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60 Cal.Rptr.3d 601 (2007)
151 Cal.App.4th 1163
SAN DIEGO COUNTY EMPLOYEES RETIREMENT ASSOCIATION, Plaintiff and Respondent,
v.
COUNTY OF SAN DIEGO, Defendant and Appellant.
Robert P. Hickey, et al., Interveners and Respondents.
No. D048038.
Court of Appeal of California, Fourth District, Division One.
June 7, 2007.
*602 John J. Sansone, County Counsel, William A. Johnson, Jr. and William H. Songer, Senior Deputy County Counsel, for Defendant and Appellant.
Crowell & Moring and Steven P. Rice, Irvine, for Plaintiff and Respondent San Diego County Employees Retirement Association.
Law Offices of Michael A. Conger and Michael A. Conger, Santa Fe; Law Offices of Richard H. Benes and Richard E. Benes, San Diego, for Interveners and Respondents *603 Robert P. Hickey and Glenn Michael Still.
HALLER, Acting P.J.
The County of San Diego (County) adopted a resolution providing higher pension benefits (referred to as Tier A) for all county employees, but permitting a retroactive increase to Tier A only for those individuals employed on the effective date of the resolution, March 8, 2002. The San Diego County Employees Retirement Association (Retirement Association) challenged this resolution on behalf of two groups of employees who were not employed on March 8, 2002: (1) individuals who were employed before March 8, 2002, then left county employment without withdrawing their retirement contributions, and later returned to county employment after March 8, 2002; and (2) individuals who were employed before March 8, 2002, then left employment and withdrew their retirement contributions from the system, and later returned to county employment after March 8, 2002 and redeposited their retirement contributions with interest. The Retirement Association alleged the County Employees Retirement Law of 1937 (CERL) precluded the County from excluding these employees from a retroactive Tier A pension benefit increase. (Gov. Code,[1] §§ 31450 et seq.) Two returning County employees intervened in the action.
After the parties filed cross-summary judgment motions, the court granted the Retirement Association's summary judgment motion and denied the County's motion. The court entered judgment ordering the County to calculate pension benefits for the two groups of returning employees at the highest level (Tier A) for their entire period of eligible service, both before and after March 8, 2002.
The County appeals. We reverse the judgment and order the court to enter a summary judgment in County's favor. At the time the County enacted the challenged resolution, state law did not prohibit counties from providing a retroactive pension benefit increase only to individuals who were employees on a particular date, and the County was not required to extend this retroactive benefit to returning employees.
FACTUAL AND PROCEDURAL
BACKGROUND
The County employee retirement system is governed by CERL, a comprehensive statutory scheme that guides the manner in which a county may provide retirement benefits to its employees. (§ 31450 et seq.) The Retirement Association is an independent entity administering the County's retirement system. (§ 31550.) Employees generally become members of the association in the first month after they begin employment. (§ 31552.) Members are classified as either safety members or general members. (See §§ 31469.3, 31470.) In this case, we are concerned only with general members, and all references to members are intended to include only those individuals.
Under CERL, members of the Retirement Association include: (1) current employees; (2) former employees who left their retirement contributions in the County account and elected a deferred retirement; and (3) those individuals who have retired and are drawing retirement benefits. (See § 31470.) When an employee leaves county employment and withdraws his or her contributions, the employee's membership terminates. (Dodosh v. County of Orange (1981) 127 Cal.App.3d 936, 938, 179 Cal.Rptr. 804.) If subsequently *604 reemployed by the county, a former member may redeposit withdrawn retirement contributions with interest and resume membership "as if unbroken" in the retirement association. (§ 31652, subd. (a).)
CERL sets forth several levels of retirement allowances that may be offered to county employees upon retirement. A county has the discretion to decide which statutory benefit level will be provided to its retirement members. (§§ 31676.1-31676.19.) Each of the levels is contained in a separate code section that includes a list of retirement ages with corresponding fractions, and describes the manner in which an employee's retirement allowance is to be calculated. (Ibid.) With respect to each statutory benefit level, a retiring employee's pension benefit depends on the statutory fraction amount along with the employee's retirement age, years of qualified service, and highest annual salary. (Ibid.) These retirement benefits are generally funded by county and employee contributions to the retirement fund. (§' 31453.5.)
Before 1977, the County (like most other counties) provided the same level of retirement benefits to all of its employees. However, in 1977, the Legislature amended CERL to clarify that counties may offer lower benefits to new employees. (§ 31483; see Lear v. Board of Retirement (2000) 79 Cal.App.4th 427, 430, 94 Cal.Rptr.2d 89; Aquilino v. Marin County Employees' Retirement Assn. (1998) 60 Cal.App.4th 1509, 1516, 70 Cal.Rptr.2d 870 (Aquilino.) Pursuant to section 31483, in 1978 the County enacted an ordinance providing for two benefit tiers for general members. Those who were employed before October 1978 were eligible for Tier I retirement benefits at the level designated in section 31676.12. All employees hired after that date were eligible for lower Tier II benefits at the level designated in section 31676.1.
In February 2002, the County Board of Supervisors adopted Resolution No. 2-44 providing for a differentand generally higherpension benefit level (Tier A) for all employees. This new level was contained in section 31676.17, and represented the highest level of statutory benefits then permitted under CERL.[2] Resolution No. 2-44 provides: (1) all individuals employed by the County on March 8, 2002, are entitled to the Tier A enhanced retirement allowance for all service credit earned before and after March 8, 2002, unless the employee opts out within a specified time period; (2) persons who were not employed on March 8, 2002, are entitled to Tier A benefits only prospectively and do not receive Tier A benefits for any prior service; and (3) the former Tier II level is eliminated (retroactively and prospectively) for all employees.[3] Thus, for any rehired individual not employed on March 8, 2002, who had prior service credit at Tier II and who deferred or redeposited retirement contributions, the rehired employee would receive a retroactive increase to Tier I level for the prior service, and would receive Tier A for all post-March 8, 2002 employment.
*605 In connection with its collective bargaining agreements, the County agreed to pay the full cost of the increased contributions for the retroactive benefit increases needed to fund the system at the increased Tier A or Tier I level. With respect to the prospective benefit increases, each employee would pay the appropriate higher contribution level.
It is undisputed that in enacting Resolution No. 2-44, the County expressly intended to exclude a retroactive pension increase to Tier A for those employees who had worked for the County before March 8, 2002, left employment, and then were later rehired. The purpose of this exclusion was to control county pension costs.
After Resolution No. 2-44 was enacted, each of the returning employees who had deferred their retirement contributions or repaid the contributions, received a retroactive pension increase from Tier II to Tier I without having to pay for the cost of this increased benefit, and these employees were on notice before the reemployment that he or she would not receive the benefit of the retroactive Tier A pension increase if the first day of reemployment was after March 8, 2002. However, one returning county employee complained and asserted a right to receive a retroactive increase to Tier A (in addition to receiving the Tier A prospective benefit increase). In response, the Retirement Association's board requested the County to amend Resolution No. 2-44 to permit the Association to treat returning employees the same as those who were County employees on March 8, 2002, for purposes of pension benefit levels. The Retirement Association asserted that Resolution No. 2-44 violated CERL to the extent it did not provide retroactive pension increases for returning employees. The County disagreed, and refused to amend the Resolution.
In April 2005, the Retirement Association filed a declaratory relief action against the County on behalf of two groups of general members rehired after March 8, 2002:(1) persons who left County employment before March 8, 2002, withdrew their retirement contributions, but thereafter returned to County employment and redeposited their contributions with interest ("Redepositors"); and (2) persons who left County employment before March 8, 2002, but left their retirement contributions in the county retirement system, and then returned to County employment ("Returning Deferreds").
The Retirement Association sought "a declaration that Returning Deferreds and Redepositors are entitled to ... a retirement allowance based on Tier A benefits for such members' entire period of eligible service, including pre-March 8, 2002 service." Two returning County employees, Robert Hickey and Glenn Still, intervened in the action. They sought a judicial declaration that their retirement benefits for their prior and future service should be calculated at the Tier A level.
In moving for summary judgment, the Retirement Association argued CERL precluded the County from treating these returning employees differently from employees who never left. In support, the Retirement Association relied on two CERL code sections that set forth certain rights of returning employees pertaining to retirement benefits: section 31642[4] and section 31652, subdivision (a),[5] and a Court of Appeal decision interpreting the latter code section, Aquilino, supra, 60 Cal. App.4th 1509, 70 Cal.Rptr.2d 870.
*606 The Retirement Association also supported its summary judgment motion with evidence of the estimated cost of providing retroactive Tier A benefits to those who went on deferred status or withdrew their contributions before March 8, 2002, and then were reemployed. This evidence showed the cost of this increase would be a small percentage of the overall cost of providing the Tier A benefits to all employees. The Retirement Association also presented evidence relating to the prior opinions of county counsel when it represented the Retirement Association. Because the cost evidence and opinion evidence are not relevant to the statutory interpretation issues before us, we do not discuss this evidence.
In opposing the Retirement Association's motion and bringing its own summary judgment motion, the County argued that it had the authority under CERL to provide retroactive benefits only to certain employees, and the statutes relied on by the Retirement Association did not support the Association's argument. The County also urged the court to enforce the resolution as written because it was the result of negotiations with its labor unions, which binds the Redepositors and Returning Deferreds. In support, the County produced copies of the written agreements with its various employee unions, which were consistent with Resolution No. 2-44 (although did not expressly address the returning employee issue) and required the County to bear the costs of the retroactive pension increases. The County also produced the declaration of Bob Baker, a member of the bargaining team for the County's largest employee union, who stated that returning employees are bound by collective bargaining agreements, and "[t]he status of [returning] deferred ... members was specifically discussed during the collective bargaining process. It was very clear at the bargaining table that the Tier A benefits would only apply prospectively [to these members]. In other words, members who were not employed as of the effective date would not be eligible to receive Tier A credit for past service...." The County also submitted a declaration of its labor relations manager, who described a similar understanding during the labor negotiations.
The trial court initially issued a tentative ruling in favor of the County. However, after a lengthy oral argument and considering the parties' supplemental submissions, the court granted summary judgment to the Retirement Association. The court stated that although it agreed with the County that the decision relied on by the Retirement Association, Aquilino, supra, 60 Cal.App.4th 1509, 70 Cal.Rptr.2d 870, was distinguishable and not controlling, it found the Aquilino court's focus on equitable considerations to be the correct approach in analyzing the issue. Specifically, the trial court stated that Resolution No. 2-44 could not be upheld because it creates an "inequity" by providing only those persons employed on March 8, 2002 with retroactive Tier A benefits, and excludes returning employees from obtaining this benefit. The court thus entered judgment ordering the County to calculate the pension benefits for the two groups of returning employees at Tier A for their entire period of eligible service, both before and after March 8, 2002.[6]
*607 DISCUSSION
I. Review Standards
The parties agree that, under Resolution No. 2-44, only individuals who were employed by the County on March 8, 2002 are entitled to retroactive Tier A benefits for their past service credit. The parties further agree that this provision excludes Returning Deferreds and Redepositors from obtaining this retroactive benefit. The parties disagree, however, as to whether the County had the authority to make this distinction under the applicable state law, CERL. Thus, the sole issue on appeal concerns one of statutory interpretation.
This analysis requires that we ascertain the intent of the Legislature in enacting the relevant CERL provisions. In so doing, "`"[w]e first examine the words themselves because the statutory language is generally the most reliable indicator of legislative intent. [Citation.] The words of the statute should be given their, ordinary and usual meaning and should be construed in their statutory context." [Citation.] If the statutory language is unambiguous, "we presume the Legislature meant what it said, and the plain meaning of the statute governs."'" (Bonner v. County of San Diego (2006) 139 Cal.App.4th 1336, 1344, 44 Cal.Rptr.3d 116.)
"`"If, however, the terms of the statute provide no definitive answer, then courts may resort to extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.] `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.] "[T]he courts `should construe every statute with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness.'" [Citations.] "Any ambiguity or uncertainty in the meaning of pension legislation must be resolved in favor of the pensioner, but such construction must be consistent with the clear language and purpose of the statute." `"(Lear v. Board of Retirement, supra, 79 Cal.App.4th at p. 434, 94 Cal. Rptr.2d 89.)
The proper interpretation of the CERL is a question of law subject to independent review on appeal. (Bonner v. County of San Diego, supra, 139 Cal.App.4th at p. 1344, 44 Cal.Rptr.3d 116.)
II. Summary of Analysis and Conclusions
We begin our statutory analysis with the undisputed principle that in 2002, a county could select different retirement benefit levels for members of its retirement system to achieve its desired financial and employment objectives, unless the distinction was otherwise specifically prohibited. (See § 31485.9.) In this case, the County elected to provide a retroactive benefit only to members who were employed on a particular date. The Retirement Association argues that this distinction was prohibited. Because the Retirement Association is seeking to invoke an exception to the general rule, it is the Retirement Association's burden to show the County's action was improper under a relevant statute.
In determining whether this burden was satisfied, we examine each of the statutes relied upon by the Retirement Association: (1) the statute authorizing the County to make pension increases retroactive, section 31678.2; (2) the statute authorizing the Tier A level benefits, section 31676.17; and (3) the statutes primarily relied upon by the Retirement Association that concern *608 the rights of Returning Deferreds and Redepositors, sections 31642 and 31652. We conclude that none of these statutes prohibited the County from providing a retroactive pension benefit increase only to those employees employed on the effective date of the resolution. We further conclude that the decision relied on by the Retirement Association, Aquilino, supra, 60 Cal.App.4th 1509, 70 Cal.Rptr.2d 870, while superficially similar, is factually and legally distinguishable, and its reasoning is not applicable to the matter before us.
III. Section 31678.2: Statute Authorizing Retroactive Pension Benefit Increases
Before 2000, the Legislature expressly prohibited a county from providing increased pension benefits on a retroactive basis. (§ 31678.) However, in 2000, the Legislature enacted a broad exception to this rule, specifically providing counties with the option of applying an improved benefit formula in a retroactive manner. (§ 31678.2)[7] Under section 31678.2, counties may require members to pay for the increased retroactive benefits "if approved in a memorandum of understanding executed by the board of supervisors and the employee representatives." (§ 31678.2, subd. (b).)
On our review of section 31678.2, we find no express language or implied terms reflecting that the Legislature intended to require a county providing this elective retroactive pension benefit to extend the benefit to those who later return to employment. The statute does, however, contain an express limitation that counties may not offer the retroactive benefit to employees who retired before the effective date of the resolution. (§ 31678.2, subd. (c).) This subdivision reflects that the Legislature knew how to impose restrictions on a county's use of the retroactive benefit, and by not including a rule that the retroactive benefit must be shared by existing and returning employees, we infer this requirement was not intended.[8]
The legislative history underlying section 31678.2 supports our conclusion. The legislative history materials submitted by the parties show that the supporters of this legislation were seeking to provide counties with "`maximum local control'" *609 in determining the appropriate retirement formula and to require the counties to engage in collective bargaining on the retroactive benefit issue. (See Assem. Com. on Public Employees, Retirement and Social Security Analysis of Sen. Bill No. 1696 (1999-2000 Reg. Sess.) as amended May 18, 2000, p. 1; Sen. third reading analysis of Sen. Bill No. 1696 (1999-2000 Reg. Sess.), as amended May 18, 2000, p. 1.) These objectives are consistent with a conclusion that the Legislature intended to provide the counties with broad discretion in deciding the manner in which to apply this optional retroactive benefit. In asserting a contrary view, the Retirement Association quotes from various committee analyses and other memoranda in an attempt to show the Legislature intended to restrict this authority by requiring that the retroactive benefit be offered to "all members." However, when viewed in context, the quoted statements do not support the Retirement Association's position.
IV. Section 31676.17: Statute Authorizing "Tier A" Benefit Level
We also reject the Retirement Association's reliance on the statute authorizing the Tier A benefit level, section 31676.17.[9] This code section provides a table and formula reflecting this benefit level and states that this higher (Tier A) benefit level "may be made applicable in any county." The statute further provides that its provisions "shall apply to members employed by the county on or after the date this section becomes operative in the county." (§ 31676.17.)
Section 31676.17's terms do not support the conclusion that the Legislature intended to require that counties electing to offer this higher pension allowance in a retroactive manner must provide this increased benefit equally to existing and returning employees. To the contrary, as recognized by the trial court, the use of the word "may" in the statute suggests a legislative objective of providing counties broad discretion to determine whether this benefit level is appropriate and not to restrict the county's decision making in this regard. (§ 31676.17.)
Retirement Association argues that although the Legislature made section 31676.17 elective, it did not provide a county with the authority to make the higher benefit level retroactive only for those employed on a particular date. Retirement Association relies on the statutory language that upon adoption by a county, the benefits "shall apply to members employed by the county on or after the date this section becomes operative in the county." *610 (§ 31676.17, italics added.) This sentence does not reasonably suggest that the Legislature was intending to address the rights of returning employees. Instead, a more realistic interpretation is that the Legislature intended the reference to "members" to broadly identify those who may be affected by the adoption of the higher benefit level, and not to specify which members must be entitled to a retroactive benefit increase.
V. Sections 3164.2 and 31652: Statutes Governing Returning Deferreds and Redepositors
We now turn to the two code sections upon which the Retirement Association primarily relies: section 31642[10] and section 31652.[11] Before examining these specific statutes, it is helpful to place these statutes in the context of the larger statutory scheme.
A. Statutory Framework
Both statutes are contained in the "Service" article of the CERL. "Service" within the meaning of CERL refers to the amount of qualified time an employee has worked for the county, i.e., the amount of employment time that an employee is entitled to be credited at retirement. (See § 31641.) The calculation of the retirement allowance is generally determined by taking the employee's retirement age multiplied by a statutory fraction of the employee's final compensation, which is then multiplied by the number of "service" years for which the employee has received credit. (See, e.g., § 31676.17.) Thus/the higher the service credit, the higher the retirement benefit.
Under CERL, an employee earns service credit through "uninterrupted employment," which is specifically defined in section 31641.[12] Under this code section, an *611 employee who leaves county employment, and then returns, will be credited only with the latter period of time for purposes of determining the amount of current "service" years when calculating the employee's retirement allowance at retirement. However, there are broad exceptions to this rule.
Of particular relevance here, one of the code sections relied upon by the Retirement Association, section 31642 (see fn. 10, ante), identifies five situations that "shall not be considered as breaking the continuity of service." Two of those situations involve Returning Deferreds and Redepositors: (1) "Resignation of a member who has elected in writing to come within the provisions of Article 9[[13]] followed by reemployment before withdrawal of any accumulated contributions"; and (2) "The withdrawal of accumulated contributions followed by the redeposit of the contributions upon re-entrance into service does not constitute a break in the continuity of service." (§ 31642, subd. (d).) The first situation above refers to Returning Deferreds, i.e., those who elected to leave their retirement contributions in the county retirement system when they terminated their county employment, and then were subsequently reemployed. The second situation concerns Redepositors, i.e., those individuals who removed their retirement contributions upon leaving County employment, and then redeposited the contributions upon their reemployment with the County. With respect to these Redepositors, the other code section relied upon by Retirement Association (§ 31652, subd. (a), fn. 11, ante), sets forth the manner in which the employee may redeposit the withdrawn funds to obtain the credit for the employee's prior service referred to in the second paragraph of section 31642, subdivision (d).
B. Retirement Association's Contentions
The Retirement Association contends that a returning employee's statutory right to "continuity of service" in section 31642 and to "unbroken" membership in section 31652, subdivision (a), means that the County is prohibited from conditioning an increased pension benefit on employment on a particular date and using this condition to deny the increased benefit to the returning employee. On our review of the statutory language and each statute's function and purpose in the overall statutory scheme, we find no reasonable basis for interpreting the statutes in this manner. Although we are required to interpret pension legislation favoring employee rights, we cannot adopt a meaning that is not grounded in the statutory language. (See Lear v. Board of Retirement, supra, 79 Cal.App.4th at p. 434, 94 Cal.Rptr.2d 89.)
As described above, section 31642's "continuity of service" language is directly related to the statutory requirement that, to count as "service," the employment must have been "uninterrupted." By ineluding the code section in the "Service" article and stating that the listed circumstances do not break the "continuity of *612 service," the Legislature created an exception to the general rule and allowed the earlier service to be counted for purposes of determining years of service at retirement. Beyond this specific language relating to the interrupted service concept, there is nothing in this code section suggesting the Legislature was intending to provide affirmative rights to Redepositors or Returning Deferreds to be to be treated as if the individual was always "employed" by the county, and thus to preclude a county from conditioning certain increased benefits on employment status on a particular date.
The Retirement Association argues that because "service," as defined in section 31641 (see fn. 12, ante), means "uninterrupted employment," section 31642, subdivision (d) "can only properly be interpreted to provide that Returning Deferreds must be treated as having continuous, unbroken, and uninterrupted `employment'" (Italics added.) However, service is defined as "uninterrupted employment" during only those periods when the member or the employer is making retirement contributions that entitle the member to service credit. (§ 31641.) Under this definition, "service" and "employment" are related, but are not necessarily the same. If the Legislature had intended to provide in section 31642 that a returning employee who comes within one of the statutory categories should be considered as having continuous employment, the Legislature could have stated this in express terms. Read in a reasonable manner, the statute cannot be interpreted as reflecting an intent to restrict a county's discretion to decide that a particular pension benefit should be provided only to those who were actually employed on a particular date. Although the statutory scheme prohibits the County from taking an action that would dilute, ignore or decrease the pension benefits previously held (or deferred) by a returning employee (see Aquilino, supra, 60 Cal. App.4th 1509, 70 Cal.Rptr.2d 870),' the County is not statutorily required to retroactively increase those prior benefits to the same level given to employees actually working for the County on a given date.
The other section relied upon by the Retirement Association, section 31652, subdivision (a), describes the procedure for a Redepositor to reinstate his or her prior membership in the association and trigger the "continuity of service" exception in section 31642, subdivision (d). (See fns. 10 & 11, ante.) Under section 31652, subdivision (a), if an employee who left county employment and withdrew his or her accumulated contributions, returns to employment and redeposits the same amount of contributions with interest, "his membership is the same as if unbroken by such termination." In other words, he is the same as a Returning Deferred, who always remained a member of the county retirement association. (§ 31470.)
The Retirement Association argues that this right to "unbroken" membership equates with the right to claim all benefits as if he or she remained employed. However, there is no statutory support for this argument. The CERL statutes do not state that membership in the county retirement system is the same as employment. To the contrary, the statutes expressly provide that an individual may be a member of the retirement association even if the individual is not a current employee, For example, an employee who leaves county employment but leaves his retirement contributions in the retirement system, continues to be a member but is clearly not viewed as an employee.
*613 Aquilino, 60 Cal.App.4th 1509, 70 Cal. Rptr.2d 870, relied upon by the Retirement Association, does not support a contrary conclusion. The Aquilino court addressed the rights of Redepositors after a county changed from a single formula (tier) system to a multiple tier system. (Id. at pp. 1512-1515, 70 Cal.Rptr.2d 870.) In that case, the plaintiffs were employees who had been employed before the establishment of tiers in Marin County. (Id. at p. 1513, 70 Cal.Rptr.2d 870.) During their absence, the county created Tier I and Tier II. Persons employed before July 1980 were permitted to continue in the original plan (Tier I), and persons employed after July 1980 were placed in the new Tier II plan which provided lower benefits and thereby required lower employee contributions. (Id. at pp. 1512-1513, 70 Cal.Rptr.2d 870.)
