable intelligence would have known that
the police officers’ actions were contrary to their duty. Accordingly,
1
The record indicates that Michael was 41 years-old at the time these
events took place.
2
The parties consented to have the case decided by a Magistrate Judge
pursuant to 28 U.S.C.A. § 636(c) (West Supp. 2003). For ease of refer-
ence, we refer to the magistrate judge as the district court throughout.
BAILEY v. KENNEDY 3
we affirm the district court’s denial of qualified immunity and public
officers’ immunity.
The Baileys cross-appeal the district court’s grant of summary
judgment to the police officers and the City of Hickory on the Bai-
leys’ procedural due process claim, and its denial of summary judg-
ment on two of their state law claims. Because we do not have
jurisdiction over this interlocutory cross-appeal, see Swint v. Cham-
bers County Comm., 514 U.S. 35 (1995), we grant the motion to dis-
miss the cross-appeal.
I.
On May 27, 1998, Officers Whitley and Kennedy, police officers
with the City of Hickory, North Carolina, took Michael Bailey invol-
untarily out of his parents’ home to a hospital for an emergency men-
tal evaluation. Accepting the facts as the district court viewed them,
Michael was riding his bike while intoxicated before the officers were
called.3 He rode to his neighbor’s house and fell down. His neighbor,
Ms. Matheson, called 911. The 911 operator "relayed the following
report to a City police communications operator: ‘Mike Bailey
advised a neighbor that he is going home to commit suicide. He is
intoxicated and has been depressed.’" (J.A. at 75.) Officers Whitley
and Kennedy responded separately to the call. Officer Whitley arrived
at the Baileys’ home first. The district court described the subsequent
events as follows:
It is undisputed that Michael was home alone when
Defendant Whitley arrived and knocked on the front door of
the house. In the light most favorable to the Plaintiffs,
3
We recognize that the police officers hotly dispute what happened on
the afternoon of May 27. As discussed below, our jurisdiction to consider
an appeal from the denial of qualified immunity is limited. We must
accept the facts as the district court viewed them and "determine
whether, based on those facts, a reasonable person in the defendant’s
position could have believed that he or she was acting in conformity with
the clearly established law at the time." Gray-Hopkins v. Prince
George’s County, Md., 309 F.3d 224, 229 (4th Cir. 2002). Accordingly,
we quote at length from the district court’s recitation of the facts.
4 BAILEY v. KENNEDY
Michael admitted Defendant Whitley into the house and
returned to sit at the dining table where he was eating lunch.
Defendant Whitley asked Michael a series of questions,
which Michael answered to Defendant Whitley’s apparent
satisfaction. Michael denied any thoughts of suicide, but
declined Defendant Whitley’s request to search the rest of
the house, instead directing Defendant Whitley to contact
his father, Plaintiff Billy Bailey, for permission to conduct
a search.
It is undisputed that there were no weapons or any other
evident preparations for a suicide attempt in view in the
foyer, dining room, or kitchen of the house, but Michael tes-
tified in his deposition that he told Defendant Whitley that
his father kept guns locked in a gun safe.3 In the light most
favorable to the Plaintiffs, Michael asked Defendant Whit-
ley to leave, escorted him out of the house, and closed the
front door. . . .
FN.3 Michael Bailey’s deposition testimony that
he told Defendant Whitley about the gun safe is
the first mention in the record of even the possibil-
ity of a gun being in the Bailey residence. In his
deposition, Defendant Whitley could not recall
ever asking Michael about the presence of weap-
ons in the house, but merely asked generally for
permission to search.
There is no evidence . . . that Defendant Whitley voiced
any objection to returning to the porch or made any attempt
to remain inside the house or prevent Michael from closing
the door. Instead, Defendant Whitley stepped out of the
house and allowed Michael to shut the door.
At the same time that Defendant Whitley stepped out the
front door onto the porch, Defendant Kennedy arrived on
the scene, exited his patrol car, and began to walk towards
the front porch. Defendant Whitley rang the doorbell but
BAILEY v. KENNEDY 5
then stepped a few feet away from the doorway, turned his
back to the door, and attempted to contact his supervisor,
Lieutenant Ron Lambreth, via his portable radio.
Even in the light most favorable to the Defendants,
Defendant Whitley said only "we’re going to have to do
something" to Defendant Kennedy, before Defendant Whit-
ley began his radio conversation with his supervisor and
Defendant Kennedy knocked on the front door. . . .
It is undisputed that while [Michael] was . . . speaking
with his sister-in-law on the telephone — that is, while he
was holding the telephone handset to his ear — Michael
reopened the front door and faced Defendant Kennedy.
In the light most favorable to the Plaintiffs, after telling
Defendant Kennedy that the suicide report was "crazy," that
the officers "need[ed] to leave," and that he was going to
call his lawyer, Michael attempted to close the door and
turned and reached towards a cabinet where the telephone
base was located. In the light most favorable to the Plain-
tiffs, Defendant Kennedy placed his foot in the doorway to
prevent the door from closing and grabbed Michael’s arm in
an attempt to pull him onto the porch. Defendant Kennedy
then stepped into the house and began to fight with Michael
in an attempt to take him to the floor.
...
. . . [W]hen Defendant Whitley heard sounds of a struggle
and Defendant Kennedy’s verbal commands for Michael to
get down on the floor, he turned and saw Defendant Ken-
nedy fighting with Michael. Defendant Whitley discontin-
ued his radio call and ran to assist Defendant Kennedy.
. . . Michael testified that Defendant Kennedy had tackled
him and knocked him off his feet before Defendant Whitley
came into the house, while Defendant Whitley testified that
it required the efforts of both officers to finally take Michael
to the floor.
6 BAILEY v. KENNEDY
It is undisputed that the officers ultimately succeeded in
holding Michael down on the floor and placed a handcuff on
one of his wrists. Defendant Whitley testified that Defen-
dant Kennedy then struck Michael in the face "multiple"
times with his fist, cutting Michael’s mouth and lips, which
bled and required stitches. Defendant Kennedy testified that
he struck Michael "two or three times" in order to subdue
Michael to the point that he could be handcuffed with his
hands behind his back. Michael testified that his left shoul-
der was also injured by the Defendant officers’ repeated
attempts to grab his arm and apply handcuffs.
The Defendant officers finally handcuffed Michael with
his hands in front, held him down on the floor, and waited
for back-up. At 2:28 p.m., the Defendant officers did a "stop
unit time check" on their portable radios, indicating that
they were not in any danger.
Three minutes later, other officers arrived and placed
flex-cuffs on Michael’s ankles and wrists — this time with
his hands behind his back. . . .
Michael testified . . . that while he was still lying face-
down in the house, with his hands and feet "flex-cuffed,"
that Defendant Kennedy attempted to pick him up by the
arms, which caused great pain in his shoulders. Michael tes-
tified that Defendant Whitley responded to his curses and
shouts of pain by kicking him in the back.
In the light most favorable to the Plaintiffs, one unknown
officer then dragged Michael by his feet to the curbside.
At this point, Plaintiff Billy Bailey arrived at his home.
He observed his son still resisting the officers’ attempts to
place him in a police car and saw that Michael had scratches
on his back and was bleeding profusely from his mouth. Mr.
Bailey told Michael to stop fighting. . . .
. . . After the officers left with Michael, Mr. Bailey went
inside the house where he discovered on the foyer floor a
pool of blood that was two feet in diameter.
BAILEY v. KENNEDY 7
(J.A. at 76-80.) We note that, in the light most favorable to the Bai-
leys, after the officers arrived at the hospital, they falsely told the doc-
tors that Michael had attacked them and that Michael’s father already
had petitioned to have Michael involuntarily committed. Kennedy
then proceeded to procure a commitment order from the county mag-
istrate without disclosing that Michael was already in custody. In
addition, Kennedy completed the return of service portion of the com-
mitment order by falsely indicating that he had served the order on
Michael.
The second incident alleged in the complaint involved Michael
Bailey’s arrest on September 3, 1998. On the morning of September
3, Michael Bailey consumed an unknown quantity of alcohol. He then
walked from his home to a Wachovia bank branch and attempted to
cash a check. The teller refused to cash the check because Michael
did not have any identification and was not a customer of the bank.
Michael "‘exchanged words’ with bank personnel, including a ‘cuss
word.’" (J.A. at 83.) The bank employees called the police. Sergeant
Sigmon and Officer Kennedy responded to the bank. After talking
with bank employees, who described a man wearing a green tank top
and black pants, Sergeant Sigmon left the bank and drove in the direc-
tion that the bank employees had last seen the man with the green
tank top walking. Officer Kennedy then returned to the scene of an
unrelated accident.
Sergeant Sigmon soon came upon Michael, who met the descrip-
tion of the man who had been in the bank. She asked him where he
was going. "Michael replied that he was going home and asked if the
teller was going to press charges against him. Michael testified that
Sergeant Sigmon responded by saying, ‘No,’ but asked Michael to go
home and return with someone who would confirm that he would not
go back to the bank." (J.A. at 84.)
Michael left Sergeant Sigmon and then returned with his neighbor
Ms. Miller. By the time Michael returned, Officer Kennedy had
arrived. "Kennedy informed Michael that he intended to arrest him for
the events that occurred at the bank; Michael responded that he had
resolved the matter with Sergeant Sigmon and that Defendant Ken-
nedy did not need to become involved. In the light most favorable to
the Plaintiffs — that is, according to Ms. Miller’s affidavit —
8 BAILEY v. KENNEDY
Michael neither threatened nor cursed Defendant Kennedy but only
asked Defendant Kennedy to stop harassing him." (J.A. at 84-85.)
Kennedy then struck Michael in the chin and pushed him back 20
to 30 feet over a bush. Sigmon and Kennedy then sprayed Michael
with pepper spray. "[Michael] did not fight with the officers or resist
arrest in any way, and it is undisputed that he was handcuffed and
placed in the back of Defendant Kennedy’s patrol car."4 (J.A. at 85.)
II.
On January 12, 2000, Michael Bailey, Jane Bailey and Billy Bailey
filed a complaint against D.H. Kennedy, D.B. Whitley, Mike Crisp,
(the police officers) and the City of Hickory, alleging violations of the
United States Constitution, actionable under 42 U.S.C.A. § 1983
(West 2003), as well as violations of the North Carolina Constitution
and North Carolina common tort law. Specifically, Michael Bailey
alleged that on May 27, 1998, Kennedy and Whitley violated his right
to be free from unreasonable seizure under the Fourth Amendment by
seizing him in the absence of probable cause and by using excessive
force; violated his right to procedural due process under the Four-
teenth Amendment;5 and committed the state common law torts of
trespass by a public official, false arrest, false imprisonment, assault
and battery, and gross negligence. Jane and Billy Bailey alleged that
on May 27, 1998, Kennedy and Whitley violated their Fourth Amend-
ment right to be free from unreasonable search; violated their analo-
gous right under the North Carolina Constitution; and committed the
state common law tort of trespass by a public official. In addition,
Michael Bailey alleged that on September 3, 1998, Kennedy and
Crisp violated his Fourth Amendment right to be free from unreason-
4
The complaint and the district court’s opinion include additional facts
about the incidents after Michael was placed in the patrol car and taken
to the police station, including the participation of Officer Crisp. Because
the police officers do not appeal the district court’s denial of qualified
immunity on the excessive force claim and denial of public officers’
immunity on the state law assault and battery claim related to these sub-
sequent events, we do not discuss them further.
5
Michael Bailey also alleged a violation of his substantive due process
rights, but he later voluntarily dismissed that claim.
BAILEY v. KENNEDY 9
able seizure and committed the state common law torts of trespass by
a public official, false arrest, assault and battery, and malicious prose-
cution. The Baileys sued the City of Hickory on a theory of
respondeat superior based on the police officers’ actions on both May
27 and September 3.
On January 31, 2000, the police officers and the City moved for
summary judgment on all claims, and the Baileys filed a cross-motion
for partial summary judgment on all claims arising out of the May 27
event. The police officers based their motion for summary judgment,
as it related to the federal constitutional claims, on the defense of
qualified immunity, and as it related to the state law claims, on state
law public officers’ immunity.
On April 16, 2002, the district court entered summary judgment in
favor of the City on the federal constitutional claims against it,
entered summary judgment in favor of Kennedy and Whitley on the
procedural due process claim against them, granted qualified immu-
nity to the police officers on the Fourth Amendment false arrest claim
associated with the September 3 incident, and entered summary judg-
ment in favor of the police officers on the malicious prosecution
claim associated with the September 3 incident. The district court
denied the parties’ motions for summary judgment respecting the
remaining claims.
The police officers now appeal the denial of qualified immunity on
the federal constitutional claims associated with the May 27 event; the
denial of public officers’ immunity on the state law claims associated
with the May 27 event; and the denial of public officers’ immunity
on the state law false arrest claim associated with the September 3
event.
The Baileys filed a timely notice of cross-appeal. In their brief, the
Baileys limit their cross-appeal to three issues: the grant of summary
judgment to the police officers and the City of Hickory on the proce-
dural due process claim; the denial of summary judgment on the state
law claim of false imprisonment associated with the May 27 incident;
and the grant of summary judgment to the police officers and the City
of Hickory on the state law malicious prosecution claim associated
with the September 3 incident. As noted above, we do not have juris-
10 BAILEY v. KENNEDY
diction over this interlocutory cross-appeal. Swint v. Chambers
County Comm., 514 U.S. 35 (1995).
III.
We have jurisdiction to review final orders of district courts under
28 U.S.C.A. § 1291 (West 1993). The police officers appeal the dis-
trict court’s denial of qualified immunity on the federal law claims.
To the extent that an order of a district court rejecting a government
official’s qualified immunity defense turns on a question of law, it is
a final decision within the meaning of § 1291 under the collateral
order doctrine recgonized in Cohen v. Beneficial Industrial Loan
Corp., 337 U.S. 541 (1949), and is therefore subject to immediate
appeal. See Johnson v. Jones, 515 U.S. 304, 313 (1995) (holding that
although interlocutory appeal is allowed from the denial of qualified
immunity, questions of evidentiary sufficiency are not collaterally
appealable). Accordingly, "we possess jurisdiction to consider an
appeal from a decision of a district court rejecting a government offi-
cial’s claim of entitlement to qualified immunity to the extent that the
official maintains that the official’s conduct did not violate clearly
established law." Winfield v. Bass, 106 F.3d 525, 529 (4th Cir. 1997)
(en banc). On the other hand, "to the extent that the appealing official
seeks to argue the insufficiency of the evidence to raise a genuine
issue of material fact—for example, that the evidence presented was
insufficient to support a conclusion that the official engaged in the
particular conduct alleged—we do not possess jurisdiction under
§ 1291 to consider the claim." Id. at 529-30.
Where, as here, the district court articulates the facts as it viewed
them in determining that summary judgment was inappropriate, our
task is relatively straightforward. We "must accept those facts and
then determine whether, based on those facts, a reasonable person in
the defendant’s position could have believed that he or she was acting
in conformity with the clearly established law at the time." Gray-
Hopkins v. Prince George’s County, Md., 309 F.3d 224, 229 (4th Cir.
2002); accord Bass, 106 F.3d at 530 (holding that in reviewing the
denial of qualified immunity we "accept[ ] the facts as the district
court viewed them").
The police officers also appeal the denial of public officers’ immu-
nity on the state law claims. In determining whether we have jurisdic-
BAILEY v. KENNEDY 11
tion over the questions of law in this interlocutory appeal, "we must
apply the collateral order doctrine with due regard to the nature and
scope of the immunity." Gray-Hopkins, 309 F.3d at 231. We have
jurisdiction over the denial of public officers’ immunity if "under
state law, the immunity is an immunity from suit, but we lack such
jurisdiction if it is an immunity from liability only." Id. Because,
under North Carolina law, public officers’ immunity is an immunity
from suit, Summey v. Barker, 544 S.E.2d 262, 264 (N.C. App. 2001),
we have jurisdiction over the police officers’ appeal of the district
court’s denial of public officers’ immunity to the state law claims. We
again accept the facts as the district court viewed them.
"We review de novo the district court’s denial of qualified immu-
nity, employing our full knowledge of our own and other relevant pre-
cedents." Wilson v. Kittoe, 337 F.3d 392, 397 (4th Cir. 2003). "The
burden of proof and persuasion with respect to a claim of qualified
immunity is on the defendant official." Id. We also review the denial
of public officers’ immunity de novo. See Gray-Hopkins, 309 F.3d at
233-34 (reviewing denial of public official immunity de novo).
IV.
Determining whether a state officer is entitled to qualified immu-
nity is a two-step inquiry. First, we must decide "whether a constitu-
tional right would have been violated on the facts alleged." Saucier
v. Katz, 533 U.S. 194, 200 (2001). "Next, assuming that the violation
of the right is established, courts must consider whether the right was
clearly established at the time such that it would be clear to an objec-
tively reasonable officer that his conduct violated that right." Brown
v. Gilmore, 278 F.3d 362, 367 (4th Cir. 2002).
A.
Considering first Michael Bailey’s Fourth Amendment unlawful
seizure claim, our initial task is to assess whether the facts alleged,
taken in the light most favorable to Michael Bailey, indicate that Offi-
cers Kennedy and Whitley had probable cause to seize Michael for an
emergency mental evaluation. See S.P. v. City of Takoma Park, 134
F.3d 260, 266 (4th Cir. 1998) (holding that police officers "must have
probable cause to believe that the individual posed a danger to
12 BAILEY v. KENNEDY
[him]self or others before involuntarily detaining the individual"). If
probable cause was lacking, then Michael has successfully asserted
the violation of a constitutional right — specifically his Fourth
Amendment right against unreasonable seizure — and we may move
on to the second prong of our qualified immunity analysis.
Probable cause is a "practical, nontechnical conception" that
addresses the "the factual and practical considerations of everyday life
on which reasonable and prudent men, not legal technicians, act." Illi-
nois v. Gates, 462 U.S. 213, 231 (1993) (quotation marks omitted).
It is a "fluid concept" that cannot be "reduced to a neat set of legal
rules." Id. at 232. We have previously held that in the case of the law
governing seizures for psychological evaluations, there is a "lack of
clarity" as far as what constitutes probable cause. Gooden v. Howard
County, 954 F.2d 960, 968 (4th Cir. 1992). Based on Michael’s ver-
sion of the events giving rise to this case, as accepted by the district
court, when Officer Whitley responded to the 911 dispatch, he found
Michael intoxicated and sitting at the dining room table eating lunch.
Michael denied any thoughts of suicide, and there were no weapons
or any other preparations for a suicide attempt evident. When Officer
Whitley asked for permission to search the house, Michael told the
officer to contact Michael’s father, Billy Bailey, the owner of the
house, for permission to search. Apparently satisfied, Officer Whitley
left the house within five minutes of his arrival. Officer Kennedy
arrived as Officer Whitley was leaving the house. Officer Whitley
said, at most, "we’re going to have to do something." (J.A. at 77.)
Michael, who was then on the telephone, opened the door when Offi-
cer Kennedy knocked, and again denied any thoughts of suicide, call-
ing the suicide report "crazy." (J.A. at 77.) He told the officers that
they needed to leave and that he was going to call his lawyer. Michael
attempted to close the door and turned toward a cabinet where the
telephone base was located. At this point, Officer Kennedy placed his
foot in the doorway to prevent the door from closing and grabbed
Michael’s arm.
The police officers argue that they had probable cause to seize
Michael for an emergency mental evaluation based on the neighbor’s
911 report. According to the officers, the 911 report asserted that
Michael was at home, intoxicated, and suicidal. The police officers
argue that once they confirmed two of these three assertions, namely
BAILEY v. KENNEDY 13
that Michael was at home and intoxicated, they then had probable
cause to believe that Michael was a danger to himself. Michael, how-
ever, denied any thoughts of suicide, calling the report crazy. When
Officer Whitley arrived, Michael was sitting at the dining room table
eating lunch. More telling, after talking to Michael for approximately
five minutes, Officer Whitley exited the house. Officer Kennedy,
knowing only that Officer Whitley had exited the house and that Offi-
cer Whitley said "we’re going to have to do something," grabbed
Michael almost as soon as he opened the door.
Without more, the 911 report cannot bear the weight that the offi-
cers would place on it. The law does not permit "random or baseless
detention of citizens for psychological evaluations." Gooden, 954
F.2d at 968. The facts of this case are distinguishable from Gooden,
where the police officers responded on two separate dates to citizen
reports of screaming in an apartment building. On the second visit,
the police officers heard the screaming themselves and believed that
Ms. Gooden’s apartment was the source of the scream. When ques-
tioned, Ms. Gooden admitted that she had "yelped," ostensibly due to
burning herself on a hot iron. Id. at 962. After leaving Ms. Gooden’s
apartment, the police officers again heard noises coming from the
apartment, including loud thuds and screaming. After again talking to
Ms. Gooden, searching her apartment, and conferring with each other,
the officers decided to detain Ms. Gooden for an emergency mental
evaluation. Id. at 963-64.
This case is also distinguishable from S.P. v. City of Takoma Park.
In S.P., the police responded to a husband’s report that his wife was
possibly suicidal. When the officers arrived at S.P.’s home, they
found her alone, "obviously distraught and crying." S.P., 134 F.3d at
267. She "admitted that she had had a ‘painful’ argument with her
husband and that if not for her children, she would have considered
committing suicide." Id. After observing and interviewing S.P., the
police officers made "a deliberate decision" to detain her for an emer-
gency mental evaluation. Id.; see also In re Woodie, 448 S.E.2d 142
(N.C. App. 1994) (holding that involuntary commitment was proper
where person had attempted suicide, and when doctor advised him
that he needed to be hospitalized, he abruptly walked out of the doc-
tor’s office and said he was going to kill himself).
14 BAILEY v. KENNEDY
In this case, the police officers had no evidence to support the
assertion in the 911 report that Michael was suicidal. Michael was not
visibly distraught or crying. Instead, he was eating lunch. There were
no weapons or other suicide preparations evident, and Michael denied
the suicide reports, told the officers they needed to leave, and said he
was going to call his lawyer. Moreover, after talking with Michael for
approximately five minutes, Whitley voluntarily left the house. Of
course, citizen complaints are entitled to some credence, and officers
need not wait "until they [see] blood, bruises and splintered furni-
ture." Gooden, 954 F.2d at 967 (citation and quotation marks omit-
ted). Nonetheless, accepting the facts as the district court viewed
them, the 911 report, viewed together with the events after the police
officers arrived, was insufficient to establish probable cause to detain
Michael for an emergency mental evaluation.
We now must determine whether the right alleged to have been
violated was a "clearly established . . . right[ ] of which a reasonable
person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818
(1982). A right is "clearly established" if "‘the contours of the right
[are] sufficiently clear’" so that a reasonable officer would have
understood, under the circumstances at hand, that his behavior vio-
lated the right. Wilson v. Layne, 526 U.S. 603, 615 (1999) (quoting
Anderson v. Creigton, 483 U.S. 635, 640 (1987)). The inquiry is an
objective one, dependent not on the subjective beliefs of the particular
officer at the scene, but instead on what an objectively reasonable
officer would have understood in those circumstances. Milstead v.
Kibler, 243 F.3d 157, 161 (4th Cir.), cert. denied, 534 U.S. 888
(2001).
In deciding whether the right alleged to have been violated was
clearly established, we must define the right "at a high level of partic-
ularity." Edwards v. City of Goldsboro, 178 F.3d 231, 250-51 (4th
Cir. 1999). We have recognized that "the general right to be free from
seizure unless probable cause exists [is] clearly established in the
mental health seizure context." Gooden, 954 F.2d at 968. We have
also recognized that "an officer must have probable cause to believe
that the individual posed a danger to [him]self or others before invol-
untarily detaining the individual." S.P., 134 F.3d at 266. The test of
whether a right is clearly established, however, cannot be applied at
this level of generality. Id. Defining the right at issue with the requi-
BAILEY v. KENNEDY 15
site level of particularity, the appropriate question is whether, at the
time of Kennedy and Whitley’s actions on May 27, 1998, it was
clearly established that a police officer may not detain someone for
an emergency mental evaluation based only on a 911 report that the
person was suicidal, where the officers were able to observe the per-
son alleged to be suicidal and observed nothing indicating that the
person might have been a danger to himself.
We conclude that it was clearly established that probable cause was
lacking in such a situation. Although we have noted that what consti-
tutes "dangerousness" in the mental health seizure context is not pre-
cisely defined, see Gooden, 954 F.2d at 968, this lack of clarity does
not automatically immunize police officers from liability for every
seizure made for purposes of a mental evaluation. As we noted above,
"the law in no way permits random or baseless detention of citizens
for psychological evaluations." Id. Accepting the facts as the district
court viewed them, the police officers observed nothing that would
indicate to them that Michael might be a danger to himself. Certainly,
no reasonable officer, upon seeing Officer Whitley voluntarily leave
the house, would have thought that Michael was in such imminent
danger of harming himself that immediate seizure was required, with-
out any additional investigation, deliberation or consultation with
Whitley, who had just been inside the house. Moreover, even assum-
ing that Whitley did say "we’re going to have to do something," (J.A.
at 77), to Kennedy as he arrived, there is nothing in the record to sug-
gest that this brief, non-specific comment would have made a reason-
able officer believe that immediate seizure was necessary. The
contours of probable cause were sufficiently clear that the unlawful-
ness of seizing someone in such a situation would have been apparent
to reasonable officers. Accordingly, we affirm the district court’s
denial of qualified immunity on Michael Bailey’s Fourth Amendment
unlawful seizure claim.
Several of the Baileys’ other claims are intertwined with Michael’s
Fourth Amendment unlawful seizure claim. Because, given the facts
as the district court viewed them, there was no probable cause to seize
Michael for an emergency mental evaluation, the police officers also
committed both false arrest and false imprisonment under state law.
See Glenn-Robinson v. Acker, 538 S.E.2d 601, 614 (N.C. App. 2000)
(holding that where police officers did not have probable cause, they
16 BAILEY v. KENNEDY
committed a false arrest); Emory v. Pendergraph, 571 S.E.2d 845,
848 (N.C. App. 2002) (holding that false imprisonment means the
illegal restraint of someone against his will).
The police officers argue that they are entitled to public officers’
immunity as to these state law claims. Under North Carolina law,
public officials engaged in discretionary, governmental duties enjoy
absolute immunity from personal liability so long as they keep within
the scope of their official authority and act without malice or corrup-
tion. Grad v. Kaasa, 321 S.E.2d 888, 890 (N.C. 1984). The police
officers concede, and we agree, that public officers’ immunity, at the
least,6 is unavailable to officers who violate clearly established rights
because an officer acts with malice when he "does that which a man
of reasonable intelligence would know to be contrary to his duty."7 Id.
Accepting the facts as the district court viewed them, a man of rea-
sonable intelligence would have known that seizing Michael for an
emergency mental evaluation was contrary to his duty. Accordingly,
the Baileys have forecast sufficient evidence of malice to foreclose
the availability of public officers’ immunity on the false arrest and
false imprisonment claims.
Next, we consider Jane and Billy Bailey’s federal and state consti-
6
The Baileys argue that public officers’ immunity is not available if the
officer’s actions exceed the scope of his authority. They argue that
because an arrest without probable cause exceeds the scope of an offi-
cer’s lawful authority, an officer is not entitled to public officers’ immu-
nity for any seizure made without probable cause. We need not
determine whether North Carolina’s public officers’ immunity indeed
offers such thin protection. Because we find that the acts at issue violated
rights that were clearly established, an officer of reasonable intelligence
would have known that the officers’ actions were contrary to their duty.
This is all that is required to support a finding of malice under state law,
see Grad v. Kaasa, 321 S.E.2d 888, 890 (N.C. 1984), and it is clear that
there is no public officers’ immunity where the officers act with malice.
7
A finding of malice also requires that the officer "intend[ ] [his act]
to be . . . injurious to another." Grad, 321 S.E.2d at 890. Because the
police officers argue only that a man of reasonable intelligence would
not have known that their actions were contrary to their duty, we confine
our discussion to the first prong of the malice definition.
BAILEY v. KENNEDY 17
8
tutional claims based on an allegedly unlawful search of their home,
as well as their state common law claim of trespass by a public offi-
cer. The police officers argue that exigent circumstances made their
warrantless entry into the Bailey residence objectively reasonable.
Mincey v. Arizona, 437 U.S. 385, 394 (1978). Because, as discussed
above, the officers had no reason to believe that Michael was a danger
to himself, no exigent circumstances justified their warrantless entry
into the Baileys’ home. Also, as discussed above, accepting the facts
as the district court viewed them, it was clearly established that no
exigent circumstances requiring immediate action to protect human
life existed to justify the search. Moreover, a man of reasonable intel-
ligence would not have believed that exigent circumstances existed in
this situation. See Grad, 321 S.E.2d at 890 (holding that public offi-
cers’ immunity is not warranted when official does that which a man
of reasonable intelligence would know was contrary to his duty).
Accordingly, we affirm the district court’s denial of qualified immu-
nity and public officers’ immunity on these claims as well.
B.
The last three claims associated with the May 27 event are the fed-
eral excessive force claim and the two related state law claims: assault
and battery and gross negligence. Respecting the federal constitu-
tional claim, as discussed above, qualified immunity is a two-step
inquiry, so we turn first to whether, accepting the district court’s view
of the facts, there was a constitutional violation. "The Fourth Amend-
ment prohibition on unreasonable seizures bars police officers from
using excessive force to seize a free citizen." Jones v. Buchanan, 325
F.3d 520, 527 (4th Cir. 2003). We determine whether an officer has
used excessive force to effect a seizure based on a standard of "‘ob-
8
We note that the police officers have not argued that the Baileys do
not have a direct action for monetary damages for the abridgment of their
state constitutional rights. Accordingly, we do not address whether the
Baileys’ claim of trespass by a public officer constituted an adequate
remedy at law. See Corum v. University of North Carolina, 413 S.E.2d
276, 293 (N.C. 1992) (holding that an individual whose state constitu-
tional rights have been abridged has a direct action for monetary dam-
ages against a state official in his official capacity, if there is no adequate
remedy provided by state law).
18 BAILEY v. KENNEDY
jective reasonableness.’" Id. (quoting Graham v. Connor, 490 U.S.
386, 399 (1989)). "We weigh the nature and quality of the intrusion
on the individual’s Fourth Amendment interests against the counter-
vailing governmental interests at stake. This test requires us to deter-
mine the reasonableness of an officer’s actions and is not capable of
precise definition or mechanical application. Instead it requires care-
ful attention to the facts and circumstances of each particular case."
Id. (quotation marks omitted). Those facts and circumstances include
"the severity of the crime at issue, whether the suspect poses an
immediate threat to the safety of the officers or others, and whether
[the suspect] is actively resisting arrest or attempting to evade arrest
by flight." Graham v. Connor, 490 U.S. 386, 396 (1989). "The extent
of the plaintiff’s injury is also a relevant consideration." Jones, 325
F.3d at 527.
We consider the Graham factors in turn. Starting with the first fac-
tor, the severity of the crime at issue, Michael committed no crime.
In fact, as discussed above, the police officers did not even have prob-
able cause to seize Michael. When we considered this factor in Jones,
we noted that "[i]n recent years, we have twice confronted situations
in which a plaintiff, subjected to police force, had committed no
crime; in each, we held that the plaintiff had stated a claim for viola-
tion of his constitutional right to be free from excessive police force."
Jones, 325 F.3d at 528 (citing Clem v. Corbeau, 284 F.3d 543, 545-
47 (4th Cir. 2002); Park v. Shiflett, 250 F.3d 843, 848, 853 (4th Cir.
2001)). Moreover, Jones itself was a case in which the plaintiff had
committed no crime, and we held that because "Jones committed no
crime, this first factor clearly weighs in his favor." Id. Similarly,
because it was unquestionable that Michael had not committed any
crime, this factor weighs heavily in Michael’s favor.
The second factor, whether a reasonable officer could have per-
ceived Michael to be an immediate threat to the safety of the officers
or others, also weighs in favor of Michael. As discussed above, there
was no reason to believe that Michael was a danger to himself or oth-
ers, including the officers. No reasonable person viewing Officer
Whitley voluntarily leaving the house could have concluded that
Michael was an immediate threat to himself or to the officers. At the
time that Officer Kennedy used force to seize him, Michael was
attempting to shut the door to his parents’ home. Moreover, it is
BAILEY v. KENNEDY 19
undisputed that Michael was unarmed. Thus, the threat to the safety
of the officers or others was minimal, if it existed at all.
Turning to the third factor, it is clear that after Kennedy started to
use force to seize him, Michael resisted arrest. Whitley then joined
Kennedy and both administered repeated hand-blows and kicks while
trying to handcuff Michael. The officers continued to use force after
Michael’s hands were bound behind his back,9 his feet were bound,
and he was lying face down on the floor. (J.A. at 99 ("[I]n the light
most favorable to the Plaintiffs, after backup arrived and Michael’s
hands and feet were secured, and while he was still lying face down,
Defendant Kennedy pulled him up by his arms, causing further injury
to his shoulders, and Defendant Whitley kicked Michael in the
back.").) Accepting the facts as the district court viewed them,
Michael was not resisting arrest when he was bound hand and foot
and lying face down on the floor. Accordingly, even this factor does
not weigh completely against Michael.
Considering these three factors together, we conclude that the
amount of force used was excessive. Assuming arguendo that some
degree of force was justifiable, the extensive blows and kicks used
against an unarmed man were unreasonable, especially the use of
force that continued after Michael was bound hand and foot and lying
face down on the floor. We note in this respect that the level of force
used caused severe injuries. Michael’s injuries included cuts that left
a two-foot diameter pool of blood on the foyer floor and later required
him to have stitches. He was also bruised and incurred shoulder inju-
ries that required repeated surgeries to repair. (J.A. at 80, 99.)
Having determined that Michael has proffered evidence of a viola-
tion of a constitutional right, we now consider whether Officers Ken-
nedy and Whitley are nonetheless entitled to qualified immunity. As
we held in Jones v. Buchanan:
9
Kennedy and Whitley initially handcuffed Michael with his hands in
front of his body. After back-up arrived, flex-cuffs were placed on
Michael’s ankles and wrists — "this time with his hands behind his
back." (J.A. at 79.)
20 BAILEY v. KENNEDY
Even though the facts of a prior case may not be "identical,"
the reasoning of that case may establish a "premise" regard-
ing an unreasonable use of force that can give an officer fair
notice that his conduct is objectively unreasonable.
Ten years before Deputy Keller’s November 1999 use of
force against Jones, the Supreme Court in Graham v. Con-
nor had clearly established that all claims of excessive force
in the course of any seizure of a free person must be ana-
lyzed under an "objective reasonableness" standard, taking
into account the factors discussed above. Graham, 490 U.S.
at 395-96, 109 S.Ct. 1865. Both before and after November
1999, courts have consistently applied the Graham holding
and have consistently held that officers using unnecessary,
gratuitous, and disproportionate force to seize a secured,
unarmed citizen, do not act in an objectively reasonable
manner and, thus, are not entitled to qualified immunity.
Jones, 325 F.3d at 531-32 (citation omitted). There, we held that the
officer was not entitled to qualified immunity because the officer
attacked Jones "even though Jones, although drunk and using foul
language, was unarmed, handcuffed, and alone in a secured room in
the sheriff’s headquarters." Id. In Jones, we cited several cases
decided prior to May 1998, in which police officers were denied qual-
ified immunity where the officer’s use of force might seem to be more
justified than the use of force in this case. See Rowland v. Perry, 41
F.3d 167 (4th Cir. 1994) (denying qualified immunity on excessive
force claim where police officer attacked person suspected of taking
a $5 bill from the floor that did not belong to him even though Row-
land may have resisted after he was attacked); Kane v. Hargis, 987
F.2d 1005, 1006-07 (4th Cir. 1993) (denying qualified immunity on
excessive force claim where taking the facts in the light most favor-
able to Kane, she resisted arrest for driving under the influence and
the police officer, after he had secured her, "repeatedly push[ed] her
face into the pavement, cracking three of her teeth, cutting her nose,
and bruising her face"); see also Mayard v. Hopwood, 105 F.3d 1226,
1227-28 (8th Cir. 1997) (denying qualified immunity to an officer
who slapped and punched a suspect, in handcuffs and leg restraints,
even though the suspect had, prior to being completely restrained,
kicked and hit an officer, physically resisted arrest, and shouted and
BAILEY v. KENNEDY 21
screamed at officers). "Thus, years before [1998], it was clearly estab-
lished that a police officer was not entitled to use unnecessary, gratu-
itous, and disproportionate force against a handcuffed, secured
citizen, who posed no threat to the officer or others and had neither
committed, nor was suspected of committing, any crime." Jones, 325
F.3d at 534. Here, Michael was unarmed, and the use of force contin-
ued even after he was secured with flex-cuffs around both his hands
and his feet, and lying face down on the floor, alone in a room of his
parents’ house. Kennedy lifted Michael up by his arms while they
were bound behind his back, thereby wrenching his shoulder, and
Whitley kicked Michael in the back when he cried out in pain. Thus,
Kennedy and Whitley violated clearly established law in using force
to seize Michael when he had committed no crime and when they had
no reason to believe he was a danger to himself or others. It was espe-
cially clear that they were not entitled to use force after Michael was
secured face down on the floor in handcuffs and leg restraints.
Accordingly, we affirm the denial of qualified immunity on the
§ 1983 excessive force claim.
For the same reasons that we affirm the denial of qualified immu-
nity on the § 1983 excessive force claim, we affirm the denial of pub-
lic officers’ immunity on the state common law assault and battery
claim. Glenn-Robinson, 538 S.E.2d at 615 (holding that a citizen can
sue a law enforcement officer for assault and battery if "the officer
used force against plaintiff which was excessive under the given cir-
cumstances" (quotation marks omitted)); Grad, 321 S.E.2d at 894.
With regard to the gross negligence claim, the police officers make
no argument on appeal. Therefore, we consider them to have aban-
doned this issue on appeal. See Edwards, 178 F.3d at 241 n.6.
C.
The only claim appealed by the police officers related to the Sep-
tember 3 event is the state law false arrest claim. Officer Kennedy
argues that the arrest of Michael Bailey on September 3 was in accor-
dance with state law. The district court held that the arrest violated
state law because Kennedy was not an eyewitness to Michael’s mis-
demeanor offenses. N.C. Gen. Stat. § 15A-401(b)(2) provides, in rele-
vant part:
22 BAILEY v. KENNEDY
(b) Arrest by Officer Without a Warrant. —
(1) Offense in Presence of Officer. — An officer may
arrest without a warrant any person who the officer has
probable cause to believe has committed a criminal offense
in the officer’s presence.
(2) Offense Out of Presence of Officer. — An officer may
arrest without a warrant any person who the officer has
probable cause to believe:
a. Has committed a felony; or
b. Has committed a misdemeanor, and:
1. Will not be apprehended unless immedi-
ately arrested, or
2. May cause physical injury to himself or oth-
ers, or damage to property unless immediately
arrested . . . .
N.C. Gen. Stat. § 15A-401(b) (2001). Kennedy admits that Michael’s
offenses were misdemeanors and were committed outside of Kenne-
dy’s presence. Kennedy argues that the arrest was nonetheless lawful
because N.C. Gen. Stat. § 15A-401(b)(2)(b)(2) allows an officer to
arrest people who commit misdemeanors outside of his presence if
that person may cause physical injury to himself or others unless
immediately arrested. Kennedy argues that he had probable cause to
believe that Michael might cause physical injury to himself or others
because of his knowledge of the events of May 27. We held above,
however, that Kennedy did not have probable cause on May 27 to
believe that Michael was a danger to himself or others. Given that the
events of May 27 were insufficient to give the officers probable cause
to seize Michael on that date, they are a fortiori insufficient to consti-
tute probable cause to believe that Michael was a danger to himself
or others three months later. Moreover, an officer of reasonable intel-
ligence would have known that arresting Michael in such a situation
was contrary to his duty. Accordingly, Kennedy is not entitled to pub-
lic officers’ immunity on the state law false arrest claim.
BAILEY v. KENNEDY 23
V.
For the foregoing reasons, we affirm the district court’s denial of
qualified immunity and public officers’ immunity to the police offi-
cers. We grant the motion to dismiss the cross-appeal.
AFFIRMED AND REMANDED FOR
FURTHER PROCEEDINGS
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563 S.E.2d 725 (2002)
264 Va. 23
Philip B. BAYSDEN,
v.
James F. ROCHE, III.
Record No. 011880.
Supreme Court of Virginia.
June 7, 2002.
Yvette J. Nageotte (Richard R. Nageotte; Yvonne J. Nageotte; Nageotte, Nageotte & Nageotte, on brief), Stafford, for appellant.
Jeff Krause, Fairfax (Grant T. Moher; Paul T. Scott, Fredericksburg; Scott, Dalton & Van Lear, on brief), for appellee.
Present: All the Justices.
Opinion by Justice ELIZABETH B. LACY.
This case arises out of a claim Philip B. Baysden brought against James F. Roche, III, for failure to repay a $50,000 loan that Baysden obtained for the purpose of advancing the proceeds to Roche, pursuant to the parties' oral agreement. The trial court granted Roche's motion to strike at the conclusion of Baysden's case-in-chief. We hold that, when viewed in the light most favorable to Baysden, there was sufficient evidence to raise an issue for the jury as to whether the parties had entered into an oral *726 agreement, and that two check endorsements were evidence that the oral agreement was performed, not writings setting forth partial terms of a written contract. Therefore, the trial court improperly granted the motion to strike.
Baysden filed a motion for judgment against Roche alleging inter alia breach of an oral contract. At trial Baysden produced the following evidence. Roche owned a construction business called Embassy Homes, Inc. (Embassy Homes). Baysden worked as a real estate agent for Jack Baker and Associates d/b/a Why USA and was assigned to work as a salesperson for Embassy Homes. While serving in that capacity, Baysden spent five to six days a week in the Embassy Homes office and became friendly with Roche. Roche had confided in Baysden that Embassy Homes was suffering from serious cash flow problems. Roche invested a significant portion of his personal money in the business in an effort to save the project and could not qualify for any further loans.
Baysden testified that he made an oral agreement to lend $50,000 to Roche personally in order that Roche could, in turn, use the money to help Embassy Homes overcome its financial problems. The terms of the oral agreement, according to Baysden, were that he would obtain a $50,000 loan and advance the money to Roche for use in Embassy Homes. In exchange, Roche would make all principal and interest payments on the loan and he would pay Baysden $5,000 per year for each year that the loan was actually outstanding, up to four years.
Thomas M. Heck-Howard, a commercial loan officer at Central Fidelity Bank and mutual friend of Baysden and Roche, processed the loan. The loan documents recited that Baysden's purpose in taking the loan was for a "business investment," but Baysden testified that the investment was not an investment in Embassy Homes. Heck-Howard testified that when Baysden discussed obtaining the loan he said, "he was going to give the money to [Roche] for the business." Roche, Baysden, and Heck-Howard were all present when Baysden received the loan in the form of two $25,000 cashier's checks issued by Central Fidelity. At Roche's request, Baysden endorsed the checks to Embassy Homes directly.
Eight interest payments were made on the loan before Embassy Homes and Roche and his wife declared bankruptcy. At that point, Heck-Howard contacted Baysden and informed him that, as a result of the bankruptcy, "[Roche] and Embassy [Homes] were no longer making the payments and that [Baysden] would have to start making the payments himself." Over the next four years, Baysden paid $50,000 in principal and $9,367.18 in interest to satisfy the loan. In his motion for judgment, Baysden seeks recovery of these amounts from Roche.
In considering a motion to strike for failure to establish a prima facie case, the trial court was required to view the facts in the light most favorable to Baysden and to draw all fair inferences therefrom. Hadeed v. Medic-24, Ltd., 237 Va. 277, 285-86, 377 S.E.2d 589, 593 (1989) (relying upon Walton v. Walton, 168 Va. 418, 423, 191 S.E. 768, 770 (1937)). That same standard is applicable to our review of the decision of the trial court granting the motion to strike. Washburn v. Klara, 263 Va. 586, 561 S.E.2d 682 (2002) (applying these principles on appellate review); see also Walton, 168 Va. at 423, 191 S.E. at 770. Applying that standard, we hold that Baysden's evidence established a prima facie case on his breach of contract claim. The evidence, taken in the light most favorable to Baysden with all reasonable inferences drawn in his favor, demonstrated that the parties had an oral contract, which Roche breached, and that Baysden was damaged by the breach.
The trial court granted the motion to strike on the premise that the cancelled checks were "documentary evidence of the loan." Applying the partial integration doctrine, the trial court concluded that Baysden's parol evidence that Roche and Baysden were the parties to the contract was inadmissible to vary the written terms of the contract which, according to the trial court, clearly and unambiguously indicated that the contract was between Baysden and Embassy Homes. This was error. The partial integration rule applies to instances in which *727 part of the contract is written. Under that doctrine, parol evidence may be considered to show additional terms or the entire agreement, as long as those terms are not inconsistent with the written part of the contract. High Knob, Inc. v. Allen, 205 Va. 503, 506, 138 S.E.2d 49, 52 (1964). However, in this case Baysden did not allege a written contract or that the checks and endorsements at issue were part of a written contract. Rather, Baysden asserted the contract was oral and that the checks and endorsements were simply evidence of the performance of the oral contract. Documentary evidence of the existence of a contract may be evidence that is separate and apart from the contract itself. In ruling on the motion to strike, the trial court was required to consider the evidence in the light most favorable to Baysden and, therefore, should have considered the checks and endorsements as evidence of the existence of a contract, not as the terms of the contract itself.
Accordingly, for the above reasons, we will reverse the judgment of the trial court and remand the case for further proceedings.
Reversed and remanded.
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NUMBERS 13-09-00375-CR, 13-09-00376-CR,
13-09-00377-CR, & 13-09-00378-CR
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE: DAVID BAILEY
On Petition for Writ of Mandamus.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Yañez and Benavides
Per Curiam Memorandum Opinion1
Relator, David Bailey, has filed pro se petitions for writ of mandamus in the
foregoing causes complaining that the respondent, Aurora De La Garza, the District Clerk
of Cameron County, Texas, did not forward documents allegedly constituting notices of
appeal to this Court in 1988.
This Court does not have mandamus jurisdiction over district clerks unless it is
shown that issuance of the writ is necessary to enforce our jurisdiction. See TEX . GOV'T
1
See T EX . R . A PP . P . 5 2 .8 (d ) (“W hen denying relief, the court m ay hand dow n an opinio n but
is not required to do so.”); T EX . R . A PP . P . 47.4 (distinguishing opinions and m em orandum opinions).
CODE ANN . § 22.221(a), (b) (Vernon 2004); In re Smith, 263 S.W.3d 93, 95 (Tex.
App.–Houston [1st Dist.] 2006, orig. proceeding); In re Washington, 7 S.W.3d 181, 182
(Tex. App.–Houston [1st Dist.] 1999, orig. proceeding); In re Coronado, 980 S.W.2d 691,
692 (Tex. App.–San Antonio 1998, orig. proceeding); see also In re Nubine, No.
13-08-507-CV, 2008 Tex. App. LEXIS 6534, at *1 (Tex. App.–Corpus Christi Aug. 27,
2008, orig. proceeding) (per curiam) (mem. op). For instance, mandamus relief is
appropriate when a trial court clerk fails to file and forward a notice of appeal to the
appropriate court of appeals. In re Smith, 270 S.W.3d 783, 785 (Tex. App.–Waco 2008,
orig. proceeding); Smith, 263 S.W.3d at 95-96; Washington, 7 S.W.3d at 182; see also
Aranda v. District Clerk Clerk, 207 S.W.3d 785, 786-87 (Tex. Crim. App. 2006) (orig.
proceeding) (per curiam) (granting mandamus relief where district clerk failed to file
postconviction habeas application). However, while courts of appeals have mandamus
jurisdiction in criminal matters, only the Texas Court of Criminal Appeals has jurisdiction
over matters related to post-conviction relief from otherwise final felony convictions. See
TEX . CODE CRIM . PROC . ANN . art. 11.07 § 3 (Vernon Supp. 2008); In re McAfee, 53 S.W.3d
715, 717 (Tex. App.–Houston [1st Dist.] 2001, orig. proceeding).
The Court, having examined and fully considered the petition for writ of mandamus,
is of the opinion that we lack jurisdiction to consider this matter. Accordingly, the petition
for writ of mandamus is DISMISSED FOR WANT OF JURISDICTION. See TEX . R. APP.
P. 52.8(a).
PER CURIAM
Do not publish. See TEX . R. APP. P. 47.2(b).
Memorandum Opinion delivered and filed
this 9th day of July, 2009.
2
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ARMED SERVICES BOARD OF CONTRACT APPEALS
Appeals of -- )
)
Afghan American Army Services Corporation ) ASBCA Nos. 58607, 58922
)
Under Contract No. W91B4N-10-D-5000 )
APPEARANCES FOR THE APPELLANT: Philip J. Davis, Esq.
William M. Novak, Esq.
Brian G. Walsh, Esq.
Laura E. Sherman, Esq.
Wiley Rein LLP
Washington, DC
APPEARANCES FOR THE GOVERNMENT: Raymond M. Saunders, Esq.
Army Chief Trial Attorney
LTC Gregg A. Engler, JA
Trial Attorney
ORDER OF DISMISSAL
The dispute has been settled. The appeals are dismissed with prejudice.
Dated: 4 March 2015
~~·
Administrative Judge
Acting Chairman
Armed Services Board
of Contract Appeals
I certify that the foregoing is a true copy of the Order of Dismissal of the Armed
Services Board of Contract Appeals in ASBCA Nos. 58607, 58922, Appeals of Afghan
American Army Services Corporation, rendered in conformance with the Board's Charter.
Dated:
JEFFREY D. GARDIN
Recorder, Armed Services
Board of Contract Appeals
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Matter of Agbai v New York City Civ. Serv. Commn. (2017 NY Slip Op 03699)
Matter of Agbai v New York City Civ. Serv. Commn.
2017 NY Slip Op 03699
Decided on May 9, 2017
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on May 9, 2017
Acosta, J.P., Renwick, Mazzarelli, Gische, Gesmer, JJ.
3938 101083/14
[*1]In re Richard Agbai, Petitioner-Appellant,
vNew York City Civil Service Commission, et al., Respondents-Respondents.
Siskopoulos Law Firm, LLP, New York (Alexandra Siskopoulos of counsel), for appellant.
Zachary W. Carter, Corporation Counsel, New York (Benjamin Welikson of counsel), for respondents.
Judgment (denominated an order), Supreme Court, New York County (Joan B. Lobis, J.), entered April 3, 2015, granting respondents' cross motion and dismissing the article 78 petition seeking, inter alia, to vacate respondents' determination, dated June 3, 2014, which terminated petitioner's employment as a correction officer, unanimously affirmed, without costs.
The determination of respondent New York City Civil Service Commission is subject to judicial review only if "the agency has acted illegally, unconstitutionally, or in excess of its jurisdiction" (Matter of New York City Dept. of Envtl. Protection v New York City Civ. Serv. Commn., 78 NY2d 318, 323 [1991]). The court properly rejected petitioner's argument that the Administrative Law Judge did not have the authority and jurisdiction to conduct the subject disciplinary hearing (see e.g. Matter of Stapleton v Ponte, 138 AD3d 751 [2d Dept 2016]).
Petitioner's remaining contentions are either improperly raised for the first time on appeal or unavailing.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: MAY 9, 2017
CLERK
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447 So.2d 189 (1984)
J.D. SIMPSON
v.
J.D. HARBIN and Mickey Smith.
82-1039.
Supreme Court of Alabama.
February 24, 1984.
*190 Robert F. Prince, Tuscaloosa, for appellant.
Robert V. Wooldridge, III, Tuscaloosa, for appellee.
BEATTY, Justice.