When the Aquilino plaintiffs returned to Marin County employment after July 1980, they repaid their withdrawn contributions at the higher Tier I level, but then were placed in Tier II level, and were told they would receive only Tier II benefits for their past and future service upon their retirement. (Aquilino, supra, 60 Cal. App.4th at pp. 1513-1515, 70 Cal.Rptr.2d 870.) Thus, these employees would not receive the full benefit of the contributions that they were required to return to the system to reactivate their prior membership status. Not surprisingly these employees petitioned for a writ of mandate seeking to compel the county to place them in Tier I.
Reversing the trial court's judgment dismissing the action, the Aquilino court initially observed that the statute authorizing different benefit levels for new employees (§ 31483) did not address the issue whether returning redepositing employees may be characterized as "newly hired" employees for purposes of the tiered benefit levels. (Aquilino, supra, at pp. 1516-1517, 70 Cal.Rptr.2d 870.) However, the Aquilino court found the Legislature manifested its intent on this issue in section 31652, subdivision (a), the code section that sets forth the procedures for a redepositing employee to repay withdrawn contributions. (Aquilino, supra, 60 Cal.App.4th at pp. 1518-1522, 70 Cal.Rptr.2d 870.) Focusing on the statutory language that once a redeposit is completed, the employee's "`membership is the same as if unbroken by such termination,'" the Aquilino court stated it agreed with the returning employees' argument that "once a returning employee completes the redeposit of withdrawn retirement contribution, the employee resumes the same membership status as if the employee had never left county employment." (Id. at p. 1518, 70 Cal. Rptr.2d 870, italics added.) Based on this conclusion, the Aquilino court held that a returning employee is entitled to return to the same membership tier as when the employee left county employment, and rejected Marin County's argument that section 31652, subdivision (a) is "limited to calculation of a redepositing employee's credit for time of service." (Aquilino, supra, at p. 1518, 70 Cal. Rptr.2d 870.)
The Aquilino court also based its statutory interpretation on its view that Marin County's treatment of the Returning Deferreds was "inequitable" because CERL requires the employee to repay the contributions at his or her prior benefit level, and that the Legislature would not have intended to require county employees to pay for more benefits than they would receive. (Aquilino, supra, 60 Cal.App.4th at p. 1519, 70 Cal.Rptr.2d 870.) The Aquilino court stated, "we see no reason to presume that the Legislature intended the inequitable result of forcing a redepositing member to buy service credit at *614 prices unrelated to the benefits to be received. [Citation.] While the Legislature [enacted the legislation permitting tiered benefit levels] clearly intending] to assist counties in controlling future pension costs in order to avert pending fiscal crises, there is nothing in the legislative history that indicates an intent to permit counties to `have their cake and eat it too' in this fashion." (Ibid.) The court thus concluded that a requirement that a redepositing member repay all of his prior withdrawn amount plus interest, "is only consistent with an interpretation of the statute that permits a redepositing member to receive benefits commensurate with his or her contributions" and thus "evidences an intent that a redepositing employee be placed back into his or her former retirement tier." (Id. at pp. 1520-1521, 70 Cal. Rptr.2d 870.)
We agree with the conclusions reached in Aquilino. By stating that a rehired employee who repays his or her contributions with interest at his or her former benefit tier level resumes "unbroken" membership in the retirement association, the Legislature clearly intended that a Redepositor would be placed in a tier no less than the benefit level associated with the repaid retirement contributions, Based on the language of section 31652, subdivision (a), the Legislature could not have reasonably intended to permit a county to penalize a returning employee by requiring the employee to repay contributions at a particular level with interest and then awarding benefits at a level that is lower than these contributions.
But neither Aquilino's holding, nor its underlying reasoning, logically extends to support the Retirement Association's position in this case. Unlike Marin County's practice in Aquilino, Resolution No. 2-44 allows the returning employee to obtain the benefits of his or her prior tier: (1) a returning Tier II member is entitled to a retroactive increase to Tier I level for all prior benefits; and (2) returning Tier I and II members are entitled to a prospective increase to Tier A. Thus, unlike Aquilino, the Returning Deferreds receive the full advantage of their returned contributions (with additional benefits at no cost to them). Additionally, unlike Aquilino, the benefits that the rehired employee is seekingthe retroactive increase to Tier A were not based on membership or tier status. Instead, an employee's entitlement to the benefits was based on the fact of employment on a particular date. As noted previously, employment and membership in a county retirement association are not synonymous.
In finding Aquilino distinguishable, we recognize that the Aquilino decision contains some broad language that appears to suggest that a redepositing returning county employee must be treated as if he or she never left the county employment. (Aquilino, supra, 60 Cal. App.4th at p. 1518, 70 Cal.Rptr.2d 870.) However, it is well settled that "`the language of an opinion must be Construed in light of the facts of the particular case....'" (Finegan v. County of Los Angeles (2001) 91 Cal.App.4th 1, 9, 109 Cal.Rptr.2d 762.) "`[A]n opinion's authority is no broader than its factual setting, and the parties cannot rely on a rule announced in a factually dissimilar case.'" (Ibid.; see In re Alexis M. (1997) 54 Cal. App.4th 848, 852, 63 Cal.Rptr.2d 356 [decision must be viewed in context of specific facts of case].) Because the Aquilino court was not required to, and did not, reach the issue as to whether a county may condition an increased pension benefit on employment on a particular date, the court's broad statements equating membership with continued employment do not control here.
*615 Moreover, the Aquilino court made the statements that Redepositors must be treated as if they never left employment in the portion of the decision discussing a Redepositor's right to reclaim the same "membership status" as before the employee left the county. (Aquilino, supra, 60 Cal.App.4th at pp. 1518-1520, 70 Cal. Rptr.2d 870.) The Aquilino court stated that it agreed with the plaintiffs' argument that under section 31652, subdivision (a), "once a returning employee completes the redeposit of withdrawn retirement contributions, the employee resumes the same membership status as if the employee had never left county employment." (Aquilino, supra, at p. 1518, 70 Cal.Rptr.2d 870, italics added.) Viewed in context, the court was equating membership status with a particular tier benefit level, such that an employee was entitled to remain at that level when he or she returned to county employment. The matter of remaining at the same tier level is not at issue in this case.
Additionally, Aquilino did not address the rights of Returning Deferreds, and instead considered the rights only of Redepositors. We have reviewed section 31642 (the "continuity of service" statute) and each of the code sections contained within CERL's Article 9 pertaining to "deferred retirement," and have found no indication that the Legislature intended to require a county to extend all new increased benefits to a Returning Deferred.
Retirement Association's reliance on a 1998 superior court judgment is unhelpful. (Lear v. Board of Retirement of the San Diego County Employees Retirement Association (Super. Ct. San Diego County, 1998, No. 706279).)[14] A trial court judgment cannot properly be cited in support of a legal argument, absent exceptions not applicable here. (See Santa Ana Hospital Medical Center v. Belshé (1997) 56 Cal.App.4th 819, 831, 65 Cal.Rptr.2d 754.) Moreover, in the superior court judgment relied on by Retirement Association, the factual circumstances were the same as Aquilinowhether the county could place Returning Deferreds into a lower tier than when they left county employment. As we have explained, the factual and legal issues in this case are distinguishable.
Retirement Association additionally argues that we should infer from the Legislature's failure to amend sections 31642, subdivision (d) and 31652 as implicit approval of Aquilino's holding that a county may not discriminate against Returning Deferreds and Redepositors. This argument is unpersuasive. First, as discussed, Aquilino did not make this broad holding, and thus the failure to amend the statutes does not show an implicit approval of this principle. Additionally, it is well established that legislative inaction alone does not necessarily imply legislative approval, and at most provides only a "weak inference of acquiescence." (Gunther v. Lin (2006) 144 Cal.App.4th 223, 237, 50 Cal. Rptr.3d 317; see Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1156, 278 Cal.Rptr. 614, 805 P.2d 873; Tomlinson v. Qualcomm, Inc. (2002) 97 Cal. App.4th 934, 942, 118 Cal.Rptr.2d 822.)
The Aquilino court reached the correct decision based on the obvious inequity that *616 returning employees (who were entitled to "unbroken" membership in the retirement system), were compelled to accept lesser pension benefits than the contribution amount to which they had repaid into the system. The fact that the Legislature took no action to amend the statutes in light of this holding does not support an inference that the Legislature intended to restrict a county's discretion to impose limits on the elective retroactive benefit.
DISPOSITION
Judgment reversed. The superior court is ordered to vacate the summary judgment granted to Retirement Association and interveners Robert Hickey and Glenn Still, and directed to enter summary judgment in favor of County. County to recover costs on appeal.
McDONALD and McINTYRE, JJ., concur.
NOTES
[1] All further statutory references are to the Government Code.
[2] These benefits authorized an eligible general member who retires at age 60 or older to receive a pension equal to 3 percent of the member's final compensation for each year of service, not to exceed final compensation. The statute also set forth a graduated schedule for calculation of the pension for members who retire at ages 50 through 59.
[3] In summarizing the relevant terms of Resolution No. 2-44, we recognize that the resolution, as written, was not a model of clarity. However, the parties here agree on the meaning and intent of the relevant terms, and thus we adhere to this agreed meaning for purposes of this appeal.
[4] See footnote 10, post.
[5] See footnote 11, post.
[6] Although the interveners did not bring a separate summary judgment motion and merely joined in the Retirement Association's motion, the County stipulated that the court's summary judgment extends to a favorable judgment on the interveners' complaint for purposes of facilitating an appeal. All further reference to the Retirement Association as the respondent in this action includes the interveners.
[7] Section 31678.2 states: "(a) Notwithstanding Section 31678 or any other provision of this chapter, a board of supervisors or a governing body of a district may, by resolution adopted by majority vote, make any section of this chapter prescribing a formula for calculation of retirement benefits applicable to service credit earned on and after the date specified in the resolution, which date may be earlier than the date the resolution is adopted. [¶] (b) A resolution adopted pursuant to this section may, if approved in a memorandum of understanding executed by the board of supervisors and the employee representatives, require members to pay all or part of the contributions by a member or employer, or both, that would have been required if the section or sections specified in subdivision (a), as adopted by the board or governing body, had been in effect during the period of time designated in the resolution. The payment by a member shall become part of the accumulated contributions of the member. [¶] (c) This section shall only be applicable to members who retire on or after the effective date of the resolution described in subdivision (a)."
[8] To the extent the Retirement Association argues that the Legislature did not express this restriction because it is presumed to have been aware of the Aquilino decision, we find this argument to be unconvincing. (Aquilino, supra, 60 Cal.App.4th 1509, 70 Cal.Rptr.2d 870.) As explained below, Aquilino held only that returning employees cannot be placed in a less favorable benefit tier after their return, and does not stand for the broader proposition that returning employees must be provided the same increased level of pension benefits as if they remained employed for the entire period.
[9] Section 31676.17 provides: "This section may be made applicable in any county on the first day of the month after the board of supervisors of the county adopts, by majority vote, a resolution providing that this section shall become applicable in the county. Notwithstanding any other provisions of this chapter, the current service pension or the current service pension combined with the prior service pension is an additional pension for members purchased by the contributions of the county or district sufficient, when added to the service retirement annuity, to equal the fraction of one-fiftieth of the member's final compensation set forth opposite the member's age at retirement, taken to the preceding completed quarter year, in the following table multiplied by the number of years of current service or years of current and prior service with which the member is entitled to be credited at retirement, but in no event shall the total retirement allowance exceed the member's final compensation: [Table omitted.] [¶] In any county operating under this section, any limitations in any provisions of this chapter upon the amount of compensation used for computing rates of contributions shall be disregarded. [¶] ... [¶] This section shall apply to members employed by the county on or after the date this section becomes operative in the county."
[10] Section 31642 states: "The following shall not be considered as breaking the continuity of service: [¶] (a) A temporary layoff because of illness or for purposes of economy, suspension, or dismissal, followed by reinstatement or re-employment within one year. [¶] (b) A leave of absence followed by reinstatement or re-employment within one year after the termination of the leave of absence. [¶] (c) A resignation to enter, followed by entrance into, the armed forces of the United States, followed by re-employment by the county or district within six months after the termination of such service, [¶] (d) Resignation of a member who has elected in writing to come within the provisions of Article 9 followed by re-employment before withdrawal of any accumulated contributions. [¶] The withdrawal of accumulated contributions followed by the redeposit of the contributions upon re-entrance into service does not constitute a break in the continuity of service."
[11] Section 31652, subdivision (a), states: "(a) Any member may redeposit in the retirement fund, prior to filing an application for retirement, by lump sum payment or by installment payments over a period of one year or for a longer time upon approval of the board, an amount equal to all of the accumulated normal contributions which he has withdrawn, plus regular interest thereon from the date of separation from the retirement system, and his membership is the same as if unbroken by such termination. Except as provided in this section his rate of contribution shall be based on age at the nearest birthday at time of reentrance into the system. If he does not redeposit all of the accumulated normal contributions previously withdrawn he shall be considered as a new member without credit for any previous service. [¶] `Regular interest' as used in this section shall mean that amount of interest which would have been credited to the account of the member on the amount to be deposited at the interest rates established for the system if the contributions required by this section had been on deposit from the date of separation from the retirement system until the amount required to be deposited has been paid."
[12] Section 31641 provides that: "`Service' means uninterrupted employment of any person appointed or elected for that period of time: [¶] (a) For which deductions are made from his earnable compensation from the county or district for such service while he is a member of the retirement association, [f] (b) In military service for which the county or district or member is authorized by other provisions of this chapter to make, and does make, contributions, [¶] (c) For which he receives credit for county service or for public service or for both pursuant to the provisions of this article. [¶] (d) Allowed for prior service." "Prior service" means "service prior to the date of entry of a member into the retirement system." (§ 31643.)
[13] Article 9 of CERL sets forth the rights of Returning Deferreds, those who elect to leave their retirement contributions in the county retirement system when they leave county employment. (§§ 31700-31706.)
[14] In referring to the "Lear" decision to support its arguments throughout its respondent's brief, Retirement Association cites to the superior court judgment, and not to our appellate decision on a different aspect of the same case. (See Lear v. Board of Retirement, supra, 79 Cal.App.4th 427, 94 Cal.Rptr.2d 89.) In Lear, the appellants appealed only from that portion of the judgment pertaining to the scope of reciprocal retirement benefits (§ 31830 et seq.), a matter not at issue here.
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129 F.3d 614
Betty Travisv.Board of Regents of University of Texas System, Universityof Texas, at San Antonio
NO. 96-50764
United States Court of Appeals,Fifth Circuit.
Oct 07, 1997
W.D.Tex., 122 F.3d 259
1
DENIALS OF REHEARING EN BANC.
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-96-00259-CR
David Gantt, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 331ST JUDICIAL DISTRICT
NO. 0951992, HONORABLE TOM BLACKWELL, JUDGE PRESIDING
A jury found appellant guilty of aggravated sexual assault and burglary of a habitation. Tex.
Penal Code Ann. §§ 22.022, 30.02 (West 1994 & Supp. 1997). (1) The district court assessed punishment
for each count at imprisonment for life. We will affirm the judgment of conviction.
During the early morning hours of February 24, 1995, a man entered the residence of the
complainant without her consent, where he stabbed and sexually assaulted her. The man stole the
complainant's roommate's bicycle when he left. Appellant was arrested on March 27, 1995, when he
attempted to pawn the stolen bicycle. The complainant identified appellant as her assailant during a lineup
and at trial. An expert testified that the DNA profile of semen samples found at the crime scene matched
samples taken from appellant, and that appellant's DNA profile would be found in approximately one in
six million white males.
In his first point of error, appellant contends the evidence is legally insufficient to sustain his
conviction for the two offenses. While appellant does not challenge the sufficiency of the evidence as to
the offenses, he asserts that the State failed to identify him as the perpetrator. In determining the legal
sufficiency of the evidence to support a criminal conviction, the question is whether, after viewing all the
evidence in the light most favorable to the verdict, any rational trier of fact could have found the essential
elements of the offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307 (1979); Geesa
v. State, 820 S.W.2d 154 (Tex. Crim. App. 1991); Griffin v. State, 614 S.W.2d 155 (Tex. Crim. App.
1981).
In his argument in support of this point of error, appellant acknowledges the Jackson test
but fails to apply it. Instead, appellant attacks the credibility of the State's witnesses, discusses evidence
the State did not present (such as fingerprints), and assumes the truth of the alibi testimony of defense
witnesses. The jury was the exclusive judge of the credibility of the witnesses and the weight to be given
their testimony. Miller v. State, 909 S.W.2d 586, 593 (Tex. App.--Austin 1995, no pet.). The testimony
summarized above, viewed in the light most favorable to the verdict, is clearly sufficient to support a finding
beyond a reasonable doubt that appellant was the man who entered the complainant's residence and
sexually assaulted her. Point of error one is overruled.
Next, appellant urges that the district court erred by overruling his motion to suppress
identification testimony because the pretrial lineup was impermissibly suggestive. Appellant bore the burden
of proving by clear and convincing evidence both that the lineup was impermissibly suggestive and that it
gave rise to a substantial likelihood of irreparable misidentification. Delk v. State, 855 S.W.2d 700, 706
(Tex. Crim. App. 1993). Appellant contends the lineup was impermissibly suggestive because the other
persons in the lineup were not jail inmates (one was an emergency telephone operator, the other three were
police cadets), the men standing beside him differed from him in height and weight, and the lighting tended
to draw attention to appellant.
Appellant cites no authority to support his claim that the lineup was impermissibly suggestive
merely because the other persons in the lineup were not inmates. The officer who conducted the lineup
testified that she chose the other men in the lineup because they were similar to appellant in appearance.
A photograph of the lineup is in the record. The lineup consists of five white males who are dressed
identically. The two men on either side of appellant are approximately two inches shorter than he. The
other two men in the lineup are roughly appellant's height. There are no gross disparities in age or weight
among the five men. The lighting appears to be brighter near appellant, but the officer testified that the
photograph was taken through glass and that the lighting in the photograph does not accurately reflect the
lighting in the lineup room.
In 1996, the Court of Criminal Appeals held that an order granting or overruling a motion
to suppress should be reviewed on appeal as follows:
At a suppression hearing, the trial judge is the sole and exclusive trier of fact and
judge of the credibility of the witnesses, as well as the weight to be given their testimony.
The trial judge is also the initial arbiter of the legal significance of those facts. The court of
appeals is to limit its review of the trial court's rulings, both as to the facts and the legal
significance of those facts, to a determination of whether the trial court abused its
discretion.
Dubose v. State, 915 S.W.2d 493, 496 (Tex. Crim. App. 1996) (citations omitted); see also State v.
Carter, 915 S.W.2d 501, 504 (Tex. Crim. App. 1996). The Court of Criminal Appeals has now
expressly overruled Dubose and Carter and restated the standard of review:
[A]s a general rule, the appellate courts . . . should afford almost total deference to a trial
court's determination of the historical facts that the record supports especially when the
trial court's fact findings are based on an evaluation of credibility and demeanor. The
appellate courts . . . should afford the same amount of deference to trial courts' rulings on
"application of law to fact questions," also known as "mixed questions of law and fact,"
if the resolution of those ultimate questions turns on an evaluation of credibility and
demeanor. The appellate courts may review de novo "mixed questions of law and fact"
not falling within this category.
Guzman v. State, No. 190-94 (Tex. Crim. App. Sept. 24, 1997). The time for filing a motion for
rehearing in Guzman has not expired, and thus the opinion is not yet final.
Applying Dubose, appellant has not shown that the district court abused its discretion by
concluding that the lineup was not impermissibly suggestive. Applying Guzman, we conclude that the
lineup was not impermissibly suggestive. The district court did not err by overruling the motion to suppress
identification testimony. Point of error two is overruled.
Appellant's third point of error is that the district court did not allow him to question the
investigating officer in order "to develop the defense theory that the sexual assault of [the complainant] may
have been committed by the Hyde Park Rapist or other serial rapist." The record does not reflect, by bill
of exception or otherwise, the substance of the testimony appellant sought to adduce. See Love v. State,
861 S.W.2d 899, 901 (Tex. Crim. App. 1993); Tex. R. Crim. Evid. 103(a)(2). Evidence of offenses
committed by third parties is generally inadmissible, on the ground of irrelevance, unless the evidence is
inconsistent with the defendant's guilt of the offense charged. Franklin v. State, 693 S.W.2d 420, 431
(Tex. Crim. App. 1985); Florio v. State, 532 S.W.2d 614, 618-19 (Tex. Crim. App. 1976). When
questioned by the court outside the jury's hearing, defense counsel acknowledged that he had no evidence
that the Hyde Park rapist committed the offense for which appellant was on trial. No error is presented.
Point of error three is overruled.
Finally, appellant contends an African-American venire member was peremptorily struck
by the State on the basis of race. See Batson v. Kentucky, 476 U.S. 79 (1986). When appellant made
this objection at trial, the State gave three reasons for striking the juror: he was a young engineer with no
children, he had a record of numerous speeding tickets, and he failed to complete his juror information card.
These reasons are race-neutral on their face. See Tompkins v. State, 774 S.W.2d 195, 202 (Tex. Crim.
App. 1987) (occupation); Roy v. State, 891 S.W.2d 315, 325 (Tex. App.--Fort Worth 1994, no pet.)
(youth); Satterwhite v. State, 858 S.W.2d 412, 423 (Tex. Crim. App. 1933) (failure to complete
questionnaire). While appellant asserts that the prosecutor's reasons for the peremptory strike were merely
a pretext for racial discrimination, he offers no argument or authority in support of this assertion and does
not refer us to evidence in the record that would support such a conclusion. Appellant does not persuade
us that the district court's overruling of his Batson objection was clearly erroneous. See Hill v. State, 827
S.W.2d 860, 865-66 (Tex. Crim. App. 1992) (standard of review). Point of error four is overruled.
The judgment of conviction is affirmed.
J. Woodfin Jones, Justice
Before Chief Justice Carroll, Justices Jones and Kidd
Affirmed
Filed: October 9, 1997
Do Not Publish
1. Amendments to the penal statutes subsequent to the offense are irrelevant to the appeal.
CG Times Regular">[A]s a general rule, the appellate courts . . . should afford almost total deference to a trial
court's determination of the historical facts that the record supports especially when the
trial court's fact findings are based on an evaluation of credibility and demeanor. The
appellate courts . . . should afford the same amount of deference to trial courts' rulings on
"application of law to fact questions," also known as "mixed questions of law and fact,"
if the resolution of those ultimate questions turns on an evaluation of credibility and
demeanor. The appellate courts may review de novo "mixed questions of law and fact"
not falling within this category.
Guzman v. State, No. 190-94 (Tex. Crim. App. Sept. 24, 1997). The time for filing a motion for
rehearing in Guzman has not expired, and thus the opinion is not yet final.
Applying Dubose, appellant has not shown that the district court abused its discretion by
concluding that the lineup was not impermissibly suggestive. Applying Guzman, we conclude that the
lineup was not impermissibly suggestive. The district court did not err by overruling the motion to suppress
identification testimony. Point of error two is overruled.
Appellant's third point of error is that the district court did not allow him to question the
investigating officer in order "to develop the defense theory that the sexual assault of [the complainant] may
have been committed by the Hyde Park Rapist or other serial rapist." The record does not reflect, by bill
of exception or otherwise, the substance of the testimony appellant sought to adduce. See Love v. State,
861 S.W.2d 899, 901 (Tex. Crim. App. 1993); Tex. R. Crim. Evid. 103(a)(2). Evidence of offenses
committed by third parties is generally inadmissible, on the ground of irrelevance, unless the evidence is
inconsistent with the defendant's guilt of the offense charged. Franklin v. State, 693 S.W.2d 420, 431
(Tex. Crim. App. 1985); Florio v. State, 532 S.W.2d 614, 618-19 (Tex. Crim. App. 1976). When
questioned by the court outside the jury's hearing, defense counsel acknowledged that he had no evidence
that the Hyde Park rapist committed the offense for which appellant was on trial. No error is presented.
Point of error three is overruled.
Finally, appellant contends an African-American venire member was peremptorily struck
by the State on the basis of race. See Batson v. Kentucky, 476 U.S. 79 (1986). When appellant made
this objection at trial, the State gave three reasons for striking the juror: he was a young engineer with no
children, he had a record of numerous speeding tickets, and he failed to complete his juror information card.
These reasons are race-neutral on their face. See Tompkins v. State, 774 S.W.2d 195, 202 (Tex. Cr | {
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39 F.3d 1193
NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.
UNITED STATES of America, Plaintiff-Appellee,v.Thomas Lee GILBERT, Defendant-Appellant.
No. 93-4229.
United States Court of Appeals, Tenth Circuit.
Nov. 3, 1994.
Before SEYMOUR, Chief Judge, McKAY and BALDOCK, Circuit Judges.
ORDER AND JUDGMENT1
1
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); 10th Cir. R. 34.1.9. The cause is therefore ordered submitted without oral argument.
2
Thomas Lee Gilbert was convicted after a jury trial of one count of bank robbery in violation of 18 U.S.C. 2113. He was sentenced as a career offender to 180 months in prison followed by three years of supervised release, and was ordered to pay a $5000 fine under the Inmate Financial Responsibility Program.
3
Mr. Gilbert's court-appointed counsel represented him at trial and filed a notice of appeal. Counsel has since filed a brief pursuant to Anders v. California, 386 U.S. 738, 744 (1967), stating his opinion that no meritorious issues could be raised on appeal and asking leave to withdraw as counsel. As directed by the Supreme Court in Anders, counsel's brief refers to matters in the record that might arguably support an appeal. He nevertheless concludes that pursuit of those matters would be frivolous.
4
Mr. Gilbert has responded to the Anders brief, and the government has responded to both the Anders brief and Mr. Gilbert. Our procedure in these circumstances is governed by the Supreme Court's directive in Anders.
5
[I]f counsel finds his case to be wholly frivolous, after a conscientious examination of it, he should so advise the court and request permission to withdraw. That request must, however, be accompanied by a brief referring to anything in the record that might arguably support the appeal. A copy of counsel's brief should be furnished the indigent and time allowed him to raise any points that he chooses; the court--not counsel--then proceeds, after a full examination of all the proceedings, to decide whether the case is wholly frivolous. If it so finds it may grant counsel's request to withdraw and dismiss the appeal....
6
Id.
7
In his Anders brief, counsel suggests that an argument might be made that the evidence was not sufficient to support the verdict because none of the tellers present at the bank during the robbery clearly identified Mr. Gilbert as the robber. However, our review of the trial evidence convinces us that this argument is frivolous. Mr. Gilbert was arrested shortly after the crime while driving a truck bearing the same license plate as that on the truck the robber was seen driving away from the bank. Police recovered from the truck a note that the robber had shown the teller when demanding money. The government presented evidence at trial that the note had been written by Mr. Gilbert and had his fingerprints on it. This and other evidence connecting Mr. Gilbert to the crime, when viewed most favorably to the verdict, eliminates any ground for contending that the conviction must be reversed because it is not supported by the record.
8
Counsel also proffers an argument that Mr. Gilbert's Fourth Amendment rights were violated when the police stopped the truck, arrested him, and initially searched the truck. Pursuit of this argument on appeal is frivolous on two grounds. First, because the defense made no pretrial challenge to the stop, arrest, or search as required by Fed.R.Crim.P. 12(b)(3), Mr. Gilbert is precluded from raising these matters on appeal. Even if we were to consider the merits we would find no ground for appeal. The police received a radio dispatch stating that the bank had been robbed and giving the license number of the truck that the robber was driving. This knowledge gave the officers probable cause under the circumstances here to stop a truck with the same license number and arrest the driver. We likewise find no basis for challenging as improper the subsequent brief inventory search made upon Mr. Gilbert's arrest.
9
In his response to the Anders brief, Mr. Gilbert asserts in essence that his court-appointed counsel was ineffective because counsel did not adequately prepare for trial, failed to present witnesses that would have aided his defense, and failed to effectively argue evidence in his favor. This court has stated that "[t]he preferred avenue for challenging the effectiveness of defense counsel in a federal criminal trial is by collateral attack under 28 U.S.C. 2255." Beaulieu v. United States, 930 F.2d 805, 806 (10th Cir.1991). In Beaulieu we pointed out that review of such claims on direct appeal is particularly difficult when trial counsel represents the defendant in that appeal and/or when the claim requires consideration of evidence not contained in the direct appeal record. Id. at 807.
10
We agree with the government's contention that the record here is not sufficient to allow us to address Mr. Gilbert's allegations on direct appeal. Mr. Gilbert alleges inadequate trial preparation and the failure to interview or call certain witnesses, allegations we held in Beaulieu could not be evaluated on the basis of the trial record alone. Moreover, Mr. Gilbert is represented on appeal by trial counsel, who has filed an Anders brief. See id. at 808. Accordingly, we decline to consider his claims of inadequate counsel here. Mr. Gilbert may pursue them pursuant to 28 U.S.C. 2255 if he wishes.
11
Finally, as directed by the Supreme Court, we have carefully examined all the proceedings in this matter and we find nothing in them upon which a cognizable argument for reversible error could be based. Accordingly, we grant counsel's motion to withdraw and dismiss the appeal.
1
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 the court's General Order filed November 29, 1993. 151 F.R.D. 470
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299 S.W.3d 400 (2009)
Victor RODARTE, Appellant,
v.
INVESTECO GROUP, L.L.C.; Morad Mekhail, Individually and as Trustee of Certain Real Property Described as the South One-Half (½) of Lot Two (2) and all of Lots Three (3), Four (4), Five (5), and Six (6), In Block Twenty-Four (24), In Mrs. A.C. Allen's Addition to the City of Houston, Harris County, Texas NSBB, and Vincent Rodriguez, Appellees.
No. 14-08-00093-CV.
Court of Appeals of Texas, Houston (14th Dist.).
September 29, 2009.
*404 Jeffrey J. Tompkins and James Martin Juranek, Jr., Houston, TX, for Appellants.
Morad Mekhail, Paul S. Hoefker, Houston, TX, for Appellees.
Panel consists of Justices FROST, BROWN, and BOYCE.
MAJORITY OPINION
JEFFREY V. BROWN, Justice.
In this property-foreclosure case, Victor Rodarte appeals the trial court's summary-judgment orders in favor of Investeco Group, L.L.C., Morad Mekhail, and Vincent Rodriguez. Victor contends that the summary-judgment orders were improperly granted because (1) he had standing to prosecute the suit on his brother's behalf; (2) one summary-judgment order was based solely upon previously nonsuited claims; (3) the appellee-movants failed to meet the required burdens of proof; and (4) the trial court ignored Victor's properly pleaded and proven affirmative defenses. We affirm the trial court's judgment.
I. Background
In 1990, Paul Sanchez (a.k.a. Polo Sanchez) sold a piece of real property in Harris County to Eva Mendez. Sanchez and Mendez executed a promissory note for $110,000, which was secured by a deed of trust granting Sanchez a lien on the property. Mendez conveyed the property in 1997 to Marleny Serna, who assumed the note. In 1999, Serna conveyed the property via a document entitled "Assumption Warranty Deed" to Domingo Gonzales and Gregorio Rodarte, Victor's brother, and they assumed the note and executed a new deed of trust. According to the pleadings, Gonzales and Gregorio assumed the note under an oral partnership agreement in which each agreed to pay one-half of the note's payments and other expenses. Gregorio eventually assumed the entire note, allegedly buying out Gonzales's interest.
According to the pleadings, in 2004 Gregorio had difficulty making the monthly payments and began searching for a buyer for the property. Around the same time, Sanchez appointed Vincent Rodriguez as substitute trustee on the new deed of trust. Gregorio allegedly located a buyer, Gomar Properties, Inc., but then learned indirectly that Rodriguez had taken action to foreclose upon the property. In April 2004, Gonzales allegedly approached Rodriguezin his capacity as an agent to Sanchezto prevent the foreclosure, and the parties reached an oral agreement (the "Sanchez Agreement") to that effect. The specific details of that agreement remain in dispute.
In October 2004, Sanchez sold the note to Investeco. Investeco then appointed Morad Mekhail as the substitute trustee of the deed of trust. Mekhail executed a notice of foreclosure sale on the property and sold the property to the highest bidder, Investeco.
About two years later, Gregorio executed special and general power-of-attorney documents appointing Victor as his agent, and giving Victor authority to prosecute any and all legal actions relating to the property on his brother's behalf.
Victor filed suit against Investeco and Mekhail alleging claims for damages including breach of contract, negligence, improper foreclosure, and breach of fiduciary duty. Under the heading "Parties," Victor is identified as "an individual who ... is the lawful agent of real-party-in-interest, *405 Gregorio Rodarte, with respect to all suits arising from the real property in question."
Victor filed his first amended petition against Investeco and Mekhail alleging claims for (among other things) breach of contract, breach of fiduciary duty (against Mekhail in his capacity as trustee only), and conversion; Victor effectively nonsuited the previously asserted improper-foreclosure claims by omitting them from his amended pleading. After Victor filed his amended pleading, Investeco and Mekhail filed counter-claims seeking a declaratory judgment with respect to proper notice of foreclosure and the existence of surplus funds following foreclosure.
Investeco and Mekhail moved for summary judgment on several claims, including their newly asserted counter-claims. The trial court granted summary judgment in favor of Investeco and Mekhail with regard to the appellees' declaratory-judgment counter-claims, but denied the remainder of the summary-judgment motion.
Victor filed a fourth amended petition in June 2007, in which he added Gregorio and Gonzales as plaintiffs, and Sanchez and Rodriguez as new defendants. In July, Investeco and Mekhail filed a fourth amended motion against Gonzales, Victor, and Gregorio seeking summary judgment on the remaining claims for breach of fiduciary duty, tortious interference and conspiracy. Sanchez and Rodriguez subsequently joined Investeco and Mekhail in their motion.[1] On August 17, the trial court granted the motion for summary judgment ordering that Victor and Gregorio take nothing. For unspecified reasons, the trial court crossed out Gonzales's name from the summary-judgment order. But two weeks later, Gonzales nonsuited his claims.
On October 9, a suggestion of death was filed with the trial court, noting that Sanchez had died on May 8, 2007. The suggestion further indicated that no administration of Sanchez's estate was pending.[2]
In December 2007, the trial court severed the unresolved claims by Victor and Gregorio against Sanchez for breach of contract, creating a final and appealable summary-judgment order. Victor now appeals from that order.
II. Analysis
Victor appeals adverse summary-judgment orders on (1) his claims for tortious interference with contractual relations and conspiracy against Investeco, Mekhail (individually) and Rodriguez; (2) his claim for breach of fiduciary duty against Mekhail (as trustee); and (3) the declaratory-judgment claims asserted against Victor by Investeco and Mekhail regarding proper notice of foreclosure and the existence of proceeds from foreclosure. Victor contends that the summary-judgment orders were improperly granted because (1) he had standing to prosecute the suit on his brother's behalf; (2) the summary-judgment order granting declaratory relief was based solely upon previously nonsuited claims; (3) the appellee-movants failed to *406 meet the required burdens of proof; and (4) the trial court ignored Victor's properly pleaded and proven affirmative defenses.
A. Victor Rodarte's Standing
Before considering Victor's contention on appeal that the trial court erred in granting summary judgment on the merits of Victor's claims, we must consider whether the trial court erred in determining that Victor lacked standing to assert these claims in the first place. Victor contends that the trial court erred in granting summary judgment on the ground that he lacked standing to assert the claims of his brother Gregorio in his own name as a matter of law.
Standing is a constitutional prerequisite to maintaining suit. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex.1993). The absence of standing may be raised by a motion for summary judgment. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000). Under Texas law, a party has standing to bring suit if (1) it has suffered a distinct injury, and (2) there exists a real controversy that will be determined by the judicial determination sought. Brown v. Todd, 53 S.W.3d 297, 305 (Tex.2001). This second component of standing refers to presentation of a justiciable issue. State Bar of Tex. v. Gomez, 891 S.W.2d 243, 245-46 (Tex.1994). We review a party's standing de novo and construe the pleadings in favor of the plaintiff. Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 646 (Tex.2004); Tex. Ass'n of Bus., 852 S.W.2d at 446.
The appellees cite Elizondo v. Texas Natural Resource Conservation Commission for the proposition that an agent cannot bring suit on behalf of a principal in the agent's own name under a power of attorney. 974 S.W.2d 928, 931 (Tex.App.-Austin 1998, no pet.). In that case, Mildred Elizondo, "individually and on behalf of those she is authorized to represent," filed suit in a Travis County district court challenging the Texas Natural Resource Conservation Commission's final order regarding actions it was taking to divert water. Id. at 930. The trial court sustained the commission's plea to the jurisdiction on three bases, one being that Elizondo did not have standing to bring the action on behalf of the affected landowners. Id. After the trial court sustained the plea, Elizondo filed a "Plaintiff's [singular] Notice of Appeal." Id. at 930-31. The Austin court of appeals held that (1) Elizondo's appointment as attorney-in-fact by power-of-attorney documents did not authorize her to bring suit on behalf of the ten individuals in her own name in a representative capacity; and (2) even if she were authorized to bring suit in a representative capacity, she did not perfect appeal in that capacity. Id. at 931.
In reaching its decision, the court in Elizondo relied on Tinsley v. Dowell, 87 Tex. 23, 26 S.W. 946, 948 (1894), for the proposition that, in Texas, an agent cannot bring a suit in his own name for the benefit of the principal. Id. Our court recently distinguished Tinsley v. Dowell on that proposition in AVCO Corporation v. Interstate Southwest, Ltd., 251 S.W.3d 632, 652-53 (Tex.App.-Houston [14th Dist.] 2007, pet. denied). As we stated in AVCO, Tinsley involved an agent suing on his own behalf, not for the benefit of the principal. Id. Here, as in AVCO, Victor specifically stated in his pleadings that he asserted claims on his brother's behalf, and appellees do not dispute that Gregorio has a justiciable interest in these claims. See id. at 653.
In addition, the scope of Victor's authority under the special and general powers of attorney is a question of capacity, not standing. Id. at 649, 653. Standing *407 is not to be confused with capacity. Id. at 649. Capacity concerns "`a party's personal right to come into court,'" while standing concerns "`the question of whether a party has an enforceable right or interest'." Id. (quoting Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex.2005)). A plaintiff with no legally cognizable interest in the outcome of the case lacks standing to sue on its own behalf, but may be authorized to sue on behalf of another. See Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex.1996). Appellees have not challenged Victor's capacity to bring suit on his brother's behalf.
We conclude that Victor has standing as Gregorio's attorney-in-fact to litigate his brother's claims. The trial court could not have properly granted summary judgment on this basis.
Appellees also contend that Victor perfected appeal in his individual capacity only and does not have standing in this court because he has no interest in the subject property.[3] While it is true that Victor did not state in the notice of appeal that he was representing his brother, he has sued below only in a representative capacity; there is no confusion as to his capacity before this court. Having made a bona fide attempt to invoke the appellate court's jurisdiction after prosecuting this suit solely in a representative capacity on his brother's behalf, Victor effectively has perfected an appeal. See Warwick Towers Council of Co-Owners ex rel. St. Paul Fire & Marine Ins. v. Park Warwick, L.P., 244 S.W.3d 838, 839 (Tex.2008) (per curiam). We address that appeal on the merits.
B. Trial Court's Summary-Judgment Orders
In his first and second issues on appeal, Victor contends that the trial court improperly granted the appellees' second amended motion for summary judgment and fourth amended motion for summary judgment on Victor's remaining claims. Specifically, Victor argues that the trial court's granting of this summary judgment was in error because (1) the summary judgment related to Victor's notice-based and surplus-based claims was improper for procedural reasons and should have been denied; (2) the appellees failed to meet their evidentiary burden with respect to their statute-of-limitations defense; (3) appellee Rodriguez failed to meet his evidentiary burden with respect to his defenses to breach of oral agreement; (4) the appellees failed to meet their evidentiary burden with respect to Victor's conspiracy claim; and (5) the appellees failed to meet their evidentiary burden with respect to Victor's tortious-interference claim. We consider each of these issues in turn.
1. Standard of Review
We review the trial court's grant of summary judgment de novo. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156-57 (Tex.2004). In a traditional summary judgment, the movant bears the burden to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985); Aguirre v. Vasquez, 225 S.W.3d 744, 750 (Tex.App.-Houston [14th Dist.] 2007, no pet.). Thus, when a defendant moves for traditional summary judgment, it must conclusively negate at least one essential *408 element of each of the plaintiff's causes of action or conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Shirvanian v. DeFrates, 161 S.W.3d 102, 106 (Tex.App.-Houston [14th Dist.] 2004, pet. denied). We take as true all evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. Joe, 145 S.W.3d at 157; Aguirre, 225 S.W.3d at 750. We review a summary judgment for evidence that would enable reasonable and fair-minded jurors to differ in their conclusions. Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.2006) (per curiam) (citing City of Keller v. Wilson, 168 S.W.3d 802, 822 & 23 (Tex.2005)).
When, as here, the trial court does not specify in its order the grounds on which it relied in granting summary judgment, we must affirm the summary judgment if any of the grounds presented is meritorious. W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex.2005); Chappell Hill Bank v. Smith, 257 S.W.3d 320, 324 (Tex. App.-Houston [14th Dist.] 2008, no pet.). Thus, to prevail on appeal, Victor must show that each of the appellees' summary-judgment grounds is meritless. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995).
2. Notice of Foreclosure and Surplus Funds
Victor's first issue on appeal contends the trial court erred in granting the appellees' second amended motion for summary judgment related to the notice of foreclosure and the existence of surplus funds resulting from the foreclosure. Specifically, Victor contends that the trial court's order was improper because these claims had been nonsuited by omission in his first amended petition. As a result, Victor argues, there were no "live" claims related to notice of foreclosure or surplus funds, rendering any judgment by the court purely advisory. Further, Victor asserts that his act of nonsuiting the claims disposed of any justiciable controversy between the parties on these issues, precluding the appellees' request for declaratory judgment.
Victor is correct that his act of omitting these claims from his first amended petition effectively nonsuited the claims. J.M. Huber Corp. v. Santa Fe Energy Res., Inc., 871 S.W.2d 842, 844 (Tex.App.-Houston [14th Dist.] 1994, writ denied). But after Victor's nonsuit, the appellees filed counter-claims requesting declaratory judgment on both issues. If these claims were ripe for declaratory judgment, then the trial court properly could award declaratory judgment on them through its summary-judgment order.
The Texas Declaratory Judgment Act is a remedial statute the purpose of which is to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations. See Tex. Civ. Prac. & Rem.Code Ann. § 37.002(b) (Vernon 2008); Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex.1995); WesternGeco, L.L.C. v. Input/Output, Inc., 246 S.W.3d 776, 781 (Tex.App.-Houston [14th Dist.] 2008, no pet.). We must construe and administer this statute liberally. See Tex. Civ. Prac. & Rem. Code Ann. § 37.002(b); Bonham State Bank, 907 S.W.2d at 467. A court of record, acting within its jurisdiction, has power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. WesternGeco, L.L.C., 246 S.W.3d at 781. A declaratory judgment is appropriate only if a justiciable controversy exists as to the rights and status of the parties and the controversy will be resolved by the declaration sought. Bonham State Bank, 907 S.W.2d at 467; WesternGeco, *409 L.L.C., 246 S.W.3d at 781. For a justiciable controversy to exist, there must be a real and substantial controversy involving a genuine conflict of tangible interests and not merely a theoretical dispute. Bonham State Bank, 907 S.W.2d at 467; WesternGeco, L.L.C., 246 S.W.3d at 781.
Victor contends that he effectively destroyed any real, justiciable controversy by nonsuiting these claims, leaving only a theoretical dispute on the issue. But the appellees argue that because the claims were dropped voluntarily, they could be reasserted in the future. In Conte v. Greater Houston Bank, this court held that a justiciable controversy existed sufficient to support summary judgment when a bank filed suit seeking a declaration of its rights under a similar lien note. 641 S.W.2d 411 (Tex.App.-Houston [14th Dist.] 1982, writ ref'd n.r.e.). In that case, this court held that, even though the maker had not yet refused a demand by the bank, the determination of the parties' rights under the note qualified as a "present justiciable controversy." Id. at 413-14. Likewise, the appellees in this case sought clarification through their counter-claim of their rights and liabilities based on their conduct of providing notice of foreclosure.
Similarly, other courts have recognized that a determination of rights to sales proceeds are a justiciable controversy sufficient to sustain declaratory relief. See, e.g., Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Olson, 920 S.W.2d 458 (Tex. App.-Austin 1996, no pet); Blackmon v. Parker, 544 S.W.2d 810 (Tex.Civ.App.-El Paso 1976), aff'd, 553 S.W.2d 623 (Tex. 1977).[4] In this case, the appellees' counterclaims regarding the notice of foreclosure and the existence of surplus proceeds were justiciable controversies sufficient to qualify for declaratory judgment.
a. Notice of Foreclosure
In their counter-claim, the appellees contend that proper notice of the foreclosure was given in accordance with the deed of trust and the Texas Property Code. The deed of trust required only that the trustee give notice to Gonzales and Gregorio as required by law. The Texas Property Code requires only notice "by certified mail on each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt." Tex. Prop.Code Ann. § 51.002(b)(3) (Vernon 2007 & Supp. 2008).
Attached to their motion, the appellees provided evidence of Gregorio's address as provided to the trustee, copies of the letter of notice and the notice itself, a receipt for having mailed the notice to Gregorio by certified mail, and a copy of the return card. Victor offered no evidence or rebuttal to the appellees' evidence other than to reurge that no justiciable controversy existed. Based on the appellees' motion and the accompanying evidence, we conclude that the appellees proved that proper notice of the foreclosure was given as a matter of law. The trial court did not err in granting summary judgment on this issue.
b. Surplus Proceeds
After a valid foreclosure sale, Investeco would be entitled to judgment for the amount of the note, interest, and attorney's fees, less the amount received at the trustee sale and other legitimate credits. Resolution Trust Corp. v. Westridge Court *410 Joint Venture, 815 S.W.2d 327, 330 (Tex. App.-Houston [1st Dist.] 1991, writ denied). In the present case, the relevant deed of trust establishes the following priority for the distribution of foreclosure proceeds: (1) expenses of foreclosure, including a 5% commission to the trustee; (2) payment to the beneficiary under the deedhere, Investeco by assignmentof the full amount of principal, interest, attorney's fees, and other charges due and unpaid; (3) payment of any amounts required to be paid by law before payment to grantor; and (4) payment of any remaining balance to the grantorGregorio.
The appellees' summary-judgment proof shows that Investeco's bid at the foreclosure sale was $123,757.00. The appellees' attached proof further shows that the outstanding debt on the note, expenses of the sale, as well as taxes on the property paid by Investeco before the saletotal $123,757.00. Victor did not rebut this summary-judgment proof. Based on this record, there appears to be no issue of fact concerning the existence of surplus proceeds after the foreclosure sale. The trial court did not err in granting summary judgment on this issue.
Victor's first issue on appeal is overruled.