This case concerns a private prescriptive easement. The plaintiff seeks relief from the trial court's denial of his petition for rule to show cause and the court's refusal to find the defendants in contempt. We affirm.
On or about October 1, 1980, the defendants, J.D. Harbin and Mickey W. Smith, erected a fence-like structure and placed mounds of dirt over a road on their property. The road led to the adjoining property of plaintiff, J.D. Simpson, who filed suit seeking the removal of this obstruction. The trial court so ordered on March 22, 1982, following a finding that Simpson possessed a private easement by prescription over the road. These obstructions were removed; however, defendants subsequently constructed two gates across the easement and provided Simpson with keys, in the event that locks were needed. Simpson objected to these gates and petitioned the trial court to hold defendants in contempt for their refusal to follow the March 22 order requiring the "removal of all obstructions."
On Simpson's petition for rule to show cause, evidence was presented to the trial court that Simpson's use of his adjoining property consisted only of walking in the woods, and his only inconvenience by the gates was that he must get out of his car and open and close the gates. Other evidence established that persons operating motorcycles and three-wheel vehicles and riding horses were using Simpson's private easement to the disruption of defendants' households and danger to their children. The trial court refused to hold defendants in contempt of the prior order and found that the gates were not an unreasonable interference or obstruction with Simpson's use and enjoyment of his easement.
The primary issue presented for review is whether the trial court was palpably wrong in refusing to hold the defendants in contempt for erecting the gates.
The scope of review in contempt cases is limited to questions of law and does not extend to the weight and preponderance of the evidence, Citicorp v. Sanderson, 421 So.2d 1293 (Ala.Civ.App.1982); Smith v. State, 380 So.2d 897 (Ala.Civ.App. *191 1980). With regard to factual questions, these cases stand for the proposition that if there is any legal evidence that supports the judgment of the trial court, we must affirm.
In the present case, there was substantial evidence to support the trial court's refusal to hold defendants in contempt. Further, the facts of this case overwhelmingly support the discretion of the trial court in that the order from which the plaintiff sought a contempt citation was the court's own order. Clearly, it was within the power of the trial court to modify the March 22, 1982, order if it had deemed it necessary.
The plaintiff also questions the use of the unreasonable interference test where contempt is the remedy sought for obstructing an easement. While we recognize that Self v. Hane, 262 Ala. 446, 79 So.2d 549 (1955), was an appeal from the grant of a temporary injunction, the following quotation from that decision is clearly applicable in the present case:
"[T]he mere fact that complainant has a right of way by claim of necessity does not of itself mean that respondent cannot establish gates across it where it enters and leaves his property. It is a question of reasonableness under all the circumstances. [Citations omitted.]" 262 Ala. at 448, 79 So.2d at 551.
This case is due to be, and it is hereby, affirmed.
AFFIRMED.
TORBERT, C.J., and MADDOX, JONES and SHORES, JJ., concur.
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Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
6-10-2005
Mati v. Atty Gen USA
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-2964
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2005
Recommended Citation
"Mati v. Atty Gen USA" (2005). 2005 Decisions. Paper 1031.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1031
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University School of Law Digital Repository. For more information, please contact [email protected].
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-2964
FLORIAN MATI,
Petitioner
v.
*ALBERTO R. GONZALES,
Attorney General of the United States,
Respondent
(*Substituted pursuant to Rule 43(c), Fed. R. App. P.)
On Petition for Review of a Decision and Order of the
Board of Immigration Appeals
(BIA No. A78-573-610)
Submitted Pursuant to Third Circuit LAR 34.1(a)
May 24, 2005
Before: SCIRICA, Chief Judge, ALITO and RENDELL, Circuit Judges
(Filed: June 10, 2005)
OPINION OF THE COURT
SCIRICA, Chief Judge.
Florian Mati, an Albanian citizen who gained admission to the United States with
false documents, is appealing the order of an immigration judge removing him to Albania.
The judge rejected Mati’s application for asylum and his request for withholding of
removal. The Board of Immigration Appeals dismissed Mati’s appeal. The BIA had
jurisdiction under 8 C.F.R. § 1003.1(b)(3). We have jurisdiction under 8 U.S.C. § 1252.
I. Background
On February 19, 2001, Mati used a false passport to enter the United States. In
July 2002, the Immigration and Naturalization Service 1 initiated removal proceedings
against Mati as an alien who had gained admission to the United States by fraud or
misrepresentation. Mati admitted the charges, but he filed an application for asylum,
withholding of removal, and protection under the Convention Against Torture.
Mati contends that despite the fall of Communism in the early 1990s, he continues
to suffer persecution at the hands of the ruling party.2 Mati testified to two instances of
physical abuse by the police, one in September 1999 and one in November 2000. He
contends these followed his taking part in political protests and speaking out against the
government. Mati did not go to a hospital or doctor for treatment. Nonetheless, he said
he left the country out of fear of persecution, feeling that his life was in danger. We note
that Mati’s parents, sister, and brother now all live in the United States.
1
Beginning on March 1, 2003, INS became a part of the Department of Homeland
Security pursuant to Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135
(Nov. 25, 2002).
2
Mati contends the government is controlled by Socialist and Communist leaders, but
the Department of State reports that the government is a coalition government of several
parties. The issue is not material to this appeal.
2
The immigration judge denied Mati’s petition for asylum as untimely, and found
Mati’s claims of emotional trauma insufficient to constitute changed or extraordinary
circumstances to excuse the late filing. With respect to the withholding of removal, the
judge noted several inconsistencies in Mati’s testimony, as well as in the supporting
testimony of Mati’s brother. The judge found Mati’s testimony not credible, particularly
in light of a Department of State report that found no evidence of political persecution in
Albania. Mati provided no evidence beyond his direct testimony to dispute the
Department of State report. In addition, the judge found that even if Mati’s testimony had
been credible, the events he described did not meet the burden of proof for withholding
removal. The BIA agreed that Mati’s application for asylum was not timely and adopted
the immigration judge’s decision denying withholding of removal.
On appeal, Mati contends the immigration judge erred in relying on the
Department of State report and rejecting Mati’s claims of persecution as not credible. He
contends that the BIA erred in adopting the immigration judge’s decision based on these
findings. We will affirm.
II. Discussion
Because the BIA adopted the immigration judge’s decision on the issue of
withholding removal, we review the immigration judge’s order on that issue. See
Abdulrahman v. Ashcroft, 330 F.3d 587, 591 (3d Cir. 2003); Chen Yun Gao v. Ashcroft,
3
299 F.3d 266, 271 (3d Cir. 2002).3 We will affirm the order of removal. The record
supports the judge’s findings that Mati failed to prove a well-founded fear of persecution,
and that Mati’s testimony was not credible.
A. Evidence of Persecution
In order to obtain judicial reversal of the BIA’s determination, Mati “must show
that the evidence he presented was so compelling that no reasonable factfinder could fail
to find the requisite fear of persecution.” INS v. Elias-Zacarias, 502 U.S. 478, 483-84
(1992). This deferential test is now codified in 8 U.S.C. § 1252(b)(4)(B). See also Dia v.
Ashcroft, 353 F.3d 228, 247-48 (3d Cir. 2003); Chen Yun Gao, 299 F.3d at 272 (3d Cir.
2002) (“Aliens have the burden of supporting their asylum claims through credible
testimony. . . . Whether an asylum applicant has demonstrated past persecution or a well-
founded fear of future persecution is a factual determination reviewed under the
substantial evidence standard.”).
3
We will not review the BIA’s holding that Mati’s untimely asylum application renders
him ineligible for asylum, on the grounds of waiver and lack of jurisdiction. “An issue is
waived unless a party raises it in its opening brief.” Laborers’ Int’l Union of N. Am. v.
Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir. 1994). Mati failed to raise a challenge
to this holding in his opening brief. Furthermore, the Immigration and Naturalization Act
states that no court has jurisdiction to review any determination regarding whether
conditions exist to toll the asylum application deadline. 8 U.S.C. § 1158(a)(3); see also
Tarrawally v. Ashcroft, 338 F.3d 180, 185 (3d Cir. 2003). In addition, the immigration
judge found no evidence entitling Mati to protection under the Convention Against
Torture. Because Mati does not raise an appeal to this finding in his brief, this issue is
also not before the Court.
4
An alien may not be removed to a country where his life or freedom would be
threatened. 8 U.S.C. 1231(b)(3); INS v. Cardoza-Fonseca, 480 U.S. 421, 429 (1987).
The immigration judge found that Mati had not provided sufficient evidence to support a
legitimate threat to life or freedom. The Department of State report of country conditions,
while not dispositive in the face of contrary evidence, directly contradicts Mati’s claims
of ongoing political persecution. Mati did not submit any evidence to rebut the direct
assertions of this report beyond his personal account of two beatings. Testimony from
Mati’s brother, who recently traveled to Albania and who shares Mati’s opposition
viewpoints, revealed no similar fears. Without any additional evidence to support his
claims, Mati did not meet the required burden of proof. He has not shown that “no
reasonable factfinder could fail to find the requisite fear of persecution.” Elias-Zacarias,
502 U.S. at 484 (1992).
B. Credibility
“[A]dverse credibility determinations are reviewed for substantial evidence. . . .
[T]he Board’s adverse credibility determination must be upheld on review unless ‘any
reasonable adjudicator would be compelled to conclude to the contrary.’” Chen Yun Gao,
299 F.3d at 272 (3d Cir. 2002) (quoting 8 U.S.C. §1252(b)(4)(B)); see also
Balasubramanrim v. INS, 143 F.3d 157, 161 (3d Cir. 1998). However, minor
inconsistencies and minor admissions that “reveal nothing about an asylum applicant’s
fear for his safety are not an adequate basis for an adverse credibility finding.” Chen Yun
5
Gao, 299 F.3d at 272 (3d Cir. 2002) (quoting Vilorio-Lopez v. INS, 852 F.2d 1137, 1142
(9th Cir. 1988)); see also Senathirajah v. INS, 157 F.3d 210, 221 (3d Cir. 1998).
The immigration judge identified several inconsistencies and false assertions in
Mati’s testimony that went to the heart of Mati’s alleged fears. Many of these were
directly related to the details of the incidents of persecution to which Mati testified. The
testimony of Mati’s brother further raised doubt as to the credibility of Mati’s fear. The
immigration judge also pointed to the sharp divergence between the Department of State
reports on Albania and Mati’s vague and non-specific testimony to the contrary. This
Court has held that Department of State reports are “objective evidence” of country
conditions and are appropriate resources for immigration judges to use in evaluating such
conditions. Ambartsoumian v. Ashcroft, 388 F.3d 85, 89 (3d Cir. 2004). Mati presented
no additional evidence to explain the contrast between the report and his testimony, or to
otherwise rebut the content of the report. As such, a reasonable adjudicator would not be
compelled to conclude that Mati’s testimony was credible; there is substantial evidence in
the record to support the judge’s finding to the contrary.
III. Conclusion
For the foregoing reasons, we will affirm the decision of the Board of Immigration
Appeals.
6
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 11a0539n.06
No. 09-2061
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Aug 03, 2011
PAUL FINDLEY, )
) LEONARD GREEN, Clerk
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR THE
) EASTERN DISTRICT OF MICHIGAN
UNITED PARCEL SERVICE, )
)
Defendant-Appellee. )
Before: COOK, McKEAGUE, and GRIFFIN, Circuit Judges.
COOK, Circuit Judge. After the United Parcel Service, Inc. (UPS) fired Paul Findley, a
seasoned worker, he sued his former employer for discrimination and retaliation in violation of the
Michigan Persons with Disabilities Civil Rights Act (the “Act”), Mich. Comp. Laws §§
37.1101–37.1607. On appeal, Findley challenges the district court’s grant of summary judgment to
UPS on his retaliation claim. Because he failed to establish causation, an element of the prima facie
case for retaliation, we affirm.
I.
No. 09-2061
Findley v. United Parcel Serv.
UPS hired Findley, a right-hand amputee, in 1992. Over the course of ten years, UPS
assigned Findley various jobs, from part-time loader to co-chair of the safety committee, and he
performed his duties free from written reprimand.
Things changed in December 2002. That month, Findley filed disability-discrimination
complaints against UPS with both the Michigan Department of Civil Rights and the Equal
Employment Opportunity Commission (EEOC). These turned out to be the first in a series of similar
allegations: between June 2003 and November 2004, Findley filed three more EEOC complaints
alleging disability discrimination and sued UPS in state court for violating the Act.
Findley’s complaints, which were all eventually dismissed, roughly coincided with four UPS
disciplinary actions. In June 2004, just eight days after Findley filed an EEOC complaint, UPS
terminated him for purportedly “walking off the job”—clocking out before completing his work.
Findley grieved the termination, however, and UPS reinstated him. UPS then issued him a written
warning for neglecting to turn in a uniform, a reprimand that came two months after he filed another
EEOC complaint. For UPS’s third censure—which it issued just two weeks after he filed yet another
EEOC complaint—it again terminated Findley, this time for failing to return to work at the end of
a strike. When Findley complained about this decision, UPS reinstated him, but he survived only
six more months. In April 2005, UPS fired him for dishonesty, repeatedly refusing to follow
management’s instructions, and other serious offenses. Though Findley grieved this termination too,
UPS chose not to reinstate him.
-2-
No. 09-2061
Findley v. United Parcel Serv.
Findley, invoking the district court’s diversity jurisdiction, then sued UPS for discrimination
and retaliation in violation of Michigan law. The court granted UPS summary judgment on both
claims; Findley appeals that decision only with respect to his retaliation claim.
II.
Findley admits that only one employment action—the allegedly retaliatory April 2005
termination—falls within the applicable limitations period, see Mich. Comp. Laws § 600.5805(1),
(10), and that the McDonnell Douglas burden-shifting scheme applies to his claim, see McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 801–05 (1973). Under this scheme, Findley must first
establish a prima facie case of retaliation; the burden then shifts to UPS “to produce evidence of a
legitimate, nondiscriminatory reason for its actions”; and in response Findley must “demonstrat[e]
that this legitimate reason is pretextual.” Hamilton v. Gen. Elec. Co., 556 F.3d 428, 435 (6th Cir.
2009) (internal quotation marks and citation omitted); see also Roulston v. Tendercare (Mich.), Inc.,
608 N.W.2d 525, 530 (Mich. Ct. App. 2000) (per curiam). In his appellate brief, Findley rushes
through his prima facie case—even though the district court found it lacking—and then discusses
pretext in detail. Yet we, like the district court, need not address pretext: Findley’s claim fails at
the prima-facie-case stage because he cannot show causation.
To make out a prima facie retaliation case, Findley must show, inter alia, a cause-and-effect
relationship between the filing of his EEOC complaints and his firing. See Bachman v. Swan
Harbour Assocs., 653 N.W.2d 415, 437 (Mich. Ct. App. 2002) (requiring a “causal connection”
-3-
No. 09-2061
Findley v. United Parcel Serv.
between protected activity and an adverse employment action). Though Findley highlights the
temporal proximity between his November 2004 discrimination complaint and his April 2005
termination, he concedes that temporal proximity alone does not establish the requisite causal
connection: Michigan law requires that he “show something more than merely a coincidence in time
between” these events. Garg v. Macomb Cnty. Cmty. Mental Health Servs., 696 N.W.2d 646, 660
(Mich. 2005) (internal quotation marks and citation omitted). For that “something more,” Findley
points to UPS’s (A) heightened scrutiny and (B) pattern of retaliatory acts. We agree with UPS that
neither of these theories suffices here.
A.
Findley first argues that UPS’s repeated disciplinary actions, which began only after he filed
discrimination complaints, show that UPS increasingly scrutinized him in retaliation for his
protected conduct. See Hamilton, 556 F.3d at 435–36 (holding that plaintiff sufficiently established
causation by demonstrating temporal proximity combined with heightened or intensified scrutiny).
This theory, for two reasons, does not warrant reversal of the summary judgment granted to UPS.
First, Findley forfeited a heightened-scrutiny argument. Not once before the district court
did he mention heightened scrutiny, intensified scrutiny, or Hamilton, the case upon which he now
relies. Rather, he urged that UPS’s previous attempts to terminate him demonstrated its
“predisposition to retaliate” against him. The district court rejected Findley’s predisposition theory
because he offered no authority to support it, and he appeared to be conflating an element of his
-4-
No. 09-2061
Findley v. United Parcel Serv.
discrimination claim—a predisposition to discriminate—with a viable retaliation theory. On appeal,
Findley changes tack and recasts UPS’s alleged “predisposition to retaliate” as heightened scrutiny.
Yet by depriving the lower court of the first crack at examining his heightened-scrutiny argument,
he forfeits review by this court of that previously unasserted theory. See Bailey v. Floyd Cnty. Bd.
of Educ. ex rel. Towler, 106 F.3d 135, 143 (6th Cir. 1997) (“It is well-settled that this court will not
consider arguments raised for the first time on appeal unless our failure to consider the issue will
result in a plain miscarriage of justice.”).
Second, irrespective of forfeiture, Findley’s heightened-scrutiny theory lacks evidentiary
support. For proof, he simply reiterates that UPS’s repeated reprimands followed his discrimination
complaints. But merely being disciplined is not enough to establish a genuine issue of material fact;
rather, showing “that the scrutiny increased is critical.” Hamilton, 556 F.3d at 436. And Findley
fails to connect the dots. He does not explain how UPS increased scrutiny—by, for example,
monitoring him more frequently, examining his actions more closely than a coworker’s, or reviewing
his work habits or production more harshly. Nor did he testify, as did Hamilton, that UPS
disciplined him after it “greatly intensified” its scrutiny. See id. at 432. Findley’s factually
undeveloped assertion that UPS heightened its scrutiny—mentioned for the first time in his appellate
brief—does not justify reversal of summary judgment.
B.
-5-
No. 09-2061
Findley v. United Parcel Serv.
Findley next points to his first three disciplinary actions—two attempted terminations and
a written warning—as evidence of a pattern of retaliation from which a jury could infer causation
for the actionable discipline, his April 2005 termination.
Michigan courts recognize the viability of a pattern-of-retaliation theory. This theory allows
Findley to use adverse employment acts occurring outside the limitations period as background
evidence to show a pattern of retaliation. See Campbell v. Dep’t of Human Servs., 780 N.W.2d 586,
592 (Mich. Ct. App. 2009), appeal dismissed, 784 N.W.2d 824 (Mich. 2010). To establish that
pattern, however, he must prove that at least one of the prior censures constitutes retaliation, starting
with a prima facie case. See id. at 593 (finding an actionable pattern of discrimination where the
female plaintiff’s employer repeatedly promoted men—and sometimes less-qualified ones—to a
position for which she was qualified). But Findley cannot show a pattern.
None of the first three disciplinary actions works for retaliation because each lacks the
requisite causal connection to Findley’s protected activity. As to the first, no one involved in the
decision to fire him for “walking off the job” knew about his June 2004 EEOC complaint. See, e.g.,
McBrayer v. Detroit Med. Ctr., No. 294268, 2010 WL 5175458, at *3 (Mich. Ct. App. Dec. 21,
2010) (per curiam) (holding that plaintiff failed to meet her prima-facie-causation burden because
her supervisors—the individuals who decided to suspend her—had no knowledge of her protected
activity). For the second, Findley does not dispute that he initially refused to turn in the uniform.
And, as to the third, the undisputed evidence shows that his supervisor instructed him to call in each
-6-
No. 09-2061
Findley v. United Parcel Serv.
day during the strike to learn whether he should report back to work, and he simply did not comply
with that instruction. See, e.g., O’Leary v. Charter Twp. of Flint, No. 295078, 2011 WL 1376306,
at *3 (Mich. Ct. App. Apr. 12, 2011) (per curiam) (finding no causation at the prima-facie stage
where, among other things, plaintiff admitted the offense). Findley’s brief tries to overcome these
causation deficiencies but succeeds only in mischaracterizing the factual record.
Findley retreats to the ping-ponging of events (EEOC complaint, termination, EEOC
complaint, written warning, EEOC complaint, termination) to explain why each instance of
discipline constitutes retaliation. But, as discussed, temporal proximity alone will not support
causation. See Garg, 696 N.W.2d at 660. He thus leaves us without that “something more”
necessary to conclude that any of the first three reprimands amounts to retaliation. See id. And
without a single instance of retaliation, he of course cannot show a pattern of retaliation.
C.
Finally, Findley offhandedly remarks in the causation section of his brief that UPS never
filled a full-time position that he bid on. Because his argument stops there, untethered to any theory
of causation, we do not take it up. See United States v. Stewart, 628 F.3d 246, 256 (6th Cir. 2010)
(“It is not sufficient for a party to mention a possible argument in the most skeletal way, leaving the
court to . . . put flesh on its bones.” (alteration in original) (internal quotation marks and citation
omitted)).
-7-
No. 09-2061
Findley v. United Parcel Serv.
III.
For these reasons, we affirm the district court’s judgment.
-8-
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32 F.3d 565
Beckv.Alford*
NO. 93-04946
United States Court of Appeals,Fifth Circuit.
July 27, 1994
1
Appeal From: E.D.Tex.
2
REVERSED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 3 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
KEITH NGO, KNT-INC.,
KNT ENGINEERING, INC., and K-
BEAM, LLC, No. 15-16473
Petitioners - Appellants, D.C. No. 4:15-mc-80008-YGR
v.
MEMORANDUM∗
UNITED STATES OF AMERICA,
Respondent – Appellee.
Appeal from the United States District Court
for the Northern District of California
Yvonne Gonzalez Rogers, District Judge, Presiding
Argued and Submitted April 18, 2017
San Francisco, California
Before: SCHROEDERR and RAWLINSON Circuit Judges, and DRAIN, ** District
Judge.
Appellants Keith Ngo, KNT-Inc., KNT Engineering, Inc., and K-Beam,
LLC, appeal the district court’s order denying Appellants’ motion to quash and
∗
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Gershwin A. Drain, United States District Judge for the
Eastern District of Michigan, sitting by designation.
1
granting the Appellee United States of America’s motion to enforce an
administrative summons, issued without notice, to East West Bank, requesting
financial records for accounts in the Appellants’ names. We have jurisdiction
pursuant to 28 U.S.C. § 1291.
1. An IRS summons may be quashed when the IRS has not acted in
“good faith.” United States v. Richey, 632 F.3d 559, 564 (9th Cir. 2011). The
Government has the burden to show that the summons (1) was issued for a
legitimate purpose, (2) the records and testimony sought by the summons are
relevant to that purpose, (3) the records are not already in the possession of the
IRS, and (4) the administrative steps required by the Code have been followed.
United States v. Clarke, 134 S. Ct. 2361, 2365 (2014) (quoting United States v.
Powell, 379 U.S. 48, 57-58 (1964)). An IRS agent’s sworn declaration
demonstrating the Powell factors have been met is generally sufficient to show
“good faith.” Liberty Fin. Servs. v. United States, 778 F.2d 1390, 1392 (9th Cir.
1985). When the Government sets forth a prima facie case, the petitioner bears the
“heavy burden” of alleging “specific facts and evidence” supporting its allegations
of bad faith. Id.
2. Here, the Government met its prima facie burden under Powell,
through the declaration of Internal Revenue Service Officer Nicholas Brunetti. The
2
declaration established that the summons was issued for the legitimate purpose of
investigating Hoang Ngo’s earnings and assets and to determine if any of the
Appellants were his transferee, alter ego or nominee. The records sought are
relevant to the collection of Hoang Ngo’s outstanding tax liability. The IRS did
not already have possession of the summoned records. Lastly, all of the required
administrative steps were taken since the Appellants were not entitled to notice of
the summons.
3. Generally, notice must be given to the parties whose records are
summoned to avoid improper disclosure of records held by third-parties. See 26
U.S.C. § 7609. The exceptions to the general notice requirement that are relevant
to the instant appeal are found in 26 U.S.C. § 7609(c)(2)(D) and state that no
notice is required for a summons “issued in aid of the collection of—(i) an
assessment made or judgment rendered against the person with respect to whose
liability the summons is issued; or (ii) the liability of . . . any transferee or
fiduciary of any person referred to in clause (i).” 26 U.S.C. § 7609(c)(2)(D).
4. A third party is not entitled to notice that his records have been
summoned by the IRS if the third party is a fiduciary or transferee of an assessed
taxpayer, or the assessed taxpayer had “some legal interest or title in the object of
the summons.” Ip v. United States, 205 F.3d 1168, 1173, 1175 (9th Cir. 2000). To
3
determine whether a taxpayer has a sufficient legal interest in the summoned
records, courts should consider “whether there was an employment, agency, or
ownership relationship between the taxpayer and the third party.” Viewtech, Inc. v.
United States, 653 F.3d 1102, 1106 (9th Cir. 2011).
5. Here, Hoang Ngo was the 100 % owner of KNT, Inc., in 2012 and an
officer and employee of KNT, Inc., until sometime in 2014. Appellants’ suggestion
that Hoang Ngo was required to have a “present connection” and “ownership
interest” in KNT, Inc. finds no support in the law. In Viewtech, the IRS issued its
administrative summons in 2009 even though the evidence it possessed concerning
the assessed taxpayer included his ownership and employment status in the years
2007 and 2008. Id. at 1103. Nonetheless, the Viewtech court concluded that there
was a “close legal relationship” between the assessed taxpayer and Viewtech’s
summoned bank records to invoke the notice exception of § 7609. Id. at 1106.
6. As to KNT Engineering, the evidence uncovered by the IRS
demonstrated that Hoang Ngo was the 100% owner in 2012, and that KNT
Engineering had paid him more than $194,000 in income that year. Moreover,
Keith Ngo has admitted that Hoang Ngo was a corporate officer of KNT
Engineering as late as 2013. Therefore, KNT Engineering was likewise not
entitled to notice pursuant to the clause (i) exception because of the close legal
4
relationship between it and Hoang Ngo.
7. As to K-Beam, LLC, the IRS’s investigation revealed that Hoang Ngo
was either a member or manager of K-Beam, LLC pursuant to a “Statement of
Information” filed with the Secretary of State in November of 2013. A manager is
an agent under California law, see Cal. Corp. Code § 17703.01(a), thus Hoang Ngo
had a sufficient legal interest in K-Beam, LLC under the clause (i) exception to
preclude notice of the summons.
8. There is no merit to Appellants’ contention that in order for the clause
(ii) exception to apply, a determination of transferee liability is required. Neither
Ip nor Viewtech suggest that a determination of transferee liability must have been
made before clause (ii)’s notice exception may be relied upon by the IRS.
Appellants have admitted that Hoang Ngo transferred money into Keith Ngo’s
account. Thus, the clause (ii) exception applied to Keith Ngo.
9. Lastly, Appellants failed to meet their “heavy burden” with “specific
facts and evidence” that the summons was issued in bad faith or for an improper
purpose. For all of the above reasons, the district court properly denied Appellants’
motion to quash and granted the Appellee’s motion to enforce the summons issued
to East West Bank.
AFFIRMED.
5
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PD-0826-15
PD-0826-15 COURT OF CRIMINAL APPEALS
AUSTIN, TEXAS
Transmitted 7/2/2015 11:43:40 AM
Accepted 7/2/2015 3:56:21 PM
No.____________________ ABEL ACOSTA
CLERK
In the
COURT OF CRIMINAL APPEALS
CLIFTON CREWS HOYT
Petitioner
July 2, 2015 v.
THE STATE OF TEXAS
Respondent
FIRST UNOPPOSED MOTION FOR EXTENSION OF TIME TO FILE
PETITION FOR DISCRETIONARY REVIEW
TO THE HONORABLE COURT OF CRIMINAL APPEALS:
Petitioner files this First Unopposed Motion for Extension of Time to File his Petition for
Discretionary Review under Texas Rules of Appellate Procedure 10.1, 10.5(b), and 68.2(c). In
support of this motion, Petitioner shows the following:
1. The Court of Appeals for the 3rd District in Austin, Texas rendered its opinion and judgment
in Clifton Crews Hoyt v. The State of Texas, No. 03-14-00454-CR on June 4, 2015. The
petition for discretionary review is due no later than July 4, 2015.
2. Petitioner requests an extension of time of sixty days, to September 4, 2015, to file his
Petition for Discretionary Review. This is Petitioner’s first request for an extension of time in
this case.
3. Petitioner relies on the following facts as a reasonable explanation for the requested extension
of time. Petitioner’s counsel and attorneys with his firm, in addition to preparing a brief on the
merits in this case, must also devote time to the following additional matters:
Prior to July 4, 2015:
Court appearances in In re Bartels, Case No. 200936401 in the 312th Judicial District,
Harris County;
Court appearances in State v. Edward Martinez, Case No. 14-DCR-067371 in the 434th
Judicial District, Fort Bend County;
Previously scheduled vacation from June 9 through 19, 2015.
Court appearances in State of Texas v. Johnathan Cherry, Case Nos. 1462560 & 1462561
in the 178th Judicial District, Harris County;
Court appearances in State of Texas v. Lorence Hubler, Case No. 1441117 in the 351st
Judicial District, Harris County;
Court appearances in State of Texas v. Larry Cole, Case No. 15-02-01835-CR in the 9th
Judicial District, Montgomery County;
Pretrial Hearing in State of Texas v. Brian Rich, Case No. 1426217 in the 337th Judicial
District, Harris County;
Trial Setting in State of Texas v. Brian Rich, Case No. 1426217 in the 337th Judicial
District, Harris County;
Court appearances in State of Texas v. Cristian Salmeron, Case No. 1458853 in the 230th
Judicial District, Harris County;
Motion hearing in TNT Crane v. Gorham, Case No. 1059057 in Harris County Civil
Court at Law No. 3;
Court appearances in State of Texas v. Katalin Downing, Case No. 2021127 in the Harris
County Criminal Court at Law No. 4; and
Court appearances in State of Texas v. Patrick Downing, Case No. 2021128 in the Harris
County Criminal Court at Law No. 4.
.
After July 4, 2015:
Court appearances in State of Texas v. Daniel Alba, Case No. 2034027 in the Harris
County Criminal Court at Law No. 9
Sentencing in United States v. Ali Irsan, No. 4:14-cr-00248 in the Southern District of
Texas;
Court appearances in State v. Edward Martinez, Case No. 14-DCR-067371 in the 434th
Judicial District, Fort Bend County;
Court appearances in Harris County v. Darlene Brown, et al., Case No. 201446507 in the
152nd Judicial District, Harris County;
Previously scheduled vacation from July 20 through 31, 2015.
Court appearances in State of Texas v. Johnathan Cherry, Case Nos. 1462560 & 1462561
in the 178th Judicial District, Harris County;
Pretrial Hearing in State of Texas v. Brian Rich, Case No. 1426217 in the 337th Judicial
District, Harris County;
Trial Setting in State of Texas v. Brian Rich, Case No. 1426217 in the 337th Judicial
District, Harris County;
Court appearances in State of Texas v. Cristian Salmeron, Case No. 1458853 in the 230th
Judicial District, Harris County;
Court appearances in State of Texas v. Katalin Downing, Case No. 2021127 in the Harris
County Criminal Court at Law No. 4; and
Court appearances in State of Texas v. Patrick Downing, Case No. 2021128 in the Harris
County Criminal Court at Law No. 4.
Pretrial conference in State of Texas v. Lorence Hubler, Case No. 1441117 in the 351st
Judicial District, Harris County;
Hearing on Motion to Suppress in State of Texas v. Lorence Hubler, Case No. 1441117 in
the 351st Judicial District, Harris County; and
Court appearances in State of Texas v. Larry Cole, Case No. 15-02-01835-CR in the 9th
Judicial District, Montgomery County.
4. The undersigned has conferred with Assistant District Attorney Richard Villarreal, who
indicated that the State of Texas is UNOPPOSED to this request.
Therefore, Petitioner prays that this Court grant this motion for extension of time.
Respectfully Submitted,
/s/ John T. Floyd III
John T. Floyd III
SBN 00730700
2000 Smith Street
Houston, Texas 77002
Phone: 713-224-0101
Fax: 713-237-1511
CERTIFICATE OF CONFERENCE
As required by Tex. R. App. P. 10.1(a)(5), I certify that I have conferred with Assistant District
Attorney Richard Villarreal, who indicated that this motion is unopposed.
/s/ John T. Floyd III
John T. Floyd III
CERTIFICATE OF SERVICE
I certify that, on July 2, 2015, I served a copy of this motion by First Class, United States mail,
facsimile, or any other valid method of service on the following:
Richard Villarreal
Assistant District Attorney
Tom Green County, Texas
124 W. Beauregard, Suite B
San Angelo, Texas 76903
Tel: 325-659-6584
Fax: 325-658-6831
[email protected]
/s/ John T. Floyd III
John T. Floyd III
No.____________________
In the
COURT OF CRIMINAL APPEALS
CLIFTON CREWS HOYT
Petitioner
v.
THE STATE OF TEXAS
Respondent
ORDER ON PETITIONERS FIRST UNOPPOSED MOTION FOR EXTENSION OF
TIME TO FILE PETITION FOR DISCRETIONARY REVIEW
The above and foregoing Appellant’s First Unopposed Motion for Extension of Time
Within Which to File Petition for Discretionary Review, having been duly
considered by the Court, it is hereby ordered that the Motion be and hereby is
GRANTED.
Appellant’s Petition for Discretionary Review is due to be filed on
_______________________________.
SIGNED on this the ____ day of ____________________, 2015.
______________________________
JUDGE PRESIDING
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56 Mich. App. 193 (1974)
223 N.W.2d 632
GEORGE E. SNYDER ASSOCIATES, INC.
v.
THE MIDWEST BANK
Docket No. 19096.
Michigan Court of Appeals.
Decided October 9, 1974.
*194 Fleming, Fleming & Treciak, for plaintiff.
Townsend & Korten, for defendant.
Before: QUINN, P.J., and V.J. BRENNAN and CARLAND,[*] JJ.
Leave to appeal denied. 393 Mich 769.
V.J. BRENNAN, J.
Plaintiff, George E. Snyder Associates, Inc., appeals from a decision of the Jackson County Circuit Court granting defendant Midwest Bank's motion for summary judgment. GCR 1963, 117.2(3).
On March 26, 1971, plaintiff entered into a loan and security agreement with the defendant bank. By this agreement defendant loaned plaintiff $200,000 on a term loan basis with a five-year schedule of repayment. Defendant also extended to plaintiff a loan option of an additional $200,000 on a revolving credit loan basis. Plaintiff agreed to deposit all of its revenue in a "cash collateral account" with the defendant bank. This account was designed to allow plaintiff to meet its operation and payroll expenses and to serve as collateral for the loans. In mid-December plaintiff requested that funds from the cash collateral account be transferred to its operating account so that it could meet its payroll expenses. This request was refused by defendant bank as were several subsequent similar requests.
In early January, 1972, plaintiff ceased to operate due to its inability to pay its employees. The *195 money remaining in the cash collateral account was applied to the payment of plaintiff's outstanding loan indebtedness.
On January 14, 1972, plaintiff instituted the instant action against defendant bank claiming that the bank's failure to transfer funds from the cash collateral account constituted a breach of contract resulting in the complete shutdown of corporate operations and causing a loss of $600,000. Defendant answered plaintiff's complaint denying the material allegations thereof and setting up a section of the Security Agreement as an affirmative defense pursuant to GCR 1963, 111.7.[1] Following a number of preliminary proceedings defendant filed a motion for summary judgment under GCR 1963, 117.2(3) contending there was no genuine issue as to any material fact.[2] The trial court took the motion under advisement and ordered the parties to take depositions. On November 29, 1973, the trial court rendered its opinion granting defendant bank's motion for summary judgment. It is from this decision that plaintiff now appeals.
A motion for summary judgment under GCR 1963, 117.2(3), made before trial has commenced, is not to be granted unless it can be said, giving the benefit of every reasonable doubt to the party opposing the motion, that there is no genuine issue as to any material fact. Rizzo v Kretschmer, 389 Mich 363; 207 NW2d 316 (1973); Rowen & Blair *196 Electric Co v Flushing Operating Corp, 49 Mich App 89; 211 NW2d 527 (1973). In determining whether such an issue does indeed exist, a court is required to consider all affidavits filed in the action "together with the pleadings, depositions, admissions and documentary evidence then filed in the action or submitted by the parties". GCR 1963, 117.3. After reviewing these materials summary judgment is not to be granted unless it is impossible for plaintiff's claim to be supported at trial "because of some deficiency which cannot be overcome". Rizzo v Kretschmer, supra.
The section of the security agreement set up as an affirmative defense by defendant provides that plaintiff shall be in default if defendant deems itself insecure, "in good faith believing that the prospect of payment * * * is impaired". Plaintiff, in its answer to defendant's affirmative defense, stated that "defendant had no valid `good faith' basis for believing that the prospect of payment of the indebtedness or performance of the Agreement was impaired". The issue of defendant's good faith, therefore, was squarely put in issue. In his affidavit Robert O. Shelley stated that defendant was advised by plaintiff that it was unable to meet its payroll, that plaintiff had not been generating any new business of consequence, that ten employees of plaintiff would soon be discharged and that plaintiff would probably go into dissolution. Mr. Richard Huttenlocher, by his counteraffidavit, stated that he advised Mr. Shelley that certain employees were to be laid off, but as part of a corporate change to reduce costs and promote efficiency and that he did not state that plaintiff was unable to meet its payroll or that plaintiff was seeking dissolution. These discrepancies or seeming inconsistencies all involve questions of fact *197 which might relate to the ultimate issue of defendant's good faith. Therefore, under these circumstances and in light of our Supreme Court's recent decision in Rizzo, we find ourselves unable to say, giving plaintiff the benefit of every reasonable doubt, that it is impossible for plaintiff's claim to be supported at trial "because of some deficiency which cannot be overcome". Accordingly, we reverse the decision of the trial court and remand the case for trial.
Reversed and remanded.
All concurred.
NOTES
[*] Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.
[1] A section of an additional security agreement was also set up as an affirmative defense. Plaintiff, in its answer to defendant's affirmative defenses, alleged full compliance with this section. The specific application of this section was not, however, explored by the trial judge. At trial both parties should be given full opportunity to explore its relevance and applicability to this particular fact situation.
[2] Defendant's motion in this regard was supported by affidavit as required by DeMare Brothers Construction Co, Inc, v Teska, 49 Mich App 642; 212 NW2d 602 (1973).
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448 Pa. 90 (1972)
Commonwealth
v.
Archambault, Appellant.
Supreme Court of Pennsylvania.
Argued December 2, 1970.
Reargued January 11, 1972.
April 20, 1972.
*91 Before JONES, C.J., EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
John W. Packel, Assistant Defender, with him Vincent J. Ziccardi, Defender, for appellant.
Milton M. Stein, Assistant District Attorney, with him James D. Crawford, Deputy District Attorney, Richard A. Sprague, First Assistant District Attorney, and Arlen Specter, District Attorney, for Commonwealth, appellee.
*92 OPINION BY MR. JUSTICE ROBERTS, April 20, 1972:
Appellant Leonard Archambault, after trial by jury in 1962, was convicted of first degree murder and sentenced to life imprisonment. No appeal was taken from his conviction at that time. However, in 1968 appellant filed a petition pursuant to the Post Conviction Hearing Act,[1] alleging that he had been deprived of his right to appeal, guaranteed by Douglas v. California, 372 U.S. 353, 83 S. Ct. 814 (1963). His petition was dismissed by the common pleas court, but on appeal this Court ordered that appellant be permitted to file post trial motions as if timely filed if he could establish that his previous failure to prosecute an appeal was motivated by fear of the death penalty. Commonwealth v. Archambault, 433 Pa. 336, 250 A. 2d 811 (1969). Such a showing was made, but after argument appellant's motion for a new trial was denied. Appellant appealed directly to this Court, and on March 25, 1971, this Court, by a vote of three to two, affirmed the judgment of sentence. A petition for reargument was timely filed, and was granted on May 28, 1971. The case was then reargued before a full Court.
Appellant contends that the trial court erred in telling the jury during the charge: I think it would be a miscarriage of justice to find this defendant not guilty."[2] We agree with appellant and grant him a *93 new trial.[3] To the same effect see Commonwealth v. Motley, 448 Pa. 110, 289 A. 2d 724 (1972), decided this day.
We believe that when a judge expresses to the jury his opinion that the accused is guilty, he invades the province of the jury and thereby violates the accused's fundamental right to trial by jury, a right that has been guaranteed by the Constitution of this Commonwealth since 1776.[4]
In a criminal case the direction of a verdict of guilty by a trial judge is not allowed.[5] For an accused has a right to trial by jury, and if a trial judge directs the jury to return a verdict of guilty, the accused has had no jury trial at all. Our constitutional system of trial by jury is founded upon the firm conviction that the peace and dignity of our society are best maintained, and the highest degree of criminal justice is achieved, if the power to convict individuals of crimes lies solely with the jury.
Justice BRANDEIS' observations on the question of whether a trial judge may express his opinion on the guilt of an accused, expressed over fifty years ago, still ring true today: "[I]t is still the rule . . . that the judge *94 is without power to direct a verdict of guilty although no fact is in dispute. What the judge is forbidden to do directly, he may not do by indirection. The judge may enlighten the understanding of the jury and thereby inflence their judgment; but he may not use undue influence. He may advise; he may persuade; but he may not command or coerce. He does coerce when without convincing the judgment he overcomes the will by the weight of his authority."[6]
Justice BRANDEIS has not been alone in his observation that a trial judge cannot indirectly effect a directed verdict of guilty. As the United States Court of Appeals for the First Circuit recently noted: "In a criminal case a court may not order the jury to return a verdict of guilty, no matter how overwhelming the evidence of guilt. This principle is so well established that its basis is not normally a matter of discussion. There is, however, a deep undercurrent of reasons. Put simply, the right to be tried by a jury of one's peers finally exacted from the king would be meaningless if the king's judges could call the turn. Bushel's Case, 124 Eng. Rep. 1006 (C.P. 1670). In the exercise of its functions not only must the jury be free from direct control in its verdict, but it must be free from judicial pressure, both contemporaneous and subsequent. Commonwealth v. Anthes, 1857, 71 Mass. (5 Gray) 185, 209-10; Rex v. Larkin, [1943] K.B. 174; P. Devlin, Trial by Jury 14, 56, 75-91 (3d impr. with addendum, 1966); T. Plucknett, A Concise History of the Common Law 137-38 (5th ed. 1956); Howe, Juries as Judges of Criminal Law, 52 Harv. L. Rev. 582 (1939)."[7]
*95 The now-apparent weakness in some of our previous decisions[8] was the supposition that the trial judge could express his personal opinion on the guilt of the accused, and even tell the jury, as the trial court did here, that: "I think it would be a miscarriage of justice to find this defendant not guilty," and yet somehow still leave "the ultimate decision to the jury" and not "interfere with its responsibility."[9] This assumption fails to recognize the actualities of the judge-jury relationship.
An expression by the judge that in his opinion the accused is guilty leaves an indelible imprint on the minds of the jury. The jury is undoubtedly going to attribute to the judge, because of his experience in criminal cases, special expertise in determining guilt or innocence. As Mr. Justice (later Chief Justice) KEPHART stated for this Court: "The judge occupies an exalted and dignified position; he is the one person to whom the jury, with rare exceptions, looks for guidance, and from whom the litigants expect absolute impartiality. An expression indicative of favor or condemnation is quickly reflected in the jury box. . . . To depart from the clear line of duty through questions, expressions or conduct, contravenes the orderly administration of justice. It has the tendency to take from one of the parties the right to a fair and impartial trial, as guaranteed under our system of jurisprudence."[10] Or, as the United States Supreme Court recognized in Bollenbach v. United States, 326 U.S. 607, 612, 66 S. Ct. 402, 405 (1946): "`The influence of the trial judge on *96 the jury is necessarily and properly of great weight,'. . . and jurors are ever watchful of the words that fall from him. Particularly in a criminal trial, the judge's last word is apt to be the decisive word."[11]
A judge's expression of his opinion on the guilt of an accused has an even greater coercive effect on the jury when as here the judge states that it would be a "miscarriage of justice" to find the defendant not guilty. "A juror may not mind disagreeing with a judge on factual matters but he would dislike very much placing himself in the category of a person who has participated in a miscarriage of justice, judicially proclaimed." Commonwealth v. Raymond, 412 Pa. 194, 210, 194 A. 2d 150, 158 (1963) (dissenting opinion).[12]
In light of the decisive effect that a jury is likely to give to a judge's statement that in his opinion the accused is guilty, it is clear that cautioning instructions to the effect that the jury is the final arbiter of the verdict are insufficient to vitiate the impact of the judge's statement. In a lengthy charge such as the one that was given to the jury at appellant's trial, the judge's statement that "I think it would be a miscarriage of justice to find this defendant not guilty" is the one part of the charge that no juror will forget or fail to understand. Cautionary instructions will be unable to remove the indelible impact of such a statement. *97 Cf. Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620 (1968); Jackson v. Denno, 378 U.S. 368, 84 S. Ct. 1774 (1964).
In holding as we do today, that a trial judge may not suggest a verdict of guilty or not guilty nor directly express an opinion on the guilt or innocence of the defendant, we are merely reaching a result which is in harmony with our latest decisions in this general area Commonwealth v. Wilmer, 434 Pa. 397, 254 A. 2d 24 (1969), and Commonwealth v. Holton, 432 Pa. 11, 247 A. 2d 228 (1968). In both of these cases the trial judge in his charge had reminded the jurors of their responsibility to the Almighty to bring in a proper verdict. We reversed on the grounds that the "`jurors might have concluded . . . that the Court was threatening them with the wrath of God should they bring in a verdict of not guilty.'" Commonwealth v. Wilmer, supra, 434 Pa. at 400, 254 A. 2d at 25 (quoting from Commonwealth v. Holton, supra, 432 Pa. at 19, 247 A. 2d at 232). Certainly a direct statement by a judge that in his opinion the accused is guilty invades the province of the jury just as much as, if not more than, a judge's statement implying that he can discern the will of the Almighty and that God's wrath will be visited upon the jury if they fail to return a verdict of guilty.
Our holding in this case also eliminates a number of anomalies that would exist under the opposite rule. For example, we recently held in Commonwealth v. Potter, 445 Pa. 284, 285 A. 2d 492 (1971), that a new trial was required when the prosecutor expressed his personal opinion of the defendant's credibility in the presence of the jury. We reasoned that the prosecutor "thereby clearly and improperly intrud[ed] upon the jury's exclusive function of evaluating the credibility of witnesses." Id. at 287, 285 A. 2d at 493.[13] If a prosecutor *98 cannot express his personal opinion of a defendant's credibility without intruding upon the jury's function, a fortiori we cannot permit a judge, whose opinion on the guilt of an accused has a far greater impact on the jury, to express such an opinion on the guilt of an accused.
In addition, we have held many times that new trials would be granted where the judge in a jury case evidenced a prejudiced or biased attitude toward the defendant,[14] or by his conduct acted as an advocate for the Commonwealth.[15] If new trials are required in cases such as these where the judge only indirectly indicated his belief in the guilt of the accused, how can we refuse to grant a new trial where as here the judge directly and specifically expressed his personal opinion that the accused was guilty.[16]
*99 Finally, our result here is in accord with the view of the overwhelming majority of other jurisdictions.[17]
The judgment of sentence is vacated and a new trial is granted.
Mr. Justice NIX joins in the majority opinion and filed a concurring opinion.
Mr. Justice MANDERINO joins in the majority opinion and joins in the concurring opinion of Mr. Justice NIX.
Mr. Justice EAGEN filed a dissenting opinion.
CONCURRING OPINION BY MR. JUSTICE NIX:
I am pleased to witness today the demise of a doctrine that I have long believed to have been inconsistent *100 with practical realities and manifestly unfair. To have held consistently that a direction of a verdict of guilty by a trial judge in a criminal case was improper and yet condone his expression of opinion as to guilt created an anomaly in our law unsupportable in reason or logic. I, therefore, join in the opinion of the majority which has long been overdue.
I regret, however, that in reaching its result the majority did not find it necessary to strike down those decisions where the statement of the trial judge was offensive even under the former standard. The trial judge in the case at bar as in Commonwealth ex rel. Smith v. Rundle, 423 Pa. 93, 223 A. 2d 88 (1966); Commonwealth v. Raymond, 412 Pa. 194, 194 A. 2d 150 (1963); and Commonwealth v. Cisneros, 381 Pa. 447, 113 A. 2d 293 (1955), in addition to expressing an opinion as to the guilt of the defendant, went further and suggested that the jury's failure to accept his view would have been a "miscarriage of justice." The former rule, while permitting comment provided "the only restriction being that he must advise the jury that anything he states in that connection is not binding upon them but that it is their sole power and responsibility to determine the guilt or innocence of the defendant, and in cases of murder the degree of the guilt. . . ." Commonwealth v. Simmons, 361 Pa. 391, 407, 65 A. 2d 353, 361 (1949). It was clearly a requirement that the expression of opinion should be done fairly and temperately and at no time should the ultimate decision be removed expressly or implicitly from the province of the jury.
We agree with the observations of the late Justice MUSMANNO in his dissenting opinion in Commonwealth v. Raymond: "But this rule, even as stated by the Majority, carries within it a very important modification; namely, that the judge must express his opinion `fairly *101 and temperately.' The judge there did not express himself `fairly and temperately'. Metamorphically he held a whip over the heads of the jury. He told them that if they did not agree with him, their contrary view would amount to a `miscarriage of justice'. This kind of language, it seems to me, smacks of coercion. A juror may not mind disagreeing with a judge on factual matters but he would dislike very much placing himself in the category of a person who has participated in a miscarriage of justice, judicially proclaimed." 412 Pa. 194, 210, 194 A. 2d 150, 158 (1963). This was not an expression of an opinion but rather an indictment of any who would dare to differ.
By abandoning the former rule the majority will avoid many future injustices. However, by failing to reach and overrule Commonwealth ex rel. Smith v. Rundle, supra; Commonwealth v. Raymond, supra; and Commonwealth v. Cisneros, supra, they perpetuate the former inequities permitted allegedly within the ambit of that doctrine. With this I cannot agree.
Mr. Justice MANDERINO joins.
DISSENTING OPINION BY MR. JUSTICE EAGEN:
On March 25, 1971, a majority of this Court who originally heard the appeal, speaking through former Mr. Chief Justice BELL, affirmed the judgment of sentence. Although reargument was subsequently granted, nothing advanced during the second round has persuaded me that our original order of affirmance was erroneous. Hence, I would still affirm the judgment for the persuasive reasons articulated in the opinion of our former Chief Justice.
I take the privilege of setting forth the opinion of former Chief Justice BELL in pertinent part:
"On August 10, 1962, Edward Bleecher, a blind man who was a night manager of a hotel in Philadelphia, *102 was badly beaten and then strangled to death by defendant-appellant, Leonard Archambault, in the victim's room, in the early hours of the morning. Archambault orally confessed, and later signed a lengthy written confession at the end thereof, and also on every page. He signed his written confession after having been duly warned of his rights and after having stated therein that his confession was absolutely free and voluntary and was given without any force, fears, threats or promises or inducements of any kind. In his confessions, Archambault admitted that he went to the hotel keeper's room in order to rob him, and that after he left the blind man's room, he found $45 in his pocket which he could not account for. Moreover, a witness for the Commonwealth testified that, shortly before this robbery-murder, Archambault asked him to join him in robbing the hotel keeper.
"In his confessions, Archambault said that earlier that evening he had committed sexual intercourse with another man. Archambault further stated (in both his oral and written confessions) that when he thereafter went to the victim's hotel room in order to rob him, the victim asked Archambault to have sexual relations with him, and this infuriated Archambault so much that, after striking Bleecher, he strangled him to death.
"On December 6, 1962, a jury found Archambault (who had not taken the witness stand) guilty of murder in the first degree, and fixed the punishment at life imprisonment. At his trial, Archambault was represented by two experienced court-appointed attorneys. No post trial motions were filed on his behalf, nor was any appeal taken from the judgment of sentence.