3. Plaintiffs' Remaining Claims
In his second issue on appeal, Victor challenges the trial court's order granting the appellees' fourth amended motion for summary judgment on the plaintiffs' remaining claims. At the time the motion was filed these claims included breach of oral agreement by Sanchez;[5] tortious interference with contractual relations by Investeco, Mekhail (as an individual) and Rodriguez; breach of fiduciary duty by Mekhail (as trustee); and conspiracy by Sanchez, Investeco, Mekhail and Rodriguez. Appellees' motion sought summary judgment on all of these claims except for the breach of contract claim against Sanchez. Victor generally contends that the trial court erred in granting this summary judgment because the appellees failed to meet the evidentiary burdens associated with their asserted defenses.
The appellees sought summary judgment on each of the plaintiffs' causes of action based on Victor's asserted lack of standing to sue on his brother's behalf. As discussed above, Victor did not lack standing. Therefore, Victor's asserted lack of standing was not a valid basis for summary judgment in favor of the appellees on Victor's claims for tortious interference with contractual relations, breach of fiduciary duty, and conspiracy.
The appellees also sought summary judgment on all of the claims by Gregorio and Gonzales based on the statute of limitations. Gonzales has since nonsuited his claims against the appellees, and thereafter ceased to be a party to this case. Further, because Gregorio's claims in this case mirror exactly those asserted by Victor on his behalf, those claims relate back to the originally filed claims and are not barred by limitations. See Tex. Civ. Prac. & Rem Code Ann. § 16.068 (Vernon 2008); Johnston v. Crook, 93 S.W.3d 263, 269 (Tex.App.-Houston [14th Dist.] 2002, pet. denied) (when second claimant's cause *411 of action was identical to, and substituted for, original claimant's, date of original claimant's filing controlled for purposes of limitations).
We will consider the other claims and related defenses in turn.
a. Breach of Oral Agreement
In his fourth amended petition, Victor brought a single claim against Sanchez for allegedly breaching the oral Sanchez Agreement. Victor's appellate brief states that summary judgment on this claim was in error because the appellees did not meet their evidentiary burden. Apparently Victor has included these contract-based arguments as they relate equally to both the breach-of-oral-agreement claim and the tortious-interference claim. But Sanchez is not a party to this appeal because the claims related to him were severed by the trial court's order of December 14, 2007. Therefore, we will not consider this issue as it involves a party who is not a part of this appeal and a claim which was not addressed in the motion for summary judgment.
b. Tortious Interference
In the court below, and again on appeal, Victor claims that Investeco, Mekhail (individually), and Rodriguez tortiously interfered with the Sanchez Agreement by orchestrating both the assignment of the note and the foreclosure sale before Gregorio could close the sale with Gomar. A party alleging tortious interference must prove that a contract subject to interference exists; that the alleged act of interference was willful and intentional; that the willful and intentional act proximately caused damage; and that actual damage or loss occurred. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex.2000); Four Bros. Boat Works, Inc. v. Tesoro Petroleum Cos., 217 S.W.3d 653, 668 (Tex.App.-Houston [14th Dist.] 2006, pet. denied).
While disagreeing as to its exact terms, validity, and enforceability, both parties generally concede that an agreement existed between Sanchez, Gonzales, and Gregorio concerning the note and the property at issue. Victor claims that the Sanchez Agreement was based on Sanchez's promise to refrain from assigning the note or foreclosing on the property, thereby allowing Gonzales and Gregorio time to close on the sale to Gomar. In consideration for Sanchez's promises, Gonzales and Gregorio promised to pay Sanchez $9,000.00 by the end of June 2004.[6] The appellees, by contrast, concede that they were aware of an agreement between the parties in which Sanchez promised not to foreclose on the property as long as Gonzales and Gregorio paid the note in full by June 5, 2004. Because the exact terms are in dispute, a material issue of fact exists regarding the nature of the Sanchez Agreement. But it is clear that some type of agreement was made.[7]
Victor's fourth amended petition cites two specific occasions of tortious interference *412 by the appellees: (1) taking an assignment of the note from Sanchez, and (2) foreclosing on the property. Victor claims that the damages suffered as a result of these acts was the rescission of the Gomar sales contract. Looking at the first allegation of interference, it does not follow that the appellees' act of initiating and ultimately completing the sale and assignment of the note proximately caused the failure of Gomar sale. Gonzales's affidavit, attached to Victor's response to the appellees' motion, states that Gregorio was ready to close on the Gomar sale until he learned of the foreclosure from the title agent. Therefore, it was the foreclosure not the assignment of the notethat caused the rescission of the Gomar sale contract. Because the undisputed facts establish as matter of law that the appellees' purchase of the note was not the proximate cause of the complained-of damages, that could not constitute tortious interference with the Sanchez Agreement. See Prudential Ins. Co. of Am., 29 S.W.3d at 77; Four Bros. Boat Works, 217 S.W.3d at 668.
While it is clear that the appellees' act of foreclosing upon the property did prevent the Gomar sale from closing, it is equally clear that the status of both the appellees and Sanchez had changed by the time the foreclosure occurred. Accordingly, one of two outcomes must have occurred. First, after taking assignment of the note Investeco assumed the rights previously held by Sanchez as the holder of the note, and as the beneficiary of the deed of trust. Consequently, at the time of foreclosure, Investeco was a party to the Sanchez Agreement and incapable of tortiously interfering with it as a matter of law. See Prudential Ins. Co. of Am., 29 S.W.3d at 77-78; Holloway v. Skinner, 898 S.W.2d 793, 794-95 (Tex.1995) (Texas law has long recognized that the person who induces the breach of a contract cannot be a contracting party). Alternatively, if Investeco did not take Sanchez's place in the Sanchez Agreement based on the assignment, then the Sanchez Agreement must have terminated by its own terms as Sanchez lacked any authority to perform under the contract by preventing foreclosure of the property. In either case, Investeco could not have interfered with the Sanchez Agreement by foreclosing upon the property as a matter of law.
Therefore the trial court did not err in granting summary judgment on the tortious-interference claim. We overrule Victor's issue on appeal.
c. Breach of Fiduciary Duty
In his fourth amended petition, Victor asserted a claim for breach of fiduciary duty as to Mekhail, claiming that Mekhail, as trustee, breached a fiduciary duty to Gregorio by foreclosing on the property despite his knowledge of an agreement with Sanchez not to transfer the note or foreclose on the property in order to allow Gregorio to close with the new buyer. The appellees moved for summary judgment on this claim, contending that there was no fiduciary duty as a matter of law. On appeal, Victor does not raise this issue as one on which the trial court erred in granting summary judgment. We find Victor waived any challenge to the trial court's ruling on his fiduciary-duty claim by failing to raise or brief it on appeal. See Tex. R.App. P. 38.1. Accordingly, we affirm the granting of summary judgment on his claim for breach of fiduciary duty in favor of the appellees.
d. Conspiracy
Victor's fourth amended petition also asserted claims of civil conspiracy against Investeco, Mekhail, Sanchez, and Rodriguez. Specifically, Victor alleged that the *413 defendants conspired amongst themselves to tortiously interfere with the Sanchez Agreement.
To establish civil conspiracy, the appellant must show that the appellees had a meeting of the minds on an object or course of action, and that one of the members committed an unlawful, overt act in furtherance of the object or course of action. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex.2005). But since conspiracy is a derivative tort, Victor must show that the appellees were also liable for some underlying tort in order to prevail on this claim. See Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 864 (Tex.App.-Houston [14th Dist.] 2001, pet. denied) (citing Trammell Crow Co. No. 60 v. Harkinson, 944 S.W.2d 631, 635 (Tex.1997)). Because we have already affirmed the trial court's summary judgment as to both tortious interference and breach of fiduciary duty, Victor is without a tort claim upon which to base a cause of civil conspiracy. Therefore we overrule Victor's issue on the summary judgment against his conspiracy claim.
III. Conclusion
Based on the foregoing reasoning, we affirm the trial court's judgment.
FROST, J., concurring.
KEM THOMPSON FROST, Justice, concurring.
I agree with the majority's conclusion that Victor Rodarte has perfected appeal in his representative capacity; however, I respectfully disagree with the analysis the majority uses to reach this conclusion.
In determining the capacity in which a party has asserted a claim in the trial court, the focus must be on the party's pleadings. Likewise, in determining the capacity in which a party has appealed from an adverse judgment, the focus must be on the party's notice of appeal. In both instances, this court must construe the operative language liberally. Under a liberal construction of the relevant trial court pleading, Victor Rodarte sued not just in his representative capacity, as the majority concludes, but also in his individual capacity.
In his live trial-court petition, Victor, as plaintiff, did not state that he was suing in his individual capacity or as representative of his brother Gregorio, or both. Both Rodarte brothers (Victor and Gregorio) as well as Domingo Gonzales were named as plaintiffs; however, Victor's capacity was not specified. Rather, Victor was referred to as "Plaintiff Victor Rodarte" with no further explanation. Though the terms "Plaintiff" and "Plaintiffs" are used throughout the petition, these terms are not defined. Victor alleged in his trial court pleading (1) that he "is the lawful agent of real-party-in-interest, Gregorio Rodarte, with respect to all suits arising from the real property in question," (2) that Gregorio "executed special and general power of attorney agreements appointing Victor, as Gregorio's agent with respect to the Property," and (3) that "these power of attorney agreements vest Plaintiff [no specification] with full authority over Gregorio's interest in the Property, including authority to prosecute any and all legal actions relating to the Property." Victor, however, did not state that he was bringing suit in his capacity as agent for Gregorio. No party filed a motion requesting the trial court to compel Victor to show that he had capacity to assert claims in the litigation, nor did any party take any other action to place in issue Victor's capacity to assert such claims.
Well-timed special exceptions to Victor's trial-court pleading would have clarified the capacity issue. However, because no special exceptions were filed or sustained *414 against the petition, this court must construe the petition liberally to contain any claims that reasonably may be inferred from the language used in the petition. SmithKline Beecham Corp. v. Doe, 903 S.W.2d 347, 354-55 (Tex.1995). Though the majority believes it is clear that Victor sued only on Gregorio's behalf as Gregorio's attorney-in-fact, under a liberal construction of the petition, Victor sued both in his individual capacity and in a representative capacity.
Appellees, relying on Elizondo v. Texas Natural Resource Conservation Commission, contend that Victor perfected appeal in his individual capacity only. See 974 S.W.2d 928 (Tex.App.-Austin 1998, no pet.). They assert Victor lacks standing in this court because, in his individual capacity, he has no interest in the subject property. See id. However, in Elizondo, the plaintiff expressly stated in her trial-court petition that she was suing in both her individual capacity and in a representative capacity. See id. In contrast to the plaintiff in Elizondo, Victor did not expressly address in his trial-court pleading the capacity in which he brought suit. Therefore, the Elizondo case is not on point. See id.
When Victor appealed the adverse judgment by filing a notice of appeal in this court, he continued to use the same vague terminology he used in his trial court pleading. In his notice of appeal, Victor does not specify the capacity in which he is appealing. Instead, Victor states only that the appellant is "Plaintiff Victor Rodarte"the same vague term used in the trial court petition to refer to Victor suing in both an individual capacity and as representative of Gregorio. The record reflects that Victor is relying heavily on his representative capacity, and there is no apparent basis upon which Victor could sue in his individual capacity. In this context the notice of appeal should be deemed sufficient to perfect an appeal by Victor in his representative capacity. See Warwick Towers Council of Co-Owners ex rel. St. Paul Fire & Marine Ins. Co. v. Park Warwick, L.P., 244 S.W.3d 838, 839 (Tex.2008) (holding that court of appeals should have reached the merits of insurance company's appellate arguments and that insurance company had made a bona fide attempt to invoke the court of appeals' jurisdiction, even though notice of appeal did not mention the insurance company and referred only to the insurer/subrogor as the appellant). Victor's notice of appeal is not so deficient that it fails to invoke this court's jurisdiction over the disputed claims. Appellees argue that Victor lacks standing because he appealed only in his individual capacity; however, for the reasons stated above, this argument lacks merit.
NOTES
[1] While Sanchez joined the motion for summary judgment, that motion did not include the plaintiffs' claims for breach of contract against him, and those claims were never added to the motion.
[2] On October 12, Victor and Gregorio filed a fifth amended pleading asserting the same claims as stated in their fourth amended petition. But this new pleading added Edward Sanchez, "the only heir, known at this time, of the Estate of Paul Sanchez decedent," as a defendant to the suit. The pleading states that it is "necessary" to add Edward and the Estate of Sanchez in response to the previously filed suggestion of death.
[3] It bears noting that the appellees filed their counter-claims seeking declaratory judgment against Victor in an individualnot representativecapacity. But unlike standing, objections concerning capacity may be waived. Nootsie, Ltd., 925 S.W.2d at 662. Since Victor never objected to the counter-claims on this basis, this issue is waived for appeal.
[4] This court held that a declaratory-judgment action regarding escrow funds from a foreclosure sale does not qualify as a justiciable controversy in National County Mut. Fire Ins. Co. v. Hood, 693 S.W.2d 638 (Tex.App.-Houston [14th Dist.] 1985, no pet.). But our decision in that case was based on the appellee's failure to include in the record summary-judgment evidence to support the trial court's required finding. Id. at 639.
[5] In their fourth amended petition, the plaintiffs alleged breach of contract by Sanchez based on his alleged breach of the Sanchez Agreement. But perhaps because this claim did not involve Investeco and Mekhail, it was not included in their fourth amended motion for summary judgment on the plaintiffs' remaining claims. In its "Final Summary Judgment," the trial court ordered that the plaintiffs "shall take nothing on their claims against ... Paul Sanchez ...," apparently granting Sanchez more relief than he requested.
[6] Victor's response to the appellees' motion for summary judgment included receipts for payments totaling $9,000.00 made by Gonzales to Sanchez.
[7] In their motion, and again on appeal, the appellees contend that the promises which Victor claims form the basis of the Sanchez Agreement are not in writing, and therefore violate the statute of frauds as the contract would involve the sale of land. See Tex. Bus. & Com.Code Ann. § 26.01 (Vernon 2009). However, a contract held to be unenforceable under the statute of frauds may nevertheless serve as the basis for a tortious-interference claim. See Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 664 (Tex. 1990) (citing Clements v. Withers, 437 S.W.2d 818, 821 (Tex.1969)).
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10 So.3d 733 (2009)
STATE ex rel. Richard LAY
v.
STATE of Louisiana.
No. 2008-KH-2976.
Supreme Court of Louisiana.
June 19, 2009.
Denied.
WEIMER, J., recused.
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52 F.3d 1067
U.S.v.Birdd
NO. 94-20175
United States Court of Appeals,Fifth Circuit.
Apr 07, 1995
Appeal From: S.D.Tex., No. CA-H-92-1385
1
AFFIRMED.
d
Local Rule 47.6 case
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"pile_set_name": "FreeLaw"
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787 F.2d 172
Marisa LAGAMBA, Petitioner,v.CONSOLIDATION COAL COMPANY and Director, Office of Workers'Compensation Programs, United States Department ofLabor, Respondent.
No. 85-1762.
United States Court of Appeals,Fourth Circuit.
Argued March 6, 1986.Decided April 1, 1986.
Ross Maruka (Law Office of Ross Maruka, Fairmont, W.Va., on brief), for petitioner.
David Barnette (Jackson, Kelly, Holt & O'Farrell, Charleston, W.Va., on brief), for respondent.
Before WIDENER and CHAPMAN, Circuit Judges and BRITT, Chief United States District Judge for the Eastern District of North Carolina, sitting by designation.
CHAPMAN, Circuit Judge:
1
Marisa Lagamba, widow of deceased coal worker, Alexander Lagamba, appeals from the denial of benefits under the Black Lung Benefits Act, 30 U.S.C. Sec. 901, et seq, contending that she was not given the benefit of the interim presumption under 20 C.F.R. Sec. 727.203(a)(1) and (3) and that her husband's death resulted from pneumoconiosis. During the hearing she produced evidence of x-rays that were read positive for the presence of simple coal miner's pneumoconiosis and she presented evidence of a qualifying blood gas study. The ALJ and the Secretary, without invoking the presumption, denied the claim because pathological studies made during a post-mortem examination of the deceased miner's body did not reveal evidence of pneumoconiosis. Since the plaintiff was not given the advantage of the presumption, we remand the case to the Secretary for reconsideration.
2
* Alexander Lagamba worked at various times between November 1942 and June 1973 as a coal miner. In 1973 he ceased his coal mine employment with Consolidation Coal Company in order to return to his native Italy. Several months later he returned to the United States and attempted to regain his old job with Consolidation Coal, but he was not rehired. Lagamba died on July 28, 1977, and the death certificate indicated as a cause of death "Acute pulminant hepatitis and viral hepatitis B". An autopsy was performed, and it confirmed the cause of death and reported no evidence of coal worker's pneumoconiosis.
3
At the hearing, the plaintiff produced x-rays read on December 18, 1973, January 22, 1974, and December 8, 1975, which were found positive for the presence of coal worker's pneumoconiosis. Also introduced were the results of certain arterial blood gas studies; the blood gas study done on April 13, 1977 was found to be qualifying under 20 C.F.R. Sec. 727.203(a)(3). The Administrative Law Judge mentioned the three x-rays, but stated, "These would serve to invoke the interim presumption but for the autopsy performed by Drs. L.A. Guarda and Milton R. Hales on July 28, 1977." The ALJ found that none of the blood gas studies were sufficient to invoke the subsection (a)(3) presumption. He denied the claim based upon the pathology reports.
II
4
The appellant is entitled to the interim presumptions under 20 C.F.R. Sec. 727.203(a)(1) and (3). The Administrative Law Judge and the Secretary were in error in not giving the appellant the benefit of these interim presumptions. He should have invoked the presumptions and then considered whether these interim presumptions were rebutted by the evidence presented by the defendants, particularly the autopsy report. See Stapleton v. Westmoreland Coal Company, 785 F.2d 424 (4th Cir.1986) (en banc).
5
The Administrative Law Judge found none of the gas studies to be qualifying. However, it is obvious that the gas test performed on April 13, 1977 did qualify under the regulation and would invoke the interim presumption.
6
This matter is remanded to the Secretary for further consideration. In this consideration the Secretary shall consider the interim presumptions under 20 C.F.R. Sec. 727.203(a)(1) and (3) to be invoked in favor of the appellant, and he shall then consider whether these presumptions have been rebutted by other evidence in the record.
7
REMANDED.
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Case: 15-14457 Date Filed: 08/04/2016 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14457
Non-Argument Calendar
________________________
D.C. Docket No. 2:14-cr-00135-KD-N-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
WESLEY BARTHOLEMEW TUBBS,
a.k.a. Wes,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
________________________
(August 4, 2016)
Before HULL, MARCUS and WILLIAM PRYOR, Circuit Judges.
PER CURIAM:
Case: 15-14457 Date Filed: 08/04/2016 Page: 2 of 5
Wesley Tubbs appeals his sentence of 250 months of imprisonment, which
was imposed following his pleas of guilty to conspiring to possess with intent to
distribute more than 1,000 kilograms of marijuana, 21 U.S.C. §§ 841(a)(1), 846,
and conspiring to launder money, 18 U.S.C. § 1956(a)(1)(A)(i), (1)(B)(i), (h).
Tubbs challenges the denial of his motion to withdraw his guilty plea. He also
argues, for the first time, that the district court erred by enhancing his offense level
for possessing a firearm. See United States Sentencing Guidelines Manual
§ 2D1.1(b)(1) (Nov. 2014). After careful review, we affirm.
Two standards of review govern this appeal. We review the denial of a
motion to withdraw a guilty plea for abuse of discretion. United States v. Gonzalez-
Mercado, 808 F.2d 796, 798 (11th Cir. 1987). We review an argument regarding
sentencing that is raised for the first time on appeal for plain error. United States v.
Cavallo, 790 F.3d 1202, 1234 (11th Cir. 2015).
The district court did not abuse its discretion by denying Tubbs’s motion to
withdraw his pleas of guilty. Tubbs argues that he was entitled to withdraw his
pleas because, after he pleaded guilty, the presentence investigation report
provided a sentencing range of 360 months to life imprisonment, which exceeded
the minimum sentencing range of 151 to 188 months provided in the probation
office guideline worksheet he received after arraignment. But Tubbs ignores that
the worksheet also stated he faced a potential maximum sentencing range of 360
2
Case: 15-14457 Date Filed: 08/04/2016 Page: 3 of 5
months to life imprisonment and that he was notified in his plea agreement and
during his plea colloquy that he could receive a maximum sentence of life
imprisonment. Tubbs also was informed twice that he was not guaranteed a
particular sentence: first, the plea agreement stated that it did not create any right to
a particular sentence and that Tubbs would not be permitted to withdraw his pleas
if the district court calculated a guideline range higher than expected or if it
departed or varied from the guideline range; and second, the district court informed
Tubbs during his plea colloquy that any sentence calculated by his counsel was
“just an estimate.” With this information in hand, the district court could have
inferred that Tubbs “use[d] the guilty plea as a means of testing the weight of the
potential sentence,” and decided to deny his motion to withdraw as based
impermissibly on his dissatisfaction with his sentence. See Gonzalez-Mercado, 808
F.2d at 801 (quoting United States v. Simmons, 497 F.2d 177, 179 (5th Cir. 1974)).
The district court reasonably determined that Tubbs failed to provide a “fair and
just reason for requesting the withdrawal” of his pleas. See Fed. R. Crim. P.
11(d)(2)(B).
The government argues that Tubbs’s challenge to the calculation of his
sentence is barred by his appeal waiver, but we disagree. In the plea agreement,
Tubbs “reserve[d] the right to timely file a direct appeal challenging . . . any
sentence which constitutes an upward departure or variance from the advisory
3
Case: 15-14457 Date Filed: 08/04/2016 Page: 4 of 5
guideline range.” Construing that language in Tubbs’s favor, as we must, see
United States v. Jefferies, 908 F.2d 1520, 1523 (11th Cir. 1990), we conclude that
he reserved the right to appeal his 250-month sentence for his conspiracy offense.
That represented a 10-month upward variance from his 240-month statutory
minimum penalty, see 21 U.S.C. § 841(b)(1)(A)(vii), which was his guideline
sentence, see U.S.S.G. § 5G1.1(b). Tubbs’s appeal waiver did not bar him from
challenging the imposition of a sentence that exceeded his guideline range.
Tubbs fails to identify how the district court erred, much less plainly erred,
in calculating his sentence. Tubbs argues that his base offense level should not
have been increased by two points for his possession of a firearm, see id.
§ 2D1.1(b)(1), but a review of the record reveals that the district court did not
apply that enhancement in its calculation of Tubbs’s advisory guideline range. The
district court complied with the parties’ agreement to calculate Tubbs’s offense
level without applying the firearm enhancement. The district court applied a two-
level enhancement for laundering money, see id. § 2D1.1(b)(2)(B), and a four-level
enhancement for Tubbs’s role as an organizer or leader, see id. § 3B1.1(a).
Even if we were to assume that the district court had erred in calculating
Tubbs’s sentence, any error would be harmless. An error in sentencing is harmless
if the district court would have entered the same sentence without the error. United
States v. Keene, 470 F.3d 1347, 1348–49 (11th Cir. 2006). The district court stated,
4
Case: 15-14457 Date Filed: 08/04/2016 Page: 5 of 5
during the sentencing hearing and the post-sentencing status hearing, that it would
have imposed a 250-month sentence even if it had miscalculated Tubbs’s sentence.
We AFFIRM Tubbs’s convictions and sentence.
5
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
______________________________
)
DISTRICT OF COLUMBIA, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-2075 (RWR)
)
JOHN A. STRAUS, et al., )
)
Defendants. )
______________________________)
MEMORANDUM OPINION
The District of Columbia (“DC”) has sued attorney John
Straus and his law firm, James E. Brown & Associates, in federal
court seeking $1,752.25 in attorney’s fees under the Individuals
with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1415,
claiming that the District of Columbia Public Schools (“DCPS”)
was the prevailing party in an administrative proceeding that
Straus had needlessly brought and continued. DC moves for
summary judgment. Because DCPS was not a prevailing party, it is
Straus and his firm, not DC, who are entitled to judgment as a
matter of law.1
1
It is beyond ironic that DC’s Attorney General complains with
great flourish (see Defs.’ Opp’n, Ex. 5 (Attorney General’s press
release), Exs. 2-4 (news articles)) about lawyers who help
parents secure disabled children’s rights when his client, the
DCPS, has been found repeatedly in this court to have violated
children’s rights under the IDEA. See, e.g., Calloway v.
District of Columbia, 216 F.3d 1, 3 (D.C. Cir. 2000) (noting that
DCPS’ failure to meet its IDEA obligations was “a fact no one
disputes”); N.G. v. District of Columbia, 556 F. Supp. 2d 11, 37
(D.D.C. 2008) (holding that DCPS violated the IDEA in “multiple
-2-
BACKGROUND
Straus represented a child with special educational needs
who was enrolled in a DC public high school. A DCPS
multidisciplinary team convened on June 5, 2008 referred the
child to DCPS for a psychiatric evaluation. On August 15, 2008,
Straus filed an administrative due process complaint on behalf of
the child and his legal guardian because DCPS had not conducted
the evaluation.
The sole issue presented in the administrative complaint was
DCPS’ failure to conduct the evaluation. As relief, the
complaint sought to have DCPS fund an independent evaluation.2
Three business days after Straus filed the complaint, DCPS
authorized Straus to obtain an independent evaluation at DCPS’
expense. A hearing officer later dismissed the complaint with
prejudice since DCPS’ authorization mooted the sole issue. The
hearing officer added his conclusions that Straus had filed the
ways”); Alfono v. District of Columbia, 422 F. Supp. 2d 1, 5-8
(D.D.C. 2006) (granting the plaintiff’s motion for summary
judgment because DCPS failed to complete the child’s
individualized educational plan before the start of the school
year); Blackman v. District of Columbia, 185 F.R.D. 4, 7 (D.D.C.
1999) (recounting “the serious physical, emotional and
educational difficulties that the plaintiffs face[d] as a result
of [DC’s] failure to comply with the IDEA”). It is particularly
unclear how the Attorney General’s choice to sue in federal court
to recover $1,752.25, and not sue in the more streamlined and far
less costly Small Claims Branch of our D.C. Superior Court,
furthers his interest in saving taxpayer money.
2
Other relief sought included attorney’s fees and costs, and
designation of Straus’ client as the prevailing party.
-3-
complaint without foundation and had groundlessly maintained the
litigation after it became moot. DC moves for summary judgment.
DISCUSSION
Summary judgment may be granted only where “the pleadings,
the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any material
fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(c). The relevant inquiry “is the
threshold inquiry of determining whether there is a need for a
trial -- whether, in other words, there are any genuine factual
issues that properly can be resolved only by a finder of fact
because they may reasonably be resolved in favor of either
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986).
The IDEA permits a court, in its discretion, to award
attorney’s fees
to a prevailing party who is a State educational agency
or local educational agency against the attorney of a
parent who files a complaint or subsequent cause of
action that is frivolous, unreasonable, or without
foundation, or against the attorney of a parent who
continued to litigate after the litigation clearly
became frivolous, unreasonable, or without foundation.
20 U.S.C. § 1415(i)(3)(B)(i)(II). DC argues that there are no
material facts in dispute and that it is entitled to an award of
attorney’s fees against Straus and his firm as a matter of law.
It claims that “DCPS was plainly the prevailing party” given that
-4-
the hearing officer dismissed the complaint (Pl.’s Mem. in Supp.
of Mot. for Summ. J. (“Pl.’s Mem.”) at 10), and that the hearing
officer’s added conclusions that Straus needlessly filed and
maintained the complaint are entitled to res judicata effect.
(Id. at 9.)
DC’s assertion that the hearing officer’s gratuitous
conclusions are binding upon this court is unavailing. Whether
Straus needlessly filed or maintained the administrative
litigation arguably was not an issue presented in the complaint
or litigated by the parties. Although the administrative
complaint’s seventeenth of seventeen requests for relief that DC
says Straus extruded from DCPS’s alleged violation was that
Straus’s client be found to be a prevailing party (Pl.’s Mem. at
5), the only issue before the hearing officer, as he made clear
(Pl.’s Mem., Ex. C, Hearing Officer’s Decision at 3 ¶ 1) and as
DC concedes (Pl.’s Mem. at 5-6, 16), was “whether . . . DCPS
failed to conduct a psychiatric evaluation.” (Defs.’ Opp’n at
7.) In any event, as DC also concedes (Pl.’s Mem. at 10), it is
the district court in an action such as this, and not the hearing
officer in the administrative proceeding, which determines
prevailing party status for purposes of awarding attorney’s fees
under the IDEA. See Artis ex rel. S.A. v. District of Columbia,
543 F. Supp. 2d 15, 22 (D.D.C. 2008) (holding that “[a]lthough a
hearing officer may make a prevailing party determination, it is
-5-
in the province of the district court to make the ultimate
decision as to who prevailed in an IDEA action” for the purpose
of awarding attorney’s fees); T.S. ex rel. Skrine v. District of
Columbia, Civil Action No. 05-861 (HHK), 2007 WL 915227, at *4
(D.D.C. Mar. 27, 2007) (“The fact that a hearing officer has made
a finding on the issue [of attorney’s fees], or has failed to
make such a finding, is not controlling.”).
More importantly, however, DC was not a prevailing party in
the administrative proceeding. In Buckhannon Board & Care Home,
Inc. v. West Virginia Department of Health and Human Resources,
532 U.S. 598 (2001), the Supreme Court concluded that a
prevailing party is one who obtains a “judicially sanctioned
change in the legal relationship of the parties.”3 Id. at 605.
“Buckhannon rejected the catalyst theory under which . . . ‘a
plaintiff is a ‘prevailing party’ if it achieves the desired
result because the lawsuit brought about a voluntary change in
the defendant’s conduct[.]’” Davy v. CIA, 456 F.3d 162, 164
(D.C. Cir. 2006) (quoting Buckhannon, 532 U.S. at 601-02).
“Instead, the Court held [that] a plaintiff is a prevailing party
only if he has ‘received a judgment on the merits. . . . Thus, a
defendant’s ‘voluntary change in conduct, although perhaps
accomplishing what the plaintiffs sought to achieve by the
3
When applying the Buckhannon definition of a “prevailing party”
to IDEA administrative proceedings, relief provided by a hearing
officer serves as “judicially sanctioned” relief. See T.S. ex
rel. Skrine, 2007 WL 915227, at *4.
-6-
lawsuit, lacks the necessary judicial imprimatur on the change.’”
Id. (quoting Buckhannon, 532 U.S. at 605 (emphasis in original)).
Reported IDEA cases in this circuit decided after Buckhannon
have assessed whether parent plaintiffs are prevailing parties
entitled to attorneys fees. The court of appeals has concluded
that “[u]nder Buckhannon it is clear that [an IDEA] plaintiff
‘prevails’ only upon obtaining a judicial remedy that vindicates
its claim of right.” District of Columbia v. Jeppsen, 514 F.3d
1287, 1290 (D.C. Cir. 2008). Likewise, at least one three-prong
test has emerged in the district court: “[t]o obtain ‘prevailing
party’ status, the plaintiff must show first that there was a
court-ordered change in the legal relationship between the
plaintiff and the defendant; second, that the judgment was
rendered in the claimant’s favor; and third, that the claimant
was not a prevailing party merely by virtue of having acquired a
judicial pronouncement rather than judicial relief.” Robinson v.
District of Columbia, Civil Action No. 06-1253 (RCL), 2007 WL
2257326, at *4 (D.D.C. Aug. 2, 2007).
However, the D.C. Circuit has not ruled on what the proper
test is to determine whether DCPS as a defendant in an IDEA
administrative proceeding is a prevailing party. While it is
clear that the statute contemplates that either side is eligible
to be a prevailing party, it is not clear that the common tests
applied to parents in IDEA cases are also fitting for the DCPS.
-7-
Parents file complaints because they are seeking a judicially-
sanctioned change in the legal relationship between the child and
DCPS. When they achieve that through a hearing officer’s
decision, they meet the first prong of the test articulated in
Robinson. However, DCPS as a defendant cannot usually be
expected to seek such a change in defending against a complaint.
When DCPS opposes a complaint by disputing that its action or
inaction violated the IDEA, it seeks an affirmation that the
status quo complies with IDEA and a disposition reflecting that
affirmation. Of course, DCPS might also seek some favorable
disposition on other procedural or jurisdictional grounds such as
a lack of timeliness or ripeness of a complaint, or loss of
jurisdiction if a child has relocated out of the district. If
DCPS prevails, a sanctioned change is not what can be expected
from the hearing officer’s decision and should not be what DCPS
is required to show to qualify for prevailing party status.
Jeppson discusses the varying post-Buckhannon tests employed
by other circuits to determine prevailing party status. See 514
F.3d at 1290. The First and Second Circuits require a party to
receive a favorable judgment on the merits. See id. (citing
Torres-Negron v. J&N Records, LLC, 504 F.3d 151, 164-65 (1st Cir.
2007) and Dattner v. Conagra Foods, Inc., 458 F.3d 98, 101-02 (2d
Cir. 2006)). On the other hand, the Tenth Circuit, citing a pre-
Buckhannon Seventh Circuit decision, decided that a defendant
-8-
could be a prevailing party upon obtaining a dismissal based upon
a jurisdictional ground even if the dismissal did not speak to
the merits of the plaintiff’s claim. See id. (citing United
States ex rel. Grynberg v. Praxair, Inc., 389 F.3d 1038, 1056-58
(10th Cir. 2004) (relying on Citizens for a Better Env’t v. Steel
Co., 230 F.3d 923 (7th Cir. 2000))).
Whatever the proper test is or should be for whether DCPS is
a prevailing party, it cannot be that what DCPS advocates
satisfies it. To its credit, DCPS voluntarily corrected the only
wrong complained of in the child’s due process complaint here
early on. That should certainly entitle DCPS to avoid liability
for paying plaintiffs’ attorney’s fees. But DCPS grabs for more.
After it successfully mooted the complaint and got the complaint
dismissed for mootness, DCPS turned around and ran into district
court claiming prevailing party status and seeking attorney’s
fees.
Permitting a school system defendant to claim prevailing
party status because it voluntarily corrected the wrong
complained of before judgment would be a perverse result that
would stand the statute on its head. While it could in theory
create an incentive for schools to engage in prompt corrective
action, it would punish plaintiffs who were right to complain
about the wrongs the schools committed. Buckhannon’s conclusion
that a defendant’s voluntary conduct providing the relief sought
-9-
by the plaintiff “lacks the necessary judicial imprimatur” to
permit a plaintiff to claim prevailing party status, 532 U.S. at
605, does not convey prevailing party status upon a defendant who
secures a dismissal for mootness brought on by the defendant’s
voluntary conduct providing the relief sought by the plaintiff
and ending the controversy.
Because the administrative complaint was dismissed as moot
as a result of DC’s voluntary authorization of the requested
evaluation, DCPS was not the prevailing party and it is not
entitled to attorney’s fees under the IDEA. Thus, DC’s motion
for summary judgment will be denied. Furthermore, because there
are no disputed facts left to be resolved, and it is Straus and
his law firm who are entitled to judgment as a matter of law,
judgment will be entered for the defendants. See 10A Wright,
Miller & Kane, Federal Practice & Procedure: Civil 3d § 2720
(1998) (noting that summary judgment may be granted in favor of
the nonmoving party without waiting for a cross-motion); Keh Tong
Chen v. Attorney Gen., 546 F. Supp. 1060, 1068 (D.D.C. 1982)
(“Filing of a cross-motion is not a prerequisite to the entry of
judgment for the non-moving party.”)
CONCLUSION
Because DC was not a prevailing party at the administrative
level, it is not entitled to attorney’s fees under the IDEA.
Accordingly, its motion for summary judgment will be denied and
-10-
judgment will be entered for the defendants. A final, appealable
order accompanies this Memorandum Opinion.
SIGNED this 14th day of April, 2009.
/s/
RICHARD W. ROBERTS
United States District Judge
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SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
58
CAF 11-01213
PRESENT: SMITH, J.P., PERADOTTO, LINDLEY, SCONIERS, AND GORSKI, JJ.
IN THE MATTER OF GARY A. NIKIEL,
PETITIONER-RESPONDENT,
V MEMORANDUM AND ORDER
PATRICIA ORZECH, RESPONDENT-APPELLANT.
(APPEAL NO. 2.)
KUSTELL LAW GROUP, LLP, BUFFALO (CARL B. KUSTELL OF COUNSEL), FOR
RESPONDENT-APPELLANT.
MCCREADY & TODARO, BUFFALO (MAUREEN A. MCCREADY OF COUNSEL), FOR
PETITIONER-RESPONDENT.
FRANCINE E. MODICA, ATTORNEY FOR THE CHILD, TONAWANDA, FOR HANNAH G.N.
Appeal from an order of the Family Court, Erie County (Sharon M.
LoVallo, A.J.), entered July 14, 2010 in a proceeding pursuant to
Family Court Act article 6. The order denied the motion of Patricia
Orzech to reopen trial testimony.
It is hereby ORDERED that said appeal is unanimously dismissed
without costs.
Same Memorandum as in Matter of Orzech v Nikiel (___ AD3d ___
[Jan. 31, 2012]).
Entered: January 31, 2012 Frances E. Cafarell
Clerk of the Court
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12 F.3d 175
Eugenio Lopez RODRIGUEZ, Petitioner-Appellant,v.STATE OF NEW MEXICO, Respondent-Appellee.
No. 93-2128.
United States Court of Appeals,Tenth Circuit.
Dec. 27, 1993.
Richard J. Knowles, Albuquerque, NM, for petitioner-appellant.
Margaret McLean, Asst. Atty. Gen., and Tom Udall, Atty. Gen., Santa Fe, NM, for respondent-appellee.
Before TACHA, BALDOCK and KELLY, Circuit Judges.*
PER CURIAM.
1
Petitioner-appellant Eugenio Lopez Rodriguez appeals from the district court's denial of his request for an evidentiary hearing and subsequent dismissal of his habeas corpus petition, 28 U.S.C. Sec. 2254. Our jurisdiction arises under 28 U.S.C. Secs. 1291 & 2253, and we affirm.
2
In an attempt to collaterally attack the presumptive voluntariness of his plea, see Blackledge v. Allison, 431 U.S. 63, 74, 97 S.Ct. 1621, 1629, 52 L.Ed.2d 136 (1977), Mr. Lopez asserts by affidavit that the government breached a promise, undisclosed on the record of the plea proceedings, of an unsupervised conjugal visit. Although promises made by prosecuting attorneys "must be fulfilled to maintain the integrity of the plea," United States v. Hand, 913 F.2d 854, 856 (10th Cir.1990) (citing Santobello v. New York, 404 U.S. 257, 262, 92 S.Ct. 495, 499, 30 L.Ed.2d 427 (1971)), only breaches of material promises will allow a court to conclude that a plea was involuntarily induced and thus constitutionally infirm. United States v. Pollard, 959 F.2d 1011, 1028 (D.C.Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 322, 121 L.Ed.2d 242 (1992). As in contract, the terms of a plea agreement and their relative materiality are evaluated by an objective standard. See McKenzie v. Risley, 801 F.2d 1519, 1526-27 (9th Cir.1986), vacated in part on other grounds, 842 F.2d 1525 (9th Cir.1988) (en banc). In light of the significant benefits Mr. Lopez did receive as a result of his plea agreement, including the avoidance of a possible death sentence, the alleged breach of a promise of a conjugal visit did not deprive the agreement of its voluntary character. Because Mr. Lopez has failed to "allege[ ] facts which, if proven, would entitle him to relief," Townsend v. Sain, 372 U.S. 293, 312, 83 S.Ct. 745, 757, 9 L.Ed.2d 770 (1963), the district court did not err in denying his request for an evidentiary hearing and dismissing the petition.
3
AFFIRMED.
*
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); 10th Cir.R. 34.1.9. The cause therefore is ordered submitted without oral argument
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359 S.E.2d 16 (1987)
Colleen Shiels STACK
v.
MECKLENBURG COUNTY, Mecklenburg County Department of Social Services, Lutheran Family Homes in North Carolina, Inc., and Ken Golden.
No. 8626SC1216.
Court of Appeals of North Carolina.
August 4, 1987.
*17 Mark A. Michael, Charlotte, for plaintiff-appellant.
Smith Helms Mullis & Moore, by H. Landis Wade, Jr. and Elizabeth M. Quattlebaum and Gerdes Mason, Wilson & Tolbert by Michael Wilson, Charlotte, for defendant-appellee.
EAGLES, Judge.
I
Plaintiff first contends that the court erred in dismissing her claim for willful, wanton and reckless negligence. This contention presents the question of whether the North Carolina Workers' Compensation Act represents an employee's exclusive means of recovery for personal injuries resulting from the willful, wanton and reckless negligence of an employer. Following the precedent of Barrino v. Radiator Specialty Co., 315 N.C. 500, 340 S.E.2d 295 (1986), we hold that it is an employee's exclusive remedy.
G.S. 97-10.1 states that:
If the employee and the employer are subject to and have complied with the provisions of this Article, then the rights and remedies herein granted to the employee, his dependents, next of kin, or personal representative shall exclude all other rights and remedies of the employee, his dependents, next of kin, or representative as against the employer at common law or otherwise on account of such injury or death.
The exclusive remedy portion of the statute limits an employee to recovery under the Workers' Compensation Act. Accordingly, an employee must pursue those claims covered by the Act before the North Carolina Industrial Commission.
Because of the limited recovery afforded by the Act, our courts have recognized a few exceptions to its exclusive coverage. When an employer intentionally injures an employee, an independent civil action is available. Essick v. City of Lexington, 232 N.C. 200, 60 S.E.2d 106 (1950). Likewise, an injured employee may maintain a tort action against a co-employee for intentional injury. Wesley v. Lea, 252 N.C. 540, 114 S.E.2d 350 (1960). This court, on the basis of a selection of remedies, denied an employee's right to sue outside the Worker's Compensation Act to recover for willful, wanton and reckless negligence of a fellow employee. Freeman v. SCM Corporation, 66 N.C.App. 341, 311 S.E.2d 75 (1984). The Supreme Court allowed discretionary review and in a per curiam decision made clear that an employee's purported selection of remedies was not the determinative factor in the decision that claimant's only avenue of recovery was the Industrial Commission. Freeman v. SCM Corporation, 311 N.C. 294, 316 S.E.2d 81 *18 (1984). Subsequently, in Pleasant v. Johnson, 312 N.C. 710, 325 S.E.2d 244 (1985), the exception for recovery against a co-employee was extended to conduct which is willful, wanton and reckless. Freeman precludes an employee who qualifies for workers' compensation from bringing a similar negligence action against an employer.
Most recently, the Supreme Court reaffirmed Freeman in Barrino v. Radiator Specialty Co., supra. In a split decision, the Court rejected an independent action for the willful, wanton and reckless negligence of an employee and refused the separate action because of the Freeman precedent. Id., 315 N.C. at 510, 340 S.E.2d at 302. Two justices agreed that the civil action was not available but relied instead on an election of remedies theory. The plaintiff's "election" to receive benefits under the Workers' Compensation Act precluded an independent civil action. Id. at 516, 340 S.E.2d at 309 (Billings, J., concurring). The three remaining justices dissented, disputing that plaintiff did not have an alternative remedy. Id. at 517, 340 S.E.2d at 305 (Martin, J., dissenting).
Plaintiff now contends that the Barrino decision permits an election for an employee injured by the willful, wanton and reckless negligence of an employer. Plaintiff argues that the injured worker can choose either the Act's compensation or a civil action. We hold that the Barrino decision, when read in context with Freeman requires a contrary conclusion.
The Freeman decision expressly negated any inference that an employer's willful negligence creates alternative remedies. Freeman, 311 N.C. at 296, 316 S.E.2d at 82. Likewise, Barrino, in refusing to overrule Freeman, recognized that "[t]he operative fact in establishing exclusiveness is that of actual coverage, not of election to claim compensation in a particular case." Barrino, 315 N.C. at 506, 340 S.E.2d at 300 (quoting 2A Larson, The Law of Workmen's Compensation, section 65.14 (1984)). Accordingly, when an employee's injury is covered by the Act, the right to bring an independent negligence action against the employer is barred by the existence of the workers' compensation remedy.
Since the Act's coverage extends to injuries resulting from an employer's willful, wanton and reckless negligence, there is no issue regarding an election of remedies in this case. This coverage relegates the plaintiff to the compensation designated by the Act.
Our decision here is controlled by the Freeman and Barrino precedents. Plaintiff's employment at the time of the rape subjects her to the provisions of the Workers' Compensation Act. Her rights and remedies against defendant employer were determined by the Act and she was required to pursue them before the North Carolina Industrial Commission. Freeman, supra. Therefore, the trial court lacked subject matter jurisdiction and properly dismissed this claim.
II
Plaintiff also alleges claims based on intentional injury and intentional infliction of emotional distress. By doing so, plaintiff attempts to utilize the intentional conduct exception from the exclusive remedy rule pursuant to the decision in Essick v. City of Lexington, supra.
The trial court granted the defendant's Rule 12(b)(6) motion to dismiss these claims for failure to state a claim on which relief can be granted. The scope of review for a Rule 12(b)(6) motion involves a determination of whether the complaint's allegations contain sufficient material to comprise the elements of some claim recognizable in law. Hendrix v. Hendrix, 67 N.C. App. 354, 313 S.E.2d 25 (1984).
Plaintiff first claims intentional injury. By her employer's failure to disclose the history of sexual misconduct associated with the group home, plaintiff claims defendant-employer intentionally misrepresented the danger involved.
Plaintiff's allegations asserting intentional injury do not differ from those used to support her wanton, willful and *19 reckless claim. She cannot change a negligence claim simply by applying an "intentional conduct" label. Plaintiff fails to allege that Lutheran intended to harm her through its conduct. The failure to allege an actual intent to injure precludes the plaintiff from invoking the exemption for intentional conduct. See Barrino, 315 N.C. at 507-08, 340 S.E.2d at 300. Therefore, the trial court properly dismissed this claim.
Plaintiff also alleges intentional infliction of emotional distress. In Hogan v. Forsyth Country Club Co., 79 N.C.App. 483, 340 S.E.2d 116 (1986), this court recognized that the Workers' Compensation Act does not bar a claim for intentional infliction of emotional distress. An essential element of this tort requires the plaintiff to prove the intent to cause emotional distress. Dickens v. Puryear, 302 N.C. 437, 276 S.E.2d 325 (1981). Again, the absence of allegations that Lutheran intended to injure the plaintiff requires dismissal of this claim.
Finally, plaintiff assigns as error the court's dismissal of her claim for punitive damages. Recovery of punitive damages depends on the successful maintenance of one of plaintiff's other claims. Since plaintiff's underlying causes of action were properly dismissed, this claim must also be dismissed.