"On January 25, 1968, Archambault filed a petition for post-conviction hearing relief, alleging that he had not knowingly and intelligently waived his right to a direct appeal. After a hearing, his petition was dismissed, *103 whereupon he took an appeal to this Court. In Commonwealth v. Archambault, 433 Pa. 336, 250 A. 2d 811, we remanded the case to the Court below for a hearing on whether Archambault's failure to take an appeal was due to his lawyers' advice, or to his fear of receiving the death penalty at a second trial. The Court of Common Pleas (Trial Division) denied his petition for relief, as well as his motion for a new trial. However, that Court granted him the right to file a direct appeal.
"Archambault's principal contention is that the charge of the trial judge constituted reversible error because the Judge expressed therein his opinion as to appellant's guilt. He urges us to overrule our prior decisions and abandon our long-established rule in this Commonwealth that a trial Judge may express an opinion as to the guilt or innocence of a defendant, if he leaves solely to the jury the determination of innocence or guilt and the crime, if any, of which the defendant is guilty. This we decline to do. More particularly, the portions of the charge which, he contends constitute such prejudicial error as to require a reversal of the jury's verdict, and the grant of a new trial, are as follows:
"`They are the three crimes. I say to you, members of the jury and here is my comment that I don't think voluntary manslaughter is in this case, and I don't think murder in the second degree is in this case. I think it is a question of murder in the first degree or not guilty, and I say it because all the evidence is that way[*] . . . . I make comment again, but that comment can be totally disregarded by you, because it is entirely for you. I think it would be a miscarriage of justice to find this defendant not guilty.'
*104 "The real issue before us boils down to this: did the trial Judge's comments on Archambault's guilt and his possible crimes improperly and unfairly impair the absolute right of a jury to determine his innocence or guilt as well as the crimes, if any, of which he was guilty?
"This Court has held many times that in reviewing a charge for prejudicial and reversible error, we must consider the charge as a whole. Commonwealth v. Butler, 442 Pa. 30, 272 A. 2d 916; Commonwealth v. Whiting, 409 Pa. 492, 187 A. 2d 563; Commonwealth v. Lance, 381 Pa. 293, 113 A. 2d 290. In Commonwealth v. Butler, 442 Pa., supra, this Court pertinently said (page 34): `"It is elementary that the instructions to a jury must be read as a whole and correctness and adequacy thereof determined from that reading: Commonwealth v. Thompson, 321 Pa. 327, 184 Atl. 97 (1936); Commonwealth v. Gibbs, 366 Pa. 182, 76 A. 2d 608 (1950)."' In Commonwealth v. Lance, 381 Pa., supra, the Court expressed the same principle in slightly different language (page 298): `The charge must be considered in its entirety and error cannot be predicated on certain isolated excerpts from it (Commonwealth v. Moyer, 357 Pa. 181, 187, 53 A. 2d 736); which is what defendant attempts to do in contending that the court disparged his evidence. . . .'
"When we examine the Court's charge in its entirety, we find that the defendant-appellant was not unfairly or unjustly prejudiced. The above-quoted excerpts from the Court's charge were covered and explained by the Judge's repeated instructions to the jury that it and it alone was to determine the ultimate innocence or guilt of the defendant. For example, the Court charged: `. . . And you are the complete, final, unequivocal arbiter of the verdict, no matter what I say.
"`I am going to make a comment, but in the last analysis you, and only you, have the ultimate, final and *105 unequivocal responsibility to decide this case and to return one, and only one, of these four possible verdicts. Do you understand that? . . . Under that "murder", you can find one of these three verdicts: murder in the first degree, murder in the second degree or voluntary manslaughter. I will tell you what I think, but you are not bound by what I think, no matter what I say, except as to the law.
"`I will make a comment when I get, later on in my direction to you, or my charge to you, as to what I think, but what I think is not at all binding on you, and please remember that, because I say again, unequivocally, the final determination of this case is completely in the hands of the jury, entirely with you. . . . Nevertheless, members of the jury, please understand me and I am pointing my finger at you so you will understand the emphasis of what I am saying it is entirely, completely, in your power to find any verdict.
"`We always hope that a jury will exercise intelligence and use its power wisely and intelligently, but in this case, I cannot take away from you the power to return a verdict of murder in the second degree if you so decide unanimously, or a verdict of voluntary manslaughter if you so decide. . . . But please remember, I am giving you my thought, but it is entirely, completely, for you to say what the verdict shall be, and it shall be one of those four possible verdicts. . . But it is entirely, completely, for you. If you think it differently, it is your thought that controls, and it will be for you to say which one of these four possible verdicts you will bring in after you have deliberated and unanimously decided on what verdicts to bring in. . . . But, members of the jury, on that, too, I say again, with emphasis, it is entirely, completely, for you and I can't and nobody else can stop you or prevent you, if you so unanimously decide, from bring in a verdict of murder in the second *106 degree. . . . The Commonwealth asserts, and whether the assertion is so or not is entirely for you, for you and only you can decide what the evidence is. . . . But if you find those to be the facts beyond a reasonable doubt, then you would be warranted in finding this defendant guilty of murder in the first degree, because if you find those to be the facts you find an agreement to rob, going in, robbing, pockets turned out, money taken, a radio taken, and a death, bruises, and a strangulated throat with a towel around the throat.
"`But whether that is so is entirely, completely, and finally for you. Then, members of the jury, you have a right, if you so unanimously decide for any reason, or if your reasons establish themselves from the evidence, to find this defendant not guilty. This is entirely for you. . . . But again I say emphatically that it is entirely, completely, finally, unequivocally for you, because yours is the power of a full, honest, impartial, intelligent consideration of the case to say what the verdict shall be. And it shall be one of these four verdicts, and that sheet will go out with you.'
"In the light of the repeated and crystal clear statements in the Court's charge, we are convinced that the jury was not coerced or unfairly and improperly influenced to bring in a verdict of guilty of murder in the first degree.
"Furthermore, we note that appellant's experienced trial counsel made no objection, at the time of the trial to the Court's comments and instructions to the jury of which he now complains.
"In Commonwealth v. Chambers, 367 Pa. 159, 79 A. 2d 201, this Court said (page 164): `It is the exclusive province of the jury, not the court, to decide all the facts, the inferences therefrom, the credibility of the witnesses and the weight and effect to be given to all of the testimony. While the main purpose of a judge is to *107 state and explain the law and briefly review the evidence, it is always the privilege and sometimes the duty of a trial judge to express his own opinion, including his opinion of the weight and effect of the evidence or its points of strength and weakness or even the guilt or innocence of the defendant and the verdict, which in his judgment, the jury should render, provided (1) there is reasonable ground for any statement he may make; and (2) he clearly leaves to the jury the right to decide all the facts and every question involved in the case, regardless of any opinion of the court thereon: Commonwealth v. Cunningham, 232 Pa. 609, 611, 81 A. 711; Commonwealth v. Foster, 364 Pa. 288, 293, 72 A. 2d 279; Commonwealth v. Simmons, 361 Pa. 391, 407, 65 A. 2d 353; Commonwealth v. Watts, 358 Pa. 92, 97, 56 A. 2d 81; Commonwealth v. Jones, 341 Pa. 541, 551, 19 A. 2d 389; Commonwealth v. Nafus, 303 Pa. 418, 420-1, 154 A. 485.'
"More recently in Commonwealth ex rel. Smith v. Rundle, 423 Pa. 93, 223 A. 2d 88, the appellant complained of the trial Court's comment that a not guilty verdict would be a `miscarriage of justice'. We rejected this contention, and said (page 97): `In view of this record, particularly Smith's own trial testimony, we find no merit in the argument that the trial judge's comment, that a not guilty verdict would be a miscarriage of justice, was unwarranted or unfair. This is especially so, since it also appears that the jury received careful instructions that the determination of all factual questions was solely for its decision, and that a not guilty verdict could be returned.' This same language, i.e., `miscarriage of justice'[*] was specifically used *108 by a trial Judge and approved by this Court in Commonwealth v. Cisneros, 381 Pa. 447, 113 A. 2d 293; Commonwealth v. Raymond, 412 Pa. 194, 194 A. 2d 150.
"In reviewing the record in this case, particularly Archambault's confessions, we find no prejudicial or reversible error in the trial Judge's charge.
"The cases relied upon by appellant are clearly distinguishable. In Commonwealth v. Ott, 417 Pa. 269, 207 A. 2d 874, this Court granted a new trial because the Judge stated in his charge that he had a duty without any qualification to comment on guilt. The Court held that the use of these words may result in the jury's concluding that a guilty verdict is the only choice they have. However, the Court said (pages 272-273):
"`In connection with the right of the trial judge to express an opinion on the weight and effect of the evidence, this Court said in Commonwealth v. Cunningham, supra, 232 Pa. 611, 81 A. at 712: "It is the undoubted right of a judge, and often it is his duty, to express to the jury his opinion of the weight and effect of the evidence."
"`For the first time, as far as our research discloses, in Commonwealth v. Nafus, 303 Pa. 418, 154 A. 485 (1931), this Court held that a trial judge may also express an opinion as to the guilt or innocence of the defendant. And in many cases since, this right has been reaffirmed provided (1) that it is exercised fairly and temperately; (2) that there is reasonable ground for any statement the judge may make; and (3) that he clearly leaves to the jury the right to decide all the facts and every question in the case, regardless of his opinion: Commonwealth v. Raymond, 412 Pa. 194, 194 A. 2d 150 (1963); Commonwealth v. Chester, 410 Pa. 45, 188 A. 2d 323 (1963); Commonwealth v. Patskin, 372 Pa. 402, 93 A. 2d 704 (1953); and Commonwealth v. Watts, 358 Pa. 92, 56 A. 2d 81 (1948).
*109 "`In connection with the right of the trial judge to express an opinion as to the guilt or innocence of the accused, it was said in Commonwealth v. Nafus, supra, 303 Pa., at 420, 154 A. at 486, "that it was sometimes[*] his duty to do so." In Commonwealth v. Moyer, 357 Pa. 181, 53 A. 2d 736 (1947), it was held that "in some cases" it may be his duty to express such an opinion. Likewise, in Commonwealth v. Chambers, supra, 367 Pa. at 164, 79 A. 2d 204, we said ". . . it is always the privilege and sometimes the duty[*] of a trial judge to express his own opinion, including his opinion of the weight and effect of the evidence or its points of strength and weakness or even the guilt or innocence of the defendant and the verdict which, in his judgment, the jury should render. . . ." See also, Commonwealth v. Patskin, supra. However, in no case within our knowledge has it been said that it is always[*] the duty of the court to do so, and clearly no language of this Court has ever indicated that a judge should feel compelled to do so in every case, regardless of the nature, quality or quantity of the proof.'
"In Commonwealth v. Young, 418 Pa. 359, 211 A. 2d 440, we reversed and granted a new trial because of the following language in the Court's charge: `"My comment . . . and I have a good reason for making it.[**]. . ."' This Court held that a jury could conclude that a trial Judge was in possession of facts, not disclosed by the evidence, that proved the guilt of the defendant. In Commonwealth v. Holton, 432 Pa. 11, 247 A. 2d 228, and Commonwealth v. Wilmer, 434 Pa. 397, 254 A. 2d 24, the Judge stated to the jury its responsibility to God in determining the guilt or innocence of the defendant. We granted a new trial because we believed that the jury could have concluded that the Judge was threatening *110 them with the wrath of God should they bring in a verdict of not guilty.
"From the experience of several centuries the law permits, under certain circumstances, a trial Judge to comment on a witness's testimony or on any part of the evidence and to express his view and opinion of the evidence and of the alleged crimes and defenses, provided he expresses his opinion fairly and temperately and that there is reasonable ground for any statement he may make, and, most importantly, that he clearly leaves to the jury the right to decide all the facts and every question in the case regardless of his opinion. The reason and justification for this (although rarely ever expressed) is that a Judge's knowledge and experience and analysis may at times, aid the jury in reaching a just verdict."
NOTES
[1] Act of January 25, 1966, P.L. (1965) 1580, §§ 1 et seq., 19 P.S. §§ 1180-1 et seq. (Supp. 1970).
[2] The trial court also told the jury in the course of the charge: "I say to you, members of the jury and here is my comment that I don't think voluntary manslaughter is in this case, and I don't think murder in the second degree is in this case. I think it is a question of murder in the first degree or not guilty, and I say it because all the evidence is that way." By this statement and his "miscarriage of justice" statement, the trial court in effect directed the jury to return a verdict of guilty of first degree murder.
[3] Because we grant appellant a new trial on the basis of his first contention, it is unnecessary for us to consider appellant's additional contentions that the trial court erred in charging the jury that no defense of intoxication was present, and by admitting into evidence certain photos of the deceased.
[4] See Constitution of the Commonwealth of Pennsylvania, Art. I, § 9, and accompanying Historical Note in Purdon's, Constitution Articles 1 to 2, at 311-12.
[5] See, e.g., Commonwealth v. Bonomo, 396 Pa. 222, 230, 151 A. 2d 441, 445 (1959); Commonwealth v. Orr, 138 Pa. 276, 283, 20 Atl. 866 (1890); Commonwealth v. Bloom, 88 Pa. Superior Ct. 93, 97-98 (1926); Commonwealth v. Havrilla, 38 Pa. Superior Ct. 292, 297-98 (1909); 9 Wigmore, Evidence § 2495 (1940); 1 Kessler, The Law of Criminal Procedure in Pennsylvania 136 (1961); 5 Anderson, Wharton's Criminal Law and Procedure 230 (1957); 2 Henry, Criminal Procedure in Pennsylvania 651 (2d ed. Sadler 1937).
[6] Horning v. District of Columbia, 254 U.S. 135, 139, 41 S. Ct. 53, 54 (1920) (dissenting opinion) (emphasis added) (citations omitted).
[7] United States v. Spock, 416 F. 2d 165, 180-81 (1st Cir. 1969) (footnotes omitted). See Buchanan v. United States, 244 F. 2d 916, 920 (6th Cir. 1957).
[8] See, e.g., Commonwealth ex rel. Smith v. Rundle, 423 Pa. 93, 223 A. 2d 88 (1966); Commonwealth v. Raymond, 412 Pa. 194, 194 A. 2d 150 (1963); Commonwealth v. Cisneros, 381 Pa. 447, 113 A. 2d 293 (1955).
[9] Commonwealth v. Raymond, 412 Pa. 194, 208, 194 A. 2d 150, 157 (1963).
[10] Commonwealth v. Myma, 278 Pa. 505, 508, 123 Atl. 486, 487 (1924).
[11] For additional observations on the great weight that a jury attaches to a judge's opinion on the guilt of an accused, see Commonwealth v. Cisneros, 381 Pa. 447, 460, 113 A. 2d 293, 300 (1955) (dissenting opinion); United States v. Smith, 399 F. 2d 896, 898 (6th Cir. 1968); see also O'Mara, Standard Jury Charges Findings of Pilot Project, 43 Pa. Bar Ass'n Q. 166, 173 (1972).
[12] One former Justice of this Court suggested that a judge's use of the phrase "miscarriage of justice" indicates to the jury that "they themselves might have to answer for some species of misconduct if they acquitted the defendant." Commonwealth v. Cisneros, 381 Pa. 447, 454, 113 A. 2d 293, 297 (1955) (dissenting opinion).
[13] The standards set forth in American Bar Association Project on Standards for Criminal Justice, The Prosecution Function (Approved Draft 1970), § 5.8(b), which we relied upon in Potter, provide: "It is unprofessional conduct for the prosecutor to express his personal belief or opinion as to the truth or falsity of any testimony or evidence of the defendant."
The ABA Code of Professional Responsibility provides: "In appearing in his professional capacity before a tribunal, a lawyer shall not . . . [a]ssert his personal opinion . . . as to the credibility of a witness . . . or as to the guilt or innocence of an accused. . . ." American Bar Association Special Committee on Evaluation of Ethical Standards, Code of Professional Responsibility (Final Draft 1969), DR 7-106(C) (4).
[14] See, e.g., Commonwealth v. Hales, 384 Pa. 153, 119 A. 2d 520 (1956); Commonwealth v. Trunk, 311 Pa. 555, 565-66, 167 Atl. 333, 337 (1933); see generally Annotation, 34 A.L.R. 3d 1313 (1970).
[15] See, e.g., Commonwealth v. McCoy, 401 Pa. 100, 162 A. 2d 636 (1960); Commonwealth v. Myma, 278 Pa. 505, 508, 123 Atl. 486, 487 (1924).
[16] Cf. § 5.6 of the American Bar Association Project on Minimum Standards for Criminal Justice, Standards Relating to Trial by Jury (Approved Draft 1968). That section provides: "Judicial Comment on Verdict. While it is appropriate for the court to thank jurors at the conclusion of a trial for their public service, such comments should not include praise or criticism of their verdict."
[17] See, e.g., Robinson v. State, 161 So. 2d 578 (Fla. D.C. App. 1964); People v. Chatman, 67 Ill. App. 2d 481, 214 N.E. 2d 545 (1966); State v. Cox, 352 S.W. 2d 665 (Mo. 1961); People v. Mulvey, 1 A.D. 2d 541, 151 N.Y.S. 2d 587 (1956); Tilford v. State, 437 P. 2d 261 (Okla. Crim. Ct. App. 1968); Holober v. Commonwealth, 191 Va. 826, 62 S.E. 2d 816 (1951); State v. Loveless, 140 W. Va. 875, 87 S.E. 2d 273 (1955); see generally 23 C.J.S. Criminal Law, § 993 (1961); Comment, Power to Comment on the Issue of Guilt: Trial by Jury or Trial by Judge, 9 Vill. L. Rev. 440 (1964).
One jurisdiction has gone so far as to state that if a trial judge does or says anything which might prejudice the jury or be construed by the jury as indicating a belief in defendant's guilt or innocence, a violation of the Canons of Judicial Ethics, Canon 3, has occurred. See State v. Sanders, 360 S.W. 2d 722, 726 (Mo. 1962).
In United States v. Murdock, 290 U.S. 389, 54 S. Ct. 223 (1933), the United States Supreme Court restricted the power of federal trial judges to express an opinion on the guilt of an accused to "exceptional cases." Id. at 394, 54 S. Ct. at 225. Intermediate federal courts, in interpreting and applying Murdock, have generally agreed that an opinion as to the guilt of a defendant is only warranted when the facts are undisputed, and the only issue is whether defendant's conduct constitutes a violation of the statute in question. See, e.g., United States v. Smith, 399 F. 2d 896 (6th Cir. 1968); McBride v. United States, 314 F. 2d 75 (10th Cir. 1963); United States v. Woods, 252 F. 2d 334 (2d Cir. 1958); Davis v. United States, 227 F. 2d 568 (10th Cir. 1955); United States v. Link, 202 F. 2d 592 (3d Cir. 1953).
[*] "In view of the numerous complaints about this language, and in the interest of avoiding the possibility that such strong language might unfairly prejudice a jury, the Court believes that this phrase should not hereafter be used by a trial Judge in his comments or charge to the jury."
[*] "In view of the numerous complaints about this language, and in the interest of avoiding the possibility that such strong language might unfairly prejudice a jury, the Court believes that this phrase should not hereafter be used by a trial Judge in his comments or charge to the jury."
[*] "Italics in Commonwealth v. Ott."
[**] "Italics in Commonwealth v. Young."
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242 B.R. 199 (1999)
In re CAPITOL HILL HEALTHCARE GROUP D/B/A Capitol Hill Nursing Center, Debtor.
Bankruptcy No. 99-01801.
United States Bankruptcy Court, District of Columbia.
December 13, 1999.
*200 *201 Marcia K. Docter, Docter, Docter & Lynn, P.C., Washington, DC, for Debtor.
Ralph S. Tyler, Hogan & Hartson L.L.P., Baltimore, MD, for Petitioning Creditor.
DECISION RE DISMISSING INVOLUNTARY PETITION AND CASE
S. MARTIN TEEL, Jr., Bankruptcy Judge.
The involuntary petition filed by NeighborCare-TCI, Inc. d/b/a NeighborCare-Richmond must be dismissed. The court adopts its oral decision of December 6, 1999, and supplements it as follows.
The court's thorough reading of the depositions in evidence and examination of the other exhibits convinces it that the debtor clearly is "a corporation that is not a moneyed, business, or commercial corporation" within the meaning of 11 U.S.C. § 303(a). Accordingly, pursuant to § 303(a), the debtor was not eligible to have an involuntary petition filed against it.
I
Procedurally, the court set for trial the question of whether the debtor was eligible under 11 U.S.C. § 303(a) to have a petition filed against it and deferred trying the other issues in the case. Although the debtor's motion to dismiss prompted the scheduling order setting the trial, the court rejects the petitioner's argument that the question tried was whether the debtor could demonstrate that the petitioner could prove no set of facts in support of its claim that it is entitled to relief. The court clearly singled out the § 303(a) issue for trial; this was not a hearing regarding whether facially the petition possibly presented a good case under the liberal construction rules that apply under F.R.Civ.P. 12(b)(6).
II
The debtor, Capitol Hill Healthcare Group d/b/a Capitol Hill Nursing Center ("the Nursing Center"), and a sister corporation, Capitol Hill Community Hospital d/b/a Medlink Hospital at Capitol Hill ("the Hospital"), are registered as nonprofit corporations under District of Columbia law. As their names imply, they run, respectively, a nursing home and a hospital. They were organized for those purposesspecifically to provide long-term acute care that other hospitals in the community did not provide. Both entities are operated at the same site.
They make payments to a for-profit corporation, BHS Management, Inc. ("BHS"), for providing common services to the two non-profit corporations (for example, finance, patient accounting, housekeeping, security, and maintaining a cafeteria). In addition, the Nursing Center and the Hospital make rent payments to Capitol Hill Group ("CHG"), the owner of the real property they occupy.[1]
The Nursing Center and the Hospital were organized as nonprofit corporations under the California Mutual Benefit Corporations statute. Dr. Peter Shin is the sole member of the Hospital which in turn is the sole member of the Nursing Center. *202 Dr. Shin is the 100% shareholder of BHS, and also owns or controls CHG.
No evidence was presented to show that the payments to BHS and CHG are unreasonable in amount. In the case of BHS, it has simply been reimbursed for the expenses it incurs on behalf of the Nursing Center and the Hospital. Although it contractually is entitled to receive reimbursement of its costs plus 15%, the 15% has never been paid, and, in any event, no showing was made that a 15% commission would be unreasonable compensation to BHS. Nor was any showing made that the lease payments to CHG are unreasonable in amount. There simply was no showing that the payments to BHS and CHG are used as a subterfuge to route distributions to BHS, CHG, or Dr. Shin. Although Dr. Shin received a salary from BHS for which the Nursing Center and the Hospital reimbursed BHS, there was no showing that Dr. Shin's salary was unreasonable in amount.
The debtor and BHS have been operated as related entities, but this does not alter the debtor's true non-profit character. For example, the debtor, the Hospital, BHS, and CHG are treated as related entities as essentially a single entity under 42 C.F.R. § 413.17 for Medicare cost reimbursement purposes. Similarly, to minimize accounting fees, the Nursing Center, the Hospital, BHS, and CHG underwent a joint audit resulting in a single audit report. Although the report showed the combined effects of the entities' operations, nevertheless, the report included portions showing the results of the entities as separate corporations. Finally, the entities have also executed joint borrowing documents in order to obtain loans to the Nursing Center and the Hospital. All of this proved irrelevant because it failed to show that the separate existence of the non-profit entities is not fully respected or that the debtor should otherwise be viewed as operated for pecuniary gain.
The debtor has been operating at a loss. In 1997, the debtor reduced its number of charity cases to a relatively minimal level in comparison to 1996. Nor has the debtor ever sought to qualify with the Internal Revenue Service as a charitable organization. The court fails to see how any of these facts are relevant to whether the debtor is operated for pecuniary gain.
III
The § 303(a) formulation of "moneyed, business, or commercial corporation" embraces only corporations organized for profit. In re Allen University, 497 F.2d 346 (4th Cir.1974) (applying phrase under the Bankruptcy Act); Hoile v. Unity Life Ins. Co., 136 F.2d 133, 135 (4th Cir.1943) (same); In re Caucus Distributors, Inc., 106 B.R. 890, 909-13, 915 (Bankr.E.D.Va.1989). To determine whether the debtor fits within the formulation, it is necessary to examine the corporation's charter of incorporation and its corporate activities. Allen, 497 F.2d at 347-48; Hoile, 136 F.2d at 135; In re United Kitchen Assocs., Inc., 33 B.R. 214, 216 (Bankr.W.D.La.1983).
State law organization or registration as a non-profit corporation is not decisive. But such organization or registration is probative, and the petitioner failed to adduce any evidence establishing that the debtor is organized or conducted for profit despite its non-profit status under state law.
The debtor's mission is to provide health care to the community. The debtor has not issued stock. No distributions have been declared or made by the debtor on account of the membership interest of Dr. Shin.
The debtor's failure to seek to qualify as a charitable organization with the Internal Revenue Service, and its minimal charity cases, do not negate its nonprofit status. Being a charity is not a prerequisite to not being a "moneyed, business, or commercial corporation" under 11 U.S.C. § 303(a).
*203 Nor does the debtor's joining in joint borrowing documents and undergoing joint audits with BHS and CHG make the debtor a for-profit entity. Those activities do not establish that the debtor is conducted to earn a profit, as the borrowings are only for the benefit of the debtor and its sister non-profit corporation, the Hospital, and the joint audits minimized accountants' fees.
Finally, the debtor's payments to related entities have been on terms which the petitioner has not contended were unreasonable. No showing was made that the payments were a subterfuge for making distributions to Dr. Shin's through his for-profit corporations.
The court thus concludes that the debtor is not a "moneyed, business, or commercial corporation" under 11 U.S.C. § 303(a).
IV
The petitioner, however, urges that the court should disregard the debtor's separate identity, specifically, that the debtor should be treated as the alter ego of BHS. Although the debtor and BHS share common control through Dr. Shin, such common control for reasons discussed below is insufficient standing alone to warrant treating the debtor as the alter ego of BHS clad with its for-profit status.
Treating a corporation as the alter ego of another entity is the same thing as piercing the corporate veil: it comes down to disregarding the corporation's separate existence. "Veil-piercing is an extraordinary procedure that is not to be used lightly." Schattner v. Girard, Inc., 668 F.2d 1366, 1370 (D.C.Cir.1981). The petitioner has not shown any circumstances warranting the extraordinary remedy of piercing the corporate veil.
When a federal interest is at stake, the courts often bring to bear a more liberal federal common law of veil-piercing than applies when veil-piercing is sought in enforcing state tort or contract claims. United States through SBA v. Pena, 731 F.2d 8, 12 (D.C.Cir.1984). For example, liberal veil-piercing is frequently brought to bear in regulatory contexts. E.g., Capital Tel. Co. v. FCC, 498 F.2d 734, 738 n. 10 (D.C.Cir.1974) ("Where the statutory purpose could be easily frustrated through the use of separate corporate entities a regulatory commission is entitled to look through corporate entities and treat the separate entities as one for purposes of regulation.") (citing General Tel. Co. v. United States, 449 F.2d 846, 855 (5th Cir.1971)). Thus, in Capital Telephone a license applicant and a sister corporation were treated as one and the same for purposes of a regulatory scheme barring a license grant to any entity which already had a license to broadcast in the area. See also Quinn v. Butz, 510 F.2d 743 (D.C.Cir.1975) (straw vice president allowed to show that corporation was alter ego of president such that the vice president ought not be treated as "responsibly connected" with the operation by virtue of his vice president status for purposes of agricultural commodities regulatory statute). But the petitioner has failed to show any regulatory scheme at stake here which would warrant using a liberal doctrine of piercing the corporate veil.
Applying the federal common law of corporate veil-piercing to 11 U.S.C. § 303(a) yields the result that § 303(a) embodies a federal policy that only a truly non-profit corporation should be allowed to be exempt from involuntary petitions as a non-moneyed corporation. But the case law examined in part III above already incorporates that test, and the court's application of that case law has already demonstrated that the debtor is truly a nonprofit corporation.
That the debtor and BHS are treated as related organizations for Medicare disbursement purposes under 42 C.F.R. § 413.17 is wholly irrelevant to the application of 11 U.S.C. § 303(a). Treating them as related organizations for a *204 federal reimbursement program is precisely the type of regulatory arena in which the separate existence of the entities may be disregarded for statutory purposes. That entities are a single economic unit under Medicare cost reimbursement regulations does not carry over to determinations under 11 U.S.C. § 303(a).[2]
Declaring a corporation to be an alter ego is only available "as the justice of the case may require." Quinn v. Butz, 510 F.2d at 757, quoting Chicago, M. & St. P. Ry. v. Minneapolis Civic & Commerce Ass'n, 247 U.S. 490, 501, 38 S.Ct. 553, 62 L.Ed. 1229 (1918). Penetration of the corporate veil, in other words, is a device for which "the ultimate principle is one permitting its use to avoid injustice." Quinn, 510 F.2d at 759. Thus, courts have "disregarded the corporate fiction where its recognition would pervert the truth." Quinn, 510 F.2d at 758 (footnote omitted). Regardless of what formulation of the alter ego doctrine may be used, the bottom line in this case is that the petitioner has utterly failed to articulate any injustice (for example, a perversion of the truth) which would arise by respecting the debtor's separate corporate existence. The debtor has done nothing improper, its separate existence was in no way an attempt to circumvent § 303(a), and respecting its separate existence visits no injustice on the petitioner.
In urging application of the alter ego doctrine, the petitioner has principally pointed to Dr. Shin's control of the debtor, the Hospital, BHS, and CHG. That alone does not establish an injustice as required by Quinn to pierce the corporate veil.
Indeed, it has long been the clearly stated rule in this circuit that the existence of a sole and controlling shareholder does not alone justify invoking the alter ego doctrine, however that doctrine might be formulated. The doctrine of alter ego is brought to bear only upon a showing "not merely of single ownership, or of deliberate adoption and use of a corporate form in order to secure its legitimate advantages, but of such domination of a corporation as in reality to negate its separate personality" in circumstances in which "at some innocent party's expense, the corporation is converted into such an instrumentality," with the result that the corporate identity is disregarded "as the justice of the case may require." Quinn, 510 F.2d at 758 (emphasis added). As observed more recently in Valley Finance, Inc. v. United States, 629 F.2d 162, 171-72 (D.C.Cir.1980), cert. denied, 451 U.S. 1018, 101 S.Ct. 3007, 69 L.Ed.2d 389 (1981):
The concept of distinct corporate entity has long served useful business purposes, encouraging risk-taking by individual investors as well as overall convenience of financial administration. Ordinarily, such considerations justify treating the corporation as a separate entity, independent of its owner. On occasion, however, this concept is abused, and yields results contrary to the interests of equity or justice. Courts have not hesitated to ignore the fiction of separateness and approve a piercing of the corporate veil when the corporate device frustrates clear intendment of the law....
Given the diversity of corporate structures and the range of factual settings in which unjust or inequitable results are alleged, it is not surprising that no uniform standard exists for determining whether a corporation is simply the alter ego of its owners. The fact of sole ownership *205 is not by itself sufficient, although it is certainly not irrelevant.
To recapitulate, what is clear from Valley Finance and from Quinn is that beyond a sole controlling shareholder there must be some showing of an injustice for example some wrong or abuse arising from the fiction of separate corporate existence.[3] To paraphrase Valley Finance, the alter ego doctrine ought not be applied here because respecting the debtor as a separate entity would neither abuse the concept of corporations being distinct entities; nor yield results contrary to the interests of equity or justice; nor frustrate the clear intendment of 11 U.S.C. § 303(a).
Plainly, 11 U.S.C. § 303(a) embodies no policy akin to a regulated industry scheme which warrants disregarding a debtor's separate existence simply because there is common control of the debtor and a related entity that has provided services to the debtor on reasonable terms.
NOTES
[1] The petitioner questions whether CHG is a non-profit corporation as CHG claims, but that issue is irrelevant to the status of the Nursing Home and the Hospital, and so the court will assume (without deciding) that CHG is a for-profit corporation.
[2] Nor is it relevant to application of 11 U.S.C. § 303(a) that for labor law or employee discrimination law purposes entities may be deemed to constitute "an integrated enterprise" as discussed in Radio & Television Broadcast Technicians Local Union 1264 v. Broadcast Service of Mobile, Inc., 380 U.S. 255, 256, 85 S.Ct. 876, 13 L.Ed.2d 789 (1965) (entities treated as single employer for labor law purposes); Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir.1983) (entities treated as single employer for purposes of employment discrimination law).
[3] As stated long ago by this circuit's court of appeals:
[T]here is an exception to the entity rule, where its recognition would result in promoting illegality, fraud, or injustice. In other words, since the franchise is granted by the state for a useful and valid purpose, it may not be employed to further wrong. Where it is so employed the law will disregard the rule, go behind the fiction, and treat the stockholders as if the corporation did not exist.
Eichelberger v. Arlington Bldg., Inc., 280 F. 997, 999 (D.C.Cir.1922) (citations omitted).
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136 Cal.App.2d 171 (1955)
THE PEOPLE, Respondent,
v.
CARL E. FIGUIEREDO, Appellant.
Crim. No. 5367.
California Court of Appeals. Second Dist. Div. Three.
Oct. 13, 1955.
Albert L. Linnick, under appointment by the District Court of Appeal, for Appellant.
Edmund G. Brown, Attorney General, and William E. James, Deputy Attorney General, for Respondent.
SHINN, P. J.
Carl E. Figuieredo was found guilty of the crime of robbery of the first degree while armed and *172 was sentenced to state prison July 8, 1953. He had admitted prior convictions of three felonies for which he had served terms of imprisonment. During the trial which was to a jury he was represented by counsel.
December 28, 1954, there was filed with this court an application by Figuieredo, the purpose of which was to procure an order of court requiring the county clerk of Los Angeles County to file his notice of appeal and to prepare a record on appeal. In making this application he was not represented by counsel. In the written application Figuieredo represented that at the time of sentence, namely, July 8, 1953, "he filed with the Superior Court of the State of California, at Long Beach, before the Honorable Judge Maltby, a Notice of Appeal." It was also stated that on July 16, 1953, he was transferred to the California Institution for Men at Chino, California, and that on that day he "filed with a Correctional Officer Lieutenant H. M. Comstock, a Notice of Appeal to the Superior Court of the State of California, In the County of Los Angeles"; that due to his unfamiliarity with law he addressed the envelope which contained his notice of appeal from the judgment and order denying motion for new trial "to the District Attorney's Office, District Attorney T. W. Cochran, County of Los Angeles, 713 Jergins Trust Building, Long Beach, 2, California"; about September 23, 1953, he wrote to the court reporter requesting information pertaining to a notice of appeal "filed by the defendant on July 8, 1953"; he received an answer from the court reporter stating that the reporter had not "received any data pertaining to a Notice of appeal"; thereafter he had been trying to the best of his ability to find out why his notice of appeal sent to T. W. Cochran had not been delivered to the county clerk; November 16, 1954, he wrote to Mr. Cochran inquiring concerning the notice of appeal and that Cochran returned the notice of appeal to him on or about December 24, 1954. Attached were copies of the letter to the court reporter, a reply from the county clerk, the letter to Mr. Cochran and the latter's reply, with which reply Cochran returned the notice of appeal which he had previously received from Figuieredo. Upon consideration of the application this court made an order that the county clerk file the notice of appeal which had been mailed by mistake to Mr. Cochran and returned to Figuieredo. In due time the clerk's transcript and reporter's transcript were filed with this court and upon application of Figuieredo, Mr. Albert L. Linnick, member of the Los Angeles Bar Association *173 Committee on Criminal Appeals, was appointed as appellant's counsel. The People have moved to dismiss the appeal and the matter has been argued and submitted.
The clerk's minutes contained in the clerk's transcript of the proceedings had at the time judgment of imprisonment was imposed are silent with respect to the giving of oral notice of appeal by the defendant. The reporter's transcript discloses that at that time defendant's attorney, Mr. Van Tatenhove, stated as follows: "At this time I would like to file a notice that we intend to make an appeal on Count III, as necessary, as far as the record is concerned." The clerk's transcript does not contain any notice of appeal other than one dated July 16, 1953. The allegation of the petition that a notice of appeal was filed on July 8, 1953, would appear to have been based upon the statement made by defendant's counsel at that time but, as we have seen, the allegation is not borne out by the record.
Section 1239 of the Penal Code provides that an appeal by the defendant may be taken in the manner provided in rules adopted by the Judicial Council. The rule, so far as pertinent, reads as set out in the margin. [fn. 1]
[1] The statement of defendant's counsel "we intend to make an appeal on Count III" was not sufficient as a notice of appeal, which is required to be in writing, signed by the defendant or his attorney and filed with the clerk. It was merely a statement that an appeal would be taken.
[2] Defendant maintains that the notice mailed to Mr. Cochran must be deemed to have been filed at the time it was received by Mr. Cochran in his capacity of deputy district attorney--that its receipt constituted constructive filing. He relies upon People v. Slobodion, 30 Cal.2d 362 [181 P.2d 868], as authority for this proposition. In that case Slobodion had deposited an envelope addressed to the county clerk, containing a notice of appeal, with a prison employee who had charge of the mail, informing the employee of the contents and the importance of mailing it promptly; there was ample time for the notice to reach the county clerk within the time allowed for appeal had it been mailed promptly. Mailing was *174 delayed and the notice reached the county clerk five days after the time for appeal had expired. The question in the case was stated as follows: "Should appellant--who was incarcerated by the state, who desired to appeal, who took every step he could possibly take to perfect his appeal, who delivered his notice of appeal to the prison authorities well within the statutory period with the request that they mail it but they carelessly and negligently failed to forward the notice so that it would be received by the 'clerk of the superior court' within the time limitation specified by law--be deprived of his right of appeal?" The answer of the court was "Both reason and justice compel a negative answer." (P. 365.) The ground of the decision was that "appellant's delivery of his notice of appeal to the state prison employees for forwarding six days prior to the expiration date for the taking of his appeal constituted a constructive filing within the prescribed time limit and satisfied the jurisdictional requirement as contemplated by law." (Pp. 367-368.) The holding that the delivery of the notice of appeal amounted to a constructive filing was based upon the particular facts of the case. The notice would have been received by the clerk in time had the letter been placed in the mail promptly by the prison employee who accepted it and promised "to take care of it." The prisoner did everything that was in his power to accomplish the filing of his notice of appeal. No such situation existed in the present case. Figuieredo alone was responsible for the failure to cause delivery of the notice of appeal of date July 16 to the county clerk. It was not sent to the deputy district attorney with a request that it be delivered to the county clerk, nor with the expectation that it would be so delivered. We do not have his version of the incident and therefore we are not informed whether he realized that the notice he received was the original which should go to the county clerk and was sent to him through error or believed that it was only a copy sent to him in the belief that service of a copy was necessary. His silence in the matter, in view of his knowledge that Figuieredo was endeavoring to perfect an appeal, would indicate that it was of no interest to him whether Figuieredo was acting under a mistake as to the requirements of the law in forwarding the notice to him instead of to the county clerk. But it was his privilege to be indifferent as to the consequences, since he had no legal duty in the premises.
[3] The reviewing courts have no jurisdiction to entertain *175 an appeal where notice of appeal is not given within the time prescribed by law (In re Horowitz, 33 Cal.2d 534 [203 P.2d 513]), nor can the party be relieved of his default (People v. Lewis, 219 Cal. 410 [27 P.2d 73]). Since defendant's attempted appeal was not taken in time, it must be dismissed.
The appeal is dismissed.
Wood (Parker), J., and Vallee, J., concurred.
NOTES
[fn. 1] 1. "Appeals in Criminal Cases. ... Rule 31. Notice of appeal. In the cases provided by law, an appeal may be taken by filing a written notice of appeal with the clerk of the superior court within 10 days after the rendition of the judgment or the making of the order. ... If the appeal is by the defendant the notice shall be signed by him or by his attorney, and if the appeal is by the People, the notice shall be signed by the district attorney, his deputy, or other counsel for the People. ..."
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Lyles v. State
NO. 10-90-076-CV
IN THE
COURT OF APPEALS
FOR THE
TENTH DISTRICT OF TEXAS
AT WACO
* * * * * * * * * * * * *
          VERNON P. LYLES,
                                                                                            Appellant
          v.
          THE STATE OF TEXAS,
                                                                                            Appellee
* * * * * * * * * * * * *
From County Court
Robertson County, Texas
Trial Court # 89-34C
* * * * * * * * * * * * *
O P I N I O N
* * * * * * *
          This is an appeal in a bail bond forfeiture case. Vernon Lyles was a surety on a $1,500
bond for Thomas Earl Marks, the principal, who was charged with a misdemeanor property
offense. Marks failed to appear in County Court on December 7, 1989, and judgment nisi was
entered. On December 16, Marks was re-arrested and placed in the Robertson County jail. On
February 7, 1990, final judgment was entered. Lyles filed a timely motion to vacate or modify
the judgment, alleging his right to a remittitur because Marks was in custody on February 7. The
ultimate issue is whether the court should have granted a remittitur of the bond. We will reverse
and remand with instructions.
          Appellant asserts in point one that the court erred in entering a final judgment prior to the
nine-month delay provision in article 22.16(c)(1) of the Code of Criminal Procedure. See Tex.
Code Crim. Proc. Ann. art. 22.16(c)(1) (Vernon 1989). Because State v. Matyastik recently
held that article 22.16(c)(1) is unconstitutional as a violation of the separation of powers provision
in the Texas Constitution, we overrule point one.
See State v. Matyastik, No. 632-90 (Tex. Crim.
App. May 8, 1991).
          Points three, four, five and six concern remittitur of the amount of the bond, pre-judgment
and post-judgment interest. Article 22.16(a)(1) provides:
(a) After forfeiture of a bond and before the expiration of the time limits set by
Subsection (c) of this article, the court shall, on written motion, remit to the surety
the amount of the bond after deducting the costs of court, any reasonable costs to
the county for the return of the principal, and the interest accrued on the bond
amount as provided by Subsection (e) of this article if:
(1) the principal is incarcerated in the county in which the prosecution is
pending; . . . .
Tex. Code Crim. Proc. Ann. art. 22.16(a)(1) (Vernon 1989) (emphasis added). In Matyastik,
the Court also held that the italicized portion of art. 22.16 (a), which utilizes the time limitations
of subsection (c) before entering final judgment, to be unconstitutional. See Matyastik, No. 632-90. The Court ruled that "remittitur now may be done anytime between forfeiture and entry of
a final judgment." Id., slip op. at 4. Here, the principal was returned to custody on December
16, 1989, before final judgment was entered February 7, 1990. The Court still had jurisdiction
over its judgment at the April 5 hearing on Lyles' motion to vacate or modify the judgment, and
upon being made aware that Marks had been in custody since December 16, was required to order
a remittitur in accordance with the mandatory provision of article 22.16(a). See Tex. Code Crim.
Proc. art. 22.16(a) (Vernon 1989).
          The legislature has considered the overcrowded condition of most jails and the state
penitentiary, and determined it to be the public policy to allow a remittitur of an appearance bond
when the principal is returned to custody prior to final judgment. In making its determination, the
legislature has recognized that jail and penitentiary space is critical in Texas and that the bail bond
industry provides a useful service by assuming the risk of a defendant's timely appearance in
court. When a defendant is released on a bail bond, the potential liabilities that cities and counties
assume while housing persons accused of crime are eliminated as well as the financial burden for
housing each prisoner. In addition, critical jail space is made available for more serious offenders.
          Here, we are presented with a principal who was charged with a misdemeanor property
offense, theft by check. The State is insisting upon payment of the entire penalty of the bond,
$1,500, in addition to pre-judgment and post-judgment interest and attorney feesâall when the
defendant was returned to custody only nine days after he failed to appear and long before final
judgment was entered. We find that the court should have vacated or modified its February 7,
1990, judgment and granted remittitur in accordance with art. 22.16(a). Id. We believe that this
is true even though Lyles presented his request for remittitur after final judgment because (1) his
response to the motion for summary judgment made such a request and (2) at the time final
judgment was entered he could have relied on the nine-month-delay provision of article 22.16(c)(1)
which was declared to be unconstitutional at a later date. We sustain points of error three, four,
five and six.
          In point two, Appellant complains that attorney fees are not authorized by law. We agree.
See Blue v. State, 170 Tex. Crim. 449, 341 S.W.2d 917 (1960); Pitts v. State, 736 S.W.2d 191
(Tex. App.âWaco 1987, no writ). The State contends that the bail bond should be decided under
the law of contracts and that attorney's fees are proper. In Bailout Bonding Co. the Court stated
that bond forfeiture cases are criminal in nature and that the rules of civil procedure apply, but not
the rules of substantive civil law. See Bailout Bonding Co. v. State, 797 S.W.2d 275, 277 (Tex.
App.âDallas 1990, pet. ref'd). Further, the Court held that a judgment on a bond is not in the
nature of a violation of contract. Id. Accordingly, we sustain point two.
          We reverse and remand with instructions that the court modify the judgment to remit the
bond to the surety after deduction of only those items authorized by article 22.16(a).
Â
                                                                                 BOBBY L. CUMMINGS
                                                                                 Justice
Before Chief Justice Thomas,
          Justice Cummings and
          Justice Vance
Reversed and remanded with instructions
Opinion delivered and filed June 13, 1991
Publish
o the minors.
However, the theory that Harris made
alcohol available to minors was alleged in the information. The information alleges all of the elements
of the offense of making alcohol available to minors and tracks the language of
the statute. As a general rule, an
indictment in the language of the statute creating and defining the charged
offense will be sufficient. Beck v. State, 682 S.W.2d 550, 554 (Tex.
Crim. App. 1985).
         HarrisÂs contention appears to be that
there is a variance between the offense as alleged in the information and the
proof at trial. Even if the inclusion of
the words Âby purchasing alcohol in the information created a variance, the
variance was not material. Whether a
variance is material is determined by examining whether the information (1)
sufficiently informs the defendant of the charge against her to allow her to
adequately prepare a defense, and (2) is sufficiently clear about what criminal
conduct it is referring to, such that the defendant could not be subjected to
prosecution for the same offense under a differently-worded information. Gollihar
v. State, 46 S.W.3d 243, 247 (Tex.
Crim. App. 2001). The charging
instrument sufficiently informed Harris of the charge against her and was clear
enough about the offense that she would not be subjected to double jeopardy by
a differently worded indictment about the same offense. Thus there is no material variance.
         Because of our resolution of HarrisÂs
first issue, HarrisÂs second issue fails.Â
The State was not required to prove that Harris purchased the alcohol to
obtain a conviction. The statute
provides more than one means by which a person can commit an offense. Â The charging instrument alleged that Harris,
with criminal negligence, made alcohol available to minors. Harris was convicted of that offense.
CONCLUSION
         Having overruled HarrisÂs issues, we
affirm the judgment.
        Â
BILL VANCE
Justice
Â
Before Chief Justice Gray,
Justice Vance, and
Justice Reyna
Affirmed
Opinion delivered and filed November
10, 2004
Do not publish
[CR25]
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Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-18-00042-CV
Joseph M. ESPARZA d/b/a Volaire Jet Interiors and Volaire Jet Interiors, Inc.,
Appellants
v.
Chad F. CHRISTIAN,
Appellee
From the County Court at Law No. 10, Bexar County, Texas
Trial Court No. 2017CV03128
Honorable David J. Rodriguez, Judge Presiding
PER CURIAM
Sitting: Sandee Bryan Marion, Chief Justice
Karen Angelini, Justice
Irene Rios, Justice
Delivered and Filed: September 26, 2018
VACATED AND DISMISSED
The parties have filed a joint motion to vacate the trial court’s judgment and dismiss this
appeal because they have reached an agreement that resolves this dispute. We grant the parties’
motion, vacate the trial court’s October 12, 2017 judgment, and dismiss this appeal. See TEX. R.
APP. P. 42.1(a)(2); Caballero v. Heart of Tex. Pizza, LLC, 70 S.W.3d 180, 181 (Tex. App.—San
Antonio 2001, no pet.).
PER CURIAM
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462 F.Supp. 575 (1978)
Helen A. LITTLE, Plaintiff,
v.
Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Defendant.
No. C-C-77-267.
United States District Court, W. D. North Carolina, Charlotte Division.
October 13, 1978.
Order December 29, 1978.
*576 *577 Harry B. Crow, Jr., Monroe, N.C., for plaintiff.
Wayne C. Alexander, Asst. U.S. Atty., Charlotte, N.C., for defendant.
ORDER GRANTING BENEFITS
McMILLAN, District Judge.
Plaintiff brings this action pursuant to 42 U.S.C. § 405(g) seeking review of a decision of the Secretary of Health, Education and Welfare denying her application for disability insurance benefits under the Social Security Act, 42 U.S.C. §§ 416(i) and 423(a).
Plaintiff filed her application on May 26, 1976, and her application was denied. On February 23, 1977, she made a timely request for a hearing to review the decision. The hearing was held before an Administrative Law Judge on April 7, 1977. Mrs. Little was not represented at the hearing. The only oral testimony was from Mrs. Little and Mrs. Little's daughter, Mrs. Brenda L. Brooks. No vocational evidence, other than that found in Mrs. Little's testimony and applications for benefits, was introduced either orally or by documentary exhibits. Records of medical examinations and reports were introduced at the hearing and considered. Based on this evidence the Administrative Law Judge concluded that Mrs. Little was not entitled to receive disability benefits. At the request of Mrs. Little, the Appeals Council reviewed this decision, and by letter dated July 15, 1977, it affirmed the decision of the Administrative Law Judge.
This action was commenced on September 19, 1977. Both parties have moved for summary judgment; there are no genuine issues of material fact and the case is ready for decision. For the following reasons I conclude that the decision of the Secretary is not supported by substantial evidence in the record and that plaintiff is entitled to receive the benefits for which she applied.
Plaintiff's earnings record shows that the special earnings requirement of the statute was met from the time she claims she first became unable to work in 1976 and will continue to be met through June 30, 1980.
The evidence before the Administrative Law Judge showed that plaintiff was a fifty-seven-year-old woman with a high school education who has no apparent vocational training except that received on the job. Mrs. Little worked as a seamstress in a shirt factory from January 1967 to June 1969 and again from July 1973 to May 7, 1976, the claimed date of onset of her disability. Her work required that she handle and move bundles of shirts weighing as much as thirty pounds for distances as far as fifteen feet. Record at 35, 52-3. In the interim period, July 1969 to June 1973, Mrs. Little worked in a woodworking firm doing decoupage. Record at 27, 52. Mrs. Little has no other employment history other than many years of work on a family farm operated by her and her husband. Record at 52.
Plaintiff left her job at the woodworking firm, claiming that the paint and glue with which she was required to work were aggravating her nerves and causing or aggravating dizzy spells. Record at 26-7. She left her position as a seamstress in May 1976, claiming that she had become unable to work as a result of inner ear trouble, high blood pressure, headaches, facial spasms, arthritis and dizziness. Record at 34. She is not now employed.
Mrs. Little testified that her principal problems resulted from an inability to perform any function requiring either substantial motion (Record at 24) or prolonged periods of sitting (Record at 29). She testified that she is unable to do much of the daily housework as she cannot stoop down without losing her balance. Chores such as vacuuming are beyond her ability because they involve too much motion and physical exertion. Record at 24. Plaintiff testified that the frequent dizzy spells often prevented her from driving, even though she did have a valid driver's license. Record at 24. She claimed that her arthritic condition affected both her back and her hands, the latter *578 becoming very painful when used actively. Record at 28. Mrs. Little also testified to a history of involuntary facial spasms. Record at 29-30. No substantial testimony was taken about the side effects of these spasms, but the record contained the report of Dr. F. A. Stewart, a family practitioner, who, during his first encounter with Mrs. Little on November 11, 1976, observed one period of spasms. He noted in his report that as a result of the spasm, "She was slightly confused, but could communicate." Record at 77. Dr. Stewart reported that the spasm he observed lasted approximately twenty to thirty minutes. Record at 73.
Mrs. Little also testified that she takes daily medication, including hormones, for blood pressure, circulation and arthritis. Mrs. Little apparently has been unable to take any medication other than aspirin for her arthritis because of problems with side effects. Record at 25-26.
Mrs. Little's testimony was in large measure corroborated by her daughter, Mrs. Brooks. She testified that she saw Mrs. Little every day. Record at 31. Mrs. Brooks noted that her mother's dizzy spells prevented her from doing physically taxing labors at any time and from doing general housework much of the time. She stated in addition that Mrs. Little was forced to give up her gardening activities for the first time in 1976. Record at 31. The Administrative Law Judge made no finding or suggestion questioning the credibility of either Mrs. Little or Mrs. Brooks.
The medical evidence before the Secretary, either at the hearing or Appeals Council stage, consisted of the reports of three doctors, two of whom, Dr. F. A. Stewart and Dr. Richard Felkner, had observed and treated Mrs. Little on isolated occasions. The third, Dr. William Deskins, reported that he and his associates had treated Mrs. Little from August, 1969, through May 7, 1976, the date of the claimed onset of disability. Record at 79-80.
Dr. Deskins briefly summarized Mrs. Little's medical history in a letter to the North Carolina Department of Human Resources, which was made a part of the record before the Secretary at the Appeals Council level:
". . . She was hospitalized by my associate, Dr. A. P. Kitchin in September of 1970 and then by Dr. W. M. Nesbit, a neurologist, in Charlotte in December of 1970. The reason for these hospitalizations and evaluations was the development of the following symptoms: persistent weakness, easy fatigability, frequent intermittent episodes of blanching and associated numbness and paresthesias of both hands and occasionally of one or both feet. Then on September 23, 1970 she had her first episode of drawing of the face with face tending to pull to the left but with both sides of the face being involved with involuntary muscle spasms. These episodes occurred at irregular intervals lasting from seconds to minutes and were associated with a generalized weak feeling, [mal]aise and poor ability to control her hands but no impaired consciousness X-rays were normal as was a right carotid arteriorgram. She was initially placed on Dilantin, but after approximately one month developed an allergic rash to this and it had to be discontinued. While on Dilantin she had no difficulty; however, following discontinuation of the Dilantin the difficulty recurred. In addition to the above spinal fluid examination was normal, also brain scan and EEG were normal. Discharge diagnosis was left hemifacial spasm of undetermined etiology. Because of persistence of these symptoms as well as development of vertigo, she was referred to Duke Medical Center in March, 1971. By this time she had developed frequent severe throbbing frontal headaches, occasionally severe enough to cause nausea without vomiting. Occasionally with headaches she noted blurred vision. The final diagnosis was listed by Duke Medical Center as facial spasms, etiology undetermined; history of Dilantin allergies; status posthysterectomy. She was placed on Valium but showed little improvement. Subsequently because of depressive reaction she was placed on Pertofrone but was unable to take this. She *579 was subsequently seen by Dr. Kitchin in July of 1971 with generalized joint pain and tenderness and stiffness and was placed on Aspirin with a tenative diagnosis of osteoarthritis. Since that time the patient has continued to have fairly frequent episodes of symptoms described above including headaches and drawing of the face. She also has continued to display joint difficulty with pain, tenderness and stiffness. She also has had labile hypertension but this has been fairly well controlled with Chlorothiazide. Because of persistance of symptoms she was referred to the Durwood Clinic in Charlotte in April, 1973. Their diagnosis was migraine variant suspected; labile hypertension; osteoarthritis to the thoracic spine. She was placed on Sansert 1 tablet t. i. d.
"She was seen on several occasions in 1973, 1974 and 1975 with coccydynia which was treated by injection and symptomatic treatment. The vertigo which she had had to some extent became much more severe and in mid 1976 she was referred to Dr. Richard Felkner, otolaryngologist, in Charlotte. She was placed on Antivert by Dr. Felkner.
. . . . .
"In summary, Mrs. Little's problems include mild labile hypertension, migraine headaches; osteoarthritis, particularly of the spine; acute and chronic anxiety; depression; vertigo, suspected postural; facial spasms of undetermined etiology and menopausal syndorme. In view of this lady's multiple problems and based on my observation of her over this period of years, I feel that she is totally and permanently disabled."
Record at 79-80 (emphasis added).
As Dr. Deskins' letter indicates, Dr. Felkner also diagnosed Mrs. Little's balance and motion problems as postural vertigo, for which Dr. Felkner began treatment with the medication Antivert. However, Dr. Deskins reported to the Secretary in a report filed before the hearing in front of the Administrative Law Judge that "Antivert has not seemed to help" (emphasis added). Record at 69. Dr. Deskins has also noted that Mrs. Little would be functionally restricted in heavy lifting or long walking due to her arthritis. Record at 70.
In spite of this uncontradicted medical and testimonial evidence that Mrs. Little suffered from a form of vertigo for which no compatible treatment had been found, and which had become increasingly debilitating, particularly in 1976 (Record at 31, 80), the Administrative Law Judge, apparently sua sponte, decided that plaintiff's vertigo malady "is caused by posture and can be readily eliminated by change of posture." Record at 11. Assuming arguendo that the Administrative Law Judge has properly noted a possible course of treatment, plaintiff's condition may nevertheless not be so readily dismissed as "remediable" as the Secretary would suggest. The Secretary argues in his memorandum that under Health, Education and Welfare regulations, a malady that is subject to treatment cannot form the basis of a finding of disability. See 20 C.F.R. § 404.1507 (1977). Since plaintiff's vertigo is so amenable, he reasons, it therefore cannot support a finding of disability. This argument, however, fails to reflect either the exact wording of the regulation or the limited burden of proof placed on the disability claimant. The regulation at issue reads in pertinent part:
"For purposes of entitlement to a period of disability or to disability insurance benefits or to child's, widow's or widower's insurance benefits based on disability, an individual's impairment must also be expected to result in death or to have lasted or be expected to last for a continuous period of not less than 12 months. An individual with a disabling impairment which is amenable to treatment that could be expected to restore his ability to work shall be deemed to be under a disability if he is undergoing therapy prescribed by his treatment sources but his impairment has nevertheless continued to be disabling or can be expected to be disabling for at least 12 months..."
*580 (Emphasis added.) The Secretary infers from this language that a finding of nondisability is justified if such treatment will restore the claimant's ability within the statutory twelve-month period. Accord, Remington v. Folsom, 157 F.Supp. 473 (N.D. N.Y.1957), cited in Bradey v. Ribicoff, 298 F.2d 855 (4th Cir. 1962). A claimant's initial burden in a disability determination is not, however, to show that he or she is precluded from engaging in all forms of work; rather, he or she need only show that the disability is such as to preclude a return to former employment. The burden then shifts to the Secretary. Thorne v. Weinberger, 530 F.2d 580 (4th Cir. 1976). The only appropriate way to reconcile the remedial disability concept with the limited burden placed on the claimant is to hold that the remedy noted by the Secretary must be one which will permit the claimant to return to his former line of work, at least where the remedy is noted in support of a finding that claimant has failed to satisfy the threshold burden of proving a disability.
Such an implicit finding is not supported by substantial evidence in the record before the court. The uncontradicted testimony of plaintiff was that her employment required long periods of immobility. Record at 53. It would seem, then, that plaintiff's former occupation was, at least to some degree, one which would prevent her from engaging in the therapy the Administrative Law Judge has recommended. This latter comment would also seem to apply with equal strength to plaintiff's earlier position as a woodworker.
The Administrative Law Judge similarly dismissed the claimant's diagnosed arthritis condition, noting that "no joint changes or limitation of motion is noted." Record at 11. However, Dr. Deskins did state that Mrs. Little would be functionally restricted from engaging in activities requiring heavy lifting as a direct result of her arthritis. Record at 70. This uncontradicted medical determination, together with plaintiff's uncontradicted testimony that she suffers severe arthritic pain in her hands and lower back, demonstrates plaintiff's inability to return to her former occupation in the shirt factory as a seamstress, requiring manual dexterity, significant physical exertion in lifting heavy objects, and long periods of immobility during the operation of the sewing machine (Record at 53). Even in the absence of the arthritic condition, the long periods of sitting required in plaintiff's former job suggest that her vertigo condition would preclude her from returning to this work if the Administrative Law Judge is correct in his determination that frequent changes in posture are necessary to compensate for the malady.
It does not appear to be within the authority of the Administrative Law Judge to take judicial notice of a supposed, available course of treatment in the absence of corroborating medical evidence in the record. See Tyler v. Weinberger, 409 F.Supp. 776, 788 (E.D.Va.1976) (error for Administrative Law Judge to rely on personal medical recommendation in absence of record of his medical qualifications). Such action by the hearing officer would represent a significant inroad on the rights of claimants to have their cases decided, to the extent possible, on the record. Cf. McDaniel v. Celebrezze, 331 F.2d 426 (4th Cir. 1964) (decided under 5 U.S.C. § 1006(d), now codified as amended at 5 U.S.C. § 556(e)).
There are other apparent errors in the Secretary's findings which at a minimum would require a remand for reconsideration. For example, plaintiff was diagnosed as suffering from menopausal syndrome as well as acute and chronic arthritis. Record at 80. The Administrative Law Judge's response was to take notice (again apparently without support in the record), that "this is a natural condition which time and medication will cure." Record at 11. Subsequently, the Administrative Law Judge dismissed from his consideration the effects of acute and chronic anxiety by noting the absence of evidence of bizarre or inappropriate behavior. Record at 12. It appears from the record, however, that no consideration was given to the possible cumulative effect of these maladies. Where impairments are medically related in *581 terms of their effect on the claimant, it is incumbent on the Secretary to consider the impairments together. Landess v. Weinberger, 490 F.2d 1187 (8th Cir. 1974).
Based on all the evidence before the Administrative Law Judge and the Appeals Council, plaintiff clearly established a prima facie case of disability preventing her from returning to her former employment. Upon such a showing the burden shifted to the Secretary to demonstrate that there exist specific jobs which plaintiff can perform and that such jobs exist in the economy. Thorne v. Weinberger, supra.
The Administrative Law Judge had no evidence before him of the existence of any jobs which plaintiff could perform. Dr. Deskins stated in a report on Mrs. Little's condition that she would be functionally restricted from heavy lifting due to arthritis, and from heights due to vertigo. Record at 70. The vertigo which, it appears from the medical evidence as well as the subjective evidence, has eluded successful treatment, has prevented the plaintiff from engaging in even the most rudimentary household chores because of the motion required. On the other hand, plaintiff's arthritis, which Dr. Deskins noted "particularly" affects plaintiff's spine (Record at 80), causes plaintiff great pain and prevents her from engaging in long sedentary periods in a sitting position. In view of this evidence, the court finds that the Secretary failed to demonstrate that there existed in the national economy specific jobs which plaintiff was capable of performing.
IT IS THEREFORE ORDERED that the Secretary's motion for summary judgment is denied; that plaintiff's motion for summary judgment is granted; and that the case is remanded to the Secretary for determination of the appropriate disability onset date and for computation and payment of the benefits for which plaintiff is eligible.
ORDER
Plaintiff's counsel has petitioned for determination of a reasonable attorney's fee to be allowed by the court so that it may be certified by the Secretary and paid to counsel directly out of past-due benefits withheld by the Secretary for that purpose. See 42 U.S.C. § 406(b). The Secretary has been served with a copy of the petition but has not responded.
On October 13, 1978, the court filed an order on cross motions for summary judgment reversing the Secretary's denial of benefits to plaintiff and remanding the case to the Secretary for computation and payment of past-due benefits. By letter dated December 5, 1978, the court was informed by the United States Attorney that the Secretary, on remand, awarded $3,755.00 to Ms. Little. Under these circumstances the court has clearly rendered "a judgment favorable to [the] claimant" within the meaning of 42 U.S.C. § 406(b).
Plaintiff's counsel has submitted a verified motion detailing a total of eleven hours committed to the prosecution of the action in this court on behalf of plaintiff. It appears to the court that since September 19, 1977, to the date of the filing of counsel's petition, counsel rendered substantial, diligent and valuable services to plaintiff, resulting in the $3,755.00 award by the Secretary.
The entirety of counsel's services was rendered in connection with the suit in this court; no appeal has been taken by the Secretary.
Counsel has petitioned the court for an award of $500.00, considerably less than the statutory maximum of 25% of the award, which in this case would be $938.75. Counsel has noted with commendable forthrightness that the case was not an unusually complex one requiring any extraordinary services and that the court, in reversing the Secretary, did not adopt the precise line of reasoning argued by counsel in his brief for plaintiff.
Based on the foregoing and upon a consideration of the record as a whole, the court concludes that counsel is entitled to a reasonable attorney's fee under 42 U.S.C. § 406(b) of $650.00.
IT IS THEREFORE ORDERED that Harry B. Crow, Jr., attorney for plaintiff, is allowed an attorney's fee of $650.00.
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154 F.3d 739
41 Fed.R.Serv.3d 1229
THE HOME INSURANCE COMPANY OF ILLINOIS, Plaintiff-Appellant,v.ADCO OIL COMPANY, Defendant-Appellee.
No. 98-1055.
United States Court of Appeals,Seventh Circuit.
Argued May 27, 1998.Decided Sept. 4, 1998.
Robert M. Chemers, John M. McGregor (argued), Pretzel & Stouffer, chicago, IL, Stanley M. Ward (argued), Norman, OK, for Plaintiff-Appellant.
E. Vance Winningham (argued), Winningham & Stein, Oklahoma City, OK, for Defendant-Appellee.
Before BAUER, EASTERBROOK, and DIANE P. WOOD, Circuit Judges.
EASTERBROOK, Circuit Judge.
1
Adco Oil Company has not fared well in the market for legal services. In 1988 it hired attorney Michael J. Rovell to sue Guy Taylor and his law firm for malpractice. By outward appearances Rovell did a good job. After a jury trial a judgment for $120 million was entered in Adco's favor. But Adco never saw a penny of that judgment and Adco now has filed suit accusing Rovell of malpractice. The complaint alleges that without Adco's consent Rovell made an agreement with Adco's co-plaintiff and adversaries that left Rovell with $265,000 in fees and Adco with nothing. Rovell has since filed a petition in bankruptcy (he is the debtor in possession in a Chapter 11 reorganization). Adco wants to collect from Rovell's malpractice carrier, The Home Insurance Company. Rovell has done his best to frustrate Adco. He refrained from notifying Home of Adco's malpractice suit, and its claims-made policy expired before Home learned of the proceeding. Rovell also ignored the adversary action Home initiated in the bankruptcy case. Following this default Bankruptcy Judge Ginsberg entered a declaratory judgment that Home need not defend or indemnify Rovell.
2
Adco contends, however, that the policy remains available, faulty notice and default judgment notwithstanding. Adco concedes that Rovell did not comply with the policy's notice provision but insists that this does not matter. Illinois (whose law, the parties agree, controls) prevents injurers and their insurers from destroying the "vested rights" of injured parties. France v. Citizens Casualty Co., 400 Ill. 55, 79 N.E.2d 28 (1948); Scott v. Freeport Motor Casualty Co., 392 Ill. 332, 64 N.E.2d 542 (1945); Reagor v. Travelers Insurance Co., 92 Ill.App.3d 99, 47 Ill.Dec. 507, 415 N.E.2d 512 (1st Dist.1980). Adco contends that, as a result, Rovell's decision to conceal Adco's claim from Home may not be a basis for denying coverage. For its part, Home observes that Illinois law permits insurers to condition indemnity on timely notice of casualties. E.g., American Country Insurance Co. v. Bruhn, 289 Ill.App.3d 241, 224 Ill.Dec. 805, 682 N.E.2d 366 (2d Dist.1997). Carrying Adco's reasoning to its logical conclusion would foreclose enforcement of notice requirements, if it would not abolish claims-made policies, though Illinois law permits both. See, e.g., Graman v. Continental Casualty Co., 87 Ill.App.3d 896, 899, 42 Ill.Dec. 772, 409 N.E.2d 387, 390 (5th Dist.1980). The district court agreed with Adco's arguments and granted summary judgment in its favor. 965 F.Supp. 1147, 987 F.Supp. 1057 (N.D.Ill.1997).
3
First we must inquire whether the district court had subject-matter jurisdiction, a topic the judge did not explore. Home invoked the diversity jurisdiction. 28 U.S.C. § 1332. Home and Adco are of diverse citizenship, and the amount in controversy exceeds the jurisdictional minimum. But Home's dispute with Adco arises out of its policy with Rovell, and the normal alignment of parties in a suit seeking a declaratory judgment of non-coverage is Insurer versus Insured and Injured Party. Both Home and Rovell are citizens of Illinois, which forecloses diversity jurisdiction in such a suit. Carving a single controversy into pieces--Insurer vs. Insured in the bankruptcy court, Insurer vs. Injured Party in the district court--nominally yields jurisdiction over each suit but creates the possibility of inconsistent outcomes (which has come to pass) and does not really solve the jurisdictional problem, for Rovell is an indispensable party under Fed.R.Civ.P. 19. He has a stake in the outcome because victory for Adco would restore the policy as an asset in the bankruptcy, remove the possibility that discharge will be denied for wasting the estate's assets, and affect the recoveries of other creditors; Adco's claim is derivative of Rovell's contract with Home. We need not trace through the consequences, however, because there is an independent source of federal jurisdiction.
4
Home's adversary proceeding in Rovell's bankruptcy named not only Rovell but also Adco. After entering the default judgment against Rovell, the bankruptcy judge expressed doubt that he had jurisdiction over the dispute between Adco and Home and encouraged Home to dismiss the case and refile it in the district court. Home followed this advice, creating the problem we have discussed. It is a problem the bankruptcy judge could and should have averted. Its root is the default judgment against Rovell, as opposed to a notation of default. In a suit against multiple defendants a default judgment should not be entered against one until the matter has been resolved as to all. Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 21 L.Ed. 60 (1872). (Fed.R.Bankr.P. 7054(a), incorporating Fed.R.Civ.P. 54(b), permits a bankruptcy judge to enter final decision with respect to a single party in a multi-party case, but the judge did not use this power--nor was this an appropriate case for its use.) Having entered judgment prematurely against Rovell, the bankruptcy judge could have saved the day by adjudicating Home's claim against Adco. The insurance policy is an asset of Rovell's estate, Adco is a creditor, and the disposition of the claim may affect how much Adco and other creditors receive. Home versus Adco therefore was within the bankruptcy court's jurisdiction. See UNR Industries, Inc. v. Continental Casualty Co., 942 F.2d 1101, 1103 (7th Cir.1991); In re Xonics, Inc., 813 F.2d 127, 131-32 (7th Cir.1987). More: it is still "a proceeding ... related to a case under title 11", 28 U.S.C. § 157(b)(3), and "relatedness" jurisdiction is available whether the claim is before a bankruptcy judge or a district judge. See 28 U.S.C. § 1334(b) ("the district courts shall have ... jurisdiction of all civil proceedings ... arising in or related to cases under title 11"). That all proceedings in Rovell's bankruptcy have been stayed until the insurance coverage dispute has been resolved is a testament to the link between the two.
5
The district judge's failure to withdraw the reference from the bankruptcy judge complicates matters, but not fatally. A district judge should not hear as an original matter any part of a bankruptcy case it has referred to a bankruptcy judge without first withdrawing the reference "in whole or in part, ... on its own motion or on timely motion of any party, for cause shown." 28 U.S.C. § 157(d). No motion was made, and no cause was shown, in this case. But a judge's failure to follow orderly procedures for allocating bankruptcy matters within a district court does not deprive the court of subject-matter jurisdiction. It is an error, no doubt, but the kind of error that leads to reversal only if a party protests. Neither Home nor Adco challenges the district court's decision to resolve the case, and as it had adjudicatory competence no more need be said.
6
On to the merits. Home undertook in the malpractice policy
7
[t]o pay on behalf of the Insured all sums in excess of the deductible amount ... which the Insured shall become legally obligated to pay as damages as a result of CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD AND REPORTED TO THE COMPANY DURING THE POLICY PERIOD caused by any act, error or omission for which the Insured is legally responsible, and arising out of the rendering or failure to render professional services for others in the Insured's capacity as a lawyer or notary public.
8
The policy ran from April 1, 1994, to April 1, 1995, and would have entitled Rovell to coverage on Adco's malpractice claim, which was filed on October 21, 1994, if he had reported the claim to Home. But he did not, and Home did not learn of the suit from Adco until after April 1, 1995. Even under an occurrence policy, which links coverage to the date of the tort rather than of the suit, an insurer has a strong interest in prompt notice about claims, so that it can investigate or settle them. See Transport Insurance Co. v. Post Express Co., 138 F.3d 1189, 1191-92 (7th Cir.1998). Illinois gives insureds a "reasonable" time to notify insurers under occurrence policies. E.g., Barrington Consolidated High School v. American Insurance Co., 58 Ill.2d 278, 319 N.E.2d 25 (1974). A claims-made policy imposes a more rigid notice requirement, because it links coverage to the claim and notice rather than to the injury. Timing of suit and notice determines which policy applies--if any does. Coverage for claims made in a later period requires an additional premium, which Rovell did not pay. The district court's decision effectively required Home to cover more than one year's claims, but for only one year's premium. Because Rovell was uninsured for claims made after April 1, 1995, delay has had adverse consequences for Adco, but, for purposes of determining whether notice after the termination of a claims-made policy gives rise to coverage under that policy, Rovell's failure to pay for an additional period of coverage cannot matter. Home is bound only for the year's coverage it contracted to supply. The question at hand is whether Illinois enforces notice requirements in claims-made policies. As far as we can see, it does. Cincinnati Insurance Co. v. Baur's Opera House, Inc., 296 Ill.App.3d 1011, 230 Ill.Dec. 624, 694 N.E.2d 593 (4th Dist.1998); American Country Insurance Co., 289 Ill.App.3d at 250, 224 Ill.Dec. 805, 682 N.E.2d at 372. No case we have found, and none Adco has cited, invokes public policy to require the underwriter of a claims-made policy to defend or indemnify a claim of which it did not learn until after the policy expired. (We could imagine an argument for a little leeway if a suit had been filed against Rovell at the close of business on April 1, 1995; claims-made policies sometimes provide a short time for notice of claims made at the tail end of coverage, although this allowance also may come at a price. Because Adco's suit was filed with ample time remaining for notice, we need not explore the subject.)
9
Seizing on the statement in Reagor that "neither the insured nor the insurer, acting separately or together, may act to defeat the rights of the injured person" (Reagor, 92 Ill.App.3d at 105, 47 Ill.Dec. 507, 415 N.E.2d at 516), Adco maintains that its rights vested at the time of injury, so that Rovell's failure to comply with the policy's notice requirement came too late to defeat coverage. But propositions so abstract rarely decide concrete cases. In Reagor the insured notified the insurer and performed all of the policy's requirements; later the insured and insurer agreed that the policy did not cover the claim. All Reagor holds is that this bare agreement is not conclusive against an injured party, any more than a cancellation of the policy (after the accident) and a refund of the premium to the insured would be. Scott holds that the insured's decision to accept workers' compensation coverage does not establish, in an action between the victim and the insurer, that the insured was an "employee" of the firm that paid benefits, and therefore that the accident was outside the policy's scope. France has nothing to do with Adco's contentions; it holds that the insurer may limit coverage to the vehicle named in the policy, foiling efforts by the insured to fool the insurer into thinking that the insured truck (rather than an uninsured truck) had been involved. None of these cases holds or even suggests that a policy's stated conditions of coverage are unenforceable. Cooperation and defense clauses then would be wiped out along with notice requirements. Suppose Rovell had notified Home in time but then refused to make his records available, or had insisted on managing the defense himself (despite a clause turning control over to Home), or had stipulated to liability. By the district court's reasoning, none of these events would relieve Home of its duty to indemnify. If an insurer must pay despite lack of notice, cooperation, and an opportunity to control the defense, the price of coverage will skyrocket--if the market can continue to exist. Nothing we have seen in the state cases suggests that Illinois has taken that path.
10
Adco's retainer agreement with Rovell did not require Rovell to carry malpractice insurance. Illinois permits clients to hire uninsured lawyers. The state does not have any statute for lawyers comparable to the law requiring drivers to carry liability insurance, and to our knowledge no court has interpreted the Code of Professional Responsibility to imply such a mandatory-insurance obligation. Cf. Weisblatt v. Chicago Bar Association, 292 Ill.App.3d 48, 225 Ill.Dec. 993, 684 N.E.2d 984 (1st Dist.1997). If it is proper to practice law without insurance, then it is also possible for lawyers to purchase claims-made policies with inflexible notice requirements, rather than occurrence policies with more lenient provisions. Illinois courts routinely enforce these agreements and so, therefore, must we.
11
In the end none of this may matter--for Adco was represented in the litigation against Taylor by Jenner & Block, of which Rovell was then a partner, and may have recourse against the firm's assets or insurance. Moreover, Adco's co-plaintiff in the Taylor suit, to whom Rovell supposedly diverted winnings in violation of his duties to Adco, is a partnership in which Adco has an interest. Indirect recovery through the partnership may be as good as direct recovery. Whatever claim remains against Rovell must be satisfied by Rovell personally, if he is liable for anything--a subject we have not broached, because like the district judge we have taken Adco's contentions at face value.
12
One last issue requires brief comment. We assumed when discussing subject-matter jurisdiction that Home and Adco are the only parties. That is not quite right. Dismayed by some statements in the district court's opinion, Rovell sought leave to intervene under Fed.R.Civ.P. 24 after judgment. Though Rovell disclaimed any interest in the suit's outcome, the district court allowed him to intervene on the same side as Home for the purpose of clarifying some facts for the court. That was a mistake, and not only because the motion to intervene was untimely (after judgment), unnecessary (Rovell could have made his views known as amicus curiae), inappropriate (if as the district court believed Rovell had no interest in the outcome, how could he be a party?), and created jurisdictional problems (if Rovell had been aligned as a defendant, as he should have been, diversity of citizenship would have vanished). As a debtor in bankruptcy, Rovell has a fiduciary duty to his creditors not to squander property of the estate, see 11 U.S.C. §§ 704(1), 1107(a), including his interest in the policy. In re United States Brass Corp., 110 F.3d 1261, 1268 (7th Cir.1997); Tringali v. Hathaway Machinery Co., 796 F.2d 553, 560-61 (1st Cir.1986) (Breyer, J.); cf. United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983). A debtor in possession must act in the best interests of his creditors. Wasting assets during bankruptcy (or the preceding year) is a ground for denial of discharge. 11 U.S.C. §§ 727(a)(2), 1141(d)(3)(C). By failing to notify Home and then abetting its effort to avoid coverage Rovell has betrayed his creditors by reducing the assets available to satisfy a judgment, should Adco prevail in the malpractice litigation.
13
The judgment of the district court is reversed, and the case is remanded with instructions to enter a declaratory judgment that Home has no duty to defend or indemnify Rovell in Adco's suit.
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FILED
NOT FOR PUBLICATION NOV 03 2016
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARCO ANTONIO VIEYRA, No. 14-72059
Petitioner, Agency No. A074-800-055
v.
MEMORANDUM*
LORETTA E. LYNCH, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted October 25, 2016**
Before: LEAVY, SILVERMAN, and GRABER, Circuit Judges.
Marco Antonio Vieyra, a native and citizen of Mexico, petitions for review
of the Board of Immigration Appeals’ (“BIA”) order denying his motion to reopen
deportation proceedings based on ineffective assistance of counsel. We have
jurisdiction under 8 U.S.C. § 1252. We review for abuse of discretion the denial of
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
a motion to reopen. Mohammed v. Gonzales, 400 F.3d 785, 791 (9th Cir. 2005).
We deny the petition for review.
The BIA did not abuse its discretion in denying Vieyra’s motion to reopen as
untimely, where Vieyra filed the motion over twelve years after his final order of
deportation, see 8 C.F.R. § 1003.2(c)(2), and he has not demonstrated the due
diligence necessary to warrant equitable tolling of the filing deadline, see Avagyan
v. Holder, 646 F.3d 672, 679 (9th Cir. 2011) (equitable tolling is available to an
alien who is prevented from filing a motion to reopen due to deception, fraud, or
error, as long as the alien exercises due diligence in discovering such
circumstances).
PETITION FOR REVIEW DENIED.
2 14-72059
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622 F.Supp. 557 (1985)
Victor LASA, Plaintiff,
v.
Severo COLBERG and Miguel Hernandez Agosto, Defendants.
Civ. No. 82-0149 (JP).
United States District Court, D. Puerto Rico.
October 1, 1985.
*558 Antonio Córdova, and Rafael Rosario Hernández, San Juan, P.R., for plaintiff.
Marcos A. Ramirez Lavandero, Hato Rey, P.R., for defendants.
OPINION AND ORDER
PIERAS, District Judge.
This action for alleged violation of civil rights, pursuant to 42 U.S.C. 1983 and 42 U.S.C. 1985, is before us on defendants' Motion to Dismiss, the Magistrate's Report and Recommendation and Defendants' Objections to said Report.
The facts alleged in the complaint are as follows:
Plaintiff Victor Lasa was appointed Superintendent of the Capitol Building on August 1, 1978 by the New Progressive Party legislators, pursuant to Law No. 4 of July 21, 1977, 2 L.P.R.A. Secs. 651-661. On January 4, 1982, defendants Severo Colberg and Miguel Hernández Agosto fired Lasa because of his ideological or political affiliation. Lasa claims that defendants Colberg and Hernández, using their respective positions as Speaker of the House and President of the Senate and acting under color of authority and law, have denied and infringed several Constitutional rights guaranteed to plaintiff, namely, his rights to equal protection of the law, due process of law, and political belief and association. Plaintiff requests this Court for injunctive relief and/or damages.
Defendants move for dismissal, alleging: (a) lack of jurisdiction because the complaint fails to present a substantial federal question; (b) failure of the complaint to state a claim upon which relief can be granted; and (c) immunity on the basis of the common law immunity recognized for state legislators.
A. Jurisdiction:
Defendant has alleged lack of jurisdiction for failure to present a "substantial" federal question. This Court takes defendant's allegations as a defense made under F.R.C.P. 12(b)(1), that is, lack of jurisdiction over the subject matter. In this case, the plaintiff has adequately alleged a cause of action for violation of constitutional rights. Regardless of the actual validity of said allegations, we find that federal question jurisdiction under 28 U.S.C. 1331 is sufficiently established for purposes of this lawsuit. See Wheeldin v. Wheeler, 373 U.S. 647, 83 S.Ct. 1441, 10 L.Ed.2d 605 (1963).
B. Failure to State a Claim Upon Which Relief Can Be Granted:
Defendants also assert a 12(b)(6) defense, alleging failure of the complaint to state a claim upon which relief can be granted.
Insofar as plaintiff's claim under 42 U.S.C. 1985 is concerned, and reading the complaint in plaintiff's favor as a claim brought under subsection (3) of said statute, this Court finds that plaintiff has failed to properly and specifically plead a § 1985(3) cause of action. The complaint does not mention a conspiracy and merely presents the broad allegation that defendant Colberg discharged plaintiff "with the advice and consent of defendant Hernández Agosto". For the foregoing reasons, the Court dismisses plaintiff's claim under 42 U.S.C. § 1985. Griffin v. Breckenridge, 403 U.S. 88, 102-03, 91 S.Ct. 1790, 1798-99, 29 L.Ed.2d 338 (1971); Serrano Medina v. U.S., 709 F.2d 104, 106 (1st Cir.1983); Fletcher v. Hook, 446 F.2d 14, 15-16 (3d Cir.1971).
As to plaintiff's claim under 42 U.S.C. § 1983, this Court finds that the complaint *559 adequately constitutes the statement of a claim under the federal rules of pleading. F.R.C.P. 8(a). Furthermore, in the exercise of its discretion under F.R.C.P. 12(b), the Court chooses to exclude matters outside the pleading, thereby abstaining from considering the motion as one for summary judgment. Wright, Miller & Kane, Federal Practice and Procedure, § 2713. This action is taken in light of the forthcoming disposition of the matter under the affirmative defense of legislative immunity.
C. Legislative Immunity:
Defendants assert absolute immunity to plaintiff's suit for damages or injunctive relief under Sec. 1983 under the common law immunity accorded state legislators. The Supreme Court has clearly held that state legislators acting in a legislative capacity are absolutely immune from the imposition of injunctive remedies or civil damages in suits brought under 42 U.S.C. § 1983. Supreme Court of Virginia v. Consumers Union, 446 U.S. 719, 732-34, 100 S.Ct. 1967, 1974-76, 64 L.Ed.2d 641 (1980) (immunity from equitable remedies), Tenney v. Brandhove, 341 U.S. 367, 71 S.Ct. 783, 95 L.Ed. 1019 (1951) (immunity from civil liability). Furthermore, legislative activities which otherwise are entitled to immunity in a 1983 suit do not lose the absolute protection of that immunity merely because such activities allegedly have violated a plaintiff's constitutional rights, Colón Berríos v. Hernández Agosto, 716 F.2d 85 (1st Cir.1983).
This immunity under Sec. 1983 was recognized to protect the integrity of the legislative process and not for the personal or private benefit of the members. The motive of the clause remains as a shield protecting the legislators from intimidation by other governmental authority, as well as from the time-consuming distractions of defending official legislative acts in Court. See Tenney v. Brandhove, supra, at 373-78, 71 S.Ct. at 786-89. Such protection allows the legislative function to be performed independently without fear of outside interference. Supreme Court of Virginia, supra, at 731, 100 S.Ct. at 1974.
The Sec. 1983 immunity enjoyed by state legislators, while originating in the common law of legislative immunity, has been placed on a parity with the constitutional immunity granted members of Congress under the Speech and Debate clause, Art. I, Sec. 6, Clause 1 of the U.S. Constitution. The two types of immunity have been compared for purposes of determining the scope of legislative activities subject to their protection. Supreme Court of Virginia, 446 U.S. at 733, 100 S.Ct. at 1975.
As was stated in the Magistrate's Report and Recommendation, the Speech and Debate clause protects "things generally done in session of the House by one of its members in relation to the business before it." Kilbourn v. Thompson, 103 U.S. 168, 204, 26 L.Ed. 377 (1880) cited with approval in United States v. Johnson, 383 U.S. 169, 179, 86 S.Ct. 749, 755, 15 L.Ed.2d 681 (1966). In order to effectuate the purposes of the privilege, prior decisions have extended immunity under the Speech and Debate clause to matters beyond pure speech or debate in either House but "only when necessary to prevent indirect impairment of such deliberations," Gravel v. United States, 408 U.S. 606, 625, 92 S.Ct. 2614, 2627, 33 L.Ed.2d 583 (1972), citing United States v. Doe, 455 F.2d 753, 760 (1st Cir.1972). That is, the immunity is available only when the legislative act at issue is "an integral part of the deliberative and communicative process by which members participate in committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House." Gravel v. United States, supra, at 625, 92 S.Ct. at 2627.
Decisions regarding the scope of § 1983 immunity protecting state legislators have been guided, but not necessarily determined, by the boundaries drawn for immunity under the clause. See Agromayor v. Colberg, 738 F.2d 55 (1st Cir.1984); cert. denied, ___ U.S. ___, 105 S.Ct. 515, 83 L.Ed.2d 405 (1984). The § 1983 decisions *560 have characterized the legislators' privileged conduct as those acts undertaken "within the sphere of legitimate legislative activity" or within "a field where legislators traditionally have power to act." Tenney v. Brandhove, supra, at 376, 379, 71 S.Ct. at 788, 789; Supreme Court of Virginia, supra at 732-33, 100 S.Ct. at 1974-75.
It is clear that not everything a legislator may regularly do in his official capacity is necessarily a legislative act qualifying for the immunity protection. In particular, the act of hiring or firing of legislative aides, assistants or staff personnel does not, in every case, receive immunity. The hiring or firing of an employee in a position which is only casually or incidentally related to the legislative process cannot be considered a legislative act entitled to immunity. See, e.g., Walker v. Jones, 733 F.2d 923 (D.C.Cir.1984) (the position of House restaurant manager has no "meaningful input" into the legislative function; thus discharge of this employee is not within protection of the Speech and Debate clause). Protection should be afforded a legislative decision to hire or fire only when the particular position at issue provides sufficient opportunity for meaningful input into the legislative process. Agromayor v. Colberg, supra at 60. See Davis v. Passman, 442 U.S. 228, 229, 249-50, 99 S.Ct. 2264, 2268, 2279-80, 60 L.Ed.2d 846 (1979).
In this case, an inquiry limited to the statutory definition of plaintiff's post is sufficient to conclude that Mr. Lasa occupied a position which constitutes an integral element of the meaningful input necessary for the performance of defendants' legislative duty and for the general functioning of the legislative process. Title 2, Section 652 of the Laws of Puerto Rico creates the Office of Superintendent of the Capitol. Said provision clearly states in its pertinent part that "the Superintendent shall hold office at the discretion of the Presidents of both Bodies of the Legislature of Puerto Rico, who shall fix the remuneration for the position." This language is unequivocal and must be taken in its plain meaning. Plaintiff, as a politically-appointed employee, holds his position at the discretion of the Presidents of both Bodies of the legislature.
From the statute, it is clear that the Superintendent acts as an advisor and formulates plans for the implementation of broad goals. The statute provides that the Superintendent may seek the cooperation and advice of government agencies, an action which involves party affiliation. 2 L.P. R.A. § 653. Likewise, the functions, duties and powers of the Superintendent grant him control over the maintenance and development of the Capitol buildings and the financial planning, public appropriations and private contributions involved therein. 2 L.P.R.A. §§ 655, 656. He is also required to submit reports, plans and recommendations for the approval of the President of the Senate and Speaker of the House regarding such matters as acquisition of real property, conservation of energy, and public order and safety within the Capitol. 2 L.P.R.A. § 655.
In short, plaintiff is a political creature governed by Presidents of the two Legislative Bodies. His powers and functions revolve around politics; he is a confidential employee appointed by mutual agreement of both legislative bodies. With this in mind, the Court finds that defendants' discharge of Mr. Lasa was an act performed in furtherance of their legislative duties and is thus protected by legislative immunity.
Plaintiff's allegations of politically discriminatory discharge do not take into consideration the business of those that run the Government. We cannot lose sight of the political ideology and programs of the politicians in charge of Government. When there is a change in government, a new government is voted in to answer and respond to a pledged program of action. This program has been submitted to the people by the new political head, his political advisors and in general, his staff. The people voted for the program in an election and in a sense have ordered the politician to put into effect that program as an inherent *561 part of that election. The mandate given to the politicians by the people requires that those who are associated with the elected leader and who create and believe in the spirit of the program put the same into practice. Their public service would be markedly thwarted were they required to retain "those who hold steadfast to their claim in deliberate challenge to the electoral verdict." Ramos Villanueva v. Cintrón, et al., No. R-81-137 (P.R., March 31, 1982), Justice Diaz Cruz, dissenting.[1] In sum, the new political leaders must have the freedom to substitute those who believe in the new program, and who will work towards the accomplishment of it.
The reason for the privilege which we uphold today is clear and deeply rooted in the United States system of government. In reference to the successful Parliamentary struggles of the sixteenth and seventeenth centuries to be independent from the Crown, Blackstone disclosed that the "(p)rivilege of parliament was principally established, in order to protect it's (sic) members not only from being molested by their fellow subjects, but also more especially from being oppressed by the power of the crown... These privileges however, which derogate from the common law, [are] only indulged to prevent the member's being diverted from the public business." 1 Blackstone, Commentaries on the Laws of England (1768), 159-60, reprinted by Dawsons of Pall Mall (1966). The legislators' immunity has been established, not for their good, but for the good of the people. The separation of powers, co-ordinated in their several functions, achieves a balance which ensures the political liberty of each citizen. See C. Montesquieu, The Spirit of Laws (1748), translated by T. Nugent, revised by J.V. Prichard, 38 Great Books of the Western World 70 (1952). With reference to the prototype of the Speech & Debate Clause in our Federal Constitution, Blackstone observed:
"As to privilege of speech, it is declared by the statute I W. & M. § 2. c. 2. as one of the liberties of the people, "that the freedom of speech, and debates, and proceedings in "parliament, ought not to be impeached or questioned in any court or place out of parliament."
1 W. Blackstone, Commentaries, supra, at 160 (emphasis supplied).
The application of the legislative privilege to the political and legal realities in this District of Puerto Rico stands in sharp contrast to the unrealized form of a similar privilege in the Spanish law of the last half of the 19th Century, during the time of the Spanish possession of Puerto Rico. Although commentators have recognized the influence of Montesquieu upon Spanish constitutional law, e.g., 1 Nueva Enciclopedia Jurídica (1975) 384-85, the realities of Spanish government, both in Spain and Puerto Rico, revealed monarchic, rather than democratic ideals put into practice. The Constitutions of Spain, written in the 19th Century, present a system of lawmaking shared by the Crown and the Cortes, the latter a bicameral body composed of a Senate and a Congress of Deputies.[2] The Constitution, Art. 46, provided that the Senators and Deputies were "inviolable for their opinions and votes in exercise of their duties," Art. 46, Constitution of Spain, 1876, Documents on the Constitutional History of Puerto Rico (2d ed. 1964) 16. However, any privilege of independence from the Crown granted by these words was effectively nullified by the decisive role of the monarch in the composition and *562 management of the Cortes and the provincial leaders.[3]
Thus, the people of Puerto Rico, in the 19th Century, along with those of Spain, knew little of "government by the people" as that system is defined in the United States Constitution and practiced in the organization of government which is the United States. It is this government which has been inherited and is now applied by the United States citizens living in Puerto Rico after 87 years of association with the United States, a period of time which represents nearly one-half the life of the United States. And it is this government which protects the rights of the people to self-government by providing to their elected legislators the privilege of immunity in the performance of legislative acts. The Puerto Rican cultural philosophy has been true to these Constitutional principles throughout its history of association with the United States.
The underpinning of the culture of the New World is essentially Greco-Roman, the culture prevailing in Europe at the time of the discovery of the Americas. Thereafter, the great experiment in democracy using a Republican form of government which is consecrated in the Constitution of the United States, gave rise to a practical cultural principle predicated on respect for the natural rights of men. The United States Constitution with its separation of powers protects such rights. The principle that ours is a government of laws and not of people has become second nature to every citizen of our Republic, including the citizens of this community.
It has been said that "there is no country in the world which can touch Spain in the matter of magnificent laws and there is no country in the world which can touch Spain in non-compliance with laws." Santiago Iglesias, Puerto Rico Resident Commissioner to Congress, quoted in H.K. Carroll, Report on the Island of Puerto Rico 723 (U.S. Gov't Printing Office, 1899). Whatever the truth of this statement, it is precisely at the juncture of Spanish and U.S. involvement in 1898 that Puerto Rico adopted a culture based upon the U.S. Constitutional principles. Such Constitutional principles are so imbedded in the conscience and thinking of the people that they are conceived as articles of faith of their everyday life and an integral part of their culture and prevailing institutions. Indeed, the communal will of the people of Puerto Rico is buttressed by the principles of liberty and their corresponding obligations, such that Puerto Ricans, in defense of these principles have contributed together with their fellow citizens of the continent in the patriotic endeavor of two World Wars and other conflicts. Meanwhile, most of the other Latin American countries have been unconscious of this sacrifice and what it has meant in terms of preservation of our culture. Many of these countries have adopted a different culture devoid of the concept of a Government of laws and not of people.
This century's history shows that, in many of these countries which have failed to embrace a democratic way of life, citizens are subjected to violations of their civil rights, repeated revolutions with no relation to the welfare or will of the people, terror, mass assassinations and extreme poverty.
Puerto Rico's culture stands in contrast to that of Latin America. See generally Juan R. Torruella, The Supreme Court and Puerto Rico: The Doctrine of Separate and Unequal (1985). The community of Puerto Rico within the United States has learned to solve its political differences with great respect for the civil rights of the people by applying constitutional principles, as in this case where one of our pivotal concepts, the separation of powers, is at issue. Such principles are applied independently of any partisan political consideration because U.S. Judges have one and only client to which they are loyal: the Constitution and laws of the United States which they have sworn to uphold.
*563 For all the above reasons, and in strict application of the Constitutional principles which are an integral part of our American culture, the Motion to Dismiss filed by the defendants is hereby GRANTED and Judgment is to be entered by the Clerk accordingly.
IT IS SO ORDERED.
NOTES
[1] Ramos Villanueva dealt with an executive decision to discharge a government employee. Although no immunity is accorded such executive decisions in suits for injunctive relief, see Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980), we find the policy supporting Justice Cruz' dissent particularly appropriate to a discussion of the merits of legislative immunity.
[2] In the Constitution of 1876, the last of the Spanish Constitutions, the Senate was composed of royalty, royally-appointed noblemen, and officials elected by corporations of the state and the largest taxpayers. The Deputies were selected by electoral committees under the provisions of Article 27; each one represented 50,000 people. The Constitution of 1876 was extended to Puerto Rico by decree on April 2, 1881.
[3] For a fuller discussion of the constitutional powers of the Spanish Crown by the late 19th Century, see I J. Trias Monge, Historia Constitutional de Puerto Rico 68-73.
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39 P.3d 1015 (2002)
2002 WY 16
Sharon LONG-RUSSELL, Appellant (Plaintiff),
v.
Robert A. HAMPE, Appellee (Defendant).
No. 00-310.
Supreme Court of Wyoming.
February 4, 2002.
Walter Urbigkit of Frontier Law Center, Cheyenne, WY, Representing Appellant. Argument by Mr. Urbigkit.
Curtis B. Buchhammer of Buchhammer & Kehl, P.C., Cheyenne, WY, Representing Appellee. Argument by Mr. Buchhammer.
Before LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, JJ.
HILL, Justice.
[¶ 1] In this matter we are asked to answer questions certified to this Court in accordance with W.R.A.P. 11. Appellant, Sharon Long-Russell (Long-Russell), seeks an opinion of this Court which would resolve the question of whether damages for emotional suffering may be awarded in the context of a legal malpractice case wherein mere negligence on the part of the attorney is the basis for the claim of emotional damages. Appellee, Robert A. Hampe (Hampe), Attorney-at-Law, asks that those questions be answered in the negative.
[¶ 2] We will answer the certified questions in the negative. Such emotional damages may be an element of a claim for damages, in the context of a legal malpractice action, under certain limited circumstances, but not the circumstance of mere negligence.
THE CERTIFIED QUESTIONS
[¶ 3] The issues certified to this Court, by the district court, are:
*1016 1. Are damages for emotional suffering available in a legal malpractice case which alleges that an attorney negligently failed to properly assert property claims in a divorce, or negligently gave bad advice resulting in a client's eviction from her place of residence?
2. Are damages for emotional suffering available in a legal malpractice case which alleges that an attorney negligently gave incorrect legal advice about a child visitation order?
FACTUAL BACKGROUND
[¶ 4] We are asked to settle a question of law that has not been directly presented to this Court before, but which is somewhat clouded by decisions of this Court that appear to be in conflict with each other. The facts of this case are not a factor in our resolution of the questions of law at issue, but we will provide a brief outline of those facts so as to provide a structural background for our decision. The certified questions assume a factual circumstance wherein an attorney is alleged to have been negligent in the performance of his services for a client.
[¶ 5] Long-Russell was divorced from her second husband, Gary Long (Long), in September, 1982. The property settlement agreed to in that divorce made no mention of the parties owning a home. Hampe played no role in that divorce. At the time of that divorce, Long-Russell and Long were apparently renting a home from Long's parents and completing repairs on that home with a view to ultimately buying it from Long's parents. Some time after that divorce was final, Long obtained title to the home from his parents. The most significant complicating factor in this case is that Long-Russell continued to live in that house, apparently without paying rent, until Long had her evicted in 1995. Hampe did not represent Long-Russell in the eviction action either. However, Long-Russell did hire Hampe in 1995 to try to undo the eviction. At the time Hampe began representing Long-Russell, she was still residing in the home but was forcibly evicted pursuant to court order shortly after retaining Hampe as her lawyer.
[¶ 6] At the time of her divorce from Long, Long-Russell was pregnant with Richard Russell's (Russell) child. Long-Russell then married Russell, and the two of them (and eventually their two children) continued living in Long's house, with the Russell family living in the upstairs portion of the house and Long living in the basement. In January, 1995, Long-Russell was divorced from Russell. The decree of divorce in that case made no reference to Long-Russell or Russell owning any interest in Long's home. During this divorce and even after the divorce was final, custody of the children born of Long-Russell's marriage to Russell was in dispute. Hampe did not represent Long-Russell during this divorce or in the child custody proceedings which resulted in her temporary loss of the custody of the children. However, Long-Russell did hire Hampe to attempt to undo the loss of the custody of her children. Eventually, Russell was given permanent custody of the children and Long-Russell was accorded liberal visitation. The record extant suggests that all parties continue to reside in Cheyenne.
[¶ 7] The essence of Long-Russell's malpractice claim against Hampe is that he accepted her payment of attorney's fees in the approximate amount of $9,500.00 and did no meaningful work for her, gave her bad advice which complicated her legal problems, pursued hopeless claims and failed to pursue hopeful ones, and made promises of success in the legal arena that were irresponsible and, of course, they did not come to pass. In addition to the loss of the $9,500.00 in attorney's fees, Long-Russell sought damages for loss of her alleged interest in Long's home, emotional damages for the emotional upheaval that attended her eviction from Long's home, and the loss of the custody of her children. It is the claim of emotional damages that is our sole concern in this matter.
DISCUSSION
[¶ 8] In the case Jackson State Bank v. King, 844 P.2d 1093, 1096 (Wyo.1993), we stated that Wyoming's comparative negligence statute is limited to those actions based on negligence only, and that it could *1017 not be extended to actions based on contract. Continuing, we stated that the comparative negligence statute would not bar recovery in a legal malpractice action, "which necessarily is based on claims of breach of contract and breach of fiduciary duty." We did not further develop the reasoning behind the quoted sentence and, furthermore, we did not cite pertinent authority to substantiate it. Although we do not call into question the result reached in the Jackson State Bank case, from today's perspective it cannot be said to resolve any of the issues at large in the instant matter.
[¶ 9] In the case Moore v. Lubnau, 855 P.2d 1245, 1248-49 (Wyo.1993), we adopted a standard well known to the area of medical malpractice as applicable also to the area of legal malpractice. This is a negligence standard, rather than a contract standard. In Meyer v. Mulligan, 889 P.2d 509, 516 (Wyo. 1995), we continued to discuss legal malpractice as an action sounding in negligence. Also see Peterson v. Scorsine, 898 P.2d 382, 388 (Wyo.1995) (wherein it is suggested that legal malpractice claims may sound both in contract and in negligence).