Claims against an employer for willful, wanton and reckless negligence fall under the coverage of the Workers' Compensation Act. Accordingly, the trial court did not have subject matter jurisdiction of plaintiff's claim and properly dismissed it. Similarly, plaintiff's claims involving intentional conduct were properly dismissed for their failure to state claims on which relief could be granted.
Affirmed.
HEDRICK, C.J., and PARKER, J., concur.
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543 S.W.2d 913 (1976)
G. P. ENTERPRISES, INC., Appellant,
v.
Gordon H. ADKINS, Appellee.
No. 8404.
Court of Civil Appeals of Texas, Texarkana.
November 23, 1976.
*914 Robert A. Scardino, Houston, for appellant.
Gerard B. Rickey, Dallas, for appellee.
CORNELIUS, Justice.
Appellee filed suit in Collin County against appellant for breach of contract. Appellant, a corporation, filed its plea of privilege to be sued in Harris County where its principal place of business is located. The trial court overruled the plea and appellant has appealed.
The judgment sustaining venue in Collin County was based upon Tex.Rev.Civ.Stat. Ann. art. 1995-23 (1964) which provides that suits against a private corporation may be brought in the county "in which the cause of action or part thereof arose." Appellant's primary contention is that appellee did not sustain his burden of showing that the cause of action or a part thereof arose in Collin County.
Appellee's evidence may be summarized as follows: Appellee had received information that appellant was interested in selling some 12,000 feet of oil well casing. From his office in Collin County he telephoned appellant's office in Houston and inquired about the pipe. Mr. Prause, Vice President of appellant, stated from his office in Houston that appellant had the pipe which it would allow appellee to sell as broker. Mr. Prause stated that the price would be $25.00 per foot and that appellant would pay appellee, as broker, a commission of $4.00 per foot. Appellee consented to that arrangement and told Mr. Prause to send him a Telex, in care of appellee's bank in Collin County, confirming the arrangement. Appellant sent the Telex as requested. It provided, among other things, that appellant would sell the pipe at $21.00 per foot net to it, and it agreed:
". . . to remit to Mr. Gordon Atkins (sic) via his specified mode of movement additions (sic) funds received from Apxco (the party to whom appellee expected to sell the pipe) and will be payable upon collection as received. GP Enterprises, *915 Inc. is not responsible for any commissions or brokerage fees payable to other parties than to Mr. Gordon Atkins direct." (Parenthesis supplied.)
Upon receipt of the Telex appellee called Apexco and arranged for the sale. Pursuant to appellant's agreement to pay his commission "via his specified mode of movement," appellee notified appellant to forward his commission to him in Plano, Collin County, in care of his local bank. Thereafter, appellant paid appellee $27,000.00 commission at his bank in Plano. Appellee called appellant to inquire as to the reason for the deficiency in the commission. He was told that only 9,000 feet of pipe was usable and that appellant and Apexco had agreed to certain changes in the specifications for the threading and joints for the casing. Because appellant's cost was greater than it anticipated, appellee was told that appellant was only going to pay $3.00 per foot commission, and it was to be paid only on the 9,000 feet of pipe which was actually delivered. Appellee thereupon filed suit to collect the $4.00 per foot commission on the 12,000 feet of casing as he contended was originally agreed.
To sustain venue under subdivision 23 of Article 1995, a plaintiff must establish by a preponderance of the evidence all of the elements of a cause of action against the defendant, and that at least a part of that cause of action occurred in the county of suit. See 1 McDonald's, Texas Civil Practice, Sec. 4.30.2, p. 518, and cases there cited. In a breach of contract case the "cause of action" is composed of two elements: (1) the contract, which is the primary right, and (2) the breach thereof, which is the act or omission on the part of the defendant without which there could be no cause of action or right of recovery. Stone Fort Nat. Bank of Nacogdoches v. Forbess, 126 Tex. 568, 91 S.W.2d 674 (1936); Taylor-Evans Seed Company v. Hart, 420 S.W.2d 138 (Tex.Civ.App. Amarillo 1967, no writ); National Life Co. v. Wolverton, 163 S.W.2d 654 (Tex.Civ.App. Waco 1942, no writ); General Motors Acceptance Corporation v. Lee, 120 S.W.2d 622 (Tex.Civ.App. Fort Worth 1938, no writ). Thus, if the contract was entered into in the county of suit, or if the breach thereof occurred in the county of suit, venue may be retained in that county. Stone Fort Nat. Bank of Nacogdoches v. Forbess, supra. A contract is made where the acquiescence or final agreement of the minds occurs. If the contract is entered into through an offer by one party and its acceptance by another, the agreement is deemed to have been made at the place where the offer is accepted. Curtis Peanut Co. v. United Sales Co., 283 S.W.2d 113 (Tex.Civ.App. Dallas 1955, no writ); Loessin & Herndon, Inc. v. Coffield Lumber Company, 280 S.W.2d 796 (Tex.Civ.App. Galveston 1955, writ ref'd); Farmers' State Bank v. Sullivan, 241 S.W. 727 (Tex.Civ.App. Beaumont 1922, no writ); 13 Tex.Jur.2d, Contracts, Sec. 298, p. 545. That principle applies to contracts made over the telephone. Traders Oil Mill Co. v. Arnold Bros. Gin Co., 225 S.W.2d 1011 (Tex. Civ.App. Galveston 1949, no writ); Gleason v. Southwestern Sugar & Molasses Co., 214 S.W.2d 640 (Tex.Civ.App. Waco 1948, no writ); Cowdin Grocery Co. v. Early-Foster Co., 237 S.W. 578 (Tex.Civ.App. Austin 1921, no writ). However, where other things or acts are to be done after acceptance before the parties are to be bound, the contract will be considered to have been made at the place where the other acts are performed. Clifford-Bell Petroleum Co. v. Banker's Petroleum & Refining Co., 286 S.W. 564 (Tex.Civ.App. Fort Worth 1926, no writ); 13 Tex.Jur.2d, Contracts, Sec. 298, p. 546.
The court in this case made findings of fact and conclusions of law. Among other things, it was found that:
"1. On June 14, 1974, Defendant acting through its duly authorized Vice President, Mr. Prause, offered to authorize Plaintiff to broker approximately 12,000 ft. of casing and to pay Plaintiff a commission of $4.00 per ft. on all casing for which Plaintiff found a buyer, at $25.00 per ft.
2. Plaintiff assented to Defendant's offer by telephone from his office in Plano, Collin County, Texas.
*916 3. Plaintiff and Defendant agreed that the arrangement would be confirmed in writing and be effective upon delivery of a telegram to Plaintiff in care of his bank in Plano, Collin County, Texas.
4. Defendant sent the telegram, a true copy of which is attached hereto as Exhibit A, to Plaintiff and such telegram was delivered to Plaintiff at Plaintiff's bank in Collin County, Texas.
5. Plaintiff acted upon receipt of the telegram by calling Apexco from his office in Collin County regarding purchase of the casing upon the terms stated in the aforementioned telegram.
6. Plaintiff specified to Defendant that his commission should be forwarded to him in care of his bank in Plano, Collin County, Texas.
7. Defendant paid to Plaintiff at Plaintiff's bank in Collin County, Texas, only $27,000.00.
8. Defendant has not paid Plaintiff any sums of money in connection with the aforementioned casing other than the $27,000.00."
Other findings established that appellee performed all of his obligations under the contract and, for the purposes of the venue hearing, had proven all of the elements of his cause of action against appellant. The record reveals that these findings are supported by sufficient evidence. As the court found that the acceptance of the offer was made in Collin County, and that the arrangement was to be effective upon the receipt by appellee of appellant's telegram in Collin County, a portion of appellee's cause of action, i. e., the contract or primary right arose in Collin County as required by subdivision 23. Moreover, appellant agreed to pay appellee's commissions "via his specified mode of movement." Appellee specified that payment was to be made to him in Collin County. As full payment, at least according to appellee's view of the contract, was not made in Collin County as required, the breach of which appellee complains also occurred in Collin County.
We conclude that appellee sustained his burden of showing that his cause of action or a part thereof arose in Collin County as required by subdivision 23.
Appellant also complains that the venue hearing developed into an actual trial of the case on the merits, whereas it should have been restricted to a hearing on venue facts only. As above noted, in a subdivision 23 case the plaintiff is required to establish by a preponderance of the evidence on the venue hearing all of the elements of his cause of action. The court properly heard evidence on all those elements and made findings thereon. Those findings do not establish the elements of appellee's cause of action on the merits, but only for the purpose of determining venue. The judgment properly made no disposition of the case on the merits but only decreed that the plea of privilege was overruled.
We find no error. The judgment of the trial court is affirmed.
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314 S.W.2d 373 (1958)
J. R. FLOWERS, Appellant,
v.
CENTRAL POWER & LIGHT CO. et al., Appellees.
No. 3540.
Court of Civil Appeals of Texas, Waco.
May 22, 1958.
Rehearing Denied June 26, 1958.
*374 G. F. Steger, Columbus, for appellant.
H. K. Howard and J. M. Wilson, Corpus Christi, for appellee Central Power & Light Co.
Miller & Allen, Columbus, for appellee L. H. Sanders.
McDONALD, Chief Justice.
This is a suit for damages for malicious prosecution brought by J. R. Flowers as plaintiff against the Central Power & Light Company and L. H. Sanders, as defendants, claiming that defendants had maliciously caused the prosecution of plaintiff, and set in motion the machinery of the law so as to cause plaintiff to be indicted by the grand jury of Colorado County for "Receiving and Concealing Stolen Property", and to be tried for such offense. Plaintiff was acquitted, and in this suit seeks damages for his alleged malicious prosecution. Defendants filed motion for summary judgment under Rule 166-A, T.R.C.P., which was granted by the trial court, and plaintiff appeals.
Background of this case appears to be that the Central Power & Light Company's warehouse in Bay City was found to have missing several coils of wire. This information was furnished the authorities, who found the wire in Houston. It developed that two employees of Central Power & Light Company had stolen the wire and sold it to plaintiff Flowers, who in turn sold the wire in Houston. Flowers was indicted for receiving and concealing stolen property, and on the trial of the case was acquitted. He then filed the instant cause for damages, contending that his prosecution was maliciously caused by defendant Central Power & Light Company, acting through defendant L. H. Sanders, an employee *375 of the Company, and one Clyde Nispel, another employee of the Company.
The elements necessary for a malicious prosecution action are: 1) The commencement of a criminal prosecution against plaintiff, 2) which has been caused by the defendant or through defendant's aid or cooperation, 3) which terminated in favor of the plaintiff; 4) that plaintiff was innocent; 5) that there was no probable cause for such proceeding; 6) that it was done with malice, 7) and resulted in damages to the plaintiff.
Defendants filed motion for summary judgment, in which they attempt to negate element 2 supra, that they caused or co-operated in the prosecution of plaintiff. Defendant Sanders' affidavit in support of defendants' motion for summary judgment says:
"I did not commence or prosecute any criminal charge or charges against J. R. Flowers, nor did I sign any criminal complaint charging him with an offense, nor did I solicit or procure or present any information or testimony to the Grand Jury of Colorado County, not did I procure, present to or discuss with the County Attorney of Colorado County any matter or things connected with or related to the matters mentioned herein."
Defendants' motion for summary judgment is further supported by the affidavit of its local manager, Clyde Nispel, who says that he did not commence any criminal prosecution against plaintiff.
Plaintiff filed answer to the defendants' motion for summary judgment, in which he asserts that defendants' motion for summary judgment amounts to a mere denial under oath of plaintiff's cause of action, and sets out verbatim testimony of defendant Sanders given as a witness at the trial in which plaintiff herein was tried for receiving and concealing stolen property, as follows:
"Q. All right. Now did you have any property of your own stored in that warehouse? A. No, Sir.
"Q. All that property in there belonged to Central Power & Light Company, did it not? A. Yes, Sir.
"Q. Then when you instituted this action here you did it for the Central Power & Light Company, isn't that correct? A. That's right.
"Q. And when you filed a complaint in this case you filed it for the Central Power & Light Company, didn't you? A. Yes, sir."
Affidavits of plaintiff, the Court Reporter in the criminal trial, and plaintiff's attorney are to the effect that defendant Sanders testified as to the foregoing on the criminal trial.
The deposition of Deputy Sheriff M. H. Buller is likewise attached to plaintiff's opposition to defendants' motion for summary judgment. In his deposition Deputy Buller testifies that he went to the office of Clyde Nispel, local manager of Central Power & Light Company, and told him that the wire had been located in Houston and "asked him whether they were going to file charges or prosecute anyone for stealing the wire before we went to Houston. He said he didn't know, that he would have to call Corpus Christi. He called Corpus Christi and he told us to go ahead, that the Company would stand behind him in filing the charges against anybody stealing the wire."
Rule 166-A T.R.C.P. provides that the judgment sought shall be rendered if the pleadings, depositions, and admissions on file, together with the affidavits, show that except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Such rule further provides that supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall *376 show affirmatively that the affiant is competent to testify as to the matters stated therein.
In a summary judgment hearing the movant has the burden to prove clearly his right to summary judgment, and that there is no issuable fact in the case for determination. Tigner v. First Nat. Bank of Angleton, 153 Tex. 69, 264 S.W.2d 85.
Our Supreme Court, in Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931, in discussing this rule, says:
"The duty of the court hearing the motion for summary judgment is to determine if there are any issues of fact to be tried, and not to weigh the evidence or determine its credibility, and thus try the case on affidavits. * * * `The underlying purpose of Rule 166-A was elimination of patently unmeritorious claims or untenable defenses; not being intended to deprive litigants of their right to a full hearing on the merits of any real issue of fact.' The burden of proving that there is no genuine issue of any material fact is upon the movant, and `all doubts as to the existence of a genuine issue as to a material fact must be resolved against the party moving for a summary judgment.' * * * (The court) accepts as true all evidence of the party opposing the motion which tends to support such party's contention, and gives him the benefit of every reasonable inference which properly can be drawn in favor of his position." See also Trammel v. Trammell, 290 S.W.2d 324, 325, W/E Ref.
Keeping in mind the foregoing authorities, and reverting to the record in the instant case as made by the affidavits, we think there is an issuable fact as to whether defendant Sanders (the employee of defendant Central Power & Light Company) signed the complaint against plaintiff or otherwise caused or cooperated in the criminal prosecution of plaintiff. Sanders says in his affidavit that he did not. Plaintiff's affidavits reflect that on the criminal trial of plaintiff that Sanders testified that he did file the complaint and that he did it for the Central Power & Light Company.
Defendant earnestly contends that plaintiff's affidavits setting up the foregoing are hearsay and not competent evidence and should be stricken and not considered by this court. We think the foregoing are admissible in evidence as exception to the hearsay rule for several reasons: 1) Testimony given by a witness at a former trial of like issue is admissible to impeach the witness. 2) Admission or declaration of a party litigant against his interest is admissible though made by him when testifying as a witness in a former trial involving like issues. Defendant Sanders by affidavit testifies that he had nothing to do with the prosecution of plaintiff in the criminal case. Yet in the criminal case he swore it was he who filed the complaint. We know not the truth of the matter, but believe it would be manifestly unjust to exclude the affidavits as to his provious testimony, and moreover, believe that same are admissible in evidence here. Since same are admissible, a factual issue certainly is presented. Further to the foregoing, accepting as true all evidence which tends to support the opposing party's contention and giving him the benefit of every reasonable inference which can properly be drawn therefrom, a factual issue is made further by the deposition of Deputy Buller in rebuttal and impeachment of the affidavit of Central Power & Light Company's manager Nispel.
It follows that the cause should be reversed and remanded for trial upon its merits.
Reversed and remanded.
HALE, J., took no part in the consideration and disposition of this case.
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82 Cal.App.3d 772 (1978)
147 Cal. Rptr. 341
THE PEOPLE, Plaintiff and Respondent,
v.
ALPHONSO PANKY, JR., Defendant and Appellant.
Docket No. 16876.
Court of Appeals of California, First District, Division One.
July 13, 1978.
*775 COUNSEL
Paul N. Halvonik and Quin Denvir, State Public Defenders, under appointment by the Court of Appeal, Clifton R. Jeffers, Chief Assistant State Public Defender, Philip A. Schnayerson, Michael G. Millman, Harriet Wiss Hirsch, and Gail R. Weinheimer, Deputy State Public Defenders, for Defendant and Appellant.
Evelle J. Younger, Attorney General, Jack R. Winkler, Chief Assistant Attorney General, Edward P. O'Brien, Assistant Attorney General, W. Eric Collins and Nathan D. Mihara, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
NEWSOM, J.
In the early morning hours of September 16, 1976, Sarah S. was returning to her San Francisco apartment, having finished her shift as a waitress at Russo's Restaurant. Near the intersection of Haight and Ashbury, she was set upon by appellant, who, wielding a butcher knife and threatening to kill her, marched her down the street.
Pushing her into a nearby alley, appellant robbed Sarah at knifepoint, taking from her two rings, two bracelets and $30 in cash. Still holding the knife to her throat, he raped her, then forced her to dress, marched her away for two blocks, and raped her again.
After the second rape was completed, appellant became apprehensive because nearby lights were turned on. He forced Sarah to accompany him into a nearby schoolyard, and down several levels to the basement, where he took her wallet from her purse and removed her I.D. card. He then took her to another, more remote, area of the schoolyard, where he again raped her, then forced her at knifepoint to commit mutual acts of oral copulation.
Throughout this ordeal appellant repeatedly struck and threatened to kill Miss S. Finally satiated, he accompanied her to her apartment, where he released her, but only after she had seen his face clearly in the hall light.
Immediately after her release, Miss S. telephoned the police, giving them the essential details of the attack.
*776 Sometime later, on the afternoon of October 7, 1976, Miss S. in the company of her boyfriend, spotted appellant walking on Clayton Street. She called the police, who arrested appellant.
On November 5, 1976, appellant was charged with violations of Penal Code section 207 (kidnaping later amended to Pen. Code, § 209); with three counts of Penal Code section 261, subdivision 3 (rape); with one count of Penal Code section 211 (robbery); with four counts of Penal Code section 288a (oral copulation, two of which were later dropped); and with being armed with a concealed deadly weapon in each offense except the robbery.
After a mistrial on January 8, 1977, appellant was convicted by a jury on every count except that charging violation of Penal Code section 209, as to which he was convicted of the lesser included offense of Penal Code section 207. The jury also found all of the arming allegations to be true.
Appellant advances four major arguments in support of a reversal. We shall consider these in the order presented.
I
The first assignment of error involves the testimony of one Jimmy Nunn, an acquaintance of appellant, who testified that the latter had spoken of his plans on the day of his arrest to "clip some people off," by which, he explained, he meant in general to rob someone. Nunn also testified that appellant told him, as they neared Miss S. apartment, that he had "killed and raped a lady," and he showed Nunn a modified seven-inch butcher knife he was carrying. Finally, on cross-examination, Nunn testified that appellant on the same occasion discussed with him his recent robbery of a Haight Street liquor store.
All of this testimony was admitted over objection, subject to a motion to strike later made and denied.
Appellant contends that the admission of such hearsay evidence of other offenses was irrelevant and prejudicial.
(1) We observe first that the subject statements do fall squarely within the admissions exception to the hearsay rule. In People v. Allen (1976) 65 Cal. App.3d 426 [135 Cal. Rptr. 276], the court observed that: "Evidence *777 Code section 1220 creates an exception to the hearsay rule for the admission of a party. The section states simply that `[e]vidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party....' Section 1220 assumes that evidence of a party-declarant's statement is hearsay evidence because it is being offered to prove the truth of the matter stated in such statement. This is the definition of hearsay evidence. (Evid. Code, § 1200, subd. (a).) [¶] It is to be noted that Evidence Code section 1220 does not define when a declarant-party's extrajudicial hearsay statement becomes relevant to be admissible against such party under the personal admission exception to the hearsay rule. It is obvious, however, that, for such a statement to be admissible against a party as an admission, the statement must assert facts which would have a tendency in reason either (1) to prove some portion of the proponent's cause of action, or (2) to rebut some portion of the party declarant's defense." (P. 433.)
Evidence in the form of admissions that appellant intended to rob occupants at Miss S.'s apartment was relevant because it tended to show he knew his victim, as well as because it disclosed a common plan, or modus operandi, involving robbery with a butcher knife. (See People v. Matson (1974) 13 Cal.3d 35, 40 [117 Cal. Rptr. 664, 528 P.2d 752]; People v. Haston (1968) 69 Cal.2d 233, 246 [70 Cal. Rptr. 419, 444 P.2d 1]; People v. Thornton (1974) 11 Cal.3d 738, 755-757 [cert.den., (1975) 420 U.S. 924 (43 L.Ed.2d 393, 95 S.Ct. 1118)]; People v. Harris (1977) 71 Cal. App.3d 959, 964 [139 Cal. Rptr. 778]; People v. Enos (1973) 34 Cal. App.3d 25, 34-35 [109 Cal. Rptr. 876]. Cf. People v. Williams (1970) 10 Cal. App.3d 638, 643 [89 Cal. Rptr. 143].)
Appellant practically concedes this to be so, but asserts that the trial court had a duty, sua sponte, to give a limiting instruction to the effect that the jury could not consider this evidence for the general purpose of weighing appellant's guilt or innocence.
(2) We disagree, particularly because the disputed evidence was in our view admissible on the separate basis set out in Evidence Code section 1101, subdivision (b): "Nothing in this section prohibits the admission of evidence that a person committed a crime, civil wrong, or other act when relevant to prove some fact (such as motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident) other than his disposition to commit such acts."
*778 In People v. Donnell (1975) 52 Cal. App.3d 762, 774 [125 Cal. Rptr. 310], the court collates the general rules relating to section 1101. "In the application of this rule to criminal cases the general test of admissibility is whether the evidence tends logically, naturally and by reasonable inference, to establish any fact material for the People, or to overcome any material matter sought to be proved by the defense. (People v. Schader (1969) 71 Cal.2d 761, 775....) [¶] `"If it does, then it is admissible, whether it embraces the commission of another crime or does not, whether the other crime be similar in kind or not, whether it be part of a single design or not."' (People v. Peete (1946) 28 Cal.2d 306, 315....) [¶] It is for the trial court to determine whether the probative value is outweighed by the possible prejudicial effect and to admit or exclude it accordingly. (People v. Greene (1973) 34 Cal. App.3d 622, 635....) [¶] `Probative value and prejudice obviously are not commodities subject to quantitative measurement.... The chief elements of probative value are relevance, materiality and necessity. [¶] [T]he court must ascertain that the evidence (a) "tends logically, naturally and by reasonable inference" to prove the issue upon which it is offered; (b) is offered upon an issue which will ultimately prove to be material to the People's case; and (c) is not merely cumulative with respect to other evidence which the People may use to prove the same issue....' (People v. Schader, supra, 71 Cal.2d 761 at pp. 774-775.)"
Applying these principles to the present circumstances, we find no error in admission of the evidence or denial of motions to strike it.
II
Appellant next argues that the trial court erred in admitting tape recordings of the victim's telephone calls to the police.
As part of the prosecution's case tape recordings of the victim's call of September 10 reporting the crime, and of October 7 reporting her sighting of appellant, were admitted into evidence as falling under the "fresh complaint" exception to the hearsay rule, and to show the emotional condition of the victim at the time of the calls.
We believe that appellant's objections to such evidence were properly overruled.