[¶ 10] In Daily v. Bone, 906 P.2d 1039 (Wyo.1995), we held that a claim for emotional damages stemming from a tort arising out of an automobile accident is properly assigned to a jury. In Blagrove v. JB Mechanical, Inc., 934 P.2d 1273, 1275-77 (Wyo.1997), we held as follows:
In Wyoming, our decisions have restricted recovery for emotional distress damages without accompanying physical injury. Gates v. Richardson, 719 P.2d 193, 195 (Wyo.1986). We have recognized the torts of intentional and negligently inflicted emotional distress but their application is narrowly construed to allow recovery for emotional distress only under limited circumstances. Gates, 719 P.2d at 195; Leithead v. American Colloid Co., 721 P.2d 1059, 1066 (Wyo.1986). We have permitted recovery for emotional distress as an element of damages in certain underlying actions: 1) some intentional torts, Waters v. Brand, 497 P.2d 875, 877-878 (Wyo. 1972) (false imprisonment); Cates v. Eddy, 669 P.2d 912, 921 (Wyo.1983) (malicious prosecution); 2) violation of certain constitutional rights, Town of Upton v. Whisler, 824 P.2d 545, 549 (Wyo.1992); and 3) breach of the covenant of good faith and fair dealing, State Farm Mutual Auto. Ins. Co. v. Shrader, 882 P.2d 813, 833 (Wyo. 1994). Outside of these few instances, we have adhered to the general concept that negligence permits recovery for personal injury or property damage but usually will not result in liability for emotional distress. Gates, 719 P.2d at 195; Payton v. Abbott Labs, 386 Mass. 540, 437 N.E.2d 171, 178 (1982); W. Page Keeton et al., Prosser and Keeton on Torts § 54, at 359-60 (5th ed.1984) (few courts permit compensation for negligence which causes fright, shock, or mental disturbance). In a negligence action for personal injury, Wyoming permits recovery for emotional distress accompanying physical injury, but has not yet answered whether emotional distress damages are compensable where the defendant negligently damages or destroys real property.
The Blagroves contend that Daily provides authority for permitting recovery of their emotional distress damages under a negligence theory. In Daily, Bone drove his snowmobile through a stop sign onto a major highway causing a collision with Daily's vehicle and killing Bone. Daily, 906 P.2d at 1042. Daily was not physically injured but her witnessing Bone's impact and death caused her mental suffering of post traumatic stress disorder, depression, and agoraphobia. Id. Daily sued Bone's estate for emotional distress caused by Bone's negligence and we decided that, under the circumstances of the case, she was entitled to a trial to determine if Bone's negligence had caused her emotional distress damages. Id. at 1044.
Daily is not helpful to the Blagroves because it has the limited scope of allowing recovery for mental injury absent physical injury in an automobile collision case. Under the general rule, if Daily had been physically injured in the automobile collision she could have recovered damages for pain and suffering associated with her physical injuries and she could have recovered for the emotional distress of *1018 witnessing Bone's death. Id. at 1043. But because the general rule linked physical injury to an emotional distress claim, that rule would not permit Daily to recover for the emotional distress of witnessing Bone's death if she was not physically injured in the collision. Id. We determined that the absence of a physical injury should not prevent her from recovering for her mental injury under a negligence theory. She alleged sufficient facts to create a question for the jury and we remanded it for trial. Id. at 1044. Our decision in Daily resulted from the particular facts involved, did not generally establish that a claim for negligence alleging only mental injury had been recognized in Wyoming, and does not provide an analysis which would extend its result to a property damage situation.
Emotional distress is not usually recoverable as an element of property damages unless an improper motive is involved. Valley Development Co. v. Weeks, 147 Colo. 591, 364 P.2d 730, 733 (1961); see Towns v. Anderson, 39 Colo.App. 332, 567 P.2d 814, 815 (1977), reversed on other grounds, 195 Colo. 517, 579 P.2d 1163 (1978). It is generally agreed that mere sorrow, anger, worry and fear are not compensable and recovery for more serious emotional distress is restricted because of the burden for the judicial system and defendants. The likelihood that courts will be burdened with either fraudulent claims or those of a temporary or trivial nature, and the perceived unfairness of imposing heavy and disproportionate financial burdens upon a defendant, whose conduct was only negligent, for consequences which appear remote from the wrongful deed usually act to restrict recovery. Rodrigues v. State, 52 Haw. 156, 472 P.2d 509, 519 (1970); Keeton, supra § 54 at 360-61.
In deciding whether the plaintiff's interests are entitled to legal protection against the defendant's conduct, we must balance the interest of the injured parties against the view that a negligent act should have some end to its legal consequences. Gates, 719 P.2d at 196. We are persuaded that the concerns which have acted to prevent recovery for emotional distress when property is damaged remain relevant and weigh against permitting recovery. While we do not doubt that the Blagroves were justifiably and seriously distressed over the damage to the home they had built together with their families, adopting a rule allowing trial on the issue and recovery if proved would result in unacceptable burdens for both the judicial system and defendants. We therefore hold that emotional distress damages in connection with property damages are not compensable.
[¶ 11] These precedents establish an apparent and predictable framework for the resolution of the matter before us. We are persuaded that the decision of the Minnesota Supreme Court in the case Lickteig v. Anderson, Ondov, Leonard & Sween, P.A., 556 N.W.2d 557 (Minn.1996), comports well with our previous decisions with respect to many aspects of the matter before us, and we will adopt its decision in that case, to govern in similar cases in Wyoming. Lickteig was injured in an automobile accident, and the attorneys who represented her admitted their negligence in their representation of her. The issue of damages was submitted to binding arbitration, and a claim for emotional damages in the amount of $45,000.00 was awarded. Lickteig, 556 N.W.2d at 559. The decision of the Minnesota Supreme Court is as follows:
We first consider the issue of emotional distress damages. We have not been anxious to expand the availability of damages for emotional distress. K.A.C. v. Benson, 527 N.W.2d 553, 559 (Minn.1995); Hubbard v. United Press Int'l, Inc., 330 N.W.2d 428, 437-38 (Minn.1983). This reluctance has arisen from the concern that claims of mental anguish may be speculative and so likely to lead to fictitious allegations that there is a potential for abuse of the judicial process. Hubbard, 330 N.W.2d at 438. Thus, we have been careful to limit the availability of such damages to "those plaintiffs who prove that emotional injury occurred under circumstances tending to guarantee its genuineness." Id. at 437.
In tort cases, emotional distress may be an element of damages in only three circumstances. *1019 First, a plaintiff who suffers a physical injury as a result of another's negligence may recover for the accompanying mental anguish. Langeland v. Farmers State Bank of Trimont, 319 N.W.2d 26, 31 (Minn.1982). Second, a plaintiff may recover for negligent infliction of emotional distress when physical symptoms arise after and because of emotional distress, if the plaintiff was actually exposed to physical harm as a result of the negligence of another (the "zone-of-danger" rule). K.A.C., 527 N.W.2d at 559; Langeland, 319 N.W.2d at 31; Stadler v. Cross, 295 N.W.2d 552, 554 (Minn.1980). Finally, a plaintiff may recover emotional distress damages when there has been a "direct invasion of the plaintiff's rights such as that constituting slander, libel, malicious prosecution, seduction, or other like willful, wanton, or malicious conduct." State Farm Mut. Auto. Ins. Co. v. Village of Isle, 265 Minn. 360, 368, 122 N.W.2d 36, 41 (1963). See also, M.H. v. Caritas Family Services, 488 N.W.2d 282, 290 (Minn. 1992); Hubbard, 330 N.W.2d at 437-38; Langeland, 319 N.W.2d at 31-32.
We have also recognized the independent tort of intentional infliction of emotional distress. Hubbard, 330 N.W.2d at 438. This independent tort differs from the "willful conduct" category above in that it can stand alone as a separate action, whereas in the "willful conduct" category, emotional distress is only an element of the damages arising from an intentional tort that constitutes a direct violation of the plaintiff's rights, such as defamation.
The respondent in this case did not suffer any physical injury; neither was she in any "zone of danger," nor is she alleging intentional infliction of emotional distress. Damages for emotional distress could be justified only had the appellants violated her rights by willful, wanton or malicious conduct. We note at the outset that respondent's complaint contained no allegations of willfulness or malice; it alleged only negligent representation and breach of contract. Respondent's arbitration brief and proposed findings were similarly framed in terms of negligence. In addition, the stipulation entered into by the parties prior to the arbitration hearing went only to the issue of appellants' negligence.
Appellants argue that, in the absence of any allegation of willful conduct, evidence of willful conduct, or finding of willful conduct by the arbitrator, emotional distress damages were wrongfully awarded in this legal malpractice action.
Despite the absence of an allegation or finding of willful conduct, respondent contends that willfulness was shown and found here. In particular, she argues that an arbitrator need not render an account or give reasons for his or her decision, Hilltop Constr., Inc. v. Lou Park Apartments, 324 N.W.2d 236, 239-40 (Minn.1982), and that in this case, it can be inferred from the arbitrator's finding that she suffered "compensable" emotional distress, that the arbitrator made the requisite finding of willfulness. Further, she points to allegations presented to the arbitrator in her arbitration brief which, she asserts, support a finding of willful conduct on the part of the appellants.
Our analysis is complicated by the hybrid nature of claims for legal malpractice. To state a claim for legal malpractice, one must show that the "defendant acted negligently or in breach of contract." Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686, 692 (Minn.1980) (emphasis added); Admiral Merchants Motor Freight, Inc. v. O'Connor & Hannan, 494 N.W.2d 261, 265 (Minn.1992). We have recognized that the two theories will frequently be interchangeable in legal malpractice cases. Togstad, 291 N.W.2d at 693.
However, the availability of emotional distress damages in contract actions has been even more restricted than for actions in tort. In general, extra-contractual damages, including those for emotional distress, are not recoverable for breach of contract except in those rare cases where the breach is accompanied by an independent tort. Olson v. Rugloski, 277 N.W.2d 385, 388 (Minn.1979); Haagenson v. National Farmers Union Property and Cas. Co., 277 N.W.2d 648, 652 (Minn.1979); Beaulieu v. Great Northern Ry. Co., 103 *1020 Minn. 47, 53, 114 N.W. 353, 355 (1907). The accompanying independent tort must be willful. Olson, 277 N.W.2d at 388. That is, it must support the extra-contractual damages in its own right as a tort. See Barr/Nelson, Inc. v. Tonto's, Inc., 336 N.W.2d 46, 52-53 (Minn.1983). Thus, even a malicious or bad-faith motive in breaching a contract does not convert a contract action into a tort action sufficient to support an award of emotional distress damages, Haagenson, 277 N.W.2d at 652, or other extra-contractual damages, such as punitive damages, Moore v. John E. Blomquist, Inc., 256 N.W.2d 518, 518 (Minn. 1977); Wild v. Rarig, 302 Minn. 419, 440-42, 234 N.W.2d 775, 789-90 (1975), cert. denied, 424 U.S. 902, 96 S.Ct. 1093, 47 L.Ed.2d 307 (1976).
Here, the breach of contract and tort claims are not independent: they are interchangeable. Appellants admitted negligence in the loss of respondent's claim against the other driver. From that, the trial court concluded, "An admission to negligence is also an admission to breach of the attorney-client relationship." Moreover, this will be the case in almost all legal malpractice cases. If we were to affirm the award of damages for emotional distress in this case, we would be sanctioning a similar award whenever a lawyer breached his or her contract with a client by negligently performing the promised legal services. This we are not willing to do.
Nor does the conduct giving rise to the purported breach of contract support an award of emotional distress damages on its own. The court of appeals seems to imply that a breach of the attorney-client contract is inherently willful. See Lickteig, 556 N.W.2d at 560 It is simply not the case that professional malpractice and willful indifference to another's rights are always one and the same. See Admiral Merchants, 494 N.W.2d at 267-68. Moreover, a willful breach of contract, in and of itself, is not enough to justify an award of extra-contractual damages. Haagenson, 277 N.W.2d at 652; Barr/Nelson, 336 N.W.2d at 52-53; Wild, 302 Minn. at 440-42, 234 N.W.2d at 789-90. While cases may arise where an attorney acts so egregiously that emotional distress damages may be appropriate, the creation of a per se rule for such damages in every legal malpractice case is not warranted, based on the longstanding limitation of such damages to those instances where there has been a willful violation of another's rights.
We therefore hold that, as in other negligence actions, emotional distress damages are available in limited circumstances. There must be a direct violation of the plaintiff's rights by willful, wanton or malicious conduct; mere negligence is not sufficient. Here, in the absence of an allegation or proof on these essential elements, the award of emotional distress damages was improper.
Lickteig, 556 N.W.2d at 560-62 (footnotes omitted). Thus, based solely on an allegation of negligence, a litigant is not entitled to present an emotional damages claim to a jury.
[¶ 12] The standard we have adopted above is fully consistent with the Restatement (Third) of the Law, The Law Governing Lawyers, §§ 48, 50, 52 and 53 (also see comment g. to § 53) (2000); also see Hanumadass v. Coffield, Ungaretti & Harris, 311 Ill.App.3d 94, 243 Ill.Dec. 705, 724 N.E.2d 14, 18-20 (1999); Whitehead v. Cuffie, 185 Ga. App. 351, 364 S.E.2d 87, 89-90 (1987); and Lawrence v. Grinde, 534 N.W.2d 414, 420-23 (Iowa 1995).
[¶ 13] With specific regard to the claim relating to child custody, we view with favor the case McGee v. Hyatt Legal Services, Inc., 813 P.2d 754, 758-59 (Colo.App.1990), for the additional guidance it provides. We take special note of that court's concerns about the impossibility of quantifying intangible injuries to the parent-child relationship, the effect recognition of damages would have on the district court's authority to regulate and supervise custody decisions which must turn on the best interests of the child, the certainty of some significant level of emotional disturbance in the dissolution of a marriage which includes a child custody component (especially one burdened with a high level of animosity), as well as the certainty that neither *1021 parent can reasonably expect full-time custody of the children because of the statutorily required liberal visitation with the noncustodial parent.
CONCLUSION
[¶ 14] We answer the certified question in the negative.
1. Are damages for emotional suffering available in a legal malpractice case which alleges that an attorney negligently failed to properly assert property claims in a divorce, or negligently gave bad advice resulting in a client's eviction from her place of residence?
Our answer is "No," as is more fully explained above.
2. Are damages for emotional suffering available in a legal malpractice case which alleges that an attorney negligently gave incorrect legal advice about a child visitation order?
Our answer is "No," as is more fully explained above.
[¶ 15] This matter is remanded to the district court for further proceedings consistent with this opinion.
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720 So.2d 1030 (1998)
Eddie Lee MOORE
v.
CITY OF MONTGOMERY.
CR-96-2378.
Court of Criminal Appeals of Alabama.
March 20, 1998.
Rehearing Denied May 8, 1998.
Certiorari Denied August 21, 1998.
*1031 Thomas Goggans, Montgomery; James A. Tucker, Montgomery; and Shannon Holliday, Montgomery, for appellant.
N. Gunter Guy, Jr., and Marc Alan Starrett, Montgomery, for appellee.
Alabama Supreme Court 1971458.
BASCHAB, Judge.
The appellant, Eddie Lee Moore, pled guilty to a charge of operating his car radio at a level that was plainly audible at a distance of five feet, a violation of § 27-6(a), Montgomery Municipal Code. He was fined $100 and was ordered to pay court costs.
The appellant moved to dismiss the charges against him, arguing that the Montgomery noise ordinance is unconstitutionally vague and overbroad. The trial court denied the motion. The appellant reserved the right to appeal this issue, and this appeal followed.
The Montgomery noise ordinance provides:
"Scope: It shall be unlawful for any person to make, continue, or cause to be made or continued any loud or excessive noise which unreasonably interferes with the comfort, health, or safety of others within the jurisdiction of the city.
"In addition to the general prohibition set out above, the following specific acts are declared to be in violation of this article:
"Section 27-6.
"(a) It is hereby declared a nuisance and shall be unlawful to operate or play any radio, musical instrument, or similar device, whether from a motor vehicle or by a pedestrian, in such a manner as to be plainly audible to any person other than the player or operator of the device at a distance of five feet (5') in the case of a motor vehicle or ten feet (10') in the case of a pedestrian.
"(b) It is hereby declared a nuisance and shall be unlawful to operate or play any radio, television, phonograph, musical instrument, or similar device which produces or reproduces sound, whether from a business or a residence, in such a manner as to be plainly audible at a distance of fifty (50') feet to any person in a commercial, residential, multi-family dwelling, or public place.
"(c) Violation of this section shall be a violation and punishable by a fine not to exceed five hundred dollars ($500.00).
"(d) Nothing in this section shall be construed to prohibit special performances by a band or orchestra in a hall, building, or in the open air after proper permits have been obtained from the Chief of Police.
"(e) Nothing in this section shall be construed to prohibit the ringing of bells or chimes by churches within the city.
"(f) Nothing in this section shall be construed to prohibit any noises or sounds produced by radios, sirens, or other equipment attached to, or being operated by, any police, fire, rescue, or other emergency vehicles or personnel.
"(g) Nothing in this section shall be construed to prohibit the conducting of live remote broadcasts by duly licensed radio stations upon business premises, at the request of the owner of the business. Said live remote broadcasts shall be limited to daylight hours only.
"(h) Each violation shall be a separate offense."
It is well established that noise ordinances address a matter that is "well within [a] city's police power." Moore v. City of Gulf Shores, 542 So.2d 322, 323 (Ala.Cr.App. 1988). However, a statute that is unduly *1032 vague, unreasonable, or overbroad violates an individual's right to due process. Id.
First, the appellant argues that § 27.6(a) of the Montgomery noise ordinance is unconstitutionally vague. "To withstand a challenge of vagueness, a statute must: 1) give a person of ordinary intelligence a reasonable opportunity to know what is prohibited, and, 2) provide explicit standards to those who apply the laws." Culbreath v. State, 667 So.2d 156, 158 (Ala.Cr.App.1995) (citing Grayned v. City of Rockford, 408 U.S. 104, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972)).
The distance standards in the Montgomery noise ordinance define what constitutes a violation of the ordinance with sufficient detail to put a person of ordinary intelligence on notice of what conduct is prohibited. The appellant argues that the ordinance is vague because it does not distinguish what part of the music (such as bass, treble, or lyrics) must be plainly audible. Clearly, the statute prohibits any sound coming from a device that is plainly audible at the proscribed distance. The appellant also argues that the ordinance is vague because it does not specify whether the noise must be plainly audible to someone of exceptional, average, or poor hearing. However, the statute specifically provides that a violation occurs if the music is plainly audible to any person.
Furthermore, the distance standards also provide explicit guidelines to those charged with enforcing the ordinance. If a law enforcement officer can hear sounds from a musical device at the proscribed distance, then the ordinance has been violated.
Based on the foregoing, we conclude that § 27.6(a) of the Montgomery Municipal Code is not unconstitutionally vague.
Next, the appellant argues that the Montgomery noise ordinance is unconstitutionally broad. When determining whether a statute or ordinance is overbroad, this court has stated:
"`Statutes and regulations are void for overbreadth if their object is achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.' [ Ross Neely Express, Inc. v. Alabama Department of Environmental Management, 437 So.2d 82, 85 (Ala.1983).] Music and other forms of live entertainment fall within these protected freedoms."
Moore v. City of Gulf Shores, 542 So.2d 322, 323 (Ala.Cr.App.1988). When examining the constitutionality of these statutes, this court has "`the task of balancing the legitimate community interests protected by such statutes against the infringement of First Amendment rights....'" Moore, 542 So.2d at 323 (quoting Reeves v. McConn, 631 F.2d 377, 382 (5th Cir.1980)).
The appellant relies heavily on Duffy v. City of Mobile, 709 So.2d 77 (Ala.Cr.App.), cert. denied, 709 So.2d 82 (Ala.Cr.App.1997), to support his argument that the Montgomery noise ordinance is unconstitutionally broad. In Duffy, we held that Mobile's antinoise ordinance was unconstitutional because it regulated "constitutionally protected speech more broadly than necessary to achieve the governmental interest in regulating noise." Although the Montgomery ordinance and the ordinance in Duffy are similar in that both rely on distance standards to determine whether a violation of the ordinance has occurred, there is also a crucial difference between the two ordinances. The noise ordinance in Duffy specifically included the amplification of the human voice, as well as yelling, shouting, singing, whistling, and hooting. However, the challenged portion of the Montgomery noise ordinance covers only noise coming from radios, musical instruments, and similar devices. Therefore, the prohibitions in § 27.6(a), Montgomery Municipal Code, are not as broad and sweeping as those found in the Mobile ordinance. Furthermore, the breadth of the ordinance is not unreasonable even though it does not limit its application to certain times or to certain areas. Many cities, such as Montgomery, do not have a definite separation between residential and commercial districts. Drafting time limitations that attempt to distinguish between residential and commercial districts would be nearly impossible and would result in arbitrary classifications. Furthermore, the overlap between residential and commercial districts could lead to arbitrary enforcement when it is unclear *1033 whether an area is actually residential or commercial.
Based on the foregoing, the Montgomery noise ordinance is not unconstitutionally overbroad.
The appellant also argues that there is no rational basis for many of the distinctions found in the statute. This argument is raised for the first time on appeal. It is well established that this court will not consider issues that have not been presented to the trial court. See Clay v. State, 687 So.2d 1245, 1250 (Ala.Cr.App.1996); Rowe v. State, 662 So.2d 1227 (Ala.Cr.App.1995). Therefore, this argument is not properly before this court.
Based on the foregoing, the judgment of the trial court is affirmed.
AFFIRMED.
All judges concur.
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OFFICE OF THE AlTORNEY GENERAL OF TEXAS
AUSTIN
IionorebleGeorge R. Sheppard .
Comptrollerof ?ubllc moounta
Austin, Texas
Deer Sir: OpinionNo. O-3769
en opinion iron thla deper
IIBr0110ws:
er rraa F. B.
you a ter days
he oorreepondenee~
oe to the gcrylasnt
cmket Court Order, whloh would
unrenderedesreaaeanta and the
o be oolleotebthereon In the
eptlng 20$ of the taxas ohsrged
1, w6 shall ask that you aonrridsr
n the lntormtlon or atatemsats
&oen in bW. Caudle's letter of Notembe~ 5 and
advise ua whether or not there ia any remdly other
than to oolliot b&s taxen as aherged on the tax
roll, together with the yenelty and intereat due
thereon, unlvsrsthay go into the Dlatriot CourC
and have a value pia0tba on eeOh pisoe or propeyay.
as Uraoted in Artiola 73&5b.”
. ,.._ .
Honorable CpeorgeX. Sheppard, rags 2
Attaohed to your mquaat is a latter imm the Gotmty
Attorney oi Franklin County wbloh oontaina a detaiJ,ed ro&tal
or the raota pertaining to the reduotion or the baaeaamant of
the Lsme IznprmMmnt Clstrlot Xo. 1 taxea on the unreador&
property for a number or yeers. YOU have 8180 enslose with
your request IJoopy or the order or the Comlsalonera~ Court
of Franklin County rr$uofng end oormotlag end r~asersalng
all of the property leueted 15 Lotae Imprcmaraent Diatriat Ho. 1
of Tr~nklin Gounty ror tha year8 lY30 to 1940, inolualte.
This departnent in oplnlon Ho. O-13&2 haa dlaauaaad
lo clstallthe oiroumatanosaunder whioh a aommia8ion8r8’Court
wuld be euthorize.ed to wke a reaeaea&&mt undar the teama ad
proiiaionaor Artiolr7316, 7347 of the Re7iaed Civil Statute8
or Toxba. In the OpiAiOn referred to w ha16 that an invalid
la ma m6wa,taa that term ia used and oentaplateb in said AT+
iole 7346, aupra, went M abaemmont sh ieh w8 TOM lb inib ie
bsoauae of non ooxepllanoe ulth [email protected] lUFNIUtLtl-
iw the aaaesamrnt or one whioh wa JM~O frautktlently or aar
in whloh a rundaamnballywrong scheme of aaaeamaaat WI aUiijpurd*.
wo doaire ~00quote tither trasloplaion Dia.O-1342 when it ia
saidI
VMs the opinion or Jude (?-harp, in Sate
we. Nallet Land (rCettle Co., 88 3. W, (2) 071,
w quata aa r011aw*:
*‘The rule haa been repaatedly lno ua o ed
that, in the abaenoe of frmd or ille$slifiyr thi
aotion oi a mard or Equaliaatlonupon a paHi-,
oular amenwent ia final; an&, furthermore,that
suoh roluation will not be set lafdo raerelyupao
a ahowlag that the i?mmeIa in fast lxaasaite.
fi the Bamd fairly aad honestly endeavors to
fir a ra3.r and just valuatlm for taxing pumwma,
a tiatake OLLIts part, unbr auoh o~rotm8tbnoe8,
la .notsubjeot to review by the Courts. Toter
85d PeoZftioRailwoy Co. ~a. City of El Paso. (Tes
sup. ct.1 e5 S. Gs.(2) 245$ Rowland ~8. Cfty of
Tyler (~Tex.Oom. Ap.) 5 9. W. (2) 7568 I)rusadan
~8. Baker:, (Tex. Corn.. Ap.) 229 3. W, 493~ Duck
78. Reeler, 74 Tex. 268, 11 S. K. 11113 5Rata *a.
Ohioago, R. R. k D. Railway Co. (Ter. CO& Ap.1
263 s., PT. 249; Sndap Lake Iran Co. va. %1korie16,
247 U., E. 330, 38 Sup, Ct. 495, 62 L.ed. 1354.
Xowevtm, the rule has been daolarod that if a
858
Boerilot Zqualiastioaadopts a method that lu
lllegf11,erbitrary, or rurrdaslantslly
wrong, the
desiaion or the B@erd may be attaoked as4 mot
aside,I
'
*Other oaaas use the languega that 'aa II,
gooeretlrule, the deoiaion or a Board or Equali-
zetiaa upon a partiouhr ssmQmment, in the ab-
mme of fraud a- irragulwrlty,i* oaulurr~ite.~
Port Arthur Inbepandont %hool Dlatrlot VB. Bawr,
64 6. w. (2) 4l2r NOdsrland In60 ondent sahool
Distriot re. Cartor, '?JE. W. (2P 935. When ma
uad the words *final*and *605oIQ8iye'~oaa t&o
aam thing. The talus or the properBy (18tlxed
by the Board of Equallaationis me adjudlaata,
subjeot o&flyto kiag sat aside for l'rau4OP the
sUoptlon of a SrmdamimtaUy wrong methdl of aa-
806f2nflnt."
In vlou of Wte rorogolng 8tatersst of th4 lmw II,
now grooemd to examine the findftqgaot the Ud~elo~~a'
court in ita ordor in whloh it lttompt8 to em001 oo$glnal
laawmmntr aad reas8osa Mu proparby on the unreml~d roll8
$a@&& In L~YW Improvmant IilstriotNo, 1 of X%mk%in Gounty,
.
The orhr of the Court prmiQe6 ona ef the man&
for tho rrm8mmmen8 to k 06 f01hfB:
*At& it appatring to the Gourt that thora
war adopted a fun&afwntallyWFO~~ amthod of laoaaa-
-able Claos~ tir%apPaI'd,PaiP b
ad bo me o? the fastanoaa in wh2ah the Oostrlra ha~a )J&M
that a Ooqxiaelonora* Court oould cot asldr a ?omar lo mo a ~
arnt on the p;roundsthat bhe sama WPU isvalid. Ifowov.~,wa
think that the order showo et.It8 fsoe thet the CJourtbaaa&
it8 findIng that them waa~*II?uhdaaan%allywre~~.mathM,o?
aaaosments' upon the Zeot t&t the tax ameaaors for the pub
eloren pare had nuda no lnooetig/atIon Ink, the true ral~a
o? the lards In the Levee L'iatriot,hod not boea upon the
same but hetdmerely oopiml the uaronderad rolls ?or tha pra-
ooadlng yeerraand that the asaaaaur had neror submitted the
unrondax+rdllsta for the aleven yama to the Ccnmaiaalonorm*
CouH so that It oouU pa08 upon and apgroto the aam. Wa
hare been uaablo to rind any autihortty holdding that luah
uaxiaalono and irrogularllaIoa rondoPrd Cho aamrreaMntInvalid
uader the rules already stated Ia this oplalon. Wo proa-
from tha faotm glren thatitho unrondond tax ml1 we8 a~b-
mlttetl to tho Umumiaaionor#~Go\trt?or oaoh oitha llovoa
yOar8 *miOh it f10W seeks to Z8aB808fd ati that S8ld W.ndonb
rolLa, to? eaoh o? the eIevon yoara, ware apprtmad, raapoob
lrol;l,by the WvmIsalo~~ra * Court in the mannor mqolmd br
law. In Chs O&U of HaJmoa vs. F)Beta,(Ct. Ulv. Aps.) gg
8. W. &OS, an sttaok was Bade upon an asmaameat vi&em lo
warn8howa that,the Wats o? uarandorod propartTtJwon tot mado
up by the amaamer and %elltwt~d te cha,Comalaaf6~n* aoar$
tcrrlppeotal but that atmh property wws ahown QI-I
the ua-
rea4onb tax rolL whIoh was approved by the Q~~&~aloimra'
aourt alttlng oa~a Board o? Equaltaatlon. fn heldiau that
the om.Iaalcman tho per8 or tkr ataamsor anQ oellooter te
8et in the mmixtorindioatoddid riot lmalideto the eaaoamoat
she oourt sallr
“?Fhamfa*aem ulr00*1Rg the Os;~~rn03to list
the umandarod property and aubmIt It to the beard
for approval betoro plaalae It oJ2tbs tar rolla,
we am 6r the opln9on, waa2~t E-W& a ,lagalright
aa 6he:te failure to perfom it would mmber tha
eaMatlmsnt rold."
Prom what we hare aald It follows tixt It ia auf @nIun the
tindin& jWi 8teS8&, end fo~na by the C~eslo~~~fm' OQWC;,
aa% appearis($in it* order, la no*, on it* faoo a arir’ioiuhir
baa18 upon whioh to render the pzovlow eaae~splaute 3.WalId
aa 8 arsttsr or law,
Wo next bcnsider the socon fLn4ing which the Oosrt
reund a8 a beds ror oa~eellliig the previous 4a404s~~nt4,
rhi4h m4d4 es roiim5r
7$4t no assess*6 r4lu4ti6n of sold unrsnd.r*d
propsrOy hes been aukinltted te the OEmrmiaeloners'
Uourt sitting as a Board of Bqusllsstlfm,which was
DOt iB W%iPliMOe With AdiOl4 7m6 Or the R4tl44d
or OOUW~;, mtlaie 7206 or the ROV~H~ civil DMMOB or %x~B,
1925, reqnlns that the Oomiesloners* Court pm8 upan and sp-
pr0re th0 IUWDB~WO~ ttix roil 44 a p6reqoi4itb 0r th0 ~4lid-
itr or 4 tCs* letr. i?~~~ver,ircm the last psrt or ths above
ppote4 prcnisfan rrtm amid or&or there is no finding thst the
Barr4 a4 tmt spprins the umenuelv4 tax ml14 r0r the slswsn
nspeotlva yews uadsr eonsi4erstion nor thst esoh or ssi4 sn-
roadwad tolls rOr eaah respeatlvs y-ssrbo19 the sifidstit or
the 44~o~aar 4nd 001140ww or tsr44 or Fr44klin~ coa*y 44 r4-
quird br low.
Under tho hol4dtagai Iis- vs. State, suprs,
~4 thak that th02-0is 90 tinding in the caari40h0r4~ a0m
order, on this gound~ whloh we@4 render the pretieus ss~~ss-
mn84 invttua a4 6 884tter or 14~.
prcm sll that we hsm ssfd, we am or the o Inloo,
ora you ~3% se a4vlsod, thst the 0r4sr or tie e~maiss10~0~
c6tu-t or menUin umn8g dsted Ootowr 29, 19&l, pwpopting
to esnool the pmtimm 444ea8mnt on 411 unrsnt%end lsbs in
LOVOO fmptoPemntDistriot Ro. 1 or rmnlur~ Couatf r0r slevsn
pars, be@anla(c with the yeam 1930-1940, lnelustvs,46ss not
show the proper legs1 bssis to render previous sssesmenbs,
ror said pm on eai4 property, invslld end thenrere subtoo%
to be oanoolls4 ma rcr44seeood In the maimer attenipts4.
Yhis aapartment
rulbh in opinion Ioo. *l&62, a oopr
or whleh s.8enolossd, that &tie14 73&I or ths Rstlsod Civil
Pitetutes or Tex84, 1925, only eubhorie4id the Beiwal44i01~~m’
court to oomct or Mat400 value0 or previous 4444samsat4 in
lnmtrnoea where nuoh ortginel roseaasmnttwere V&d. ?here-
fore, we bsllove,~th4tunder said *fnlonWo. O-U+62 pntl opti-
ion No. O-1342, *pies ot eeoh 0pia:on an~lssad, an4 the rathsr
authoritiesheseifmbare refemrb bo, the @ame r&lee with
Honerablo George if.Sheppard, Psga 6
rsforeaoe to what oonstltutes an invtilid assessment, under
the prorl4i.o~ or Article 7350 mpre, would be t!iose sgpli-
,. oable .to artiolea 7316 sn~i ?34$, supra. In other words, the
Ctmml44ione~r4~ Court, mist rind that the ori(plnal assesamntlr
are invalid. ror my one or the remsons heralIllrbovogiven be-
rore said a.44eetniienteoan be osnoellad and the property re-
a84048ed.
In our request you have speoliioslly rerarred ~8
to the prmis fone of Artlale 7345b, of Vernon18 Civil “tetutoa
of Texacl, end asked our opinion U? 4414 ArtlaTe and the~pro-
oedure therein authoriscd i6 z-iotthe o 7 remMy whloh Is
avsll4Uo under the oiraumst8noo4 r0une to exist in Leroe
District
Improooment; X0. I 0r mmklln County. or oouawe,
that Alt1ol.eor the statutes oontewlstes tho tixlng or an
safud~4 vslluo at the tiae a tax lion is foreolos~d in a Oourt
oi oompotent jurisblotionror delinquent texos due on proport~.
Ii suits were riled on 011 the pleoes or property thrt sro
delincpont,, then, under said statute the Wurt wauld be so-
thoriro4 ta beer evidsnoe and to m&o a itiding and rkx,rtbo
8alidg0a vsilus (rB ol'the time or the trial. go,40 lwt klion,
h-for, that tho prooeduro 44ttbori404,la Artlelo 7345b, 8upm,
14 ma sv8114ble romo4y to hewe 413 lnvslld l44044m0nt n4uoo4.
It ~enl~~prot1dO4 r0r th6 Dist~lot Court, in whlsh 4 suit r0r
the oeu8otlcm or 40linqu04t tsxes fs pen+ig, to fir sn~44-
Judged vslus et the time dudgwiib is ronboxed, tar tho pur~,~so
or l4t4bu4hing 4 bsuls rm the lotharire6 tar :4410. ~Ii t&4
444e4sluatr are imsLid,'rar any 09 the re44ona 8lready dls-
OUBU~, thm rr believe that ypn 4 propr rindi by the Corn--
ti4sion0r4* Oourt prvstmnt to ei6hor &tiOlos 733
suprs~ then suoh inralld 4e4st34sum~4r4;r be esi~O& %'&e
property ruassesaed in the a+er pforide4 in ssld stetutos.
wo trust the in this rasnner us hem fully answered
your fnqnlrll.
Yeurs very tmlly
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449 P.2d 447 (1969)
STATE of Oregon, Respondent,
v.
Steven Erik LEPPANEN, Appellant.
Supreme Court of Oregon, In Banc.
Argued and Submitted January 6, 1969.
Decided January 22, 1969.
Ken C. Hadley, Deputy Public Defender, Salem, argued the cause and filed a brief for appellant.
Stephen A. Hutchinson, Deputy Dist. Atty., Eugene, argued the cause for respondent. With him on the brief was John B. Leahy, Dist. Atty., Eugene.
Before PERRY, C.J., and McALLISTER, SLOAN, O'CONNELL, GOODWIN, DENECKE and LANGTRY, JJ.
SLOAN, Justice.
We are presented with an extensive, Brandeis brief urging us to hold that the inclusion of marihuana in the statute, ORS 474.010(18), as a narcotic drug violates the Fourteenth Amendment and Art. I, § 11, of the Oregon Constitution. Present knowledge, it is claimed, compels the conclusion that marihuana is not a habit forming drug and its specification as such, in the statute, is now so arbitrary as to violate due process. It is secondarily argued that to classify the possession of marihuana as a felony is a "`savagely indiscriminate treatment of violators.'"
The opinions, on the subject that are expressed in the brief do nothing more than express the best judgment of the persons who express the opinions. Other people, possessed of seemingly equal expertise, find a contrary result from the use of marihuana. The legislature must make the ultimate judgment on the issues presented, not the court.
Affirmed.
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804 F.2d 441
21 Fed. R. Evid. Serv. 1219
UNITED STATES of America, Appellee,v.Harold B. KAIL, Appellant.
No. 85-5190.
United States Court of Appeals,Eighth Circuit.
Submitted April 16, 1986.Decided Oct. 29, 1986.
1
Kenneth Swinger, Fort Lauderdale, Fla., for appellant.
2
Donald M. Lewis, Asst. U.S. Atty., Minneapolis, Minn., for appellee.
3
Before ROSS and ARNOLD, Circuit Judges, and HANSON,* Senior District Judge.
4
HANSON, Senior District Judge.
5
Kail appeals his conviction on fifteen counts of mail fraud, in violation of 18 U.S.C. Sec. 1341. Kail was sentenced on May 30, 1985 to serve a total of seven years imprisonment and ordered to pay restitution in the amount of $501,738. We affirm the decision of the district court.1
6
I. BACKGROUND.
7
From April 1983 to March 1984 Kail was president of Coin & Stamp Gallery, Inc., a Minnesota corporation dealing in the sale of investment quality coins. Kail was responsible for hiring personnel, and in this capacity recruited several brokers and other employees from his former employer, Investment Rarities, Inc. The brokers contacted their former Investment Rarities clients, usually by mail, and informed them that they now worked at Coin & Stamp Gallery. One letter, drafted by Kail, described him as "one of the most knowledgeable numismatic experts in the country." The brokers informed customers that Coin & Stamp Gallery dealt in the finest investment quality coins which would provide a much better investment than the lower-grade coins and bullion offered by Investment Rarities. Throughout all of their dealings with their customers, Coin & Stamp Gallery brokers emphasized the investment potential of rare silver and gold coins, although Kail did caution them that they were not to sell the coins as securities or represent that profit was guaranteed.
8
Customers purchased coins from Coin & Stamp Gallery brokers based upon the representations that this would be an excellent investment in that the coins were sold at their fair market value. The fair market value of coins sold to customers was often confirmed by letter. In addition, Coin & Stamp Gallery assured its clients that it would repurchase coins at their current market value if the client wanted to sell them later. Subsequent appraisals of the coins purchased by Coin & Stamp Gallery clients, however, established that many of the coins had been purchased at a price far in excess of the fair market value, making them almost worthless as an investment vehicle. In most instances the price listed on the broker's inventory sheets was two to three times higher than the price at which Kail originally purchased the coins, therefore misleading the sales personnel as to the true value of the coins they were selling.
9
After individual customers had brought numerous complaints about the fraudulent transactions, the government conducted additional appraisals of the coins. To determine the market value of a particular coin and its condition ("mint state"), the appraisers routinely consulted The Coin Dealer Newsletter, commonly referred to as "the gray sheet." The gray sheet reports on a weekly basis the wholesale and retail price of coins traded nationwide by hundreds of coin dealers. Dealers commonly mark up the retail price of coins 20 to 30 percent above cost.
10
Not only were the coins being sold at prices far above their market value, they were also being sold at prices significantly higher than those recommended by Kail's chief supplier, George Manter. Although he initially sold coins to Kail, Manter decided to provide coins to Kail on a consignment basis, and with Kail decided the maximum price at which they would be sold. However, coins consigned by Manter appeared on the Coin & Stamp Gallery inventory with grades and sales prices much higher than agreed to. For example, in October 1983 Manter consigned a 5-piece silver dollar set at an agreed-to price of $1,950; the Coin & Stamp Gallery inventory sheet listed the set at $12,000.
11
To his brokers' questioning as to why Coin & Stamp Gallery prices were so much higher than those of comparable coins listed in the gray sheets, Kail insisted that his profit margin was low and that the coins he sold were of particularly rare quality. However, doubts among Coin & Stamp Gallery brokers increased in early 1984 after several customers complained and requested refunds of their purchases. In several instances, Kail refused to repurchase coins at the request of customers.
12
On March 6, 1984 postal inspectors, investigating complaints of mail fraud, executed a search warrant at the Coin & Stamp Gallery offices. Among the business records seized was the Coin & Stamp Gallery commission ledger in which Kail's wife, Maggi, had recorded the actual purchase price of the coins. Postal inspectors also seized Coin & Stamp Gallery's inventory of coins. This inventory, including thousands of coins, was examined by two coin experts retained by the government. Their appraisals revealed that Kail had assigned sale prices to coins substantially higher than their fair market value.
13
II. DISCUSSION.
14
A. Search Warrant.
15
Kail asserts that the trial court erred in denying his motion for suppression of evidence seized at Coin & Stamp Gallery because the affidavit accompanying the search warrant did not contain sufficient substance to allow the magistrate to determine probable cause and because the warrant was lacking in sufficient particularity and therefore constitutionally defective. The district court denied the motion to suppress, finding initially that there was sufficient probable cause to support the issuance of the warrant.
16
A magistrate issuing a search warrant is to "make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him, ... there is a fair probability that contraband or evidence of a crime will be found in a particular place." Illinois v. Gates, 462 U.S. 213, 238, 103 S.Ct. 2317, 2332, 76 L.Ed.2d 527 (1983). In reviewing the magistrate's determinations, the court insures that the magistrate had a "substantial basis" for concluding that probable cause existed. Id. at 238-39, 103 S.Ct. at 2332.
17
The affidavit attached to the search warrant in this case reveals a substantial basis with which the magistrate could have concluded that the defendant's conduct was probably fraudulent and in violation of the federal mail fraud statute. The affidavit relates several specific examples of individuals who had been sold coins at prices far in excess of their fair market value. Three customers named in the affidavit indicated that Coin & Stamp Gallery refused to honor its commitment to refund coin purchases. The affidavit also includes information from interviews with Coin & Stamp Gallery employees who stated that numerous complaints had been received regarding the firm's pricing practices. Finally, the affidavit states in detail how the United States Mail was used in furtherance of the defendant's transactions, and describes the types of records kept by the business and how they were retained in the corporate offices. We would therefore conclude that the affidavit attached to the search warrant stated a substantial basis with which the magistrate could determine there was probable cause to issue the search warrant.
18
Kail also attacks as lacking sufficient particularity the warrant's description of the five categories of business records to be seized. The district court disagreed, and stated that the "scope of the documents sought by the warrant was ... not unreasonable or excessive, and therefore did not authorize an exploratory search."
19
The search warrant authorized inspectors to seize: (1) evidence of mailings of coins in bullion shipments; (2) books, records, papers and documents relating to the sale and purchase of coins and bullion; (3) accounting ledgers or records, checkbooks, monthly statements, cancelled checks, and deposit slips; (4) inventory records, records of safety deposit boxes, safety deposit keys and coins; and (5) customer files, client lists, letters and mailings from clients, checks, cash, coins or bullion shipments sent as payment for purchases and advertising materials. The fourth amendment requires that a search warrant describe with sufficient particularity the things to be seized in order to prevent "a general, exploratory rummaging in a person's belongings." Coolidge v. New Hampshire, 403 U.S. 443, 467, 91 S.Ct. 2022, 2038, 29 L.Ed.2d 564 (1971). The degree of specificity required in applying the particularity requirement "is flexible and may vary depending on the circumstances and the types of items involved." Marvin v. United States, 732 F.2d 669, 673 (8th Cir.1984), quoting United States v. Apker, 705 F.2d 293, 299 (8th Cir.1983). For use involving a scheme to defraud, therefore, a search warrant is sufficiently particular in its description of the items to be seized "if it is as specific as the circumstances and nature of activity under investigation permit." United States v. Wuagneaux, 683 F.2d 1343, 1349 (11th Cir.1982), cert. denied, 464 U.S. 814, 104 S.Ct. 69, 78 L.Ed.2d 83 (1983). While the search warrant in this case was broad in the sense that it allowed inspectors to seize almost all of the business records of Coin & Stamp Gallery, we would conclude that under the particular facts of this case the scope of the warrant was justified. This is because it would not be possible through a more particular description to separate those business records that would be evidence of fraud from those that would not since there was probable cause to believe that fraud permeated the entire business operation. We would therefore affirm the district court's finding that the warrant was sufficiently particular.
20
In denying the defendant's motion to suppress, the district court concluded that "[t]he reliance of the postal inspectors on the magistrate's determination of probable cause was objectively reasonable." In addition, the court stated that the postal inspectors did not exceed their authority in executing the search warrant. Since the record establishes that the postal inspectors acted in good faith in obtaining the search warrant, and acted within the warrant's scope, the district court did not err in denying the motion to suppress.
21
B. Fraud and Kail's Good Faith Defense.
22
Kail asserts that there was insufficient evidence to support the jury's verdict in light of the fact that there were honest differences of opinion and judgment as to the grade and value of the coins, therefore furnishing no basis for a finding that the defendant had committed fraud. He maintains that because the valuation of coins is inherently subjective, it cannot be fraud to sell coins at high prices. Appellant, however, mischaracterizes the nature of the charges against him. He was not charged with marking up the prices of the coins, but with misrepresenting the coins as valuable investments. In the record before us, the evidence demonstrates that Kail's representations with regard to the market value of the coins were false, and that these representations were made with an intent to defraud.
23
The evidence established the existence of official grading standards promulgated by the American Numismatic Association which, while not having the force of law, were recognized by the government's experts as having wide acceptance in the industry. Moreover, The Coin Dealer Newsletter ("the gray sheet") is almost universally relied upon by dealers to determine current market value of coins. Therefore, Kail's assertion that there is an absence of standards in the industry must be in doubt from this record.
24
In addition, in spite of the fact that the coin grading process is inherently subjective, the experts' appraisals of coins sold by Kail's firm were consistent in demonstrating a pattern of over valuation. In some instances, the markups exceeded the cost tenfold. As a result, the jury could reasonably infer that the pricing practices of Coin & Stamp Gallery were so far beyond the limits of custom and practice in the industry as to constitute mail fraud.
25
Finally, even if there were reason to believe that the subjective nature of the coin valuation process would make it difficult to prove criminal fraud, we nonetheless conclude there was abundant evidence presented that Kail operated his business dishonestly. He misled his brokers as to the cost basis of the coins that they were selling. His records reveal the actual cost of the coins had been concealed. Kail even deceived his chief supplier by marking up grades and prices of consigned coins without apparent justification. And when customers, alerted to the fraud, demanded refunds, Kail refused on several occasions to honor his buy-back guarantee.
26
We would therefore conclude the jury could reasonably find that Kail's pricing and sale of the coins was not conducted in good faith and amounted to mail fraud.
27
C. Postal Service Decision.
28
Kail asserts that the trial court erred in excluding a 1977 Postal Service administrative decision in which the administrative law judge found that there were no industry-wide standards for the grading and valuation of coins. Security National Rare Coin Corp. and Riverside Coin Co., Postal Service No. 5/130 (May 10, 1977). Kail offered the administrative decision in order to establish that the Postal Service acknowledged the absence of uniform coin grading standards and that in this prosecution the Postal Service was violating its own policy. The district court sustained the government's objection on hearsay and relevance grounds. On appeal, Kail argues that it was error to exclude the evidence since the administrative decision was admissible as a public record under Rule 803(8) of the Federal Rules of Evidence, and was relevant in that it supported his claim of good faith.
29
To be admissible under F.R.E. 401, the Security National decision must be probative of a fact of consequence in this case. The trial court noted that the opinion proffered by Kail was dated 1977 and the testimony in this case indicated that there had been standards developed since that date by the American Numismatic Society which have been widely accepted by experts in the field. In addition, the district court noted that the finding of an administrative law judge in 1977 in a totally unrelated proceeding did not bear any relevance to the issues or was a proper way to decide issues involved in this case. The record before us demonstrates that Coin & Stamp Gallery was not incorporated until 1983. In addition, Kail himself utilized the standards promulgated in 1977 by the ANA in his grading of coins. Moreover, there is no evidence presented that Kail was in any way aware of the administrative law judge's decision until the time of his own trial. The administrative decision, therefore, was not relevant to any issue of consequence in this trial.
30
In addition to the administrative decision's marginal relevance, we believe that the district court properly excluded it because its probative value was substantially outweighed by the danger of misleading or confusing the jury. F.R.E. 403. We believe that it is implicit in a situation in which an administrative decision is submitted as an exhibit to the jury that the jury would be forced to decide legal rather than factual questions. Moreover, it is apparent that allowing Kail to introduce the opinion into evidence might well have distracted the jury from the real issue in this case--Kail's intent to defraud. We believe that Kail had ample opportunity to present his good faith defense through his extensive cross-examination of experts, who were able to describe the prevailing practices among coin dealers during the relevant time period. We would therefore conclude that there was no prejudice to his case by the exclusion of this evidence and would affirm the decision of the district court.
31
D. Coin Inventory.
32
Kail first objects to the district court's finding admissible the appraisals of coins seized from Coin & Stamp Gallery by expert witnesses John G. Ross and Kent Froseth. He asserts that in light of the fact that there are no industry-wide standards for grading and value of coins, expert testimony as to the fair market value of his inventory is suspect and inherently unreliable. However, because these expert witnesses base their appraisals on the standards developed by the ANA (the same standards used by Kail), it is apparent that the reliability of the appraisals is not a sufficient reason to exclude the evidence. Moreover, the relevance of the appraisals of the inventoried coins is readily apparent in that this evidence was used to demonstrate that the prices Kail set on the coins in stock were five times greater than the experts' appraised market values. We conclude that the district court was well within its discretion under Rule 401 in allowing into evidence the appraised value of the coin inventory.
33
Kail further alleges that the use of expert testimony, in lieu of production of the actual coin inventory at trial, violated his right to confront witnesses against him. After the coin inventory had been seized by postal inspectors, Kail filed a Rule 41 motion to quash the subpoena and seek return of the coins. The district court permitted the government to have the inventory appraised, but ordered all of the inventory returned, except for a representative sample, following the appraisals. The court's order provided that the production of the coin inventory would not be required at any subsequent trial in order to establish foundation for the introduction into evidence of appraisals for the coins. The government thereafter returned the inventory to Kail. At trial Kail objected to the introduction of government witness testimony concerning their appraisals of the coin inventory, asserting that because the government could not produce the inventory in court admission of the appraisals was without foundation and violated his right to confrontation under the sixth amendment. The district court overruled his objection, stating "he is hardly in a position to be complaining that he doesn't have custody of the coins when in fact they were returned to him or the company of whom he had absolute control." (Tr. 281.) The sixth amendment is not offended when there is reliable secondary evidence as a substitute for the physical evidence. See United States v. Benedict, 647 F.2d 928, 931-32 (9th Cir.1981). In such cases, the availability of cross-examination safeguards the right to confrontation. Id. at 932. Moreover, the Confrontation Clause is not offended when the criminal defendant has access to the underlying data. United States v. Lawson, 653 F.2d 299, 302-03 (7th Cir.1981). In this case Kail was responsible for the absence of the actual coins from trial. He had the opportunity to obtain his own appraisals of the coins, but chose not to. Furthermore, the expert witnesses were cross-examined with regard to the basis of their valuations of the inventoried coins. Therefore, the district court could correctly conclude that the government's failure to produce the coins at trial did not amount to a denial of Kail's right of confrontation.
34
E. Expert Opinions.
35
Kail first asserts that the district court erred in finding admissible testimony of a type not "reasonably relied upon by experts" under Rule 703. He asserts that the lack of a single, official standard for the grading of coins which had been accepted by, and binding on, all coin dealers and collectors necessitated that the judge determine initially whether the facts and data relied upon by the experts were reasonably relied upon by other experts in the field. Rule 703 does not exclude opinion evidence based upon personal observation, and the second sentence of the Rule applies only when the expert relies on nonadmissible data--for example, hearsay. See United States v. 1014.16 Acres of Land, 558 F.Supp. 1238, 1242 (W.D.Mo.1983), aff'd, 739 F.2d 1371 (8th Cir. 1984). The opinions in this case were based on admissible evidence--that is, the experts' direct examination of coins purchased or otherwise obtained from Coin & Stamp Gallery. The experts' valuations were therefore based on information "perceived by or made known to him at or before the hearing" as required in F.R.E. 703, and were admissible.
36
Even if the ANA grading standards and the gray sheet were inadmissible hearsay, the record in this case does not support Kail's assertion that rare coin dealers do not rely upon them in reaching conclusions regarding the value of rare coins. To the contrary, each expert stated that ANA grading standards enjoyed almost industry-wide acceptance, and that the gray sheet is recognized as the chief guide to the current price of rare coins. In the final analysis, the defendant's questions as to the reliability of the experts' judgments go to the weight to be given the to the testimony, and not to the admissibility of the testimony. We therefore conclude that the district court did not err in admitting the expert testimony to the jury under Rule 703.
37
Kail further maintains that the court erred in refusing to require the government to establish a full and complete foundation for its expert testimony in order to support the experts' opinions that the coins sold by Kail were overgraded and/or overvalued. On direct examination, the government established each expert's qualifications as a professional numismatist, and asked each expert to explain the process of grading and pricing the rare coins each evaluated. Moreover, the court accorded wide latitude in the length and scope of Kail's cross-examination of all the government's experts. Rule 705 contemplates that "[t]he weaknesses in the underpinnings of such opinions may be developed upon cross-examination and such weakness goes to the weight and credibility of the testimony." Polk v. Ford Motor Co., 529 F.2d 259, 271 (8th Cir.), cert. denied, 426 U.S. 907, 96 S.Ct. 2229, 48 L.Ed.2d 832 (1976). As a result, the district court ruled correctly that Rule 705 did not preclude admission of the testimony.
38
Kail further maintains that the expert testimony should have been excluded because it was prejudicial, confusing, and precluded him from obtaining a fair trial. Nothing in Rule 403 suggests that expert testimony should be excluded simply because it is adverse to the opposing party. See Wade v. Haynes, 663 F.2d 778, 783 (8th Cir.1981). We have considered the appellant's argument and have concluded that the district court has committed no error, and furthermore that the probative value of this evidence far outweighed its prejudicial effect.
39
F. The Commission Ledger.
40
Kail contends that the trial court erred in admitting Government Exhibit 25-11, the commission ledger of Coin & Stamp Gallery, under exceptions to the hearsay rule. During the execution of the search warrant at Coin & Stamp Gallery, postal inspectors seized a black ledger book from the office of Maggi Kail, the defendant's wife and the firm's bookkeeper. The ledger recorded commissions earned by each broker in 1983 and 1984. The ledger listed by broker the purchase price as well as the base and sale price of the coins. Outside the hearing of the jury, the trial court conducted a lengthy inquiry with regard to the admissibility of the ledger. The court received the ledger into evidence, ruling that the government had laid sufficient foundation to establish its authenticity and overruling the defendant's hearsay objection, concluding that the ledger was a business record within Rule 803(6) and that the ledger possessed circumstantial guarantees of trustworthiness under Rules 803(24) and 804(b)(5). Kail argues on appeal that the admission of the ledger book was an abuse of discretion amounting to reversible error.
41
Although Maggi Kail prepared the ledger, she was unavailable as a witness. Foundation under the business record exception to the hearsay rule may be supplied by a custodian of records or "other qualified witness" who has no personal knowledge regarding the creation of the document. Ford Motor Co. v. Auto Supply Co., Inc., 661 F.2d 1171, 1175-76 (8th Cir.1981); United States v. Page, 544 F.2d 982, 986-87 (8th Cir.1976). Foundation under Rule 803(6) may also be established by circumstantial evidence, or by a combination of direct and circumstantial evidence. See Itel Capital Corp. v. Cups Coal Co., Inc., 707 F.2d 1253, 1259 (11th Cir.1983).
42
In this case, although Toniann Mathison did not herself compile the ledger, she was in a position to authenticate the ledger and to attest to its reliability as a business record. As receptionist at Coin & Stamp Gallery, she prepared the invoices which contained the sales data recorded in the ledger. These invoices were then provided to Maggi Kail, and Mathison routinely observed her record information from the invoices into the ledger. One of the brokers at Coin & Stamp Gallery corroborated her observations, stating that he had seen Maggi Kail work with the ledger in her office, and testified that the commission figures recorded in the ledger appeared accurate.
43
The hearsay admissions of Maggi Kail herself, testified to by postal inspectors, established that the ledger was a business record. During execution of the search warrant, she reviewed a list of records which were to be taken by the postal inspectors. As part of her request to have some of the materials photocopied, she identified the ledger as a document she would need to conduct business at Coin & Stamp Gallery. Moreover, the entries in the ledger corresponded to sale and price information contained in invoices already in evidence. At trial, brokers recognized and identified names of clients recorded in the ledger. In addition, the "bought at" prices listed in the ledger were consistent with purchase price information introduced through Kail's supplier, Manter. Furthermore, Kail's admission to an employee, Marcia Brooks, that the base price listed in the inventory sheet was not the actual price implied that the "bought at" information was maintained in some record not available to the sales staff.
44
It is also apparent that the ledger was admissible under the residual exceptions of Rules 803(24) and 804(b)(5) because the ledger possessed "circumstantial guarantees of trustworthiness." The ledger was prepared by Maggi Kail in the normal course of business at Coin & Stamp Gallery with no apparent incentive to present false information. Added to this, the government presented a substantial amount of corroborating evidence in the form of invoices and testimony of other employees indicating that the ledger was credible evidence.
45
Finally, we do not believe that there is merit in Kail's assertion that the government failed to prove that Maggi Kail was unavailable for cross-examination. To the contrary, it is apparent that the government made a good faith effort to obtain her presence at trial. Ohio v. Roberts, 448 U.S. 56, 74, 100 S.Ct. 2531, 2543, 65 L.Ed.2d 597 (1980). In fact, the government attempted unsuccessfully to subpoena Maggi Kail just prior to trial. It became apparent that she was avoiding service. As a consequence, the trial court's ruling that she was unavailable cannot be in question.
46
We would therefore conclude that the trial court did not err in admitting the commission ledger.
47
G. Restitution.
48
Kail contends the district court's order of restitution that he pay $501,738 to thirty victims was excessive in that it exceeded the losses which were proved to have been incurred by the victims. 18 U.S.C. Sec. 3579(a)(1) authorizes the district court to order the defendant to make restitution to "any victim of the offense." The Act does not require that the defendant be convicted of a count pertaining to that victim. Rather, the Act requires that the victim must have suffered a loss as a result of the offense charged. See United States v. Ruffen, 780 F.2d 1493, 1496 (9th Cir.1985). In this case restitution was awarded to those victims named in the indictment. Moreover, the amounts of restitution to each of these victims was calculated using the commission ledger.
49
Kail asserts that the district court improperly relied on the restitution recommendation prepared by a probation officer whose findings as to losses were excessive. He also maintains that it included victim losses which were not proved at trial. Even if we were not convinced that the losses were taken directly from the commission ledger which was in evidence at trial, we would conclude nevertheless that the trial court could properly rely on the report prepared by the probation officer. In United States v. Florence, 741 F.2d 1066 (8th Cir.1984), we stated: "[d]ue process does not mandate an evidentiary hearing to to establish the accuracy of the ... information contained in a presentence report before it can be considered by the trial court [to establish the amount of restitution]." Id. at 1069. In this case, the presentence investigation, including an addendum explaining the method of calculating restitution, was provided to the defendant in advance of sentencing. In addition, the court provided Kail with an opportunity to contest the amounts set out in the presentence report prior to the issuance of its restitution order. We would therefore conclude that the trial court's reliance on the presentence investigation was, under these circumstances, not unreasonable and did not constitute a violation of due process.
50
III. CONCLUSION.
51
For all of the reasons stated above, we affirm the decision of the district court in this case.
*
The HONORABLE WILLIAM C. HANSON, Senior District Judge for the Northern and Southern Districts of Iowa, sitting by designation
1
The HONORABLE DONALD D. ALSOP, Chief Judge, United States District Court for the District of Minnesota
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729 S.W.2d 547 (1987)
Frank HOWARD, Plaintiff-Appellant,
v.
William ARMONTROUT, Warden, Donald Clines, Assistant Warden, and George Brooks, Investigator, Individually and in their official capacities as members of the Missouri Department of Corrections, and the Missouri State Penitentiary, Jefferson City, Missouri, Defendants-Respondents.
No. WD 38676.
Missouri Court of Appeals, Western District.
March 24, 1987.
Motion for Rehearing and/or Transfer Denied April 28, 1987.
Application to Transfer Denied June 16, 1987.
Frank Howard, pro se.
*548 William L. Webster, Atty. Gen., Jefferson City, Winfield J. Sinclair, Asst. Atty. Gen., St. Louis, for defendants-respondents.
Before PRITCHARD, P.J., and KENNEDY and LOWENSTEIN, JJ.
Motion for Rehearing and/or Transfer to Supreme Court Denied April 28, 1987.
PER CURIAM.
Frank Howard, an inmate at the Missouri State Penitentiary (MSP), sued prison officials alleging deprivation of constitutional rights. Howard now appeals the dismissal of his petition for failure to state a claim.
We reverse and remand.
On November 23, 1985, unknown inmates set fire to Howard's cell destroying all of his personal property. After MSP officials questioned Howard about the fire, they placed him in detention and denied him contact with other prisoners. On December 26, 1985, Howard was transferred to the Special Management Facility and maintained on no-contact status.
On May 7, 1986, Howard filed suit against three MSP officials seeking a declaratory judgment and money damages for violations of Federal and state constitutional rights. The trial court treated Howard's petition as a civil rights action pursuant to 42 U.S.C. § 1983. In his petition, Howard alleged that the MSP officials violated § 217.375, RSMo 1986, by placing him in punitive segregation without notifying him of the reasons for his confinement, charging him with a conduct violation, or affording him a hearing. Howard objected to his no-contact status principally because it deprived him of an opportunity to consult with other inmates regarding lawsuits against MSP officials.
The MSP officials filed a motion to dismiss on June 25, 1986. Supporting the motion to dismiss was an affidavit made by Bill Armontrout, the warden. In his affidavit Warden Armontrout stated that after the fire, Howard was placed in detention, pending investigation. Aware that Howard had many enemies among the inmates and a history of violent behavior, MSP officials considered available options before transferring Howard to the Special Management Facility on December 26, 1985. Warden Armontrout further stated that Howard was denied contact with other inmates not for punitive purposes, but for his own safety and the safety of other inmates. To his affidavit, the warden attached certified copies of prison documents, including reports of the fire, correspondence between Howard and prison officials regarding his no-contact status, detention orders, and classification committee forms.
In his response to the motion to dismiss, Howard maintained that the prison officials had not informed him of any rule violations, given him reasons for his confinement, or afforded him a hearing.
In dismissing the petition, the trial court found that the MSP officials confined Howard for his own safety and the safety of others and that his confinement was constitutionally and legally permissible because the prison officials had complied with § 217.375 by conducting the requisite hearings.
In their briefs both parties discuss whether the trial court properly dismissed Howard's petition for failure to state a claim under Rule 55.27. However, presentation of matters outside the pleadings converts a motion to dismiss into a motion for summary judgment. Rule 55.27; Black Leaf Products Company v. Chemsico, Inc., 678 S.W.2d 827, 829 (Mo.App.1984). In the present case, because the trial court considered the warden's affidavit and attached documents, we must base our inquiry on the summary judgment principles set forth in Rule 74.04. Summary judgment is appropriate only when the moving party presents unassailable proof showing that no genuine issue of material fact exists. Id. "Unassailable proof" means proof leaving no room for controversy. Porter v. Georgia Casualty & Surety Company, 508 S.W.2d 27, 31 (Mo.App. 1974). We must scrutinize the record in the light most favorable to the non-moving party resolving all doubts in that party's favor. Id.
In the present matter, the factual controversy centers on whether the MSP officials afforded Howard the requisite hearings. Section 217.375 establishes the circumstances allowing prison officials to segregate *549 an inmate from other inmates. When an inmate has violated an institutional rule, he may be confined for a maximum of ten days in an adjustment unit without contact with the general prison population only after a proper hearing and upon order of the chief administrative officer. Sections 217.375.1, 217.150(1). The chief administrative officer may transfer an inmate to an administrative segregation unit denying him contact with other inmates when an inmate is
(1) an immediate security risk, or
(2) violent, struggling and creating sufficient disturbance to indicate he is not in control of himself, or
(3) physically violent, or
(4) in urgent need to be separated from others for his own safety or that of others.
Sections 217.375.2, 217.150(2).
Placing an inmate in an administrative segregation unit requires that a hearing be held within seventy-two hours. Section 217.375.2. Review hearings must be held thirty days after the initial period of confinement and every 90 days thereafter. Section 217.375.3.
Ordinarily prison officials have broad administrative and discretionary authority over the institutions they manage and lawfully incarcerated persons retain only a narrow range of protected liberty interests under the Due Process Clause. Hewitt v. Helms, 459 U.S. 460, 467, 103 S.Ct. 864, 869, 74 L.Ed.2d 675 (1983). However, a state may create a liberty interest protected by the Due Process Clause through its enactment of certain statutory or regulatory measures. Id. at 469, 103 S.Ct. at 870. Statutes regulating the use of administrative segregation in prisons create liberty interests when the language used has
an unmistakably mandatory character, requiring that certain procedures "shall", "will", or "must" be employed and that administrative segregation will not occur absent specified substantive predicates viz., "the need for control" or "the threat of serious disturbance". Id. at 471-472, 103 S.Ct. at 871.
Applying the standards enunciated by the United States Supreme Court in Hewitt, we find that § 217.375 creates a protected liberty interest. Under subsection 1, confinement in an adjustment unit requires a prior hearing and an order. Under subsection 2, administrative segregation may not take place unless the chief administrative officer determines that an emergency exists based on four specified situations. In subsections 2 and 3, the statute employs mandatory language by stating that hearings "shall be held" after an inmate's transfer to an administrative segregation unit.
To comply with the dictates of due process, an inmate placed in punitive or administrative segregation is entitled to a hearing.
... An informal, nonadversary evidentiary review is sufficient both for the decision that an inmate represents a security threat and the decision to confine an inmate to administrative segregation pending completion of an investigation into misconduct charges against him. An inmate must merely receive some notice of the charges against him and an opportunity to present his views to the prison official charged with deciding whether to transfer him to administrative segregation. Ordinarily a written statement by the inmate will accomplish this purpose, although prison administrators may find it more useful to permit oral presentations in cases where they believe a written statement would be ineffective. So long as this occurs, and the decisionmaker reviews the charges and then available evidence against the prisoner, the Due Process Clause is satisfied. Hewitt, 459 U.S. at 476, 103 S.Ct. at 873.
The evidentiary review must occur within a reasonable time following an inmate's transfer to administrative segregation. Id. at 476 n. 8, 103 S.Ct. at 873 n. 8.
The record convinces us that Howard's confinement resulted from security, not punitive, measures and was governed by the administrative segregation provisions of § 217.375.2 and .3. However, the record fails to resolve by unassailable *550 proof every genuine issue of material fact. A controversy exists as to whether the MSP officials conducted hearings complying with § 217.375.2 and .3 and the due process standards set forth in Hewitt.
The documents attached to the warden's affidavit provide our only source of information regarding the hearings conducted. We find these documents to be admissible through the business records exception to the hearsay rule. Section 490.680 RSMo 1986; see Allen v. St. Luke's Hospital of Kansas City, 532 S.W.2d 505, 508 (Mo.App. 1975). Four documents indicate that the prison officials reviewed Howard's confinement. Three documents are printed detention order forms. The lower portion of each detention order bears the caption "72 Hour Review". Each form is signed and dated and states "On the basis of a review of the current behavior and attitude of the above-named inmate, his confinement in detention is ordered: Continued". The fourth document is entitled "Special Management Facility Classification Committee Action Sheet". It reveals that three committee members met on December 30, 1985, to consider Howard's assignment to the Special Management Facility. Spaces on the action sheet for "Decision of Committee" and "rationale" remain blank. However, a fifth document reveals that the Committee assigned Howard to the Special Management Facility on December 30, 1985, "for safety and security of the institution". We find no reference in the record to a hearing held on February 13, 1986, which the trial court mentioned in its order of dismissal. While the documents indicate that the MSP officials conducted periodic reviews of Howard's confinement, they fail to provide unassailable proof showing compliance with § 217.375 and the Due Process Clause. We cannot determine whether the reviews were held timely, whether the decision makers considered the evidence supporting Howard's confinement, or whether Howard had an opportunity to submit a statement.
On the basis on the record, we find that genuine issues of material fact still exist, rendering summary judgment inappropriate on the basis of the record before the trial court. Because Howard's first point is decisive, we will not address his second point. We emphasize that, in our decision today, we determine only that summary judgment is incorrect at this point in this case; we do not intimate any view on the factual issues.
Accordingly, we reverse the trial court's judgment of dismissal and remand the cause for further proceedings.
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301 F.Supp.2d 1247 (2004)
Robert L. METTS, Plaintiff,
v.
THE UNIVERSITY OF NEVADA-RENO, Defendant.
No. CV-N-03-0297-LRH(VPC).
United States District Court, D. Nevada.
February 5, 2004.
Lynn Pierce, Reno, NV, Gail Flatt, Pro Hac Vice Firm, Santa Rosa, CA, for Plaintiff.
Mary Dugan, University & Community College System of Nevada, Reno, NV, for Defendant.
*1248 ORDER
HICKS, District Judge.
Several motions are presently before the Court. On July 21, 2003, Defendant "University of Nevada Reno" (the "University" or "UNR") filed a Motion to Dismiss and Quash Attempted Service of Process (Docket No. 11/12). Defendant argues that its motion should be granted pursuant to Federal Rules of Civil Procedure 4(j)(2) and 12(b)(1), (2), (5), and (7), as the UNR is not a legal entity capable of being sued. Subsequently, the Plaintiff filed an opposition to Defendant's motion (Docket No. 14/15) concurrently with a Motion to Amend Complaint (Docket No. 16). In these pleadings, the Plaintiff concedes that UNR is not an entity capable of being sued, and requests this Court grant leave to amend the complaint so that it names the University and Community College System of Nevada as the proper defendant. Defendant then filed a Reply to Opposition to the Motion to Dismiss and Quash Attempted Service of Process (Docket No. 17) and an Opposition to Motion to Amend Complaint (Docket No. 18). As well as again asserting that the UNR is not an entity subject to suit, the Defendant's opposition argues that Plaintiff's motion to amend should be dismissed on the grounds that amendment of the complaint is futile, as Plaintiff did not timely exhaust his administrative remedies and Plaintiff's complaint is barred by the statute of limitations. Opposing this argument, Plaintiff submitted a reply brief in support of his motion to amend (Docket No. 19). As it would otherwise be appropriate in the interest of justice to grant Plaintiff's motion to amend, see Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962), the Court must consider whether Plaintiff has failed to meet the filing deadlines imposed by the administrative agencies or the statute of limitations. If the Plaintiff's complaint is untimely, then the Court need not grant leave to amend, as amendment would be futile. See Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir.1990) (holding that the futility of amendment is one of several reasons a court may deny a motion for leave to amend).
The timeliness question posed by the parties hinges on a determination of which action, in a series of acts by UNR personnel between November 15, 2000 and May 30, 2001, is the "discriminatory employment decision" upon which this claim is brought. The relevant facts are as follows: In September 2000, the Plaintiff applied with the UNR for a promotion to full professor. On November 15, 2000, the dean of the College of Business Administration, Dean Reed, wrote to Vice President Dave Westfall to inform him that the full professors of the department as well as the department chair had voted against the Plaintiff's application, and that Dean Reed could not support the Plaintiff's application. The Plaintiff was informed of this communication and provided a copy of the letter to Vice President Westfall on November 17, 2000. At this time, Dean Reed also indicated to Plaintiff that he was not supporting his application for promotion and would not forward the application to the University. However, Dean Reed informed the Plaintiff that he could request reconsideration of his application. At some point after receiving the Dean's letter, the Plaintiff availed himself of the University's reconsideration process. On February 5, 2001, Dean Reed again wrote to Vice President Westfall to inform him that the review of Plaintiff's application resulted in a unanimous denial of the promotion and that he again would not support the application. On May 15, 2001, Westfall wrote to Plaintiff informing him that his application for promotion had been reconsidered and denied. Finally, on May 30, 2001, University President Stephen *1249 McFarlane wrote the Plaintiff informing him that, after reviewing the application and the recommendations of the other university personnel involved, he could not recommend the Plaintiff's application for promotion. The Plaintiff then filed an administrative charge with the Equal Employment Opportunity Commission (the "EEOC") on January 28, 2002, alleging violations by the University of the Americans with Disabilities Act (the "ADA") and the Rehabilitation Act. On March 10, 2003, the Plaintiff received a Right to Sue Letter from the EEOC, entitling him to bring a civil action against the University. Plaintiff filed his complaint on June 4, 2003.
Before a plaintiff may bring suit against an entity for violations of the ADA and/or the Rehabilitation Act, he must file a charge with the appropriate state agency (in this case the Nevada Equal Rights Commission) and the EEOC. The administrative charge with the EEOC must be made within 300 days of the alleged discriminatory act. 42 U.S.C. § 12117(a), 42 U.S.C. § 2000e-5(e)(1), Laquaglia v. Rio Hotel & Casino, Inc., 186 F.3d 1172, 1174-75 (9th Cir.1999). Moreover, the statute of limitations for claims brought under the Rehabilitation Act and the ADA is two years. Wilson v. Garcia, 471 U.S. 261, 276-80, 105 S.Ct. 1938, 1947-49, 85 L.Ed.2d 254 (1985); Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg'l Planning Agency, 216 F.3d 764, 786 (9th Cir.2000), N.R.S. 11.190(4)(e). The Defendant asserts that the relevant administrative and statute of limitations period began to run on November 15, 2000, while Plaintiff insists that May 30, 2001 is the date from which the time for filing an administrative charge and complaint began to run.
The Defendants cite Delaware State College v. Ricks for the proposition that the filing time limitations period begins to run from the date an employment decision is made, rather than the date that an internal grievance procedure is completed. 449 U.S. 250, 258, 101 S.Ct. 498, 504, 66 L.Ed.2d 431 (1980). According to Defendants, the November 15, 2000 letter from Dean Reed constituted the employment decision which is the subject of this lawsuit, and Plaintiff's subsequent attempts to gain the promotion through reconsideration procedures did not toll the running of the limitations periods. See Ricks, 449 U.S. at 261, 101 S.Ct. 498, 506 (holding that "... the pendency of a grievance, or some other method of collateral review of an employment decision, does not toll the running of the limitations periods.") (internal citations omitted). However, Plaintiff argues that the relevant date from which to determine the limitations period is the day he received the letter from the University's president, indicating the University's final decision not to promote him.[1]
*1250 The Court concludes that there is sufficient evidence to create a reasonable issue of fact, so that denying Plaintiff's motion to amend would be a miscarriage of justice. According to the "University and Community College System of Nevada CODE," (hereinafter "U.C.C.S.N.Code") which was provided as an exhibit by the Defendant, the president of the University must approve all recommendations concerning promotion. See U.C.C.S.N.Code § 5.2.2 (Opp'n, Ex. D). Moreover, if an applicant requests reconsideration, "[f]inal action [is] taken within a reasonable time by the president after receipt of the recommendations ...." U.C.C.S.N.Code § 5.2.4. (Id.) It appears that, with regard to promotion decisions, the only applications which are not reviewed by the president are those of unsuccessful applicants who do not seek reconsideration. However, the president is the final decision-maker with regard to successful applicants for promotion and with regard to unsuccessful applicants who seek reconsideration. Plaintiff falls into this latter category.
In Abramson v. University of Hawaii, the Ninth Circuit considered a similar question regarding whether a failure to reconsider an employment decision constitutes an act of discrimination separate from the initial employment decision. 594 F.2d 202 (9th Cir.1979). The Court noted that there were two ways in which a university might be liable for a discriminatory refusal to reconsider the denial of tenure: 1) failure to reconsider could constitute an additional discriminatory act; or 2) failure to reconsider could constitute the final decision to deny tenure. Id. at 209 (citing Weise v. Syracuse University, 522 F.2d 397 (2d Cir.1975)). The first part of this observation is echoed in the Supreme Court decision cited by both parties, in which the Court stated that even where a tenure decision was made earlier, the limitations period will commence at the date of a discharge occurring as a result of the tenure decision if the "manner in which the ... employment was terminated differed discriminatorily from the manner in which the [employer] terminated other professors who also had been denied tenure." Ricks, 449 U.S. at 258, 101 S.Ct. 498. The Ninth Circuit clarified the second way in which a university might be liable for a refusal to reconsider tenure, adding:
"...[W]hen requests for reconsideration are an ordinary and generally accepted part of the tenure decision process, a presidential refusal to overturn a departmental denial of tenure can be considered as The final denial of tenure."
Abramson, 594 F.2d at 209. See also Harris v. Ladner, 127 F.3d 1121, 1125 (D.C.Cir.1997) (denying a motion to dismiss based on the argument that the statute of limitations had run since the time plaintiff was denied tenure, finding that "the reconsideration [process] may have been a continuation of the original application process").
As denying Plaintiff's motion to amend based on a determination that amendment would be futile has the effect of granting a motion to dismiss the Plaintiff's claims with prejudice, this Court construes all pleaded facts in the complaint as true and draws all inferences in favor of the Plaintiff.[2] Although the Plaintiff's complaint is unclear as to which theory the Plaintiff seeks to assert liability, sufficient facts are alleged from which the Plaintiff could assert either that the University's reconsideration process was discriminatory, or that *1251 the denial of reconsideration itself constituted the first act of discrimination, or both. Plaintiff's failure to detail his theory, even if required,[3] can easily be cured by an amendment without imposing undue prejudice on the Defendant. Federal Rule of Civil Procedure 15(a) provides that a trial court shall grant leave to amend freely "when justice so requires." The Supreme Court has stated that "this mandate is to be heeded," Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962), and the Ninth Circuit has indicated that it is to be heeded with "extraordinary liberality." Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir.1990). Consequently, the Court concludes that a material issue of fact exists such that this Court cannot decide, as a matter of law, that amendment of Plaintiff's complaint would be futile.
IT IS THEREFORE ORDERED that Plaintiff's Motion to Amend Complaint (Docket No. 16) is GRANTED, and Plaintiff is granted leave to amend his complaint within twenty-one days of the date of entry of this order;
It is further ORDERED that the Defendant's Motion to Dismiss (Docket No. 11) is DENIED as moot;
It is further ORDERED that the Defendant's unopposed Motion to Quash Attempted Service of Process (Docket No. 12) is GRANTED;
IT IS SO ORDERED.
NOTES
[1] Indeed, in Ricks, the Supreme Court details the decisions made by various committees leading up to the ultimate decision not to grant the plaintiff tenure:
By June 26, the tenure committee had twice recommended that Ricks not receive tenure; the Faculty Senate had voted to support the tenure committee's recommendation; and the Board of Trustees formally had voted to deny Ricks tenure. In light of this unbroken array of negative decisions, the District Court was justified in concluding that the College had established its official position and made that position apparent to Ricks no later than June 26, 1974.
449 U.S. at 262, 101 S.Ct. 498. As with the instant case, various committees and other authorized individuals refused to "recommend" or "support" the plaintiff's application for tenure. On March 13, 1974, the College Board of Trustees formally voted to deny tenure to Ricks, though in May the College's Educational Policy Committee held a hearing on the matter pursuant to a grievance Ricks had filed. Nonetheless, on June 26, 1974, Ricks was offered a 1-year "terminal" contract. Id. at 252-53, 101 S.Ct. 498. It was this June 26th contact which the Supreme Court determined constituted the discriminatory employment decision from which the statute of limitations began to run.
[2] See, e.g., Barry Aviation, Inc. v. Land O'Lakes Municipal Airport Com'n, 2003 WL 23095997, *8 (W.D.Wis.2003) (dismissing plaintiff's federal claims without leave to amend because, "even construing all well-pleaded facts as true and drawing all inferences in favor of plaintiff," the court was convinced of the futility of amendment).
[3] Federal Rule of Civil Procedure 8(e)(1) states that "[e]ach averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required."
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343 F.3d 746
Marcus Bridger COTTON, Petitioner-Appellant,v.Janie COCKRELL, Director, Texas Department of Criminal Justice, Institutional Division, Respondent-Appellee.
No. 02-21263.
United States Court of Appeals, Fifth Circuit.
August 21, 2003.
COPYRIGHT MATERIAL OMITTED Kevin Scott Dunn, The Dunn Law Firm, The Woodlands, TX, for Petitioner-Appellant.
John Andrew Hutton, Austin, TX, for Respondent-Appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before JONES, STEWART and DENNIS, Circuit Judges.
EDITH H. JONES, Circuit Judge:
1
Marcus Bridger Cotton was convicted of capital murder and sentenced to death for murdering Assistant District Attorney Gil Epstein during a robbery in November 1997. After he exhausted state remedies, Cotton filed a § 2254 petition for a writ of habeas corpus in federal district court raising twelve issues. The district court granted the state's motion for summary judgment on all twelve issues. The district court granted summary judgment and denied Cotton's petition. The district court also refused to grant a certificate of appealability ("COA") on any of the issues raised by Cotton.
2
Cotton now seeks a COA from this court on four issues: (1) whether the prosecutor improperly commented on the defendant's failure to testify, (2) whether his trial counsel provided constitutionally ineffective assistance by failing to call two witnesses to testify at trial, (3) whether he was denied due process by comments made by the trial judge during jury selection about the history of the Texas capital sentencing scheme, and (4) whether his trial counsel provided constitutionally ineffective assistance by failing to object to the trial judge's comments regarding the Texas capital sentencing scheme. We grant a COA on the first issue but deny the application for COA on the other issues. With respect to the issue regarding the prosecutor's closing argument, however, we affirm the district court's denial of habeas relief.
BACKGROUND
3
At Cotton's second trial for capital murder, Lawrence Watson testified that on September 18, 1996, he and Cotton decided to commit a robbery because they were broke. Sometime later that day, Cotton and Watson observed Gil Epstein and Sean Caruthers walking toward their cars in the Houston Jewish Community Center parking lot and decided to rob them. Watson approached Caruthers, pointed a.38 caliber revolver at him, and demanded money. Caruthers gave his wallet to Watson and Watson ordered him to leave. At the same time, Cotton accosted Epstein. Cotton forced Epstein to the ground with a.380 caliber semi-automatic pistol and demanded his money. Epstein told Cotton he did not have any money. Cotton walked Epstein to his car, forced Epstein into the back seat, and began to search Epstein's wallet and glove compartment.
4
Caruthers testified that after being ordered to leave by Watson, he drove to the front of the community center and went into the center seeking help. Caruthers came back outside and drove to the side of the building where he saw Cotton in Epstein's car. Watson was on a bicycle outside of Epstein's car. Caruthers began to flash the car's lights and honked the horn in an attempt to alert the police. Watson testified that when Caruthers created this disturbance Cotton yelled to Watson to "kill that bitch." Watson aimed his gun at Caruthers, but without having fired his weapon, he heard a gunshot behind him. Watson turned around and saw Cotton fire his gun while still in Epstein's car. Several witnesses testified that Cotton said he decided to kill Epstein when he found in Epstein's wallet a badge identifying Epstein as an assistant district attorney for Fort Bend County, Texas. After shooting Epstein, Cotton left the car, jumped on his bicycle and rode toward Caruthers' car. Caruthers drove into Cotton, knocking Cotton off his bike. Cotton and Watson then escaped.
5
Cotton was first tried for the murder of Epstein on March 17, 1997. Jury deadlock caused a mistrial. At a second trial in November 1997, a jury convicted Cotton of capital murder. Cotton was sentenced to death. On direct appeal, the Texas Court of Criminal Appeals upheld Cotton's conviction and sentence. Cotton v. State, No. 72,964 (Tex.Crim.App. June 30, 1999) (unpublished). The Supreme Court denied Cotton's petition for writ of certiorari. Cotton v. Texas, 530 U.S. 1277, 120 S.Ct. 2747, 147 L.Ed.2d 1010 (2000).
6
Before the Supreme Court's denial of his petition, Cotton filed a state application for habeas corpus. The trial judge entered findings of fact and conclusions of law, which were adopted by the Court of Criminal Appeals in denying habeas relief. Ex parte Cotton, No. 49,499-01 (Tex.Crim.App. June 7, 2000)(unpublished). On June 29, 2001, Cotton filed a petition for a writ of habeas corpus in federal district court.
DISCUSSION
7
Cotton's § 2254 habeas petition is subject to the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA). See Penry v. Johnson, 532 U.S. 782, 792, 121 S.Ct. 1910, 150 L.Ed.2d 9 (2001). Under AEDPA, Cotton must obtain a COA before he can appeal the district court's denial of habeas relief. 28 U.S.C. § 2253(c)(1) (2000); Slack v. McDaniel, 529 U.S. 473, 478, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000). "[U]ntil a COA has been issued federal courts of appeals lack jurisdiction to rule on the merits of appeals from habeas petitioners." Miller-El v. Cockrell, 537 U.S. 322, 123 S.Ct. 1029, 1039, 154 L.Ed.2d 931 (2003).
8
To obtain a COA, Cotton must make "a substantial showing of the denial of a constitutional right." 28 U.S.C. § 2253(c)(2) (2000); Miller-El, 123 S.Ct. at 1039; Slack, 529 U.S. at 483, 120 S.Ct. 1595. To make such a showing, he must demonstrate that "reasonable jurists could debate whether (or, for that matter, agree that) the petition should have been resolved in a different manner or that the issues presented were adequate to deserve encouragement to proceed further." Miller-El, 123 S.Ct. at 1039 (quoting Slack, 529 U.S. at 484, 120 S.Ct. 1595).
9
In Miller-El, the Supreme Court instructed, as it had previously held in Slack, that we should "limit [our] examination to a threshold inquiry into the underlying merit of [the petitioner's] claims." Miller-El, 123 S.Ct. at 1034. The Court observed that "a COA ruling is not the occasion for a ruling on the merit of petitioner's claim ..." Id. at 1036. Instead, our determination must be based on "an overview of the claims in the habeas petition and a general assessment of their merits." Id. at 1039. "This threshold inquiry does not require full consideration of the factual or legal bases adduced in support of the claims." Id. We do not have jurisdiction to justify our denial of a COA based on an adjudication of the actual merits of the claims. Id. Accordingly, we cannot deny an "application for a COA merely because [we believe] the applicant will not demonstrate an entitlement to relief." Id. "[A] claim can be debatable even though every jurist of reason might agree, after the COA has been granted and the case has received full consideration, that petitioner will not prevail." Id.
10
Even if we grant Cotton's application for COA, Cotton is not necessarily entitled to habeas relief. "To prevail on a petition for writ of habeas corpus, a petitioner must demonstrate that the state court proceeding `resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States.'" Robertson v. Cockrell, 325 F.3d 243, 247-48 (5th Cir.2003) (en banc) (quoting 28 U.S.C. § 2254(d)(1) (2000)). A state court's decision is "contrary to ... clearly established Federal law, as determined by the Supreme Court of the United States ... if the state court arrives at a conclusion opposite to that reached by the Court on a question of law or if the state court decides a case differently than the Court has on a set of materially indistinguishable facts." Williams v. Taylor, 529 U.S. 362, 412-13, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000). A state court's decision "involves an unreasonable application of [] clearly established Federal law, as determined by the Supreme Court of the United States ... if the state court identifies the correct governing legal principle from the Court's decisions but unreasonably applies that principle to the facts of the prisoner's case." Id. at 413, 120 S.Ct. 1495.
11
In making the "unreasonable application" inquiry, this court must determine whether the state court's application of clearly established federal law was objectively unreasonable. Neal v. Puckett, 286 F.3d 230, 236 (5th Cir.2002) (en banc), cert. denied, 537 U.S. 1104, 123 S.Ct. 963, 154 L.Ed.2d 772 (2003). "We have no authority to grant habeas corpus relief simply because we conclude, in our independent judgment, that a state supreme court's application of [federal law] is erroneous or incorrect." Catalan v. Cockrell, 315 F.3d 491, 493 (5th Cir.2002)(quoting Neal, 286 F.3d at 236). "The federal habeas scheme leaves primary responsibility with the state courts for these judgments, and authorizes federal-court intervention only when a state court decision is objectively unreasonable." Woodford v. Visciotti, 537 U.S. 19, 123 S.Ct. 357, 361, 154 L.Ed.2d 279 (2002).
12
Finally, for Cotton to be entitled to habeas relief based on a constitutional "trial" error, he must demonstrate not only that the state court's decision was contrary to or an unreasonable application of clearly established federal law, but also that it was harmful under the standard set forth in Brecht v. Abrahamson, 507 U.S. 619, 113 S.Ct. 1710, 123 L.Ed.2d 353 (1993). Robertson v. Cain, 324 F.3d 297, 304 (5th Cir.2003). "Under Brecht, a federal court may grant habeas relief on account of constitutional error only if it determines that the constitutional error had a `substantial and injurious effect or influence in determining the jury's verdict.'" Id. (quoting Brecht, 507 U.S. at 623, 113 S.Ct. 1710) (quoting Kotteakos v. United States, 328 U.S. 750, 776, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946)).
1. Comment on Cotton's Failure to Testify
13
Cotton first seeks a COA with respect to the district court's failure to grant habeas relief based on the prosecutor's allegedly improperly comment on Cotton's failure to testify in his own defense. During the State's closing argument at the guilt/innocence phase of trial, the prosecutor stated:
14
One of the things — you know, they talked about what a liar [Watson] was and how you can't believe him and all that, but you know, he told you some things that really smack of the truth, and one of the things that is so indicative of the fact that he told you the truth was they never shook him about one event, and he makes admissions about some things, but they never shook him about one event in this case. They can't contradict him about one event in this case. And they've got an expert witness that could tell them if he lied. Marcus Cotton was with him.
15
Cotton's counsel timely objected to this statement as a comment on Cotton's failure to testify. The trial court overruled the objection.
16
The Fifth Amendment prohibits a prosecutor from commenting on a defendant's failure to testify, Griffin v. California, 380 U.S. 609, 615, 85 S.Ct. 1229, 14 L.Ed.2d 106 (1965), if "the prosecutor's manifest intent in making the remark must have been to comment on the defendant's silence, or the character of the remark must have been such that the jury would naturally and necessarily construe it as a comment on the defendant's silence." Jackson v. Johnson, 194 F.3d 641, 652 (5th Cir.1999) (citing United States v. Grosz, 76 F.3d 1318, 1326 (5th Cir.1996)). "The prosecutor's intent is not manifest if there is some other, equally plausible explanation for the remark." Grosz, 76 F.3d at 1326. As for whether a jury would naturally and necessarily construe a remark as a comment on the defendant's failure to testify, "the question is not whether the jury possibly or even probably would view the challenged remark in this manner, but whether the jury necessarily would have done so." Id. (quoting United States v. Collins, 972 F.2d 1385, 1406 (5th Cir.1992)) (quoting United States v. Carrodeguas, 747 F.2d 1390, 1395 (11th Cir.1984)). Additionally, challenged comments are evaluated in the context of the trial within which they are made. United States v. Robinson, 485 U.S. 25, 33, 108 S.Ct. 864, 99 L.Ed.2d 23 (1988).
17
As a threshold matter, we grant Cotton a COA on this issue. Reasonable jurists could debate whether a constitutional violation occurred due to the prosecutor's reference to the defendant as an "expert witness" while arguing that the defense could not impeach the prosecution's principal witness.
18
The district court held that the state courts did not unreasonably apply clearly established federal law in denying relief on Cotton's claim. The district court concluded that the prosecutor's statement referred to the inability of the defense counsel to impeach Watson's credibility even though Cotton was available to assist them. The district court found that this statement was intended to be a "comment on the failure of the defense, as opposed to the defendant, to counter or explain the testimony presented or evidence introduced" and as such did not violate the defendant's Fifth Amendment right against self-incrimination. Cotton v. Cockrell, Case No. H-01-CV-2201, at 41 (S.D.Tex. Oct. 30, 2002) (quoting Montoya v. Collins, 955 F.2d 279, 287 (5th Cir.1992)) (quoting United States v. Becker, 569 F.2d 951, 965 (5th Cir.1978)).
19
We need not decide whether the state courts' conclusion was or was not in that respect an unreasonable application of clearly established federal law, however,1 because habeas relief is unwarranted as the error was harmless. The comment Cotton complains of was "an isolated comment in a sea of evidence" incriminating him for Epstein's murder. Montoya, 955 F.2d at 287. Fellow victim Caruthers and the Jewish Community Center security guard Carla Chisholm both identified Cotton at trial as Epstein's attacker. Caruthers used his car to strike Cotton. When he was arrested, Cotton bore injuries consistent with such an event. Additionally, the state introduced testimony that, shortly after Epstein's murder, Cotton stated to an acquaintance that he had "killed a DA." Watson testified at length about his and Cotton's actions throughout the entire course of the robbery and murder. Finally, before the jury retired to deliberate, the trial court instructed the jury that they were not to consider Cotton's failure to testify during their deliberations.
20
Given the overwhelming evidence of guilt and the court's cautionary instruction to the jury, we conclude that the prosecution's statement had no substantial and injurious effect or influence in the determination of Cotton's guilt. See Nethery v. Collins, 993 F.2d 1154, 1159 (5th Cir.1993) (holding overwhelming evidence of guilt and presence of curative instruction rendered harmless an impermissible comment by prosecutor).
21
In sum, even if the state courts' conclusion was an unreasonable application of law, the constitutional error was harmless.
22
2. Ineffective Assistance for Failure to Present Witnesses
23
Cotton next seeks a COA on his claim that his trial counsel provided ineffective assistance by failing to present at his second trial the testimony of two men, John Fourmy and Andrew Mansfield, who testified at the first trial. During Cotton's first trial, Fourmy and Mansfield testified that they were in the parking lot of the Jewish Community Center on the night of Epstein's murder and observed men riding bicycles. Both Fourmy and Mansfield testified that they did not see Cotton in the parking lot that night. Cotton argues that there was no rational basis for his trial counsel not to present their testimony, which supports what he alleges would have been his best argument: that he was not at the scene of the crime when it occurred.
24
To establish ineffective assistance of counsel, Cotton must show that his counsel's performance was deficient and that he was actually prejudiced by the deficient performance. Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). Deficient performance is determined by examining whether the challenged representation fell below an objective standard of reasonableness. Kitchens v. Johnson, 190 F.3d 698, 701 (5th Cir.1999). "So long as counsel made an adequate investigation, any strategic decisions made as a result of that investigation fall within the wide range of objectively reasonable professional assistance." Smith v. Cockrell, 311 F.3d 661, 668 (5th Cir.2002) (internal citations and quotation marks omitted). "A conscious and informed decision on trial tactics and strategy cannot be the basis for constitutionally ineffective assistance of counsel unless it is so ill chosen that it permeates the entire trial with obvious unfairness." United States v. Jones, 287 F.3d 325, 331 (5th Cir.) (quoting Garland v. Maggio, 717 F.2d 199, 206 (5th Cir.1983)), cert. denied, 537 U.S 1018, 123 S.Ct. 549, 154 L.Ed.2d 424 (2002).
25
Even if Cotton establishes that his counsel's performance was deficient, he must also establish that "prejudice caused by the deficiency is such that there is a reasonable probability that the result of the proceedings would have been different." Ransom v. Johnson, 126 F.3d 716, 721 (5th Cir.1997). Cotton must show that the prejudice rendered the trial "fundamentally unfair or unreliable." Id. (quoting Lockhart v. Fretwell, 506 U.S. 364, 113 S.Ct. 838, 122 L.Ed.2d 180 (1993)).
26
Cotton has failed to make a substantial showing that his trial counsel provided ineffective assistance. While Fourmy and Mansfield did testify at Cotton's trial that ended with a hung jury, counsel was faced with a very different strategic landscape at Cotton's second trial. This is because, unlike at the first trial, Cotton's accomplice Watson had become available to the state after a plea bargain. Watson both placed Cotton at the scene of the crime and described in detail Epstein's robbery and murder at Cotton's hands.
27
Further, as noted by the district court in its thorough analysis, Fourmy's and Mansfield's testimonies contradicted each other and the testimony of the other witnesses. Cotton's trial counsel stated, in an affidavit, that he observed Fourmy testify during the first trial and felt that his demeanor was poor. Since neither Fourmy nor Mansfield witnessed the shooting or the robbery of either victim, and neither of them saw Epstein in the parking lot, their testimony that they also did not see Cotton in the parking lot was of limited value. In addition, neither witness recalled the date of the murder or the fact that there was a torrential rainstorm that night, and they could not agree on who else was with them in their car. Mansfield testified at the first trial as a rebuttal witness for the state, contradicting or casting doubt on Fourmy's testimony.
28
Although Fourmy and Mansfield could have supplied weak evidence that Cotton was not present at the scene of Epstein's murder, the prosecution introduced the testimony of eyewitnesses Caruthers and Chisholm and accomplice Watson, all of whom identified Cotton. There was also testimony that Cotton had told others that he had killed a district attorney. Cotton's trial counsel opted to impeach Watson's credibility rather than try to establish that Cotton was not at the scene. Calling Fourmy and Mansfield did not fit into counsel's strategy. Notably, Cotton's counsel defended Cotton in both his first and second trial. He was uniquely qualified to assess the desirability of having Fourmy and Mansfield testify at the retrial. Given these circumstances, reasonable jurists could not debate or find wrong the conclusion that counsel's strategic decision is entitled to deference under Strickland. We deny Cotton's application for COA on this claim.
3. Trial Court Address to Jury Venire
29
Finally, Cotton seeks a COA for his claim based on comments made by the trial judge to the jury venire before voir dire regarding the history of the Texas death penalty. Cotton argues that the court's comments reduced the jury's sense of responsibility for imposing the death penalty and thus violated the Eighth Amendment as construed in Caldwell v. Mississippi, 472 U.S. 320, 105 S.Ct. 2633, 86 L.Ed.2d 231 (1985). Cotton also appears to argue that the comments violated his rights under the Due Process Clause of the Fourteenth Amendment.
30
In his initial address to prospective jurors, the judge discussed, among other topics, the history of capital punishment in Texas. He described the development of capital punishment since the founding of the United States and the effect of the Eighth Amendment's prohibition on cruel and unusual punishment, as construed by the Supreme Court, on the procedures used in capital cases in Texas. He explained, among other things, that Texas at one time provided for capital punishment for several types of crimes, but now, only defendants convicted of certain categories of murder are eligible for the death penalty in Texas.
31
This claim, however construed, is procedurally barred. Cotton's counsel failed to object at trial to the comments he now argues are improper. During the state habeas proceedings, the court found that the failure to make a contemporaneous objection at trial resulted in a default of his Due Process claim. Alternatively, the state court found that the comments were not improper and even if improper they did not rise to the level of harmful error.
32
"[F]ederal courts are precluded from granting habeas relief where the last state court to consider the claims raised by the petitioner expressly and unambiguously based its denial of relief on an independent and adequate state-law procedural ground." Haley v. Cockrell, 306 F.3d 257, 263 (5th Cir.2002). We have previously recognized that the Texas contemporaneous objection rule, upon which the state court relied in this case, is an adequate and independent state ground that procedurally bars federal habeas review. Id. at 262 n. 8. Further, the fact that the state court alternatively addressed the merits of Cotton's claim does not prevent its procedural default determination from being an independent basis that bars review by the federal courts. Foster v. Johnson, 293 F.3d 766, 790 (5th Cir.), cert. denied, 537 U.S. 1054, 123 S.Ct. 625, 154 L.Ed.2d 532 (2002); Corwin v. Johnson, 150 F.3d 467, 473 (5th Cir.1998) ("It is clear in this Circuit that alternative rulings do not operate to vitiate the validity of a [state] procedural bar that constitutes the [state court's] primary holding."). Thus, to be entitled to relief on his Fourteenth Amendment claim, Cotton must either show cause for the default and resulting prejudice or that a fundamental miscarriage of justice would result. See Haley, 306 F.3d at 263.
33
Cotton argues that the failure of his trial counsel to object to the remarks made by the trial judge constituted ineffective assistance of counsel that caused the default. Ineffective assistance of counsel may constitute "cause" for a procedural default. Murray v. Carrier, 477 U.S. 478, 488, 106 S.Ct. 2639, 91 L.Ed.2d 397 (1986). We do not agree that counsel's failure to object to the comments constituted deficient performance under Strickland.
34
The conduct of a judge violates due process "only if the judge appears to predispose the jury toward a finding of guilt or to take over the prosecutorial role." Derden v. McNeel, 978 F.2d 1453, 1459 (5th Cir.1992) (en banc). The judge here outlined the history of capital punishment in Texas and described the limited circumstances under which the state can seek the death penalty. He expressed no opinion on the death penalty either generally or as it related to Cotton's crime. Nor did the trial judge encourage the jury to impose the death penalty in this case or even remotely suggest they should feel historically obliged to impose a death sentence should they find Cotton guilty. The comments simply provided a brief introduction to the Texas capital punishment scheme before the attorneys began conducting individualized voir dire examinations. These comments cannot be construed as predisposing the jury to impose a death sentence and violating Cotton's due process right. Reasonable jurists could not debate or find wrong that counsel did not unreasonably decline to object to these comments.
35
In any event, Cotton was not prejudiced by his counsel's failure to object. Throughout voir dire and during closing arguments the court and counsel repeatedly informed the jury that whether Cotton received a death sentence would be based on the jury's answers to the special issues submitted to them at the end of the punishment phase of the trial. Cotton's counsel was not constitutionally ineffective. In the absence of ineffective assistance, Cotton cannot establish cause to excuse the procedural default of his due process claim.
36
Reasonable jurists could not debate or find wrong the district court's conclusion that Cotton's claim is procedurally barred. Therefore, we deny his application for a COA on his Due Process claim.
37
Additionally, Cotton is not entitled to a COA on his Caldwell claim. Cotton did not raise this theory during his state habeas proceedings. Federal courts cannot grant habeas relief unless the applicant has presented the claims to the state court and exhausted the remedies available in state court. 28 U.S.C. 2254(b) (2000); Martinez v. Johnson, 255 F.3d 229, 238 (5th Cir.2001), cert. denied, 534 U.S. 1163, 122 S.Ct. 1175, 152 L.Ed.2d 118 (2002). Where an applicant has not presented a legal theory to the state court it is not exhausted. Finley v. Johnson, 243 F.3d 215, 219 (5th Cir.2001).
38
Reasonable jurists could not debate or find wrong the conclusion that Cotton cannot return to the Texas courts to present this claim. Texas's abuse of writ doctrine prohibits the filing of a successive petition to raise this claim, absent a showing of cause, if it could have been raised in his first habeas petition. Id.; see also Tex.Code Crim. Proc. 11.071, § 5(a) (stating Texas's abuse of writ doctrine). Cotton could have objected when the allegedly inappropriate comments were made by the judge, and he certainly could have raised the claim in his first state court petition. Thus, Texas would bar a new petition that presented his Caldwell claim.
39
This bar constitutes an adequate and independent state ground that precludes federal review. Finley, 243 F.3d at 220. "If a petitioner fails to exhaust state remedies, but the court to which he would be required to return to meet the exhaustion requirement would now find the claim procedurally barred, then there has been a procedural default for purposes of federal habeas corpus relief." Id. Since reasonable jurists could not disagree or find wrong the conclusion that Cotton's Caldwell claim is defaulted, we deny his application for a COA on this claim.
CONCLUSION
40
With respect to Cotton's claim that the prosecutor improperly commented on his failure to testify at trial, we grant his application for COA. We conclude, however, that the district court did not err in denying habeas relief on this claim because the prosecutor's comment did not rise to the level of harmful error. We affirm the district court's denial of relief on this claim. We deny Cotton's application for COA on his other claims and as such lack jurisdiction to review the district court's denial of habeas relief on these claims.
41
AFFIRMED; COA DENIED.