In People v. Burton (1961) 55 Cal.2d 328, 351 [11 Cal. Rptr. 65, 359 P.2d 433], the court discusses the fresh complaint doctrine as follows: "In a *779 case such as the present, where the nonconsenting victim of a sex offense testifies to its commission, the theory of admissibility of evidence of a complaint which is consistent with her testimony and which is not a spontaneous declaration which might be excepted from the hearsay objection is this: It is natural to expect that the victim of such a crime would complain of it, and the prosecution can show the fact of complaint to forestall the assumption that none was made and that therefore the offense did not occur. (People v. Wilmot (1903) 139 Cal. 103, 105 ...; 4 Wigmore, Evidence [3d ed., 1940], § 1135.) ... [¶] We agree with the reasoning of those cases which point out that testimony to the bare fact that the victim `made a complaint' as to an unspecified subject matter on its face would be meaningless; if the complaint did not relate to the alleged offense and (assuming that the victim identified the perpetrator) to the defendant, it would be immaterial to the proof of the People's case; but from the mere receipt of such evidence offered by the prosecution it seems inevitable that the jury would infer that the complaint was that the defendant committed the offense. We therefore accept the view that although details cannot be recounted, it can be shown by the People `that the complaint related to the matter being inquired into, and not a complaint wholly foreign to the subject' (People v. Swist (1902), supra, 136 Cal. 520, 524 [69 P. 223]); that is, the alleged victim's statement of the nature of the offense and the identity of the asserted offender, without details, is proper." (Italics added. See also People v. Brown (1973) 35 Cal. App.3d 317, 323-324 [110 Cal. Rptr. 854]; People v. Alfaro (1976) 61 Cal. App.3d 414, 428 [132 Cal. Rptr. 356]; People v. Butler (1967) 249 Cal. App.2d 799, 805 [57 Cal. Rptr. 798]. See generally, Witkin, Cal. Evidence (2d ed. 1966) § 543, p. 515.)
It is true, as appellant argues, that neither the emotional condition nor state of mind of the victim were yet in issue; Burton, however, sanctions the admission of such evidence merely to "forestall" the assumptions that no complaint was made and that therefore the offense did not occur.
(3) We think that the Burton rule applies where, as here the tape contains nothing more than the victim's name and address, a description of her assailant, and a general description of the crime. (4) We think the tapes are admissible, too, as spontaneous declarations under Evidence Code section 1240. As said in People v. Butler, supra, 249 Cal. App.2d 799, 804-805: "As stated in Showalter v. Western Pacific R.R. Co. (1940) 16 Cal.2d 460, 468 ... to render spontaneous declarations admissible `it is required that (1) there must be some occurrence startling enough to produce this nervous excitement and render the utterance spontaneous *780 and unreflecting; (2) the utterance must have been before there has been time to contrive and misrepresent, i.e., while the nervous excitement may be supposed still to dominate and the reflective powers to be yet in abeyance; and (3) the utterance must relate to the circumstance of the occurrence preceding it. (Wigmore on Evidence, [2d ed.], § 1750.)'"
III
Appellant's argument that the prosecutor was guilty of misconduct rests chiefly on his having commented on Nunn's "other crimes" testimony. Since we have concluded that such testimony was admissible to show, inter alia, a common plan or scheme, we do not agree that such comments constituted misconduct.
Appellant also points to what he views as irrelevant and prejudicial comments by the prosecutor in his final argument, referring specifically to the following remarks: "If, ladies and gentlemen, when you get in that jury room to deliberate you find yourselves in the minority saying well, I agree with you, I think he is guilty, but I don't think it has been proven to me beyond a reasonable doubt, ask yourselves why do more other people seek to think they are convinced, that they are convinced beyond a reasonable doubt."
(5) No objection was made to the above statements at trial. We think it appropriate to add, however, that appellant's reliance on People v. Gainer (1977) 19 Cal.3d 835 [139 Cal. Rptr. 861, 566 P.2d 997] in this connection is misplaced, since Gainer dealt with coercive jury instructions. Moreover, the quoted statements must be read in context. Thus: "If you now have a feeling after the Court instructs you that this man is guilty, but you really have some doubt, ask yourselves a question. What is it that makes me think that Mr. Panky is guilty? It has to be the evidence, doesn't it, because that is all you have before you. If, ladies and gentlemen, when you get in that jury room to deliberate you find yourselves in the minority saying well, I agree with you, I think he is guilty, but I don't think it has been proven to me beyond a reasonable doubt, ask yourselves why do more other people seek to think they are convinced, that they are convinced beyond a reasonable doubt. Air your views. Explain if you can why it is that you choose to believe Mr. Panky and not the overwhelming testimony." (Italics added.)
Finally, appellant argues that the prosecution committed misconduct by referring to matters not in evidence in the following statement: "On *781 September 10th, he (appellant) admits that there isn't a soul in the world other than him and Sarah S. who can testify as to where he was."
An objection that this was a misstatement of the evidence was sustained.
(6) A mere reference to matters not in evidence, or a misstatement of the evidence which is a result of inadvertence or honest mistake, is not prejudicial misconduct. (Witkin, Cal. Criminal Procedure (1963) § 454, p. 457.) The prosecutor made a further statement, after the court's ruling, as follows: "Thank you, and again, ladies and gentlemen, if I made a mistake or if I misstated the evidence, you follow your thinking on it. My recollection was that after I had asked a question a certain way, I again asked him if there was anyone else that could testify as to the time and wasn't he in fact alone and he said, `yes, between 12:30 and 4:00 o'clock that morning.' He was all alone. Listen to the story he told you about September 10." In the light of such further statement we regard the matter as innocuous.
IV
After trial and conviction, appellant was sentenced to state prison on all charges, the sentence on robbery to run consecutively to the others, which were ordered to be served concurrently.
Appellant argues that this was double punishment, and, specifically, that: "... it was improper to sentence him separately on Count I, kidnapping (Pen. Code § 207) because this offense arose from the same course of conduct involved in Count II (Pen. Code § 261.3), Count IV (Pen. Code § 261.3), Count V (Pen. Code § 288a), Count VI (Pen. Code § 288a) and Count VII (Pen. Code § 261.3)." Appellant further contends that, "Separate sentences for the convictions in counts II, IV, V, VI and VII violate the prohibition against double punishment contained in Penal Code section 654."
Penal Code section 654 provides as follows: "An act or omission which is made punishable in different ways by different provisions of this code may be punished under either of such provisions, but in no case can it be punished under more than one; an acquittal or conviction and sentence under either one bars a prosecution for the same act or omission under any other."
*782 People v. Beamon (1973) 8 Cal.3d 625, 639 [105 Cal. Rptr. 681, 504 P.2d 905], sets forth the general principles of construction respecting section 654: "This court has thus construed section 654 to be applicable to limit punishment for multiple convictions arising out of either an act or omission or a course of conduct deemed to be indivisible in time, in those instances wherein the accused entertained a principal objective to which other objectives, if any, were merely incidental. (7) The initial inquiry in any section 654 application is to ascertain the defendant's objective and intent. If he entertained multiple criminal objectives which were independent of and not merely incidental to each other, he may be punished for independent violations committed in pursuit of each objective even though the violations shared common acts or were parts of an otherwise indivisible course of conduct."
This analysis is for the trial court. As stated in People v. Scott (1966) 247 Cal. App.2d 371, 375-376 [55 Cal. Rptr. 525]: "Contrary to the supposition of the trial judge, the appellate court is not in a position to do what the trial court failed to do. Since the divisibility of the transaction depends in part upon the intent of the defendant, a factual issue is presented. It is the function of the trial court, after seeing and hearing the witnesses, to determine this factual matter which controls the number of sentences to be imposed. A reviewing court is not the place to try facts."
We are accordingly limited in our function to determining whether substantial evidence supports the trial court's finding that the subject offenses were to some extent divisible and reflective of multiple criminal objectives.
Our inquiry in this regard begins with a consideration of the kidnaping.
Section 207 reads as follows: "Every person who forcibly steals, takes, or arrests any person in this state, and carries him into another country, state, or county, or into another part of the same county, or who forcibly takes or arrests any person, with a design to take him out of this state, without having established a claim, according to the laws of the United States, or of this state, or who hires, persuades, entices, decoys, or seduces by false promises, misrepresentations, or the like, any person to go out of this state, or to be taken or removed therefrom, for the purpose and with the intent to sell such person into slavery or involuntary servitude, or otherwise to employ him for his own use, or to the use of another, without the free will and consent of such persuaded person; and every person who, being out of this state, abducts or takes by force or fraud any person *783 contrary to the law of the place where such act is committed, and brings, sends, or conveys such person within the limits of this state, and is afterwards found within the limits thereof, is guilty of kidnaping."
It is speculative to say whether the subject kidnaping was primarily motivated by robbery or by sexual gratification, and, of course, the order in which the particular crimes were committed is of no value in the analysis, since the interval separating the various offenses was relatively brief.
What is clear, however, is that the kidnaping had no independent purpose, but was definitely connected with one or another or all of the crimes which followed it.
We think that under these circumstances it was error to separately sentence appellant to state prison on the kidnaping, even though the sentence was made concurrent with those imposed for the clearly distinct offenses of rape and oral copulation.
A very similar result was reached in People v. Laster (1971) 18 Cal. App.3d 381 [96 Cal. Rptr. 108], where the alleged kidnaping was committed in connection with a robbery and rape, and the victim was held for five hours and transported two miles before escaping.
There the court viewed as crucial the determination whether the asportation, though substantial, was incidental to the commission of the offenses which were its objectives, and did not increase the risk of harm over and above that necessarily present in the commission of such related offenses. (18 Cal. App.3d at p. 391. Cf. People v. Schafer (1970) 4 Cal. App.3d 554, 560 [8 Cal. Rptr. 464].)
We think the Laster reasoning equally applicable here, where the kidnaping may have been predominantly motivated by either offense but was certainly necessarily part of a continuous course of conduct involving one or another of the offenses of robbery, rape and oral copulation. Under these circumstances, even though the kidnaping may have been completed before any subsequent offense was committed, the prohibition against multiple punishment requires a reversal insofar as the judgment below imposes sentences for the kidnaping as a separate offense.
The judgment of the trial court is accordingly modified to stay the imposition of sentence for violation of Penal Code section 207 until *784 appellant has completed the remainder of his sentences at which time the stay shall become permanent, and in all other respects it is affirmed.
Racanelli, P.J., and Elkington, J., concurred.
A petition for a rehearing was denied August 10, 1978. On August 10 and 23, 1978, the opinion was modified to read as printed above. Appellant's petition for a hearing by the Supreme Court was denied September 7, 1978.
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924 P.2d 751 (1996)
Byron Keith COOPER, Appellant,
v.
The STATE of Oklahoma, Appellee.
No. F-92-533.
Court of Criminal Appeals of Oklahoma.
July 25, 1996.
*752 ORDER DIRECTING TRIAL COURT TO DETERMINE FEASIBILITY OF CONDUCTING POST-EXAMINATION COMPETENCY HEARING; AND, IF FEASIBLE, TO CONDUCT HEARING USING CONSTITUTIONALLY ACCEPTABLE STANDARD; ORDER MODIFYING INSTRUCTION 11-2 IN OUJI-CR 2d
This case comes to this Court on remand from the Supreme Court of the United States, which reversed Appellant's conviction based on a Due Process violation which occurred when Appellant was required to prove his competence to stand trial by clear and convincing evidence. Cooper v. Oklahoma, ___ U.S. ___, 116 S.Ct. 1373, 134 L.Ed.2d 498 (1996). The Supreme Court remanded the case to this Court for further proceedings not inconsistent with its opinion. The Attorney General on behalf of the State of Oklahoma filed a Response to the Mandate of the Supreme Court. This Court gave Appellant's attorneys an opportunity to reply to that response. Appellant's attorneys failed to submit any matters for further consideration.
In cases where a post-examination competency hearing was not held, this Court has determined it is permissible to remand to the District Court to (1) determine whether it is feasible at a later time to conduct an appropriate post-examination competency hearing; and (2) if that question is answered affirmatively, to conduct a hearing to determine whether the defendant was competent to stand trial. Thomas v. State, 777 P.2d 399, 400-01 (Okl.Cr.1989); Anderson v. State, 765 P.2d 1232, 1233 (Okl.Cr.1988); Rowell v. State, 699 P.2d 651, 652 (Okl.Cr.1985). We see no reason why the same rationale cannot apply here, so long as a constitutionally appropriate standard is utilized in making the determination.
Accordingly, the District Court is ordered to determine the feasibility of conducting an appropriate post-examination competency hearing; and if such a hearing is feasible, to conduct the hearing to determine whether the defendant was competent to stand trial at the time his trial was held, using a constitutionally approved standard of preponderance of the evidence. This Court has recently approved the revision of the Oklahoma Uniform Jury InstructionsCriminal (Second Edition) which now contains instructions to be used in trials to determine present competency. These may be used with additional instructions as may be appropriate.
The instructions in OUJI-CR 2d, which go into effect August 1, 1996, must be modified to reflect the constitutional standard of burden of proof is preponderance of the evidence. Upon review we find OUJI-CR 11-2 shall be modified to comply with the dictates of the Supreme Court in Cooper, and it reflects the change in burden of proof from clear and convincing to preponderance of the evidence as follows:
You are instructed that [Name of Defendant] is presumed by law to be competent, as that term is defined in these instructions. The burden of proof rests upon [Name of Defendant] to prove to your satisfaction by a preponderance of the evidence that he is incompetent.
When I say that a party has the burden of proving any proposition by a preponderance of the evidence, I mean that you must be persuaded, considering all the evidence in the case, that the proposition on which such party has the burden of proof is more probably true than not true. The greater weight of the evidence does not mean the greater number of witnesses testifying to a fact, but means what seems to you more convincing and more probably true.
If you find that the greater weight of the evidence proves that [Name of Defendant] is incompetent, you should so state in your verdict.
On the other hand, if you do not so find, then you should return a verdict finding [Name of Defendant] to be competent.
THIS MODIFICATION IS EFFECTIVE IMMEDIATELY. THE INSTRUCTION AS SET FORTH IN THIS ORDER MUST REPLACE INSTRUCTION 11-2, AS FOUND IN OUJI-CR 2d. THIS CHANGE *753 IS EFFECTIVE IMMEDIATELY UPON PUBLICATION OF THIS ORDER.[1]
IT IS SO ORDERED.
/s/ Charles A. Johnson
CHARLES A. JOHNSON,
Presiding Judge
/s/ Charles S. Chapel
CHARLES S. CHAPEL,
Vice-Presiding Judge
/s/ Gary L. Lumpkin
GARY L. LUMPKIN, Judge
/s/ James F. Lane
JAMES F. LANE, Judge
/s/ Reta M. Strubhar
RETA M. STRUBHAR, Judge
NOTES
[1] This change is applicable to Sections 1175.1 et seq. of Title 22, dealing with the competency of a defendant to stand trial in a criminal proceeding. This change is not intended to address any questions relating to civil commitment procedures pursuant to other provisions of the Oklahoma Statutes. Also, we express no opinion as to what applicability the Supreme Court's decision in Cooper might have on a properly raised collateral attack pursuant to the Oklahoma Post-Conviction Procedure Act, Sections 1080 through 1089 of Title 22.
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122 B.R. 933 (1991)
In re Rosetta PORTER, Debtor.
Rosetta PORTER, Plaintiff,
v.
MID-PENN CONSUMER DISCOUNT CO. and Mid-Penn National Co., Defendants.
Bankruptcy No. 90-11361 S, Adv. No. 90-0641 S.
United States Bankruptcy Court, E.D. Pennsylvania.
January 7, 1991.
*934 Paul A. Brooks, Community Legal Services, Inc., Philadelphia, Pa., for debtor.
Arthur J. Matusow, Philadelphia, Pa., for defendants.
Edward Sparkman, Philadelphia, Pa., Chapter 13 Trustee.
OPINION
DAVID A. SCHOLL, Bankruptcy Judge.
A. INTRODUCTION
The instant proceeding causes us to again visit an area of the law which we chronicled at length in In re Perkins, 106 B.R. 863, 866-70 (Bankr.E.D.Pa.1989), aff'd, C.A. No. 89-8705 (E.D.Pa. Feb. 1, 1990): the practices of MID-PENN CONSUMER DISCOUNT CO. ("Consumer") regarding retention of mortgages from a prior loan when making a new loan and a new mortgage recasting the prior loan transaction, and the disclosures required under the federal Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. ("the TILA") in doing so. In Perkins, we noted the lack of success of Consumer in defending its practice of retaining multiple mortgages while not disclosing same before two panels of the Third Circuit Court of Appeals,[1] three district judges in this district,[2] and three judges of this court. Id. at 864, 866-70, 871.[3]
However, the record in this case reveals that the Defendants have made significant strides in accommodating their practices to these decisions. Thus, the practices challenged here are limited to a claim that the Defendants waited too long, nine days in sending a satisfaction piece to the Debtor *935 in one transaction and 18 days in recording the satisfaction piece itself in the other, to eliminate the mortgages executed in connection with prior loans in making new loans.
We conclude that the 45-day period referenced in 21 P.S. § 682, not noted in our dictum in In re Nichols, Nichols v. Mid-Penn Consumer Discount Co., Bankr. No. 86-05809S, Adv. No. 87-0600S, slip op. at 4 (Bankr.E.D.Pa., Nov. 10, 1987), aff'd sub nom. Nichols v. Mid-Penn Consumer Discount Co., 1989 WL 46682 (E.D.Pa. April 28, 1989), aff'd sub nom. Appeal of Mid-Penn Consumer Discount Co., 891 F.2d 282 (3d Cir.1989), is the appropriate time-limit for satisfying undisclosed prior mortgages, and that the Defendants have not violated the TILA in that regard in the instant transactions.
We also reaffirm our holding in In re Matzulis, Matzulis v. Mid-Penn Consumer Discount Co., Bankr. No. 86-01964S, Adv. No. 86-0691S (Bankr.E.D.Pa. Jan. 22, 1987), that the use of the general TILA model rescission notice form, as opposed to the use of the TILA model form for refinancing, was appropriate in these transactions, because they were not actually "refinancings," as defined by the pertinent TILA Regulation.
Finally, while acknowledging the technical accuracy of the Debtor's observation that the proof of claim in issue was erroneously filed on behalf of Consumer instead of Defendant MID-PENN NATIONAL CO. ("National"), a related company, we believe that it is appropriate to allow Consumer and National (collectively "the Defendants") to amend the said claim to accurately identify the claimant.
B. FACTUAL AND PROCEDURAL HISTORY
ROSETTA PORTER ("the Debtor") filed the individual Chapter 13 bankruptcy case underlying the instant proceeding on March 28, 1990. The meeting of creditors was initially scheduled on July 2, 1990, and the confirmation hearing was initially scheduled shortly after the expiration of the bar date on October 11, 1990.
On May 2, 1990, Consumer filed a proof of claim itemizing arrearages of $599.79 on a mortgage of April 8, 1988, in favor of National. The proof of claim also recites that a sum of $5,075.00 is "to be paid directly" to Consumer. This figure apparently references the post-petition payments falling due during the duration of the plan. On July 31, 1990, National filed an Objection to confirmation of the Debtor's plan, based upon the Debtor's alleged failure to make post-petition payments directly to it, as the proof of claim envisioned.
On that same date, July 31, 1990, the Debtor filed the Complaint in the instant adversary proceeding. The Complaint includes the following five Counts: (1) Against Consumer, for failure to properly act upon a rescission of a loan made from it to the Debtor on May 18, 1987 ("the 1987 Loan") in alleged violation of the TILA; (2) Against National, for failure to properly act upon a similar rescission of a loan made from it to the Debtor on April 8, 1988 ("the 1988 Loan"); (3) Against Consumer, for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq. (referred to herein by its generic designation as a law prohibiting Unfair and Deceptive Acts and Practices, or "UDAP"), in failing to provide TILA disclosures, see 41 P.S. § 401; failing to advise the Debtor of "the disadvantages of refinancing existing loans;" and failing to promptly satisfy the mortgage taken in the 1987 Loan; (4) Against National, similar UDAP violations in connection with the 1988 Loan; and (5) Miscellaneous objections to Consumer's proof of claim, the most prominent of which were contentions that the Debtor owed nothing to either of the Defendants but, if she owed anything to either of them, her creditor was National, not Consumer.
The trial, originally scheduled on October 11, 1990, was continued to the date of a continued confirmation hearing in the Debtor's main case on October 30, 1990. These matters were all continued again, for a final time, until November 29, 1990, on which date the proceeding was tried. In a subsequent Order of November 30, 1990, we scheduled post-trial briefing of this proceeding *936 to be completed by December 28, 1990, and rescheduled the confirmation hearing for January 22, 1991.
At trial, the parties offered a Trial Stipulation that is short enough to be quoted here in substantial part, omitting the paragraph numbers and altering the paragraphing to conform to the narrative format:
On May 18, 1987, [the Debtor and Consumer] entered into the 1987 loan transaction, and [the Debtor] executed a mortgage on her principal dwelling to [Consumer]. On May 22, 1987, the mortgage associated with the 1987 loan was recorded. On May 27, 1987, [Consumer] executed a satisfaction piece for the mortgage it had taken on [the Debtor's] dwelling in connection with [a prior] 1986 loan transaction. Also on May 27, 1987, [Consumer] sent the satisfaction piece and the original 1986 mortgage to [the Debtor].
On April 28, 1988, [the Debtor] and [National] entered into the 1988 loan transaction, and [the Debtor] executed a mortgage on her principal dwelling to [National]. On April 13, 1988, the mortgage associated with the 1988 loan was recorded. On April 14, 1988, [Consumer] executed a satisfaction piece for the mortgage it had taken in connection with the 1987 loan transaction. Said satisfaction piece was sent by [Consumer] to City Hall for recording on April 24, 1988. On April 26, 1988, the satisfaction piece for the 1987 mortgage was recorded.
On account of the 1987 loan, [the Debtor] made payments totalling $1,265.34 to [Consumer]. On account of the 1988 loan, [the Debtor] made payments totalling $4,263.00 to [National].
The only witnesses at the trial were Leonard Tench, a Vice-President of the Defendants, and Edwin Seave, Esquire, the Defendants' President and owner ("Seave"). Tench testified that he usually handled rescissions himself, although Seave claimed to have more oversight of these matters than Tench realized. Tench was confronted with a deposition taken in connection with the case of In re Steinbrecher, 110 B.R. 155 (Bankr.E.D.Pa.1990), in which he stated that, if a borrower rescinded a refinanced loan, Consumer would retain the mortgage from the prior loan. However, Tench further stated that, after that deposition, Seave informed him that he was incorrect and that, in fact, if a refinanced loan were rescinded, any and every outstanding mortgage would have been satisfied as well as any new mortgage taken.[4]
Also, through Tench, the rescission forms given to the Debtor in the transactions in issue were produced. Both tracked Rescission Model Form (General) H-8 published in the Appendix to 12 C.F.R., as opposed to Rescission Model Form (Refinancing) H-9. Tench also identified a new rescission notice form, utilized by the Defendants in "refinancing" transactions as of November, 1988, subsequent to the Debtor's loans in issue, which begins as follows:
Your Right to Cancel:
You are entering into a new transaction to increase the amount of credit provided to you. We acquired a (mortgage/lien-security interest) (on/in) your home under the prior transaction and will satisfy that (mortgage/lien/security interest) within forty-five (45) days from [date of refinancing]. This new transaction will result in a new (mortgage/lien/security interest) (on/in) your home dated today. . . .
Seave reiterated that the Defendants' policy, prior to the introduction of the new form, would have been to satisfy any prior mortgages, as well as the new mortgage, in the event of a timely rescission of a *937 "refinanced" loan. The new form was apparently devised to allow the Defendants to retain the old mortgage in the event of a rescission, as well as to better explain the Defendants' actual practices in taking new mortgages and satisfying old ones in such transactions. Seave also enumerated several reasons why the Defendants delayed in filing satisfaction pieces on prior mortgages, including waiting to see if a rescission notice arrived in the mail dated before the end of the rescission period, completing title searches and checking that insurance was in place, and delays in typing and filing necessary documents.