Notes:
1
See Barrientes v. Johnson, 221 F.3d 741, 781 (5th Cir.2000) (holding that prosecutor's comments that "He [the defendant] knows. He knows where the witness is as he sits there right now. He knows. He knows." were not improper); Lucas v. Johnson, 132 F.3d 1069, 1079 (5th Cir.1998) (holding that prosecutor's comments that "Only one person does know [the identity of the handwriting], and that's [the defendant] Henry Lee Lucas." were not improper).
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525 F.2d 1103
NATICK PAPERBOARD CORP.andCrown Paperboard Co., Inc., Appellants,v.Caspar W. WEINBERGER, Secretary of Health, Education and Welfare,andAlexander M. Schmidt, Commissioner of Food and Drugs, Appellees.
No. 75--1134.
United States Court of Appeals,First Circuit.
Argued Sept. 8, 1975.Decided Nov. 26, 1975.
1
Jerome H. Heckman, Washington, D.C., with whom Endicott Peabody, Christopher A. Hart, Peabody, Rivlin & Lambert of Washington, D.C., Paul T. Smith of Boston, Mass., and Keller & Heckman of Washington, D.C., were on brief, for appellants.
2
Alan R. Bennett, Asst. Chief Counsel, Food and Drug Administration, with whom Thomas E. Kauper, Asst. Atty. Gen., Antitrust Div., U.S. Dept. of Justice, Gregory B. Hovendon, Chief Consumer Affairs Section, U.S. Dept. of Justice, Robert V. Allen, Atty., Consumer Affairs Section, Dept. of Justice, and Richard A. Merrill, Chief Counsel, Food and Drug Administration, Washington, D.C., were on brief, for appellees.
3
Before COFFIN, Chief Judge, CAMPBELL, Circuit Judge, and THOMSEN*, Senior District Judge.
4
THOMSEN, Senior District Judge.
5
Plaintiffs appeal from a summary judgment for defendants, the Secretary of HEW and the Commissioner of Food and Drugs (collectively, FDA), which declared that they have the authority under the Federal Food, Drug and Cosmetic Act, 21 U.S.C. 301 et seq. (the Act), to recommend seizure of paper food packaging material containing polychlorinated biphenyls (PCB's) in excess of 10 parts per million (ppm) as adulterated food. 389 F.Supp. 794 (D.Mass.1975).1
6
PCB's are a group of toxic chemical compounds, which find their way into industrial waste, and thence into various products, including recycled paper products. If such a product is used for packaging food, PCB's are likely to migrate into the food unless the food is protected from such migration by an impermeable barrier.
7
Both plaintiffs manufacture paper and paper products, including paper packaging material from waste paper; they sell such material in interstate commerce, and some of it is used by their customers to make containers for packaging food. Plaintiffs argue that food packaging material is not 'food' within the meaning of the Act, and therefore is not subject to seizure as 'adulterated food', and that the notice of intended seizure is overboard.
8
* On July 6, 1973, FDA published a proposed regulation, intended to limit the presence of PCB's in human and animal foods by prohibiting, inter alia, PCB residues of more than 10 ppm in paper food packaging material intended for or used with human food, finished animal feed and any components intended for animal feeds, unless the paper food packaging material is separated from the food therein by a functional barrier which is impermeable to migration of PCB's. 38 F.R. 18096, 18101--02; 21 C.F.R. § 122.10(a)(9).2
9
Plaintiffs and others filed objections to subsection (a)(9) of the proposed regulation, and its effectiveness was thereby stayed pending a hearing,3 which has not yet been scheduled. However, on August 24, 1973, FDA announced that in the interim any paper food packaging material shipped in interstate commerce after September 4, 1973, containing PCB's in excess of 10 ppm, would be seized as 'adulterated' in violation of sec. 402 of the Act, 21 U.S.C. sec. 342, which defines 'adulterated food'. See 38 F.R. 22794.
10
Plaintiffs' complaint herein sought both injunctive and declaratory relief against such seizures. Both were originally denied by the district court because it felt that it lacked authority to grant any relief. 367 F.Supp. 885 (D.Mass.1973). We affirmed the denial of injunctive relief, but reversed the district court's judgment with respect to declaratory relief jurisdiction and remanded the case for further proceedings. 498 F.2d 125 (1 Cir. 1974).4
11
After a further hearing, the district court granted summary judgment for defendants (FDA), declaring 'that they have the authority under the Federal Food, Drug and Cosmetic Act, 21 U.S.C.A. § 301 et seq., to recommend seizure of paper food-packaging meterial containing polychlorinated biphenyls (PCB's) in excess of 10 parts per million as adulterated food.' 389 F.Supp. at 798. Plaintiffs appeal from that judgment.
II
12
The following sections of the Act relating to adulterated food and food additives are material to the issues presented. All references are to sections of Title 21 of the U.S.Code.
13
Sec. 334(a)(1) and (b) permit seizure of '(a)ny article of food * * * that is adulterated * * * when introduced into or while in interstate commerce or while held for sale * * * after shipment in interstate commerce * * *.'
14
Sec. 321(f) provides: 'The term 'food' means (1) articles used for food or drink for man or other animals, (2) chewing gum, and (3) articles used for components of any such article.'
15
Sec. 342(a)(2)(C) states that a food is adulterated 'if it is, or it bears or contains, any food additive which is unsafe within the meaning of section 348.'
16
Sec. 321(s) defines a 'food additive' as 'any substance the intended use of which results or may reasonably be expected to result, directly or indirectly, in its becoming a component or otherwise affecting the characteristics of any food (including any substance intended for use in * * * packaging * * * or holding food; * * $, if such substance is not generally recognized, among experts qualified by scientific training and experience to evaluate its safety, as having been adequately shown through scientific procedures * * * to be safe under the conditions of its intended use; * * *.'
17
Sec. 348(a) provides: 'A food additive shall, with respect to any particular use or intended use of such additives, be deemed to be unsafe for the purposes of the application of clause (2)(C) of section 342(a) of this title, unless--(1) * * *; or (2) there is in effect, and it and its use or intended use are in conformity with, a regulation issued under this section prescribing the conditions under which such additive may be safely used.' No such regulation upon which plaintiffs might rely is in effect. Therefore, if paper food packaging material containing PCB's in excess of 10 ppm is a food additive, it is unsafe within the meaning of sec. 348.
III
18
The affidavits before the district court justify the conclusions that PCB's are toxic, that they tend to migrate from paper packaging material to the contained food by a vapor phase phenomenon, that paper packaging material containing PCB's in excess of 10 ppm is not generally recognized as safe for packaging food for human consumption unless the food is protected from such migration by an impermeable barrier,5 and that if so used, without such barrier, paper food packaging containing PCB's 'may reasonably be expected to result, directly or indirectly, in its becoming a component or otherwise affecting the characteristics of * * * food' within the meaning of sec. 321(s).6
19
Since, therefore, paper food packaging material containing PCB's in excess of 10 ppm will in many instances be an 'unsafe food additive' within the meaning of the Act, we proceed to the central issue of this case: whether such material is 'adulterated food' under sec. 342 and thus, under sec. 334(a)(1) and (b), subject to seizure by FDA.
20
Sec. 342(a)(2)(C) provides: 'A food shall be deemed to be adulterated--* * * if it is, or it bears or contains, any food additive which is unsafe within the meaning of section 348 of this title.' Plaintiffs argue that, although PCB's may be introduced into food by migration from the packaging, such introduction is not intentional and therefore the packaging is not 'used for components' of food within sec. 321(f)(3). FDA replies that intentional introduction is not required to meet the definition, and refers to the 'food additive' definition in sec. 321(s), quoted above in Part II of this opinion, and to the legislative history.
21
The food additive provisions of the Act were added by the Food Additives Amendment of 1958, P.L. 85--929, 72 Stat. 1784. Its basic purpose is to permit FDA to regulate the use of substances affecting food without first determining that they are in fact dangerous; the method is to require that such substances be established as safe before being used. A new sec. 348 was added, establishing a procedure for approval by FDA and permitting the agency to establish tolerances and other regulations to insure that these substances will be used safely. Until the FDA has acted, sec. 348(a) provides that substances which meet the definition of 'food additive' are deemed 'unsafe'.7
22
The protection of the public from unsafe food additives was accomplished by amending sec. 342(a), defining 'adulterated food'. Among other provisions, a new clause (2)(C) was added to sec. 342(a), stating that a food shall be deemed adulterated 'if it is, or it bears or contains, any food additive which is unsafe within the meaning of section 409 (codified as 21 U.S.C. 348)' (emphasis added). No other means of prohibiting the unauthorized use of unsafe food additives was provided for in the Amendment; none was needed.8 We conclude that 'unsafe food additives', whether intentional or incidental,9 are 'adulterated food' under sec. 342(a)(2)(C), and, therefore, may be seized, subject to the provisions of sec. 334(a)(1) and (b).10
23
It would defeat the policy of the Act to require, as plaintiffs contend, that FDA must wait until the unsafe food additive has actually entered or come in contact with food before it can be seized; it is enough that FDA has reasonable cause to expect that the additive will be used in such a way as to enter or otherwise come in contact with food. To wait until actual contamination occurs, in the warehouse of the food processor, on the shelf of a grocery store, or in a family kitchen would effectively deny FDA the means to protect the public from adulterated food. United States v. Ewig Bros. Co., Inc., 502 F.2d 715 (7 Cir. 1974), cert. denied, 420 U.S. 945, 95 S.Ct. 1324, 43 L.Ed.2d 423 (1975); United States v. Articles of Food * * * Pottery * * * Cathy Rose, 370 F.Supp. 371 (E.D.Mich.1974). See United States v. Bacto-Unidisk, 394 U.S. 784, 798, 89 S.Ct. 1410, 22 L.Ed.2d 726 (1969).
IV
24
We do not hold, however, that FDA can properly take steps to seize any and all paperboard containing PCB's in excess of 10 ppm wherever it is located and whatever its intended use may be. The district court properly limited its judgment to paper food packaging material. We interpret this to mean that the FDA must be able to prove that any paperboard intended to be seized before it has actually been used as a container for food is either in the hands of a packager of food or in transit to, ordered by, or being produced with the intention that it be sold to a packager of food, or that its intended use otherwise meets the test of sec. 321(s). If the packager or other claimant can show that the food placed in or to be placed in the paper container is or will be insulated from PCB migration by a barrier impermeable to such migration, so that contamination cannot reasonably be expected to occur, the paperboard would not be a food additive and would not be subject to seizure under the Act. So interpreted, the notice of intended seizure is not overbroad.
25
The judgment of the district court, as interpreted in this opinion, is
26
Affirmed.
*
Of the District of Maryland, sitting by designation
1
See also 367 F.Supp. 885 (D.Mass.1973) and 498 F.2d 125 (1 Cir. 1974)
2
The regulation is quoted in 498 F.2d at 126
3
See 21 U.S.C. 371(e)(2)
4
We said, at p. 129: 'Nothing in this opinion shall be deemed to bar the institution of seizures in the interim under § 334.'
5
Cf. United States v. Articles of Food and Drug, . . . Coli-Trol 80, etc., 518 F.2d 743, 746 (5 Cir. 1975); United States v. An Article of Drug 'Bentex Ulcerine', 469 F.2d 875, 878--79 (5 Cir. 1972), cert. denied, 412 U.S. 938, 93 S.Ct. 2772, 37 L.Ed.2d 397 (1973)
6
See United States v. Articles of Food . . . Pottery . . . Cathy Rose, 370 F.Supp. 371 (E.D.Mich.1974)
7
This purpose of the Amendment was further elucidated in the Senate Report on the bill:
'. . . we would point out first that under existing law the Federal Government is unable to prevent the use in foods of a poisonous or deleterious substance until it first proves that the additive is poisonous or deleterious. To establish this proof through experimentation with generations of mice or other animals may require 2 years or even more on the part of the relatively few scientists the Food and Drug Administration is able to assign to a particular problem. Yet, until that proof is forthcoming, an unscrupulous processor of foodstuffs is perfectly free to purvey to millions of our people foodstuffs containing additives which may or may not be capable of producing illness, debility, or death.'
Report of the Senate Committee on Labor and Public Welfare, S.Rep.No.2422, 85th Cong., 2d Sess. 1, 2 (1958), U.S.Code Cong. & Admin.News. 1958, p. 5300.
8
Plaintiffs make the argument from syntax: 'it', as used in § 342(a)(2)(C), must first be food before it can be adulterated food. However, plaintiffs do not contend that unsafe food additives intended to be introduced into food may not be seized. We see no sound reason to believe that Congress intended to subject to seizure an unsafe substance reasonably expected to become a component of food through intentional mixing but to exempt from seizure an unsafe substance (in this case packaging material containing PCB's) which is likely to affect the characteristics of food by means of migration when such unsafe substance is put to its intended use
9
Both the House and Senate Reports on the Food Additives Amendment contain the following (H.Rep.No.2284, 85th Cong., 2d Sess. 3 (1958); S.Rep.No.2422, 85th Cong., 2d Sess. 4, 5 (1958)), U.S.Code Cong. & Admin.News, 1958, at p. 5303:
'The legislation covers substances which are added intentionally to food. These additives are generally referred to as 'intentional additives.'
'The legislation also covers substances which may reasonably be expected to become a component of any food or to affect the characteristics of any food. These substances are generally referred to as 'incidental additives.'
'The principal example of both intentional and incidental additives are substances intended for use in producing, manufacturing, packing, processing, preparing, treating, packaging, transporting, or holding food.'
10
Prior court approval of a seizure by the FDA is not required, and, as we held on the previous appeal in this case, 498 F.2d at 127, no court may restrain a contemplated seizure. Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950). The seizure is by process pursuant to a libel for condemnation filed in a district court against 'the article, equipment or other thing proceeded against', sec. 334(b). The owner or other appropriate person may contest the condemnation, and recover the articles or their value if they were seized unlawfully
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25 Cal.2d 48 (1944)
CAROLINE A. LLOYD et al., Respondents,
v.
WILLIAM J. MURPHY, Appellant.
L. A. No. 18738.
Supreme Court of California. In Bank.
Oct. 31, 1944.
ChaS.W. Rollinson and Wm. Roy Ives for Appellant.
Albert W. Leeds for Respondents.
Schultheis & Laybourne and Clifford E. Royston as Amici Curiae on behalf of Respondents.
TRAYNOR, J.
On August 4, 1941, plaintiff leased to defendant for a five-year term beginning September 15, 1941, *51 certain premises located at the corner of Almont Drive and Wilshire Boulevard in the city of Beverly Hills, Los Angeles County, "for the sole purpose of conducting thereon the business of displaying and selling new automobiles (including the servicing and repairing thereof and of selling the petroleum products of a major oil company) and for no other purpose whatsoever without the written consent of the lessor" except "to make an occasional sale of a used automobile." Defendant agreed not to sublease or assign without plaintiffs' written consent. On January 1, 1942, the federal government ordered that the sale of new automobiles be discontinued. It modified this order on January 8, 1942, to permit sales to those engaged in military activities, and on January 20, 1942, it established a system of priorities restricting sales to persons having preferential ratings of A-1-j or higher. On March 10, 1942, defendant explained the effect of these restrictions on his business to one of the plaintiffs authorized to act for the others, who orally waived the restrictions in the lease as to use and subleasing and offered to reduce the rent if defendant should be unable to operate profitably. Nevertheless defendant vacated the premises on March 15, 1942, giving oral notice of repudiation of the lease to plaintiffs, which was followed by a written notice on March 24, 1942. Plaintiffs affirmed in writing on March 26th their oral waiver and, failing to persuade defendant to perform his obligations, they rented the property to other tenants pursuant to their powers under the lease in order to mitigate damages. On May 11, 1942, plaintiffs brought this action praying for declaratory relief to determine their rights under the lease, and for judgment for unpaid rent. Following a trial on the merits, the court found that the leased premises were located on one of the main traffic arteries of Los Angeles County; that they were equipped with gasoline pumps and in general adapted for the maintenance of an automobile service station; that they contained a one-story storeroom adapted to many commercial purposes; that plaintiffs had waived the restrictions in the lease and granted defendant the right to use the premises for any legitimate purpose and to sublease to any responsible party; that defendant continues to carry on the business of selling and servicing automobiles at two other places. Defendant testified that at one of these locations he sold new automobiles exclusively and when asked if he were aware that many new automobile dealers were continuing in business replied: "Sure. It *52 is just the location that I couldn't make a go, though, of automobiles." Although there was no finding to that effect, defendant estimated in response to inquiry by his counsel, that 90 per cent of his gross volume of business was new car sales and 10 per cent gasoline sales. The trial court held that war conditions had not terminated defendant's obligations under the lease and gave judgment for plaintiffs, declaring the lease as modified by plaintiffs' waiver to be in full force and effect, and ordered defendant to pay the unpaid rent with interest, less amounts received by plaintiffs from re- renting. Defendant brought this appeal, contending that the purpose for which the premises were leased was frustrated by the restrictions placed on the sale of new automobiles by the federal government, thereby terminating his duties under the lease.
Although commercial frustration was first recognized as an excuse for nonperformance of a contractual duty by the courts of England (Krell v. Henry [1903] 2 K.B. 740 [C.A.]; Blakely v. Muller, 19 T.L.R. 186 [K. B.]; see McElroy and Williams, The Coronation Cases, 4 Mod.L.Rev. 241) its soundness has been questioned by those courts (see Maritime National Fish, Ltd., v. Ocean Trawlers, Ltd. [1935] A.C. 524, 528-29, 56 L.Q.Rev. 324, arguing that Krell v. Henry, supra, was a misapplication of Taylor v. Caldwell, 3 B.&S 826 [1863], the leading case on impossibility as an excuse for nonperformance), and they have refused to apply the doctrine to leases on the ground that an estate is conveyed to the lessee, which carries with it all risks (Swift v. McBean, 166 L.T.Rep. 87 [1942] 1 K.B. 375; Whitehall Court v. Ettlinger, 122 L.T.Rep. 540, (1920) 1 K.B. 680, [1919] 89 L.J. [K.B.] N.S. 126; 137 A.L.R. 1199, 1224; see collection and discussion on English cases in Wood v. Bartolino, ___ N.M. ___ [146 P.2d 883, 886-87]). Many courts, therefore, in the United States have held that the tenant bears all risks as owner of the estate (Cusack v. Pratt, 78 Colo. 28 [239 P. 22, 44 A.L.R. 55]; Yellow Cab Co. v. Stafford-Smith Co., 320 Ill. 294 [150 N.E. 670, 43 A.L.R. 1173]), but the modern cases have recognized that the defense may be available in a proper case, even in a lease. As the author declares in 6 Williston, Contracts (rev. ed. 1938), 1955, pp. 5485-87, "The fact that lease is a conveyance and not simply a continuing contract and the numerous authorities enforcing liability to pay rent in spite of destruction of leased premises, however, have made it difficult to give relief. That the tenant has been relieved, nevertheless, *53 in several cases indicates the gravitation of the law toward a recognition of the principle that fortuitous destruction of the value of performance wholly outside the contemplation of the parties may excuse a promisor even in a lease. ..."
"Even more clearly with respect to leases than in regard to ordinary contracts the applicability of the doctrine of frustration depends on the total or nearly total destruction of the purpose for which, in the contemplation of both parties, the transaction was entered into."
The principles of frustration have been repeatedly applied to leases by the courts of this state (Brown v. Oshiro, 58 Cal.App.2d 190 [136 P.2d 29]; Davidson v. Goldstein, 58 Cal.App.2d Supp. 909 [136 P.2d 665]; Grace v. Croninger, 12 Cal.App.2d 603 [55 P.2d 940]; Knoblaugh v. McKinney, 5 Cal.App.2d 339 [42 P.2d 332]; Industrial Development & Land Co. v. Goldschmidt, 56 Cal.App. 507 [206 P. 134]; Burke v. San Francisco Breweries, Ltd., 21 Cal.App. 198 [131 P. 83]) and the question is whether the excuse for nonperformance is applicable under the facts of the present case.
[1] Although the doctrine of frustration is akin to the doctrine of impossibility of performance (see Civ. Code, 1511; 6 Cal.Jur. 435-450; 4 Cal.Jur. Ten-year Supp. 187-192; Taylor v. Caldwell, supra) since both have developed from the commercial necessity of excusing performance in cases of extreme hardship, frustration is not a form of impossibility even under the modern definition of that term, which includes not only cases of physical impossibility but also cases of extreme impracticability of performance (see Mineral Park Land Co. v. Howard, 172 Cal. 289, 293 [156 P. 458, L.R.A. 1916F 1]; Christin v. Superior Court, 9 Cal.2d 526, 533 [71 P.2d 205, 112 A.L.R. 1153]; 6 Williston, op.cit. supra, 1935, p. 5419; Rest., Contracts, 454, comment a., and Cal.Ann. p. 254). Performance remains possible but the expected value of performance to the party seeking to be excused has been destroyed by a fortuitous event, which supervenes to cause an actual but not literal failure of consideration (Krell v. Henry, supra; Blakely v. Muller, supra; Marks Realty Co. v. Hotel Hermitage Co., 170 App.Div. 484 [156 N.Y.S. 179]; 6 Williston, op. cit. supra, 1935, 1954, pp. 5477, 5480; Restatement, Contracts, 288).
[2] The question in cases involving frustration is whether *54 the equities of the case, considered in the light of sound public policy, require placing the risk of a disruption or complete destruction of the contract equilibrium on defendant or plaintiff under the circumstances of a given case (Fibrosa Spolka Akcyjina v. Fairbairn Lawson Combe Barbour, Ltd. [1942], 167 L.T.R. [H.L.] 101, 112-113; see Smith, Some Practical Aspects of the Doctrine of Impossibility, 32 Ill.L.Rev. 672, 675; Patterson, Constructive Conditions in Contracts, 42 Columb.L.Rev. 903, 949; 27 Cal.L.Rev. 461), and the answer depends on whether an unanticipated circumstance, the risk of which should not be fairly thrown on the promisor, has made performance vitally different from what was reasonably to be expected (6 Williston, op.cit. supra, 1963, p. 5511; Restatement, Contracts, 454). The purpose of a contract is to place the risks of performance upon the promisor, and the relation of the parties, terms of the contract, and circumstances surrounding its formation must be examined to determine whether it can be fairly inferred that the risk of the event that has supervened to cause the alleged frustration was not reasonably foreseeable. If it was foreseeable there should have been provision for it in the contract, and the absence of such a provision gives rise to the inference that the risk was assumed.
[3] The doctrine of frustration has been limited to cases of extreme hardship so that businessmen, who must make their arrangements in advance, can rely with certainty on their contracts (Anglo-Northern Trading Co. v. Emlyn Jones and Williams, 2 K.B. 78; 137 A.L.R. 1199, 1216-1221). [4] The courts have required a promisor seeking to excuse himself from performance of his obligations to prove that the risk of the frustrating event was not reasonably foreseeable and that the value of counterperformance is totally or nearly totally destroyed, for frustration is no defense if it was foreseeable or controllable by the promisor, or if counterperformance remains valuable. (La Cumbre Golf & Country Club v. Santa Barbara Hotel Co., 205 Cal. 422, 425 [271 P. 476]; Johnson v. Atkins, 53 Cal.App.2d 430, 434 [127 P.2d 1027]; Grace v. Croninger, 12 Cal.App2d 603, 606-607 [55 P.2d 940]; Industrial Development & Land Co. v. Goldschmidt, 56 Cal.App. 507, 511 [206 P. 134]; Burke v. San Francisco Breweries, Ltd., 21 Cal.App. 198, 201 [131 P. 83]; Megan v. Updike Grain Corp. (C.C.A. 8), 94 F.2d 551, 553; Herne Bay Steamboat Co. *55 v. Hutton [1903], 2 K.B. 683; Leiston Gas Co. v. Leiston Cum Sizewell Urban District Council [1916], 2 K.B. 428; Raner v. Goldberg, 244 N.Y. 438 [155 N.E. 733]; 6 Williston, op. cit. supra, 1939, 1955, 1963; Restatement, Contracts, 288.)
[5] Thus laws or other governmental acts that make performance unprofitable or more difficult or expensive do not excuse the duty to perform a contractual obligation (Sample v. Fresno Flume etc. Co., 129 Cal. 222, 228 [61 P. 1085]; Klauber v. San Diego St. Car Co., 95 Cal. 353 [30 P. 555]; Texas Co. v. Hogarth Shipping Co., 256 U.S. 619, 630 [41 S.Ct. 612, 65 L.Ed. 1123]; Columbus Ry. Power & Light Co. v. Columbus, 249 U.S. 399, 414 [39 S.Ct. 349, 63 L.Ed. 669]; Thomson v. Thomson, 315 Ill. 521, 527 [146 N.E. 451]; Commonwealth v. Bader, 271 Pa. 308, 312 [114 A. 266]; Commonwealth v. Neff, 271 Pa. 312, 314 [114 A. 267]; London & Lancashire Ind. Co. v. Columbiana County, 107 OhioSt. 51, 64 [140 N.E. 672]; see 6 Williston, op. cit. supra, 1955, 1963, pp. 5507-09). [6] It is settled that if parties have contracted with reference to a state of war or have contemplated the risks arising from it, they may not invoke the doctrine of frustration to escape their obligations Northern Pac. Ry. Co. v. American Trading Co., 195 U.S. 439, 467-68 [25 S.Ct. 84, 49 L.Ed. 269]; Primos Chemical Co. v. Fulton Steel Corp. (D.C.N.Y.), 266 F. 945, 948; Krulewitch v. National Importing & Trading Co., 195 App.Div. 544 [186 N.Y.S. 838, 840]; Smith v. Morse, 20 La.Ann. 220, 222; Lithflux Mineral & Chem. Works v. Jordan, 217 Ill.App. 64, 68; Medeiros v. Hill, 8 Bing. 231, 131 Eng.Rep. 390, 392; Bolckow V. & Co. v. Compania Minera de Sierra Minera, 115 L.T.R. [K.B.] 745, 747).
[7] At the time the lease in the present case was executed the National Defense Act (Public Act No. 671 of the 76th Congress [54 Stats. 601], 2A), approved June 28, 1940, authorizing the President to allocate materials and mobilize industry for national defense, had been law for more than a year. The automotive industry was in the process of conversion to supply the needs of our growing mechanized army and to meet lend-laase commitments. Iceland and Greenland had been occupied by the army. Automobile sales were soaring because the public anticipated that production would soon be restricted. These facts were commonly known and it cannot be said that the risk of war and its consequences necessitating restriction of the production and sale of automobiles *56 was so remote a contingency that its risk could not be foreseen by defendant, an experienced automobile dealer. Indeed, the conditions prevailing at the time the lease was executed, and the absence of any provision in the lease contracting against the effect of war, gives rise to the inference that the risk was assumed. Defendant has therefore failed to prove that the possibility of war and its consequences on the production and sale of new automobiles was an unanticipated circumstance wholly outside the contemplation of the parties.
[8] Nor has defendant sustained the burden of proving that the value of the lease has been destroyed. The sale of automobiles was not made impossible or illegal but merely restricted and if governmental regulation does not entirely prohibit the business to be carried on in the leased premises but only limits or restricts it, thereby making it less profitable and more difficult to continue, the lease is not terminated or the lessee excused from further performance (Brown v. Oshiro, supra, p. 194; Davidson v. Goldstein, supra, p. 918; Grace v. Croninger, supra, p. 607; Industrial Development & Land Co. v. Goldschmidt, supra; Burke v. San Francisco Brewing Co., supra, p. 202; First National Bank of New Rochelle v. Fairchester Oil Co., 267 App.Div. 281 [45 N.Y.S.2d 532, 533]; Robitzek Inv. Co., Inc. v. Colonial Beacon Oil Co., 265 App.Div. 749 [40 N.Y.S.2d 819, 824]; Colonial Operating Corp. v. Hannon Sales & Service, Inc., 265 App.Div. 411 [39 N.Y.S.2d 217, 220]; Byrnes v. Balcom, 265 App.Div. 268 [38 N.Y.S.2d 801, 803]; Deibler v. Bernard Bros. Inc., 385 Ill. 610 [53 N.E.2d 450, 453]; Wood v. Bartolino, ___ N.M. ___ [146 P.2d 883, 886, 888, 890]). Defendant may use the premises for the purpose for which they were leased. New automobiles and gasoline continue to be sold. Indeed, defendant testified that he continued to sell new automobiles exclusively at another location in the same county.
Defendant contends that the lease is restrictive and that the government orders therefore destroyed its value and frustrated its purpose. [9] Provisions that prohibit subleasing or other uses than those specified affect the value of a lease and are to be considered in determining whether its purpose has been frustrated or its value destroyed (see Owens, The Effect of the War Upon the Rights and Liabilities of Parties to a Contract, 19 California State Bar Journal 132, 143). It must not be forgotten, however, that "The landlord has not covenanted that the tenant shall have the right to carry on the *57 contemplated business or that the business to which the premises are by their nature or by the terms of the lease restricted shall be profitable enough to enable the tenant to pay the rent but has imposed a condition for his own benefit; and, certainly, unless and until he chooses to take advantage of it, the tenant is not deprived of the use of the premises." (6 Williston, Contracts, op. cit. supra, 1955, p. 5485; see, also, People v. Klopstock, 24 Cal.2d 897, 901 [151 P.2d 641].) [10] In the present lease plaintiffs reserved the rights that defendant should not use the premises for other purposes than those specified in the lease or sublease without plaintiff's written consent. Far from preventing other uses or subleasing they waived these rights, enabling defendant to use the premises for any legitimate purpose and to sublease them to any responsible tenant. This waiver is significant in view of the location of the premises on a main traffic artery in Los Angeles County and their adaptability for many commercial purposes. The value of these rights is attested by the fact that the premises were rented soon after defendants vacated them. It is therefore clear that the governmental restrictions on the sale of new cars have not destroyed the value of the lease. Furthermore, plaintiffs offered to lower the rent if defendant should be unable to operate profitably, and their conduct was at all times fair and cooperative.
[11] The consequences of applying the doctrine of frustration to a leasehold involving less than a total or nearly total destruction of the value of the leased premises would be undesirable. Confusion would result from different decisions purporting to define "substantial" frustration. Litigation would be encouraged by the repudiation of leases when lessees found their businesses less profitable because of the regulations attendant upon a national emergency. Many leases have been affected in varying degrees by the widespread governmental regulations necessitated by war conditions.
The cases that defendant relies upon are consistent with the conclusion reached herein. In Industrial Development & Land Co. v. Goldschmidt, supra, the lease provided that the premises should not be used other than as a saloon. When national prohibition made the sale of alcoholic beverages illegal, the court excused the tenant from further performance on the theory of illegality or impossibility by a change in domestic law. The doctrine of frustration might have been applied, since the purpose for which the property was leased *58 was totally destroyed and there was nothing to show that the value of the lease was not thereby totally destroyed. In the present case the purpose was not destroyed but only restricted, and plaintiffs proved that the lease was valuable to defendant. In Grace v. Croninger, supra, the lease was for the purpose of conducting a "saloon and cigar store and for no other purpose" with provision for subleasing a portion of the premises for bootblack purposes. The monthly rental was $650. It was clear that prohibition destroyed the main purpose of the lease, but since the premises could be used for bootblack and cigar store purposes, the lessee was not excused from his duty to pay the rent. In the present case new automobiles and gasoline may be sold under the lease as executed and any legitimate business may be conducted or the premises may be subleased under the lease as modified by plaintiff's waiver. Colonial Operating Corp. v. Hannon Sales & Service, Inc., 34 N.Y.S.2d 116, was reversed in 265 App.Div. 411 [39 N.Y.S.2d 217, and Signal Land Corp. v. Loecher, 35 N.Y.S.2d 25; Schantz v. American Auto Supply Co., Inc., 178 Misc. 909 [36 N.Y.S.2d 747]; and Canrock Realty Corp. v. Vim Electric Co., Inc., 37 N.Y.S.2d 139, involved government orders that totally destroyed the possibility of selling the products for wich the premises were leased. No case has been cited by defendant or disclosed by research in which an appellate court has excused a lessee from performance of his duty to pay rent when the purpose of the lease has not been totally destroyed or its accomplishment rendered extremely impracticable or where it has been shown that the lease remains valuable to the lessee.
The judgment is affirmed.
Gibson, C.J., Shenk, J., Curtis, J., Edmonds, J., Carter, J., and Schauer, J., concurred.
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10-4814-cr
United States v. Yusuf Abdur-Rahman
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
AMENDED 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 Asummary order@). A party citing a
summary order must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
13th day of March, two thousand thirteen.
PRESENT:
RALPH K. WINTER,
PETER W. HALL,
Circuit Judges,
ALVIN K. HELLERSTEIN,
Senior District Judge.*
_____________________________________________
THE UNITED STATES OF AMERICA,
Appellee,
v. No. 10-4814-cr
YUSUF ABDUR-RAHMAN,
Defendant-Appellant.
______________________________________________
FOR DEFENDANT-APPELLANT: DANIEL MATTHEW PEREZ, Law Offices of Daniel M.
Perez, Newton, New Jersey.
* The Honorable Alvin K. Hellerstein, United States Senior District Judge for the Southern District of New York,
sitting by designation.
FOR APPELLEE: RACHEL P. KOVNER, Justin S. Weddle, of counsel,
Assistant United States Attorneys for Preet Bharara,
United States Attorney for the Southern District of
New York, New York, N.Y.
Appeal from a judgment of the United States District Court for the Southern District of
New York (Pauley, J.). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of conviction entered on November 17, 2010
is AFFIRMED.
A jury found Yusuf Abdur Rahman guilty of executing and attempting to execute a scheme
to defraud Medicaid in violation of 18 U.S.C. § 1347 and 2; committing access device fraud by
using New York State Benefit identification cards issued to others to fraudulently obtain Medicaid
benefits in violation of 18 U.S.C. § 1029(a)(5) and 2; acquiring and obtaining controlled
substances by misrepresentation, fraud, forgery, deception and subterfuge in violation of 21
U.S.C. § 843(a)(3); aggravated identity theft in relation to health care fraud; and access device
fraud in violation of 18 U.S.C. §§ 1028A and 2. Rahman was sentenced to a term of 101 months’
imprisonment. In his counseled brief, Rahman raises three issues for review. He first challenges
the district court’s appointment of counsel despite his request for self-representation in violation of
the Sixth Amendment of the Constitution. Second, he argues that the district court similarly erred
in denying his motion to proceed pro se at sentencing. Third, he further contends that his second
appointed counsel was ineffective in failing to press, on Rahman’s behalf, Rahman’s request for
self-representation. Rahman also filed a pro se brief in which he raises eight additional issues for
review. In a separate opinion filed simultaneously with this order, we address Rahman’s pro se
challenge to the district court’s jury instruction concerning whether health care fraud is a predicate
offense under 18 U.S.C. § 1028A.
We assume the parties’ familiarity with the factual background and issues on appeal,
elaborating only where necessary to explain our decision affirming the judgment of the district
court.
I. Right to Self-representation
A. Before and During Trial
The right to self-representation is unqualified if invoked before the start of trial. U.S. ex
rel. Maldonado v. Denno, 348 F.2d 12, 15 (2d Cir. 1965). This right derives not from statute but
from the United States Constitution. Id. at 15; see also Faretta v. California, 422 U.S. 806 (1975)
(holding that under the Sixth Amendment, the accused is guaranteed the right of electing to
represent himself). A criminal defendant may proceed pro se if he “knowingly, voluntarily, and
unequivocally” waives his right to appointed counsel. Williams v. Bartlett, 44 F.3d 95, 99 (2d
Cir. 1994).
At the time of Rahman’s arrest, Assistant Federal Defender Martin Cohen was assigned to
represent Rahman. During Rahman’s arraignment on May 5, 2009, Rahman asked the court to
replace Cohen with other counsel. The court appointed CJA counsel, Kafahni Nkrumah. One
week later, on May 12, 2009, Rahman wrote a letter to the court asking that Atty. Nkrumah be
replaced because “[he] need[ed] someone older with experience.” During the May 19, 2009 bail
hearing, the district court urged Rahman to give Atty. Nkrumah “a chance” and declined to act on
Rahman’s request at that time. On May 28, 2009, Rahman sent a letter to the court stating that
Nkrumah’s performance was inadequate and moved to proceed pro se.
3
The district court held a conference and, at the suggestion of Atty. Nkrumah, ordered a
competency evaluation of Rahman. On July 20, 2009, Atty. Nkrumah filed a motion to withdraw
as counsel and asked the court to appoint new counsel in his place.
On July 30, 2009, the district court held a hearing to discuss the status of Rahman’s case.
During the hearing, the district court granted Atty. Nkrumah’s motion, held that Rahman was
competent, appointed Charles Hochbaum to represent Rahman, and cautioned Rahman that Atty.
Hochbaum would be his last court-appointed lawyer. Rahman did not object to the appointment
of Hochbaum nor did he reassert his desire to proceed pro se. On appeal, Rahman argues that the
district court erred when it failed to consider his request to proceed pro se and instead appointed
substitute counsel.
Under the circumstances presented we are not persuaded that Rahman’s request was
unequivocal. Although clearly styled as a motion for self-representation, Rahman’s letter in
support of the motion reiterated the same concerns he expressed in his motion to replace Atty.
Nkrumah, i.e., Rahman’s dissatisfaction with the outcome of the bail hearing and his belief that
Atty. Nkrumah lacked the experience necessary to represent Rahman. Those concerns were
further shared with the psychologist evaluating Rahman, to whom Rahman expressed the view that
his first preference was for new counsel rather than proceeding pro se. We recognize that
generally “a defendant is not deemed to have equivocated in his desire for self-representation
merely because he expresses that view in the alternative, simultaneously requests the appointment
of new counsel, or used it as a threat to obtain private counsel,” Williams, 44 F.3d at 100. Here,
however, Rahman’s prior and unresolved motion for new counsel, coupled with his repeated
complaints about Atty. Nkrumah and his expressed wish for substitute counsel, evinced a desire
4
not to represent himself but instead to have the district court appoint new counsel. Compare
Wilson v. Walker, 204 F.3d 33 (2d Cir. 2000) (defendant’s repeated requests to proceed pro se,
notwithstanding the appointment of new counsel, indicated a clear desire to invoke the right to
self-representation); see also LaValle v. Artus, 403 Fed. Appx. 607, 609 (2d Cir. 2010) (summary
order) (request to proceed pro se at trial was not unequivocal where defendant expressed
dissatisfaction with current counsel’s trial strategy, stated that he wished to remain represented by
counsel, and that self-representation was his “last option.”).
Even if Rahman’s request to represent himself was sincere and unequivocal at the time
made, his subsequent statements to the evaluator and his acceptance, without objection, of Atty.
Hochbaum as trial counsel indicated that he was vacillating on the issue or had abandoned his
request altogether. Wilson, 204 F.3d at 37; see also Williams, 44 F.3d at 99–100 (citing Brown v.
Wainwright, 665 F.2d 607, 611 (5th Cir. 1982) (waiver when, after initial request to proceed pro
se, defendant asked counsel to continue representation and then, once again, requested to proceed
pro se on the third day of trial)); United States v. Bennett, 539 F.2d 45 (10th Cir. 1976).
Accordingly, on this record we conclude that Rahman’s request was not clear and unequivocal and
therefore the district court did not err in granting Rahman’s May 12, 2009 motion to replace Atty.
Nkrumah. See United States v. Purnett, 910 F.2d 51, 55 (2d Cir. 1990) (“‘[C]ourts indulge every
reasonable presumption against waiver’ of fundamental constitutional rights[.]”) (quoting Johnson
v. Zerbst, 304 U.S. 458, 464 (1938)); see also United States v. Frazier-El, 204 F.3d 553, 559 (4th
Cir. 2000) (“[W]e must ascribe a constitutional primacy to the right to counsel because this right
serves both the individual and collective good, as opposed to only the individual interests served
by protecting the right of self-representation.” (internal quotation marks omitted)).
5
B. Sentencing
Rahman also asserts that the district court erred in denying his motion for
self-representation with respect to sentencing. It is well accepted that a defendant who exercises
his right to appear pro se is not permitted to complain later about the quality of his own defense or
raise an ineffective assistance of counsel claim. McKaskle v. Wiggins, 465 U.S. 169, 177 n.8
(1984) (citing Faretta, 422 U.S. at 834, n.46). The record reveals that Rahman was unwilling to
waive a claim of ineffective assistance of counsel from the point of self-representation forward.
Accordingly, we find no error with the district court’s denial of Rahman’s motion.
II. Ineffective Assistance of Counsel
Rahman next argues that Atty. Nkrumah provided ineffective assistance of counsel in
moving to withdraw and requesting the appointment of substitute counsel rather than pressing
Rahman’s motion for self-representation. Rahman also challenges Atty. Nkrumah’s suggestion,
in the first instance, that Rahman undergo a competency evaluation. Under the familiar
Strickland standard, Atty. Nkrumah’s request for substitute counsel was not objectively
unreasonable and did not adversely affect the proceedings. Strickland v. Washington, 466 U.S.
668, 688 (1984). Furthermore, we take no issue with the request for a competency hearing, 18
U.S.C. § 4241, and conclude that the district court, in continuing to have Rahman represented by
counsel until the resolution of the competency determination, acted within its discretion. Purnett,
910 F.2d at 54–55.
III. Rahman’s Pro Se Appeal
Rahman, in his pro se brief, raises eight additional issues for review. Rahman argues that
Congress has not authorized cumulative punishment for violating federal health care statutes; all
6
four counts of the indictment are multiplicitous and violate the Fifth Amendment; he was deprived
of his right to a speedy trial; the court lacked subject matter jurisdiction over his case because the
defrauded Medicaid program was not a federal health care program; the district court was biased;
the jury instructions were erroneous; the evidence produced at trial was insufficient to convict on
counts 2 and 4 of the indictment; and the district court abused its discretion in imposing certain
sentencing enhancements.
We review de novo a preserved claim that the charges were multiplicitous. United States
v. Mejia, 545 F.3d 179, 204 (2d Cir. 2008). Multiplicity is found where an indictment “charges in
separate counts two or more crimes, when in law and fact, only one crime has been committed,”
United States v. Handakas, 286 F.3d 92, 97 (2d Cir. 2002) (overruled on other grounds). We
consider “whether each [count] requires proof of a fact which the other does not.” United States
v. Finley, 245 F.3d 199, 205 (2d Cir. 2001) (internal quotation marks omitted); see also
Blockburger v. United States, 284 U.S. 299, 304 (1932). The charges of conviction are not
multiplicitous and do not result in a violation of the Constitution’s double jeopardy clause. The
counts charged in the indictment—health care fraud, access device fraud, and obtaining controlled
substances by fraud—each required proof of at least one fact that the others did not. 18 U.S.C. §
1347; 18 U.S.C. § 1029(a)(5); 21 U.S.C. § 843(a)(3). Nor does the charge of aggravated identity
theft violate the double jeopardy clause because cumulative punishment is authorized for that
crime. See 18 U.S. § 1028A(a)(1) and (c); see also Flores-Figueroa v. United States, 556 U.S.
646, 648 (2009).
Rahman has not identified a Speedy Trial Act violation. We review for abuse of
discretion the district court’s determination that the ends of justice warrant the exclusion of time in
7
the calculation of mandated time frames. United States v. Beech-Nut Nutrition Corp., 871 F.2d
1181, 1197–98 (2d Cir. 1989). Each instance that the district court excluded time, the exclusion
was either consented to or within the court’s discretion upon a finding that the ends of justice were
served by taking such action. That determination is entrusted to the court, not the parties, Parisi
v. United States, 529 F.3d 134, 140 (2d Cir. 2008), and we hold that the district court did not abuse
its discretion in excluding time, notwithstanding Rahman’s objection, to allow for production and
discovery, to resolve the matter of Rahman’s competency, and to enable new defense counsel to
prepare pre-trial motions.
Rahman also challenges the sufficiency of the evidence produced at trial to demonstrate his
guilt on the charges of health care fraud and access device fraud. Upon our independent review of
the trial record, we conclude that there was ample evidence to sustain the jury’s verdict on each
count. See United States v. Gagliardi, 506 F.3d 140, 149–50 (2d Cir. 2007).
We have considered Rahman’s remaining claims regarding his arrest, the district court’s
jurisdiction and alleged bias, and his challenges to the sentence imposed, and we determine that
each is without merit. For the reasons stated above and in the accompanying per curiam opinion,
the judgment of conviction is AFFIRMED.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk
8
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 06-3236
___________
William J. Dominic, *
*
Plaintiff - Appellee, *
* Appeal from the United States
v. * District Court for the Western
* District of Arkansas.
*
DeVilbiss Air Power Company, *
*
Defendant - Appellant. *
___________
Submitted: April 10, 2007
Filed: July 20, 2007
___________
Before MURPHY, BRIGHT, and BENTON, Circuit Judges.
___________
MURPHY, Circuit Judge.
William J. Dominic sued his employer DeVilbiss Air Power Company
(company) for sexual harassment and retaliation in violation of Title VII of the Civil
Rights Act, 42 U.S.C. §§ 2000e et seq., and the Arkansas Civil Rights Act, Ark. Code.
Ann. §§ 16-123-101 et seq. A jury found in favor of Dominic on several claims and
awarded compensatory and punitive damages, and the district court denied the
company’s motion for judgment as a matter of law or new trial. The company
appeals, focusing only on the award of punitive damages. We reverse.
William J. Dominic was hired by DeVilbiss Air Power Company as a cost
accountant in the company's Decatur, Arkansas manufacturing facility in January
2003. The Decatur plant employs 200 permanent full time workers and 110 temporary
employees. Dominic was promoted to accounting manager by early 2004.
Throughout his employment at the company, he was directly supervised by Patricia
J. Fant, controller for the Decatur facility. As accounting manager, Dominic was
Fant's second in command of the accounting department. On Friday, April 30, 2004,
plant manager Chuck Chism overheard Dominic telling another employee that Fant
had made sexual advances toward him. Dominic then stopped Chism and told him
about the incidents. Chism asked Dominic to submit a written description of Fant's
behavior. Dominic submitted a first draft that day and a more detailed report the next
Monday, May 3.
In his written description Dominic claimed that around March 11, 2004, he and
Fant met after work for drinks at a country club. While they were at the club Fant
tried to unzip Dominic's pants and grab his crotch area. About one week later
Dominic, Fant, and other members of the accounting department met for drinks. At
that outing, Fant offered the group the use of her parents' van and her brother's
pornographic movies for a team building trip. Dominic reported that after the rest of
the group left, she asked if he wanted to rent a hotel room so she could tie him up and
attack him. He also stated that Fant brought him coffee, did unrequested favors for
him, stopped by his office, called him up even though she had no business to discuss,
and acted jealous when he spoke to other women.
After Chism reviewed Dominic's claims, he set up a meeting to discuss the
charges. At the meeting Larry Hoover, the company's human resources manager, and
Chism agreed to investigate the charges and Dominic gave them a list of people who
could substantiate his claims. The next day Hoover and Chism met with Fant to
discuss Dominic's allegations. She denied all his claims. She was nevertheless sent
home on paid leave, instructed not to contact anyone at the office, and was to remain
home while the company investigated the charges.
-2-
As part of the company's investigation, Chism and Hoover questioned each
person on Dominic's list of employees who could substantiate his claims as well as all
other workers in the departments headed by Fant and Dominic. Chism and Hoover
were particularly concerned about what they considered the most serious allegations,
that Fant had unzipped Dominic's pants and suggested that they get a hotel room. A
list of questions was prepared by Chism and Hoover to be asked of each interviewee.
These questions included: How is your job going? How would you describe the work
climate in your department? How is your relationship with Patricia Fant? Does the
department socialize outside work? Did you attend an event at a bar with the group
around March 19? Tell us about that experience. Has the group been planning a team
building trip? Have you ever observed any conduct that you thought was
inappropriate in the department? The employees who were interviewed did not
confirm Dominic's allegations, except for his claims that Fant stopped by his desk,
brought him coffee, and sometimes acted jealous when he interacted with other
women. On May 6 Chism and Hoover again met with Dominic at the plant and with
Fant offsite to ask some follow up questions.
Later in the day on May 6, Chism and Hoover also contacted Claude Kelly, a
vice president of Pentair which was the corporate owner of the company. Kelly
oversaw the human resources area for Pentair. After he heard about the results of the
investigation by Chism and Hoover, he traveled to Decatur from his office in Jackson,
Tennessee to discuss the matter with Chism, Hoover, and Dominic. Chism, Hoover,
and Kelly also consulted Pentair's attorney several times to ensure that their
investigation met all legal requirements. Management agreed that there were not
grounds to terminate Fant even though she had acted inappropriately by engaging in
"bar talk" with employees she supervised.
Kelly and Hoover met again with Dominic on May 10. They told him that their
investigation had not substantiated the most serious allegations and that Fant would
be returning to work. Although Fant would remain in her position as Dominic's
supervisor, they explained that the accounting department would be required to meet
-3-
daily as a group to minimize one on one communication between Fant and Dominic.
They encouraged Dominic to report any incidents of retaliation and gave him the rest
of the day off with pay. Kelly then met with the employees who reported to Fant and
Dominic and asked them to make it as easy as possible for the two to work together.
Kelly and Hoover also met with Fant on May 10; she again denied the
allegations. Kelly told Fant she would be allowed to return to work, but that she had
acted unprofessionally and should refrain from socializing with employees in bars
after work. They warned her that she would be terminated if she retaliated against
Dominic. They also gave Fant a letter explaining the conditions of her return and
listing specific examples of what could be considered retaliation. These examples
included dramatic changes to Dominic's work assignments, threats of termination, and
inappropriate discipline of him. Fant signed the letter and Chism followed up with
three members of the department on May 27 to gauge the effectiveness of the daily
meetings and to ask them if they had noticed any behavior by Fant toward Dominic
that could have been retaliatory. None of the employees reported any inappropriate
behavior. Dominic did not complain of any further sexual harassment after the
company's investigation.
Soon after Dominic and Fant began working together again, Dominic sent
management a series of emails alleging retaliation by Fant. He claimed Fant criticized
his work publicly, gave him too much work, assigned him busywork, tried to
sabotage his work, and gave him false instructions. He also alleged that Fant had
given him an order that would have caused him to violate the Sarbanes-Oxley Act;
he did not give any details about her request or explain why it would be illegal,
however. Dominic complained that someone had deleted work after he completed it,
and he began asking for technical support to backup his work. Chism and Hoover met
with Dominic on May 14, the same day they received his first email alleging
retaliation. They asked him for more details because of the conclusory nature of some
of his claims. Dominic refused to provide further details, claiming attorney client
privilege. After this meeting, management spoke to Fant about Dominic's complaints.
-4-
She denied all allegations and submitted a written memorandum on May 15
responding to each of Dominic's allegations.
On May 20 Dominic sent another email alleging that Fant had been rude and
obnoxious toward him, had visited him in his cubicle for 15-30 minutes which had
made him uncomfortable, and had interrupted one of his telephone calls. He claimed
that Fant embarrassed him in front of coworkers by publicly criticizing his work,
harassed him about a trainee's work, and told lies about him to other employees. He
also complained that Hoover had raised his voice in a recent meeting. Chism and
Kelly interviewed other employees in the departments of Fant and Dominic to see if
they had noticed any retaliation and reviewed Fant's written response denying
Dominic's claims of retaliation. They concluded that Dominic disagreed with Fant's
management style, but that Fant had not been retaliating against him. They reported
their findings to Dominic and asked him for more details about Fant's retaliation, but
he did not provide them. Dominic then wrote a letter of complaint to the chief
financial officer of Pentair, Tom DeWitt, alleging its subsidiary was using irregular
accounting practices. An investigation into these particular allegations did not verify
Dominic's claims.
In late June 2004 Pentair hired the law firm of Leonard, Street, and Deinard to
review the company's own internal investigation and to conduct an additional
investigation into Dominic's allegations of sexual harassment and retaliation. The
record reflects that Leonard, Street, and Deinard is a law firm headquartered in
Minnesota with extensive experience with employment discrimination claims. The
firm attorneys undertook their investigation by reviewing the files on record, asking
Fant to provide another response to Dominic's allegations of retaliation, and
conducting additional employee interviews. Their investigation concluded that the
company's investigation had been adequate, that Dominic's harassment complaint did
not show he had experienced a hostile work environment, and that there was no
evidence of unlawful retaliation.
-5-
Kelly wrote a letter to Dominic informing him of the results of the study by the
outside firm, and directed Hoover to set up sexual harassment training, to arrange
mandatory supervisor training classes for Fant, and to speak with Fant daily about her
communications with Dominic. Since Dominic objected to further contact with Kelly,
management made arrangements for him to report to a human resources manager in
a separate subsidiary of Pentair who had no previous association with the plant.
From late June until August, Dominic was placed on special paid assignment
and worked at home with full pay. Tom DeWitt wrote a letter to Dominic on July 27,
explaining that his home assignment would end and that he would be returning to the
office in early August. DeWitt also told Dominic that Fant would be required to
transmit all of his assignments via email and that these emails would be monitored by
John Uitz, the plant's previous comptroller, to ensure that no retaliation occurred.
Dominic returned to work on August 3 and attended a sexual harassment
training session required of all salaried employees. He claims that Chism commented
during the session about his "dislike of sexual harassment laws" and that Chism used
hypotheticals similar to Dominic's own experience as examples of discrimination. He
claims that after the session employees made jokes about it, grabbed each other's
breasts, performed pelvic thrusts against one another, and simulated masturbation.
Dominic also complains that upon his return he was required to meet impossible
deadlines. Dominic was not in the office after August 5 until December due to
vacation, medical leave, and another home work schedule.
Dominic met with psychiatrist Dr. Stanley Rest on August 5. Dr. Rest
recommended he seek a transfer or leave the company. Dominic's attorney sent the
company a letter on November 3 requesting a transfer to a different plant. Kelly
replied two days later that the company's accounting department was too small to be
able to accommodate Dominic's transfer request. At that time the company was in a
hiring freeze and was laying off hundreds of employees. Kelly asked Dominic for
other suggestions that would assist him in returning to work. On November 30,
-6-
Dominic's attorney submitted a list of 26 written demands, including a request that
Fant be removed as his supervisor, that he not be required to attend the department's
daily meetings, that he would no longer be required to report or have personal contact
with Chism, that several supervisors be required to "stay away from [him] altogether,"
and that neither Fant nor Chism be allowed to modify his work. The company denied
several of these demands after determining that they were unreasonable and could not
be met, but it sent Dominic a letter stating that communications between Fant and him
would continue to be monitored, that he could address any complaints to the employee
responsible for the monitoring, and that an alternative human resources contact had
been arranged for him. Dominic resigned on December 11.
Dominic later filed this action asserting sexual harassment and retaliation in
violation of Title VII of the Civil Rights Act, 42 U.S.C. §§ 2000e et seq., and the
Arkansas Civil Rights Act, Ark. Code. Ann. §§ 16-123-101 et seq. His complaint also
included state law claims for constructive discharge, negligent hiring, and negligent
supervision. A jury trial commenced at the end of November 2005. The company
moved for judgment as a matter of law at the close of the evidence, and the district
court granted it as to the negligent hiring claim but denied it in all other respects. The
jury returned a verdict in Dominic's favor for his claims for sexual harassment,
retaliation, and negligent supervision, but found for the company on the wrongful
discharge claim. It awarded Dominic $50,000 in compensatory damages on the
negligent supervision claim, $50,000 in compensatory damages on the sexual
harassment and retaliation claims, and $13,000 in lost wages and benefits on the
retaliation claim. The jury additionally awarded $250,000 in punitive damages based
solely on the Title VII sexual harassment and retaliation claims. After the district
court determined that Dominic should recover $50,964.51 in attorney fees, judgment
was entered in the total amount of $413,964.51.
The company filed a post trial motion for judgment as a matter of law or
alternatively for a new trial or remittitur. One of the errors asserted in the motion was
the submission of the issue of punitive damages to the jury. The court denied the
-7-
motion on August 4, 2006. The company appeals only the punitive damages award,
arguing that the district court should not have submitted the question of punitive
damages to the jury, particularly in light of its extensive good faith efforts to comply
with Title VII.
We review the denial of a motion for judgment as a matter of law de novo,
applying the same standard as the district court. Voeltz v. Arctic Cat, Inc., 406 F.3d
1047, 1050 (8th Cir. 2005). The motion should be granted if the responding party has
been fully heard on an issue and a reasonable jury would not have a legally sufficient
basis to find for that party on that issue. Fed. R. Civ. P. 50(a)(1). The evidence is
viewed in the light most favorable to the jury verdict which should not lightly be set
aside. Canny v. Dr. Pepper/Seven-Up Bottling Group, Inc., 439 F.3d 894, 900 (8th
Cir. 2006) (citation omitted). We reverse only when the evidence is not susceptible
to any reasonable interpretation supporting the verdict. Warren v. Prejean, 301 F.3d
893, 900 (8th Cir 2002).
Punitive damages are appropriate for victims of Title VII if the plaintiff has
shown that the employer engaged in intentional discrimination and acted with “malice
or with reckless indifference" to the plaintiff’s federally protected rights. 42 U.S.C.
§ 1981 a(b)(1); Kolstad v. American Dental Ass'n, 527 U.S. 526, 535 (1999). Malice
and reckless indifference can be shown by demonstrating that an employer
discriminated “in the face of a perceived risk that its actions will violate federal law.”
Id. at 536. This standard refers to the employer's state of mind regarding its
knowledge that it "may be acting in violation of federal law, not its awareness that it
is engaging in discrimination." Id. at 535. Even if the plaintiff can show that
individuals in the company demonstrated the requisite intent, punitive damages are
only appropriate if such intent can be imputed to the employer. Id. at 539. When an
employer promptly and conscientiously responds to complaints of harassment or
discrimination with good faith efforts, punitive damages are not warranted. Id. at 545-
46.
-8-
Dominic claims that the company did not make good faith efforts because the
investigations it initiated were cursory and biased. Examples of cursory or biased
investigations may be seen in Williams v. ConAgra Poultry Co., 378 F.3d 790, 796
(8th Cir. 2004) (employer terminated plaintiff instead of offender and took no action
despite repeated complaints); MacGregor v. Mallinckrodt, Inc., 373 F.3d 923 (8th Cir.
2004) (employer conducted only minimal investigation, issued no reprimand to
offender, and failed to communicate results of investigation to plaintiff); and Ogden
v. Wax Works, 214 F.3d 999 (8th Cir. 2000) (employer conducted "cursory
investigation" focused on plaintiff's performance rather than offender's behavior).
Here, the company had a zero tolerance sexual harassment policy, and it sponsored a
total of four investigations after Dominic made his complaint. None of the
investigations revealed evidence that would have justified firing Fant. In their
interviews, coworkers of Fant and Dominic were asked neutral questions which were
open ended and not suggestive. The company also hired outside employment law
specialists to look into whether its internal investigations had been proper and
thorough and contracted with them to investigate Dominic's claims further. The
outside specialists determined that the company's investigations had been thorough
and confirmed the company's conclusions.
Dominic argues that it was unreasonable for Fant to remain as his supervisor.
The company responds that the small size of the plant and of the accounting
department made it impossible to accommodate his request for another supervisor
unless it were to terminate Fant. Terminating her without more evidence would have
exposed the company to legal action by her. Moreover, there were no further
complaints by Dominic of any sexual harassment after the company took its actions
in response to his initial complaint.
The company did far more in response to Dominic's complaint than the
defendants in the cases cited by Dominic. In Williams, MacGregor, and Ogden, the
defendants had ignored complaints, done cursory investigations, and focused their
responses on the plaintiff's wrongdoing instead of the behavior of the alleged
-9-
offenders. The company's response here was more like that of the employer in Carter
v. The Kansas City Southern Railway Co., 456 F.3d 841 (8th Cir. 2006). In Carter,
the employer had an antidiscrimination policy, conducted an immediate investigation
once it was notified of harassment claims, and terminated the primary offender when
the charges were substantiated. Dominic seeks to distinguish Carter on the basis that
the offender in that case was ultimately fired. In contrast to the Carter employer, the
company here did not uncover any information that corroborated Dominic's serious
claims or provide it grounds to terminate Fant. As in Carter, it would be "illogical to
ascribe malice or reckless indifference" to a company which responded appropriately
to charges of discrimination. Id. at 847. We conclude that Dominic has not
demonstrated that the company exhibited malice or reckless indifference toward their
obligations under federal law in response his complaints of sexual harassment.
Dominic also contends that the company was reckless and malicious in
responding to his claims of retaliation, but the record shows that it attempted to
prevent retaliation by giving Fant a written warning explicitly listing examples of
retaliation and explaining that she would be terminated if she took any of those actions
against Dominic. The company quickly investigated and responded when Dominic
complained about retaliation. It met with Fant to get her response to his allegations
and limited direct communication between the two by requiring daily departmental
meetings. Chism later interviewed Dominic's coworkers to gauge the effectiveness
of these meetings. The company required Fant to put all of her assignments for
Dominic in writing and assigned an employee who had once held Fant's job to monitor
the assignments. Kelly directed Hoover to arrange for Fant to attend mandatory
supervisor training classes and to speak to Fant daily to monitor her interactions with
Dominic. Dominic was encouraged to report any incidents of retaliation, was given
two special paid assignments that allowed him to work from home, and was provided
an alternative human resources contact after he said he did not want to continue
dealing with Kelly.
-10-
Chism, Hoover, and Kelly interviewed members of the departments supervised
by Fant and Dominic several times as part of the investigation into his allegations and
conducted follow up interviews with them to ensure that no retaliation occurred.
When Chism, Hoover, and Kelly determined that some of Dominic's retaliation claims
were conclusory, he was given the opportunity to furnish more information. At least
one member of management reported the results of each investigation to Dominic and
explained what actions would be taken to remedy his complaints and prevent future
ones. After explaining why his request for a transfer could not be accommodated,
Dominic was asked for other suggestions to assist him in returning to the office; he
responded with a list of 26 demands.
Dominic urges that punitive damages were warranted because Fant, Chism, and
Kelly all exhibited malice and reckless indifference and their states of mind should be
imputed to the company. Malice or reckless indifference exhibited by employees
working in a managerial capacity can be imputed to the employer if they were "acting
in the scope of their employment." Kolstad, 527 U.S. at 541 (citing Restatement
(Second) of Torts, § 909). An employer cannot be vicariously liable, however, for
"discriminatory employment decisions of managerial agents where those decisions are
contrary to the employer's good-faith efforts to comply with Title VII." Id. at 545.
Dominic argues that Fant's behavior after being warned against retaliation is evidence
of malice and reckless indifference toward federal sexual harassment law, as are
Chism's comment during the sexual harassment training and Kelly's lack of response
to his complaints and unwillingness to transfer him. Chism and Kelly's extensive
efforts to respond to Dominic's complaint belie malice or reckless indifference on their
part, and the company's good faith efforts to remedy Dominic's complaints of sexual
harassment and retaliation by Fant would defeat any imputation of liability for her
conduct. See id. at 541.
We conclude the company made sufficient good faith efforts regarding
Dominic's claims to make punitive damages inappropriate. See id., see also Carter,
456 F.3d at 847-48. The company had a formal zero tolerance antiharassment policy,
-11-
and it launched thorough investigations in response to Dominic's complaints about
sexual harassment, retaliation, and accounting irregularity. Plant management
consulted with the company's human resources experts, Hoover at the Decatur facility
and Kelly at corporate headquarters. Hoover and Chism drew up a set of neutral
questions that was used in their first internal investigation. They consulted with
counsel about the sufficiency and efficacy of their investigations. Although the
investigations did not substantiate most of Dominic's claims, the company minimized
communication between Fant and Dominic, kept a written record of those
communications, granted Dominic's request to report to a human resources manager
in a separate subsidiary, and offered him several accommodations, including an at
home work schedule for two separate periods. Kelly also directed Hoover to require
Fant to participate in a supervisor training session and to organize sexual harassment
training for all salaried employees.
In sum, the company demonstrated good faith efforts to respond to Dominic's
complaints, to prevent sexual harassment and retaliation, and to fulfill its obligations
under Title VII. We conclude that on this record punitive damages should not have
been submitted to the jury.
Accordingly, we reverse and remand to the district court for modification of the
judgment consistent with this opinion.
_________________________________
-12-
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-7934
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
SHERMAN EUGENE VAUGHN,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:06-cr-00067-CMH-1)
Submitted: December 9, 2008 Decided: December 22, 2008
Before WILKINSON, MICHAEL, and AGEE, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Sherman Eugene Vaughn, Appellant Pro Se. Tracy Doherty-
McCormick, Daniel Joseph Grooms, III, Assistant United States
Attorneys, Stephen Andrew Sola, Special Assistant United States
Attorney, Alexandria, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Sherman Eugene Vaughn appeals from the district
court’s order denying his motion for reduction of sentence
pursuant to 18 U.S.C. § 3582(c) (2006). We have reviewed the
record and find no reversible error. Accordingly, we affirm for
the reasons stated by the district court. United States v.
Vaughn, No. 1:06-cr-00067-CMH-1 (E.D. Va. filed Aug. 25, 2008;
entered Aug. 26, 2008). We deny Vaughn’s motion for a stay
pending appeal and his motion to remand this case to the
district court. We dispense with oral argument because the
facts and legal contentions are adequately presented in the
materials before the court and argument would not aid the
decisional process.
AFFIRMED
2
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448 F.2d 774
UNITED STATES of America, Appellee,v.James FOYE, Appellant.
No. 1102, Docket 71-1220.
United States Court of Appeals,Second Circuit.
Argued Aug. 13, 1971.Decided Sept. 21, 1971.
Louis R. Rosenthal, Brooklyn, N. Y., for defendant-appellant.
David G. Trager, Asst. U. S. Atty. (Robert A. Morse, U. S. Atty. for Eastern District of New York, Peter R. Schlam, Asst. U. S. Atty., on the brief), for plaintiff-appellee.
Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges.
PER CURIAM:
1
After a trial before a jury in the United States District Court for the Eastern District of New York, Leo F. Rayfiel, J., James Foye appeals from a conviction of the crime of bank robbery in violation of 18 U.S.C. Secs. 2113(a), (d) and 2, for which he received a sentence of 15 years. The appeal raises only the issue whether Foye's oral statements were improperly admitted against him. Appellant argues that he was not afforded "appropriate safeguards to insure that all statements made were the product of free choice." However, it is quite clear that he was fully advised of his constitutional rights before he made the statements to which he objects. We would have affirmed from the bench were it not for the fact that the minutes of the pretrial suppression hearing were unaccountably never transcribed. Now that we have received the minutes, our earlier impression based upon what we had been told they contained is only confirmed.
2
Judgment affirmed.
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408 F.Supp. 842 (1976)
Regina J. TWARDESKY
v.
Caspar WEINBERGER, Secretary of the Department of Health, Education and Welfare.
Civ. A. No. 75-394.
United States District Court, W. D. Pennsylvania.
January 14, 1976.
*843 Simon B. John, Uniontown, Pa., for plaintiff.
Craig R. McKay, Asst. U. S. Atty., for the Secretary of Health, Education and Welfare.
MEMORANDUM AND ORDER
WILLSON, Senior District Judge.
This action is pursuant to 42 U.S.C.A. § 405(g), seeking review of a final decision of the Secretary of Health, Education and Welfare, which held that the plaintiff was not entitled to a period of disability or disability insurance benefits under the Social Security Act.
Both parties have filed a motion for summary judgment pursuant to Rule 56. Counsel have been heard in oral argument and briefs have been submitted. The only issue to be decided is whether the decision of the administrative law judge, which became the final decision of the Secretary, was supported by substantial evidence.
Plaintiff filed an application for a period of disability and for disability insurance benefits on October 30, 1973, alleging that she became unable to work on August 3, 1973, at age 47. The application was denied initially and upon reconsideration by the Bureau of Disability Insurance of the Social Security Administration, after the Pennsylvania State Agency, upon evaluation of the evidence by a physician and a disability examiner, had found that plaintiff was not under a disability. The administrative law judge, before whom plaintiff, her attorney and a vocational expert appeared, considered the case de novo, and on October 31, 1974, found that plaintiff was not under a disability. This decision became the final decision of the Secretary when the Appeals Council approved the decision on February 5, 1975.
The basic facts, adduced from the testimony and evidence before the administrative law judge, are not in dispute. Plaintiff was born on February 25, 1926, is unmarried and has an eighth grade education. She presently lives with her sister and brother-in-law next door to her married daughter. Other than part time work as a clerk in a store, plaintiff's sole occupation for thirty years has been as a presser in dry cleaning plants. Her job consisted of operating a pressing machine and other types of irons, carrying bundles of clothing and hanging the pressed clothes on a line.
The records of Uniontown Hospital show plaintiff was admitted for pelvic surgery on January 8, 1973. On January 9, 1973, Dr. James G. Zaidan, a general surgeon who had been plaintiff's personal physician since 1956, performed a repair of a large cystocele, a total abdominal hysterectomy and release of intestinal adhesions. Shortly afterward, plaintiff experienced a left lung atelectasis and was placed in the intensive care unit. Her condition improved and by January 24, 1973, she had recovered sufficiently to be discharged in good condition. *844 Plaintiff was able to return to work on April 16th and continued to work until August 3rd to have hernia surgery. On August 6, 1973, plaintiff was readmitted for repair of an incisional hernia which had developed in her lower abdomen. Dr. Zaidan operated on August 9th and plaintiff made an uneventful recovery. Chest x-rays showed her lungs were clear of any active disease. Plaintiff was discharged on August 22, 1973, in good condition. She has not returned to work since that time.
Dr. Zaidan reported on November 15, 1973, that plaintiff was improving but unable to work for fear of recurrence of the hernia. He noted that she had a history of Grave's Disease (goiter) which had been treated with radioactive iodine. He considered her a poor risk for further surgery and indicated that heavy lifting, prolonged standing and "practically any kind of job would be detrimental." In a report dated April 6, 1974, Dr. Zaidan related the same general information, but, in addition, stated plaintiff's thyroid condition was under control. In a letter dated August 28, 1974, Dr. Zaidan listed some of plaintiff's medical history and concluded by stating that he felt she would not be a good risk for surgery due to previous complications and he felt she was totally disabled. No objective findings accompanied this opinion. In a similar letter, dated October 8, 1974, Dr. Zaidan again cited some of plaintiff's medical history, adding that she also had a chronic lung condition and chronic cough. He repeated his opinion that plaintiff was completely disabled.
Plaintiff also testified that she gets weak in her knees if she stands too long and experiences pain and numbness in her side if she sits too long. The pain and numbness can be relieved only if she puts ice on it or gets up and moves about. When plaintiff turns to the right she gets a cramp across her chest and back. She also experiences pressure in the back of her head, which is only relieved when she lies down, and her stomach swells every day.
Her daily activities consist of washing the dishes, making her bed, straightening up the bathroom, and folding the laundry. She owns a car but only drives when necessary. She goes shopping with members of her family but carries nothing heavier than a loaf of bread. Plaintiff goes to church about once a month and occasionally babysits for her daughter next door provided that her sister is at home in case she needs assistance with an emergency. Plaintiff sees her physician about every six months but calls him more often if necessary. Plaintiff estimates that she can stand for about an hour and sit for about one-half hour without discomfort.
Noel A. Plummer, Ph. D., a vocational expert, appeared at the hearing by request of the administrative law judge. He was asked if there was any substantial gainful employment in plaintiff's area that she could perform, assuming she could do no heavy lifting or prolonged standing, but could do sedentary work. He testified there were such jobs in the area in substantial numbers and cited such work as painting or applying decals to dinnerware, ticket seller at a movie or parking lot, garment examiner and merchandise marker. He described these jobs as sedentary, permitting alternate sitting and standing. However, Dr. Plummer then testified that assuming plaintiff's entire symptomatology as she described it in her testimony and considering her age, education and work background he believed that she would not be able to engage in any substantial gainful work. He went on to say that the recurrence of her symptomatology and the things that are required for these to be relieved are such that she would not be able to stay at a given job for any considerable length of time. On top of that, the prospective employer, knowing her medical history and prospective operation, would be unlikely to hire her.
Upon viewing the entire record, the Secretary found that the plaintiff's impairments, neither singly nor in combination, are sufficiently severe to render her *845 disabled within the meaning of the Act. The Secretary further found that plaintiff retained the capacity to engage in lighter, sedentary work suggested by the vocational expert, all of which exist in significant numbers in the region of plaintiff's residence; consequently, plaintiff's claim was denied.
The duty of this Court is to determine whether there was substantial evidence in the record to support the finding of the Secretary that plaintiff retained the residual functional capacity to engage in substantial gainful employment. The test for disability is principally a two-step process: (1) a determination of the extent of the physical or mental impairment and (2) a determination whether that impairment results in an inability to engage in any substantial gainful activity. Hodson v. Celebrezze, 312 F.2d 260 (3rd Cir. 1963).
In his decision, the Secretary concedes that plaintiff suffers from an impairment. There is no doubt that plaintiff suffers from some pain and discomfort and that she has certain physical limitations. The Secretary agreed that she is unable to return to her former work in the cleaning plant, which requires a fair amount of strenuous physical exertion. Nevertheless, the Secretary found that with plaintiff's admitted capabilities, together with her physician's advice, seem to point toward sedentary work.
After a careful review of the entire record, this Court is unable to find that the Secretary's decision is supported by substantial evidence. This determination is compelled by a finding that the Secretary improperly evaluated the plaintiff's testimony, gave little or no weight to plaintiff's subjective symptomatology and gave little weight or credence to the uncontradicted reports of the expert witnesses, Dr. Zaidan and Dr. Plummer.
The Secretary found that it was "significant" that plaintiff does operate a car, does light household tasks and "seems to lead a rather active life, according to her own testimony." Plaintiff did testify that she does own a car, but also stated that she does not drive very often and then only when she has to. She does not want to take a risk and get involved in an accident, especially considering her problem turning to her right. The household chores she completes, making her bed, washing the dishes, straightening up the bathroom and folding the laundry, can only be considered very light tasks. None of these tasks require a long period of time to complete and, if she did feel pain or discomfort, she can stop working and perform the chore later. As to an active life, plaintiff testified she cannot walk further than around the house or the length of the street. She does go to church once a month but then she still feels discomfort even though the services only take one half an hour. Miss Twardesky only goes shopping with relatives accompanying her and then only carries a package as light as a loaf of bread. She does not even babysit her grandchildren next door unless her sister is also immediately available.
This Court must agree with plaintiff's contention that the Secretary disregarded or glossed over plaintiff's testimony detailing her symptomatology. In the case of Brittel v. Richardson, 441 F.2d 1193, 1195 (3rd Cir. 1971), where the plaintiff had testified to symptoms which were real to her but unaccompanied by objective medical data, the Court said:
"Symptoms which are real to the claimant, although unaccompanied by objective medical data, may support a claim for disability benefits, providing, of course, the claimant satisfies the requisite burden of proof. . . . Since the Secretary must evaluate the evidence in relation to the particular individual seeking benefits, where there are several illnesses suffered simultaneously by the claimant, the combined effect of the impairment must be considered before the Secretary denies the payment of disability benefits."
The Court of Appeals for the Third Circuit reiterated the duty of the Secretary to evaluate the evidence of subjective *846 symptomatology in Baerga v. Richardson, 500 F.2d 309, 312 (1974), wherein the Court stated:
"As fact finder he has the right to reject their testimony entirely, but failure to indicate rejection could lead to a conclusion that he neglected to consider it at all. `In addition to objective medical facts and expert medical opinions, the Hearing Examiner must consider the claimant's subjective evidence of pain and disability, as corroborated by family and neighbors; and all of these factors must be viewed against the applicant's age, educational background and work experience.' Mode v. Celebrezze, 319 F.2d 135, 136 (4th Cir. 1966). Pain, in itself, may be a disabling condition, Marunich v. Richardson, 335 F.Supp. 870 (W.D.Pa.1971), and the present record includes medical data which would not contradict, indeed, would support plaintiff's complaints of pain."
Although Dr. Zaidan's statement that plaintiff was totally disabled is not determinative of the ultimate issue, his opinion, unaccompanied as it was by specific and complete clinical findings, is entitled to great weight. That is especially true here where he has been treating plaintiff since 1956 and is fully aware of her medical history and her complaints. The Secretary did recognize the doctor's proscription on heavy lifting and prolonged standing as being valid. However, the Secretary disregarded and did not evaluate the reasons for Dr. Zaidan's opinion that plaintiff was totally disabled and that any type of job would be detrimental. His worry was the fear of recurrence of the ventral herniae and the fact that she was a poor surgical risk.
Finally, what is most damaging to the Secretary's position is his failure to evaluate the testimony of Dr. Plummer. The Secretary zeroed in on only the response to the question which assumed plaintiff could do sedentary work. Given that assumption, Dr. Plummer listed several jobs in the area of plaintiff's residence. However, when given the assumption of plaintiff's symptomatology as she described it in her testimony and considering her age, education and work background, he believed that she would not be able to engage in any substantial gainful work. He stated that a prospective employer knowing her medical history and prospective operation would be unlikely to hire her.
This Court is mindful of the question Judge Biggs posed in Hodson v. Celebrezze, supra at 264:
"[W]hat employment opportunities are there for a man who can only do what applicant can do? Mere theoretical ability to engage in substantial gainful activity is not enough if no reasonable opportunity for this is available."
In this case, upon viewing the entire record, it is clear that there is no reasonable opportunity available for plaintiff to engage in substantial gainful employment. Plaintiff has sustained her burden of proof. Her motion for summary judgment will accordingly be granted. The Secretary's motion for summary judgment must be denied. An appropriate order will be entered.
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[Cite as State v. McLemore, 2011-Ohio-1980.]
IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO
STATE OF OHIO :
Plaintiff-Appellee : C.A. CASE NO. 24211
v. : T.C. NO. 09CR3836
DEANDREA McLEMORE : 2011-Ohio-243
Defendant-Appellant :
:
..........
DECISION AND ENTRY
Rendered on the 18th day of April , 2011.
..........
JOHNNA M. SHIA, Atty. Reg. No. 0067685, Assistant Prosecuting Attorney, 301 W. Third
Street, 5th Floor, Dayton, Ohio 45422
Attorney for Plaintiff-Appellee
PAUL D. GILBERT, Atty. Reg. No. 0010129, 120 W. Second Street, Suite 503, Dayton, Ohio
45402
Attorney for Defendant-Appellant
..........
PER CURIAM:
{¶ 1} Deandrea McLemore has filed a Motion for Reconsideration of our opinion in this
case, which was rendered on January 21, 2011. McLemore claims that our opinion ignored
statutory and case law, inadequately distinguished a case from another appellate district, and
2
improperly concluded that the exclusionary rule does not apply to situations in which a defendant
is unlawfully arrested for a misdemeanor.
{¶ 2} “The test generally applied upon the filing of a motion for reconsideration in the
court of appeals is whether the motion calls to the attention of the court an obvious error in its
decision, or raises an issue for consideration that was either not considered at all or was not fully
considered by the court when it should have been.” State v. Bradley, Champaign App. No.
06CA31, 2008-Ohio-720, ¶2, quoting Columbus v. Hodge (1987), 37 Ohio App.3d 68.
{¶ 3} First, McLemore contends that one sentence in our opinion “contravenes the
entire history of the case law requiring that [a misdemeanor] offense be committed in the
officer’s presence” for an arrest to be lawful. As we discussed more fully in our opinion, the
offense of trespass requires that one knowingly enter or remain on the premises of another, the
use of which is restricted, when he knows that he is restricted from doing so (or is reckless in that
regard) or that one recklessly enter or remain on the premises of another after being notified that
he is not authorized to do so. R.C. 2911.21(A)(2) and (3). In McLemore’s case, there was no
question that the police officers had observed him on the premises (the BP gas station parking
lot); the question was whether McLemore knew he should not be on the premises or had been
reckless in that regard. The police officers relied on statements from an employee and from the
owner of the station in reaching their conclusion that he had been previously trespassed from the
property.
{¶ 4} We did not conclude, as McLemore suggests, that the officers did not need to
observe the misdemeanor offense; we simply concluded that the officers could gather and rely on
information from the property owner or his representatives in forming their belief that he knew
3
he was restricted from being on the property or had been notified that he was not authorized to
enter (and the officers’ reasonable belief that the offense was being committed in their presence).
In other words, police officers can reasonably rely on representations by property owners or
their employees as to who is allowed to be on the property. This conclusion does not
“contravene the entire history” of the rule that a misdemeanor must be committed in an officer’s
presence in order to make a lawful arrest for such an offense.
{¶ 5} Second, McLemore contends that our conclusion that the facts of a case on which
he relied were distinguishable was “without foundation.” We thoroughly discussed State v.
Dillon, Cuyahoga App. No. 84607, 2005-Ohio-1016, in our opinion, including our basis for
concluding that it did not compel the outcome advocated by McLemore in this case.
McLemore’s disagreement with our consideration or holding is not grounds for reconsideration.
{¶ 6} Third, McLemore asserts that our “ruling” that “the exclusionary rule need not be
applied to statutory violations falling short of constitutional violations, such as R.C. 2935.03’s
prohibition of arrest for a misdemeanor that did not occur in the officer’s presence,” contradicts
the Supreme Court of Ohio’s holding in State v. Brown, 99 Ohio St.3d 323, 2003-Ohio-3931.
{¶ 7} In Brown, the Supreme Court held that Section 14, Article 1 of the Ohio
Constitution provides greater protection than the Fourth Amendment to the United States
Constitution against warrantless arrests for minor misdemeanors, which are not jailable offenses.
The Supreme Court reasoned that the government’s interests in making a full custodial arrest for
a minor misdemeanor offense are minimal and are outweighed by the serious intrusion upon a
person’s liberty and privacy that result from an arrest. Id. at ¶19, 22. The Supreme Court has
not extended this rationale to all misdemeanors, and we decline to do so. Moreover, this
4
“ruling” in our opinion was dicta, because we found that McLemore’s offense was committed in
the officers’ presence.
{¶ 8} McLemore’s Motion for Reconsideration is OVERRULED.
{¶ 9} IT IS SO ORDERED.
THOMAS J. GRADY, Presiding Judge
MIKE FAIN, Judge
JEFFREY E. FROELICH, Judge
Copies mailed to:
Johnna M. Shia
Paul D. Gilbert
Hon. Gregory F. Singer
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STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
August 18, 2016
Plaintiff-Appellee,
v No. 325731
Wayne Circuit Court
DARRELLE BALLARD, LC No. 13-011131-FC
Defendant-Appellant.
Before: MURPHY, P.J., and STEPHENS and BOONSTRA, JJ.
PER CURIAM.
Defendant appeals by right his conviction, after a bench trial, of armed robbery,
MCL 750.529, and the trial court’s denial of his motion for a new trial. The trial court sentenced
defendant to 27 months to 6 years’ imprisonment. We reverse the trial court’s denial of
defendant’s motion, vacate defendant’s conviction, and remand for further proceedings.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
This case arises from an armed robbery that occurred at a gas station in Detroit. After the
gas station attendant and manager identified defendant as the masked robber, he was arrested and
charged with armed robbery. At trial, the victim of the robbery, Glenn Belcher, and the gas
station attendant, Taha Al-Rohimi (sometimes referred to in the record as “Al-Rohaimi”),
identified defendant as the perpetrator.1 Additionally, a surveillance video that captured the
robbery was admitted into evidence at trial. The video showed that the robber had a limp. Based
on the robber’s limp as shown in the video, the gas station manager, Khalel Saad, who had not
witnessed the robbery, also identified defendant as the robber depicted in the video. Defendant
presented a mistaken identity defense at trial. Defendant, his ex-girlfriend, and his mother
testified that defendant was home at the time of the robbery and that, while defendant had a limp
due to a right leg amputation, his limp was different than the perpetrator’s limp. No physical
1
Al-Rohimi testified that defendant was a frequent customer of the gas station, that both
defendant and the robber walked with a limp, and that the robber fled in the direction of
defendant’s home.
-1-
evidence was introduced linking defendant to the crime. The trial court found the eyewitness
identifications to be credible, and found defendant guilty as charged.
After trial, defendant filed a motion for new trial, arguing that he was entitled to a new
trial on several grounds, including that he was denied the effective assistance of counsel when
trial counsel failed to use readily available evidence to impeach Belcher’s and Al-Rohimi’s
identifications and failed to investigate and request a court-appointed expert on prosthetics and
gait analysis. The trial court held an evidentiary hearing on defendant’s motion. At the hearing,
defendant’s trial counsel admitted that he was either not aware that Belcher had failed to identify
defendant as the robber in a live lineup conducted on the day of the robbery, or that he “may
have simply forgot” to impeach Belcher with that evidence. Further, trial counsel did not seek to
introduce a call to 911 made by Al-Rohimi, in which he had reported that two men had carried
out the robbery, and he failed to impeach Al-Rohimi with this evidence. Trial counsel denied
that either of these failures to impeach key witnesses were strategic decisions. Also at the
hearing, defendant’s appellate counsel offered the expert testimony of Wendy Beattie, an expert
in the field of orthotics and prosthetics, who concluded that the perpetrator’s gait was
inconsistent with defendant’s; Beattie in fact opined that the video showed that the perpetrator
had an injury or weakness in his left leg, rather than (like defendant) in his right leg, and that it
would be very difficult, if not impossible, for defendant to move in the manner in which the
perpetrator moved in the video. Trial counsel admitted that he did not consider consulting an
expert in gait analysis or prosthetics; however, he stated that in any event the trial court had
denied him funds for retaining experts and that he “did not have the funds to get an expert.”
After the hearing, the trial court found that trial counsel was not ineffective and denied
defendant’s motion for a new trial on all grounds. Regarding the issue of expert testimony, the
court stated that it would not “have mattered if [defense counsel] had asked for the court
appointed expert . . . the court was going to deny that motion to a defense attorney who is
retained.” Further, the court stated, “the trial defense attorney testified that he gave the
defendant an option, a realistic option, you can release me as your retained attorney, you can get
a court appointed attorney and then the judge is likely to give you an expert at public expense.”
Accordingly, the court found that defense counsel’s failure to request an expert on gait analysis
or prosthetics was not ineffective assistance. Further, the trial court found the testimony of the
eyewitnesses to be credible despite the impeachment evidence, especially in light of the fact that
the perpetrator had fled in the direction of defendant’s house.
This appeal followed.
II. STANDARD OF REVIEW
“A claim of ineffective assistance of counsel presents a mixed question of fact and
constitutional law.” People v Unger, 278 Mich App 210, 242; 749 NW2d 272 (2008), citing
People v LeBlanc, 465 Mich 575, 579; 640 NW2d 246 (2002). Questions of constitutional law
are reviewed de novo. People v Sadows, 283 Mich App 65, 67; 768 NW2d 93 (2009). However,
“[a] judge must first find the facts, then must decide whether those facts establish a violation of
the defendant’s constitutional right to the effective assistance of counsel.” See People v Grant,
470 Mich 477, 484-485; 684 NW2d 686 (2004), citing People v Riley, 468 Mich 135, 139; 659
NW2d 611 (2003). A trial court’s findings of fact are reviewed for clear error. See id., citing
-2-
LeBlanc, 465 Mich at 579. “A finding is clearly erroneous when, although there is evidence to
support it, [this Court], on the whole record, is left with a definite and firm conviction that a
mistake has been made. See People v Dendel, 481 Mich 114, 130; 748 NW2d 859 (2008), mod
481 Mich 1201 (2008). This Court reviews a trial court’s decision to grant or deny a motion for
new trial for an abuse of discretion, which occurs when the trial court renders a decision falling
outside the range of principled decisions. See People v Rao, 491 Mich 271, 279; 815 NW2d 105
(2012).
III. ANALYSIS
On appeal, defendant again argues that he was denied the effective assistance of counsel
because trial counsel failed to use readily available evidence to impeach Belcher’s and Al-
Rohimi’s identifications of defendant at trial, and failed to investigate, consult, or retain and
expert on prosthetics or gait analysis. Further, defendant argues the trial court erred in holding
otherwise, and abused its discretion in denying his motion for a new trial on that basis. We
agree.
The United States and Michigan Constitutions guarantee a defendant the right to effective
assistance of counsel. US Const, Am VI; Const 1963, art 1, § 20. To establish ineffective
assistance of counsel, a defendant must show: (1) that counsel’s performance was below an
objective standard of reasonableness under prevailing professional norms, and (2) that there is a
reasonable probability that, but for counsel’s deficient performance, the result of the proceedings
would have been different. Strickland v Washington, 466 US 668, 694; 104 S Ct 2052; 80 L Ed
2d 674 (1984); People v Trakhtenberg, 493 Mich 38, 51; 826 NW2d 136 (2012). A “reasonable
probability” is a probability sufficient to undermine confidence in the outcome. Strickland, 466
US at 694.
Effective assistance of counsel is presumed, and the defendant bears a substantial burden
of proving otherwise. People v Vaughn, 491 Mich 642, 670; 821 NW2d 288 (2012). A
defendant can overcome the presumption by showing that counsel failed to perform an essential
duty and that the failure was prejudicial to the defendant. People v Reinhardt, 167 Mich App
584, 591; 423 NW2d 275 (1988), remanded on other grounds 436 Mich 866 (1990). Counsel’s
strategic judgments are afforded deference, Wiggins v Smith, 539 US 510, 521-522, 528; 123 S
Ct 2527; 156 L Ed 2d 471 (2003), but strategic choices made after an incomplete investigation
are reasonable only to the extent that reasonable professional judgments support the limitation on
investigation, Wiggins, 539 US at 521-522; Trakhtenberg, 493 Mich at 52-55.
Defendant first argues that he was denied the effective assistance of counsel when
defense counsel failed to use readily available evidence to impeach Belcher’s and Al-Rohimi’s
identifications of defendant at trial. We agree.
Counsel may provide ineffective assistance by unreasonably failing to develop the
defendant’s defense through adequate impeachment of the witnesses against the defendant. See
Trakhtenberg, 493 Mich at 54-55. A witness can be impeached by the use of prior inconsistent
statements, People v Jenkins, 450 Mich 249, 254; 537 NW2d 828 (1995), but the decision to
question witnesses, and what questions to ask, are generally considered matters of trial strategy,
see People v Russell, 297 Mich App 707, 716; 825 NW2d 623 (2012). In general, the failure to
-3-
question witnesses or to present other evidence constitutes ineffective assistance of counsel only
if it deprives the defendant of a substantial defense. Id. A defense is substantial if it might have
made a difference in the outcome. People v Chapo, 283 Mich App 360, 371; 770 NW2d 68
(2009).
At trial, defendant presented a mistaken identity defense and attempted to impeach the
eyewitness identifications by noting that the perpetrator had worn a mask, noting that Al-Rohimi
had incorrectly testified that defendant’s prosthetic was on his left leg and, after Belcher testified
that he identified defendant by his eyes, noting that Belcher had not told the police that he had
identified defendant by his eyes. However, the trial court found the identifications to be credible
and persuasive in finding defendant guilty of the robbery. As stated above, trial counsel failed to
introduce evidence of (1) Belcher’s failure to identify defendant in a live lineup on the day of the
robbery, and (2) a 911 audio in which Al-Rohimi failed to identify defendant during the robbery
and instead stated that two men were robbing Belcher. This constituted strong impeachment
evidence that was readily available but that counsel failed to use at trial. In examining whether
that failure fell below an objective standard of reasonableness, defendant must overcome the
strong presumption that his trial counsel’s performance was the product of sound trial strategy.
Trakhtenberg, 493 Mich at 52, citing Strickland, 466 US at 689. However, in this case, trial
counsel explicitly admitted that his failure to introduce either piece of impeachment evidence
was not trial strategy. Further, we can discern no strategic reason for defense counsel’s failure to
impeach the eyewitnesses whose testimony was a critical part of the prosecution’s case.
Further, while trial counsel testified that he did not remember if he had obtained before
trial the warrant request evidencing Belcher’s failure to identify defendant at the lineup or the
911 audio in which Al-Rohimi also failed to identify defendant, he conceded that the prosecution
had provided him with discovery, and that the evidence at issue was the type that is generally
available through discovery. During trial, defense counsel also stated that the prosecution had
been prompt in providing him with discovery and that it was possible that he had obtained the
impeachment evidence and simply forgot to elicit the testimony during cross-examination.
Accordingly, trial counsel was aware that the eyewitness identifications were central to the case
and vulnerable to impeachment, and he was at least presumably in possession of the evidence2
with which to effectively impeach the identifications; yet, he failed to do so. Accordingly,
defense counsel’s performance fell below an objective standard of reasonableness when he failed
to impeach Belcher’s and Al-Rohimi’s identifications of defendant at trial using readily available
evidence. Trakhtenberg, 493 Mich at 51; Strickland, 466 US at 694.
2
Even if trial counsel was not in possession of both pieces of evidence, his performance in
failing to obtain the impeachment evidence was objectively unreasonable. Counsel always
retains the “duty to make reasonable investigations or to make a reasonable decision that makes
particular investigations unnecessary.” Trakhtenberg, 493 Mich at 52. In this case, the evidence
at issue was the type generally included in discovery. Thus, if trial counsel did not have the
evidence at issue, his error was the failure to exercise reasonable professional judgment in
conducting an investigation of the case in the first instance.
-4-
Further, we conclude that defendant has also demonstrated the requisite level of
prejudice. The only evidence at trial linking defendant to the robbery were the identifications by
Belcher, Al-Rohimi, and Saad (who was not present during the robbery and whose identification
was based on the robber’s limp as depicted in the video), the fact that the robber fled in the
direction of defendant’s home after the robbery, and the surveillance video showing a masked
man with a limp. Before announcing the verdict, the trial court explicitly stated that the witness
identifications “work[ed] very strongly against defendant.” Thus, Belcher’s and Al-Rohimi’s
credibility was of paramount importance in this case. And although the impeachment evidence
at issue is additional impeachment evidence, it would not have been merely cumulative. Rather,
the fact that Belcher failed to identify defendant in a live lineup on the day of the robbery and
that Al-Rohimi originally told the 911 operator that two men were robbing Belcher constituted
impeachment evidence that would have further called into question Belcher’s and Al-Rohimi’s
credibility and could have made a difference at trial. Because the trial court indicated that the
witnesses’ identifications were a weighty factor in determining defendant’s guilt, the
impeachment evidence at issue is significant enough to show that counsel’s failure to elicit it at
trial deprived defendant of a substantial defense, i.e., one that could have made a difference in
the outcome of the trial. See Chapo, 283 Mich App at 371. Accordingly, there exists a
reasonable probability that this additional impeachment evidence “ ‘would have tipped the scales
in favor of finding a reasonable doubt about defendant’s guilt,’ ” Trakhtenberg, 493 Mich at 57,
quoting People v Armstrong, 490 Mich 281, 292; 806 NW2d 676 (2011).
Defendant also offered two additional pieces of evidence on appeal that serve to further
buttress the impeachment evidence offered at the evidentiary hearing. After the evidentiary
hearing, appellate counsel obtained two police reports pertaining to this case, and the parties
stipulated to expand the record on appeal “so as to allow this Court to consider this recently
obtained information.”3 The first report revealed not only that Belcher had failed to identify
defendant at the live lineup on the day of the robbery, but that he actually identified someone
else at that time. The second report confirmed that, in addition to telling the 911 dispatcher that
two men were robbing Belcher, Al-Rohimi originally also told the police that he had seen two
men rob Belcher. This evidence makes it less likely that when Al-Rohimi told the 911
dispatcher that two men were robbing Belcher, it was simply the product of his difficulty with
the English language (as was suggested by the prosecution at the evidentiary hearing). This
additional impeachment evidence supports our conclusion that counsel’s failure to elicit it (and
the other impeachment evidence discussed above) at trial deprived defendant of a substantial
defense, i.e., one that could have made a difference in the outcome of the trial. See Chapo, 283
Mich App at 371.
3
A party may generally not expand the record on appeal. People v Powell, 235 Mich App 557,
561 n 4; 599 NW2d 499 (1999). However, this Court may, “in its discretion, and on the terms it
deems just . . . permit amendments, corrections, or additions to the transcript or record.” In light
of the parties’ stipulation, we exercise our discretion to permit this addition to the record rather
than remand to allow the record to be supplemented below. See MCR 7.216(A)(5) and (7).
-5-
Second, defendant argues that he was denied the effective assistance of counsel when
trial counsel failed to investigate, consult, retain, or request a court-appointed expert witness in
prosthetics or gait analysis. We agree.
Decisions regarding whether to call or question witnesses are presumed to be matters of
trial strategy, People v Rockey, 237 Mich App 74, 76; 601 NW2d 887 (1999), and the failure to
call a supporting witness does not necessarily amount to ineffective assistance of counsel, People
v Beard, 459 Mich 918, 919; 589 NW2d 774 (1998). However, “[t]o provide effective assistance
of counsel, defense counsel not only must consult with experts when doing so ‘would have
revealed [the] weaknesses of the prosecution’s case,’ but also must consult with experts when an
expert analysis, as part of the investigatory process, is likely to develop evidence favorable to the
defendant.” People v Williams, 495 Mich 955, 957; 843 NW2d 551 (2014), quoting
Trakhtenberg, 493 Mich at 53. The failure to call witnesses constitutes ineffective assistance of
counsel if it deprives the defendant of a substantial defense. People v Dixon, 263 Mich App 393,
398; 688 NW2d 308 (2004). A substantial defense is one that might have made a difference in
the outcome of the trial. People v Marshall, 298 Mich App 607, 612; 830 NW2d 414 (2012),
vacated in part on other grounds 493 Mich 1020 (2013).
At the beginning of trial, trial counsel requested an adjournment to investigate whether
defendant could retain an expert in video analysis. Defense counsel eventually concluded that
defendant would not retain a video analysis expert as defendant “has not been able to secure
funds.” The trial court entered an order denying defendant’s motion for a court-appointed
expert, and the trial court later stated that it would have denied any motion by the defense to
appoint an expert because trial counsel was retained, and therefore, defendant was not indigent.
At the evidentiary hearing, the prosecution argued that because the trial court “entered an order
denying funds for the appointment of an expert witness,” any defense motion on that basis would
have been fruitless, and therefore defense counsel’s failure to make a motion for the appointment
of an expert in prosthetics did not fall below an objective standard of reasonableness. However,
the prosecution’s argument assumes that trial counsel would have needed court appointed funds
to retain such an expert. Further, while trial counsel’s failure to request a court-appointed expert
may not have fallen below an objective standard of reasonableness, his complete failure to
investigate or consult with an expert in prosthetics or gait analysis did.
Trial counsel conceded that “[defendant]’s gait related or compared to the gait of the
perpetrator as seen in the surveillance video was a pivotal issue in the trial,” but admitted that he
did not consider consulting with an expert in prosthetics or gait analysis and that he did not do
“any searching for a gait expert or anything of that nature.” Accordingly, trial counsel did not
even investigate whether an expert such a Beattie would have been able to offer consultation or
exculpatory testimony on defendant’s behalf at trial. Instead, trial counsel failed to investigate or
consult with such an expert, and did not otherwise educate himself or conduct any independent
investigation of the prosthetics/gait issue that was central to the case. “Counsel has a duty to
make reasonable investigations or to make a reasonable decision that makes particular
investigations unnecessary.” Strickland, 466 US at 690-691; see also People v Ackley, 497 Mich
381, 389; 870 NW2d 858 (2015) (finding defense counsel performed deficiently by failing to
investigate and attempt to secure an expert witness who could both testify in support of the
defendant’s theory and prepare counsel to counter the prosecution’s theory of the case); and
Trakhtenberg, 493 Mich at 54 n 9 (noting that “a defense attorney may be deemed ineffective, in
-6-
part, for failing to consult an expert when counsel had neither the education nor the experience
necessary to evaluate the evidence and make for himself a reasonable, informed determination as
to whether an expert should be consulted or called to the stand . . . .”). Accordingly, trial
counsel’s failure to investigate or consult with an expert in prosthetics or gait analysis did not
constitute reasonable trial strategy, and fell below an objective standard of reasonableness.
Trakhtenberg, 493 Mich at 51; Strickland, 466 US at 694.
Further, defendant can demonstrate prejudice. Defendant’s conviction turned in part on
the comparison between the perpetrator’s gait and defendant’s gait. While defendant, his ex-
girlfriend, and mother all testified at trial that the perpetrator’s limp did not match defendant’s,
their lay opinion was unlikely to effectively counter the eyewitnesses identifications. Further,
Beattie testified several times at the evidentiary hearing that while defendant had suffered a right
leg amputation, the video reflected that the robber’s injury or weakness was to his left leg, and
that it would be very difficult, if not impossible, for defendant to move in the same manner as did
the perpetrator. Accordingly, expert assistance was available and would have provided the court
with a viable and impartial perspective on the facts of the case while contradicting the
eyewitness identifications. The trial court in fact noted at trial that as “a lay person and the trier
of fact here” it was unable to determine from the video which leg was the weakened or injured
leg that caused the limp.4 Because the comparison between the perpetrator’s gait and
defendant’s gait was central to this case, the expert testimony at issue is significant enough to
show that counsel’s failure to investigate, consult, or retain an expert in that field deprived
defendant of a substantial defense. See Chapo, 283 Mich App at 371. Accordingly, there exists
a reasonable probability that the expert testimony “ ‘would have tipped the scales in favor of
finding a reasonable doubt about defendant’s guilt,’ ” Trakhtenberg, 493 Mich at 57, quoting
Armstrong, 490 Mich at 292.
In sum, Belcher and Al-Rohimi were the only eyewitnesses to the crime and their
credibility was crucial to the outcome of the case. Thus, defense counsel’s performance fell
below an objective standard of reasonableness when he failed to utilize readily available
evidence to impeach their identifications of defendant at trial. Additionally, the trial court
indicated that their identifications were a weighty factor in determining defendant’s guilt.
Consequently, the impeachment evidence at issue was significant enough to show that counsel’s
failure to elicit it at trial deprived defendant of a substantial defense. The comparison between
the perpetrator’s gait and defendant’s gait was also central to this case, and therefore, trial
counsel’s complete failure to investigate, consult, or retain an expert on prosthetics or gait
analysis was objectively unreasonable. Further, because (as the trial court stated) it was difficult
for a layperson to make an adequate comparison between the perpetrator’s limp and defendant’s
4
We note that the trial court stated at the evidentiary hearing that Beattie’s testimony did not
change its mind. However, we conclude that defendant can satisfy the prejudice requirement, as
expert testimony may well have altered the trial court’s conclusion if presented in the context of
a criminal trial, rather than a motion for a new trial. Further, consultation with an expert may
have enabled trial counsel to more effectively present a defense of mistaken identity by enabling
counsel to highlight differences in the gait of the perpetrator and defendant more effectively.
-7-
limp, the expert testimony at issue is significant enough to show that counsel’s failure to
investigate, consult with, or retain an expert in that field deprived defendant of a substantial
defense. Accordingly, defendant was denied the effective assistance of counsel, and the trial
court therefore abused its discretion in denying defendant’s motion for new trial. See Rao, 491
Mich at 279. Because we reverse the trial court on this basis, we decline to address defendant’s
additional arguments concerning actual innocence or entitlement to a new trial under
MCL 770.1.
We reverse the trial court’s denial of defendant’s motion for a new trial, vacate
defendant’s conviction, and remand for further proceedings consistent with this opinion. We do
not retain jurisdiction.
/s/ William B. Murphy
/s/ Cynthia Diane Stephens
/s/ Mark T. Boonstra
-8-
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