C. SINCE THE DEFENDANTS TOOK ALL STEPS NECESSARY ON THEIR PART TO SATISFY THE MORTGAGES TAKEN IN PRIOR LOAN TRANSACTIONS WITHIN 45 DAYS AFTER THE NEW LOAN TRANSACTION WERE CONSUMMATED, THE DEFENDANTS HAVE NOT IMPERMISSIBLY FAILED TO DISCLOSE THEIR RETENTION OF MULTIPLE MORTGAGES AGAINST THE DEBTOR
The Debtor argues that the Defendants unreasonably delayed the process of satisfaction of the mortgages taken in the respective previous loan transactions. As to the 1987 Loan, she points out that Consumer sent the new mortgage to City Hall in time for it to be recorded on May 22, 1987, just one day after the end of the rescission period, but did not execute the satisfaction piece until May 27, 1987, allegedly in furtherance of its actual practice of retaining the old mortgage for the purpose of insuring that, if the Debtor cancelled the refinancing, it could enforce the old mortgage to recover the sums it had previously lent to her.
As to the 1988 Loan, National sent the new mortgage to City Hall quickly enough that it was recorded on April 13, 1988, the day after the rescission period ended. However, not until April 24, 1988, twelve days after the end of the rescission period, did the Lender send an executed satisfaction piece to City Hall for recording, and the satisfaction piece was not duly recorded until April 26, 1988.
The Debtor, in contending that the period of delay in satisfying the prior mortgages was too long, relies heavily upon the following dictum in our decision of November 10, 1987, in Nichols, supra, slip op. at 4:
While we might be convinced that the "Mortgage Satisfaction Date" is more significant than the "Date Satisfaction Recorded," . . . we cannot discount the fact that the mortgage taken in the July 5, 1983, transaction was not even satisfied until [January 19, 1984,] about seven weeks after the November 30, 1983, transaction, and the satisfaction was not recorded until [February 10, 1984,] several weeks thereafter. Thus, at least two mortgages remained of record as of the date of the November 30, 1983, transaction, and the notice of rescission right clearly implies that but one mortgage is held as security for the loan. As per our analysis of analogous facts in [In re] Melvin, . . . 75 B.R. 952, 954, 956 [(Bankr.E.D.Pa.1987)] (mortgage taken in transaction prior to January 24, 1984, was retained, with a new mortgage taken as of January 24, 1984, until April 4, 1984), we hold that a failure of the Lender to satisfy a mortgage taken in a previous transaction immediately upon the passing of the three-day rescission period after the refinancing transaction is closed constitutes retaining two mortgages simultaneously. . . .
See also Perkins, supra, 106 B.R. at 874 (court "not prepared to say" that 29-day delay between new transaction and satisfaction of old mortgage was permissible).
The Defendants, meanwhile, ask us to study the relevant sequence of dates in the instant transactions even more closely. They point out that the May 18, 1987, transaction was entered into on a Monday. They then claim that the earliest date that a satisfaction piece could have been recorded would have been "at the end of the three (3) days which would have been Friday, May 22, 1987." They reference Seave's testimony that the Defendants wait two more days in order to be "reasonably satisfied that the consumer has not rescinded." 12 C.F.R. § 226.23(c). Since Monday, May 25, 1987, was a legal holiday due to *938 the celebration of Memorial Day, they claim that the earliest the prior mortgage could have been satisfied was May 26, 1987, and, in fact, the satisfaction piece was executed on May 27, 1987.
As to the 1988 Loan, they observe that it was consummated on Friday, April 8, 1988. The earliest that the loan could have been satisfied was after the running of the three days for rescission, which would have extended through Tuesday, April 12, 1988. The two-day waiting period would not have expired until April 14, 1988, on which date the satisfaction piece was executed prior to its being sent for filing on April 24, 1988.
Brushing aside the Nichols dictum regarding the impermissibility of any delay, the Defendants point out that the delay in Nichols from the date of the new loan to the signing of the satisfaction piece was 49 days, and the delay from the date of the new loan to the date of the filing of the satisfaction piece was 72 days. See also Perkins, supra, 106 B.R. at 874 (certain mortgages, not satisfied within 29 days, remained of record for more than a year after the new transaction).
Finally, irrespective of the holding in Nichols as well as Perkins that the amendment made to the Commentary in March, 1989, will not be applied retroactively, they again posit that these changes are significant in analyzing the instant transactions. They point out that, contrary to what both parties asserted and we reported in Perkins, 106 B.R. at 868-69, the change in the Commentary took a different form than an amendment to ¶ 226.23(b)(3), which was originally proposed. On March 7, 1989, the FRB instead amended the Commentary's definition of "Security Interest," at ¶ 226.2(a)(25), to add a new subparagraph 6, reading as follows:
6. Specificity of disclosure. A creditor need not separately disclose multiple security interests that it may hold in the same collateral. The creditor need only disclose that the transaction is secured by the collateral, even when security interests from prior transaction remain of record and a new security interest is taken in connection with the transaction.
This change, making the disclosure of multiple security interests unnecessary in disclosure statements as well as rescission notices, see 54 Fed.Reg. 9418 (1989); and Rohner, supra, ¶ 5.05[13][b][iii], n. 317.4, at S5-49,[5] is, according to the Defendants, mainly a definitional clarification, entitled to retroactive effect.
We cannot accept the Defendants' contention that the amended ¶ 226.2(a)(25)6 can be applied retroactively for several reasons. Firstly the controlling Nichols Court of Appeals decision, as well as the decisions at trial and in appeal in Perkins, were rendered after March 7, 1989, when the new version of ¶ 226.2(a)(25)6 was already in effect. Despite the possible misunderstanding by the courts in these cases that they were addressing the proposed Commentary amendment rather than the amendment as actually promulgated, these cases in fact must have been decided on the law as it actually existed. Furthermore, the ultimate Commentary change was effected only after compliance with the publication requirements of 5 U.S.C. § 553(b). It was for this reason that we held, in Perkins, that the Commentary change constituted "legislative rulemaking" which should not generally, or here, be given retroactive effect. 106 B.R. at 870-73.
However, we cannot totally discount the apparent view of the FRB and Rohner that the undisclosed retention of undisclosed multiple security interests was always a doubtful TILA violation, and, as to contemporary transactions covered by the Commentary Amendment, is archaic. It is difficult, in this climate, to reiterate the vigor of the Nichols dictum quoted at page 937 supra. Also, we cannot discount the efforts of the Defendants to come to grips with the problems identified in the *939 multiple-mortgage cases by satisfying the old mortgages with reasonable promptness and by the promulgation of the new, more accurate rescission notice form utilized by the Defendants as of November, 1988.
In determining what period of time constitutes an unreasonable delay in satisfying an undisclosed retention of a mortgage taken in a prior transaction making a new loan, we are now inclined to make reference to the period in which a mortgage must be satisfied subsequent to payment generally under the following applicable Pennsylvania law, 21 P.S. §§ 681, 682:
§ 681. Satisfaction of mortgage on margin of record or by satisfaction piece
Any mortgagee of any real or personal estates in the Commonwealth, having received full satisfaction and payment of all such a sum and sums of money as are really due to him by such mortgage, shall, at the request of the mortgagor, enter satisfaction either upon the margin of the record of such mortgage recorded in the said office or by means of a satisfaction piece, which shall forever thereafter discharge, defeat and release the same; and shall likewise bar all actions brought, or to be brought thereupon.
§ 682. Fine for neglect
And if such mortgagee, by himself or by his attorney, shall not, within forty-five days after request and tender made for his reasonable charges, return to the said office, and there make such acknowledgment as aforesaid, he, she or they, neglecting so to do, shall for every such offence, forfeit and pay, unto the party or parties aggrieved, any sum not exceeding the mortgage-money, to be recovered in any Court of Record within this Commonwealth, by bill, complaint or information (emphasis added).
This period is 45 days. While we believe that the 45-day period should run from the date that the new loan is consummated to the date of the mailing of the satisfaction piece to the borrower; or, if satisfaction is undertaken by the lender, to the date that satisfaction is actually recorded, we accept the 45-day term-period as reasonable. We note that the 45-day period is the time in which the Defendants certify, on their new rescission notice form, that they will satisfy a mortgage from a prior loan. We also note that this conclusion is consistent with the result in Nichols, because the lapse between the date of the new loan and the recordation of the satisfaction piece of the old mortgage was 72 days, well beyond the 45-day period.
However, this conclusion does result in a decision in favor of the Defendants in the instant factual setting on this point. The satisfaction pieces were forwarded to the Debtor and recorded, respectively, within nine and 18 days in the 1987 Loan and 1988 Loan transactions.
D. THE DEFENDANTS' USE OF THE GENERAL MODEL RESCISSION NOTICE FORMS H-8, AS OPPOSED TO THE USE OF THE REFINANCING MODEL FORMS H-9, WAS APPROPRIATE
The Debtor is well aware of the decision in Matzulis, supra, holding that the use of Rescission Model Form (General) H-8 published in the Appendix to 12 C.F.R., as opposed to Rescission Model Form (Refinancing) H-9 appearing therein, is correct when a lender enters into a new transaction with a borrower in which the only security ultimately retained is the new mortgage taken in connection with the new loan. The Matzulis decision was, of course, the springboard for the later decisions favorable to borrowers which resulted in In re Jones, 79 B.R. 233, 235, 239-41 (Bankr.E.D.Pa.1987), rev'd in part on other grounds sub nom. Jones v. Mid-Penn Consumer Discount Co., 93 B.R. 66 (E.D. Pa.1988); Melvin, supra, 75 B.R. at 954-57; and In re Tucker, 74 B.R. 923, 928-31 (Bankr.E.D.Pa.1987).
The Debtor endeavors to draw two distinctions between Matzulis and this case: (1) The intervening effectiveness of a change in the wording of the Regulation defining "refinancing," 12 C.F.R. § 226.23(f)(2), which allegedly broadens the scope of the term "refinancing" to include a transaction in which a new security interest is taken as well as one in which the lender merely retains a prior security interest *940 in making a new loan; and (2) The allegedly credible testimony of Tench in the Steinbrecher deposition, which purportedly reveals that the Defendants' practice is not to treat a refinancing like an entirely new transaction, but to treat it like a supplement to the prior loan transaction, whereby, if the new loan is rescinded, the old mortgage remains in effect. We are not convinced that either of these distinctions is viable.
Addressing the second alleged distinction first, we note that all of the foregoing cases (Nichols, Jones, Melvin, and Tucker) preceded November, 1988, the date that the Defendants changed their rescission notice form, and that all but the Melvin case involved Consumer, a defendant here. Therefore, the same "practices" of the same lender, prior to November, 1988, were the backdrop of our decisions in these cases as in the instant case.
It is true that the issue of how the Defendants generally treated borrowers who rescinded only the most recent in a series of loans never arose in those cases. However, we question whether the issue has any relevance, which in addition to the fact that the discovery on this issue by the Debtor could be answered only after a significant expenditure of time by the Defendants, was why we denied the Debtor's motion to compel answers to this discovery. It does not appear in any way inequitable or improper for the Defendants to revitalize a previous loan and the mortgage which secures it if a new loan with a new mortgage is rescinded. The effect of rescission should be to restore the parties to the status quo ante, which, in this instance, would contemplate restoring the parties to the terms of the old loan. For this reason we were surprised to hear Seave testify that the Defendants' policy was to satisfy both the old mortgage and the new mortgage if a borrower making a new loan, prior to the use of the new form in November, 1988, were to rescind the new loan. This practice would effect a tremendous windfall to the borrower rescinding the new loan. It is "bad enough" that a borrower could rescind a loan on the basis that material disclosure violations occurred in the new loan transaction after the 45-day period in which the old mortgage must be satisfied, thus leaving the Defendants with no valid mortgage. However, it does not appear at all inconsistent with treating the new loan as a transaction in which the H-8 rescission notice is required to allow the lender to wait out at least the 45-day period to satisfy the old mortgage in the event of rescission. This observation further supports the conclusion that it would be inequitable to require the Defendants to satisfy the new mortgage any sooner than at the end of a 45-day period.
Therefore, it is immaterial to us what the Defendants' practices in reacting to rescissions of "refinanced" new loans were in deciding the issue of whether the use of the H-8 model form was appropriate. The important fact is that, barring the event of rescission, which would eliminate the new loan entirely, the new loan was treated like an entirely new transaction, with a new mortgage being taken, not like a transaction contemplated by model form H-9, in which only the mortgage acquired in the original transaction would be retained as security in any event.
Hence, whether we believe the testimony of Tench and Seave at trial is irrelevant to the determination of this issue. We therefore need not and do not reach the issue of whether the testimony of Tench and Seave at trial on this issue was credible.
The second distinction offered by the Debtor has more substance. It is true that, effective December 18, 1986, see 51 Fed.Reg. 45,296 (1986), the language of 12 C.F.R. § 226.23(f)(2) was materially changed. In Jones, Nichols, Melvin, and Tucker, we considered transactions entered into during the effective period of former 12 C.F.R. § 226.23(f)(2), which read as follows:
(f) Exempt transactions. The right to rescind does not apply to the following:
. . . . .
(2) A refinancing or consolidation by the same creditor of an extension of credit already secured by the consumer's principal dwelling. If the new amount financed exceeds the unpaid principal balance *941 plus any unearned unpaid finance charge on the existing debt, this exemption applies only to the existing debt and its security interest.
In Melvin, 75 B.R. at 975, we pointed out that, where a new mortgage is taken in making a new loan, the transaction is not "already secured" by a mortgage in place, but by a new mortgage which will supplant the prior mortgage. Therefore, a transaction where a new mortgage is taken may not quite fit the definition of a "refinancing" recited in § 226.23(f)(2).
However, as to transactions subsequent to December 18, 1986, a new 12 C.F.R. § 226.23(f)(2), reading as follows, applies:
(f) Exempt transaction. The right to rescind does not apply to the following:
. . . . .
(2) A refinancing or consolidation by the same creditor of an extension of credit already secured by the consumer's principal dwelling. The right of rescission shall apply, however, to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation.
The new second sentence appears to restrict the borrower's rescission right to only the extent of the additional amount advanced in the new transaction. Certainly, the meaning is clearer than in the previous version of the Regulation. In fact, Rohner takes this court to task for "miss[ing] this point" of § 226.23(f)(2) in allowing the Jones and Tucker debtors to rescind their entire new loans. Rohner, supra, ¶ 8.02[2][c] n. 78, at S8-11.[6] Judge Fox, in Steinbrecher, supra, 110 B.R. at 165-66 n. 20, also appears to question the correctness of our decisions holding that the H-8 model form is appropriate and that the Debtor can rescind the entire loan because of an error in a new transaction.[7]
Despite the changes in 12 C.F.R. § 226.23(f)(2), we believe that it can still be maintained that the term "refinancing" is properly applied only to a transaction which is "already secured" by a prior mortgage, as opposed to one secured by a new mortgage. Since the Defendants now agree that prior mortgages must and will be satisfied, it is clearer than ever that they intend to secure a new loan with only a new mortgage. The H-9 form, with its recitation that the borrower will retain only the old mortgage as security in the new transaction, is more clearly inapplicable to the Defendants' new loan transactions than ever. We agree that the second sentence of the new 12 C.F.R. § 226.23(f)(2) may cut the other way, by stating that only the advance of new money in a refinancing transaction is subject to rescission. However, the entire section and hence the second sentence applies only to a "refinancing." The Defendants' instant transactions with the Debtor do not appear to satisfy the definition of "refinancing" per the unchanged language of the first sentence of § 226.23(f)(2) and of Model Form H-9.[8]
Hence, we reaffirm the conclusion which we reached in Matzulis and hold that the Defendants cannot be faulted for utilizing Model Form H-8 as opposed to Model Form H-9 in the instant new loan transactions. The Defendants are therefore entitled to prevail as to all of the TILA counts against them. The UDAP claims based upon TILA *942 violations and the Defendants' alleged failure to properly satisfy their mortgages must also fail. Evidence that the Defendants failed to advise the Debtor of the "disadvantages of refinancing" her loans is absent. Compare Milbourne, 108 B.R. at 533-39. Therefore, the Debtor's UDAP claims must fail as well.
E. WHILE THE DEBTOR CORRECTLY OBSERVES THAT CONSUMER, AS OPPOSED TO NATIONAL, HAS IMPROPERLY FILED A PROOF OF CLAIM AGAINST HER, WE DEEM IT EQUITABLE TO ALLOW THIS CLAIM TO BE AMENDED TO BE ASSERTED BY NATIONAL
The Debtor attacks Consumer's proof of claim the following grounds: (1) It is National who was the lender in the last, superseding loan of the Defendants to the Debtor, and hence any claim of Consumer must be stricken; (2) The proof of claim, in violation of Local Bankruptcy Rule ("L.B. Rule") 3001.1(b), recites only a calculation of the arrearages and no calculation of the entire balance due, even though the Debtor's plan contemplates payment of the Defendants' entire claim; and (3) The "claim" for arrearages was calculated incorrectly.
The Debtor appears to be correct in her assertion that the proof of claim should have been filed by National, not Consumer. Attached to the claim as support for the security interest claimed is the mortgage of April 8, 1988, in favor of National. No assignment of this mortgage to Consumer is alleged.
However, although the bar date passed over three months ago, it appears equitable, in the instant factual setting, to allow an amendment to Consumer's timely proof of claim to properly designate the claimant, although we will limit their time for doing so. We must consider several equitable factors to determine whether allowing the Defendants to so proceed would constitute an impermissible new claim or constitute a permissible amendment to a timely claim. These factors include whether the Debtor had reason to know of the claim prior to the bar date, whether any other creditors will be unfairly prejudiced or receive a windfall if the late filing is allowed, and the degree of fault of the claimant in making a late filing. See, e.g., In re Metro Transportation Co., 117 B.R. 143, 146-51 (Bankr.E.D.Pa.1990); and In re Owens, 67 B.R. 418, 423-25 (Bankr.E.D.Pa. 1986), aff'd sub nom. United States v. Owens, 84 B.R. 361 (E.D.Pa.1988). Where the documents attached to the original claim support the amendment, In re Mitchell, 82 B.R. 583, 585 (Bankr.W.D.Okla. 1988), and "misdescriptions and minor inaccuracies" are in issue, In re Lanman, 24 B.R. 741, 743 (Bankr.N.D.Ill.1982), allowance of amendments to a timely claim is appropriate. Correcting the name of a claimant by amendment may be appropriate, Carnegia v. Georgia Higher Education Assistance Corp., 691 F.2d 482, 483 (11th Cir.1982), at least where such a correction is made within a "reasonable time," usually measured by six months from the bar date. See In re Frascatore, 98 B.R. 710, 721-23 (Bankr.E.D.Pa.1989).
In the instant setting, the Debtor is well aware of the basis, propriety, and amount of the claim of one of the Defendants against her, and the error in naming Consumer as opposed to National. The claimant did not deceive her. We will therefore allow the Defendants until January 14, 1991, to file an amendment to Consumer's timely-filed claim. In so doing, we admonish them to name National if it is in fact the claimant; to comply strictly with L.B. Rule 3001.1(b) in specifying a claim for the entire balance of the obligation due to it; and to carefully review the Debtor's specific objections to their claim as filed. We will then direct the Debtor to file any Objection to this amended claim, any other pleadings necessary to prepare this case for confirmation, and any amended plan by January 21, 1991, in order that a final confirmation hearing can be scheduled on January 22, 1991, even if the plan may not be confirmable on that date.
F. CONCLUSION
An Order consistent with the conclusions reached in this Opinion will be entered.
ORDER
AND NOW, this 7th day of January, 1991, after a trial of this proceeding on *943 November 29, 1990, and upon careful review of the post-trial submissions of the parties, it is hereby ORDERED AND DECREED as follows:
1. Judgment is entered in favor of the Plaintiff and Debtor, ROSETTA PORTER ("the Debtor"), and against the Defendants, MID-PENN CONSUMER DISCOUNT CO. and MID-PENN NATIONAL CO., as to Count Five of the Debtor's Complaint only. Judgment is entered in favor of the Defendants and against the Debtor as to all other Counts in the Complaint.
2. The proof of claim filed by Defendant MID-PENN CONSUMER DISCOUNT CO. is STRICKEN.
3. However, the Defendants, or either of them, are accorded permission to file an Amended Proof of Claim and serve same upon the Debtor's counsel and the Trustee on or before January 14, 1991. Failure to do so shall result in the bar of either of the Defendants to file any proof of claim in this case.
4. The Debtor shall file any Objections to the Defendants' Amended Proof of Claim, any Amended Plan, and any other pleadings necessary to achieve confirmation of the Plan or Amended Plan and serve same upon the Defendants' counsel, the Trustee, and any other interested party.
NOTES
[1] Gill v. Mid-Penn Consumer Discount Co., 853 F.2d 917 (1988); and Abele v. Mid-Penn Consumer Discount Co., 845 F.2d 1009 (3d Cir.1988). Subsequently, the same court reached the same result in Appeal of Mid-Penn Consumer Discount Co., 891 F.2d 282 (3d Cir.1989).
[2] In addition to the decisions of Chief Judge Emeritus Lord, Judge Weiner, and Chief Judge Bechtle of the district court in Abele, Gill, and the matter reported as Appeal of Mid-Penn, supra, Nichols v. Mid-Penn Consumer Discount Co., 1989 WL 46682 (E.D.Pa. April 28, 1989), this string of cases was started with Chief Judge Bechtle's decision in Bookhart v. Mid-Penn Consumer Discount Co., 559 F.Supp. 208, 211-12 (E.D.Pa.1983).
[3] In addition to the cases chronicled in Perkins, we note another decision of this court in this line in In re Milbourne, 108 B.R. 522, 530-33 (Bankr.E.D.Pa.1989).
We also observe that these decisions have been criticized by a respected commentator on the TILA, R. ROHNER, THE LAW OF TRUTH IN LENDING, ¶ 5.05[13][b][iii], at 55-48 (1989 Cum.Supp.) ("Rohner"). However, in light of the decisions of the Court of Appeals, the established law of this Circuit is that failure to disclose retention of multiple mortgages is a violation of TILA meriting rescission, at least pending the effective date of certain amendments to the Official Staff Commentary on Regulation Z Truth in Lending ("the Commentary") published by the Federal Reserve Board ("FRB"), discussed at pages 938-939 infra.
[4] In an Order of November 22, 1990, we denied the Debtor's motion, filed November 9, 1990, attempting to compel the Defendants to produce records of all of their rescinded loans in 1987 and 1988 to test the Defendants' actual practices. Since the Defendants kept no records of such matters, the only means of ascertaining this information would have been for the Defendants to have reviewed all of their records and files in storage. Since the Defendants could provide this information only after a considerable effort, see generally 4A J. MOORE, FEDERAL PRACTICE, ¶ 33.26, at 33-145 to 33-155 (2d ed. 1990), and the importance of the result would have been doubtful, see pages 940-941 infra, we denied this motion.
[5] This final Regulation, in providing that retention of multiple mortgages need not be disclosed in contexts other than the rescission notice, eliminates the accuracy of our observation in Perkins, 106 B.R. at 864-65 n. 1, that the change in the Commentary "would not . . . affect the established law that the failure of Mid-Penn to disclose multiple mortgages is an inaccurate disclosure of the security interests taken which are set forth in the disclosure statement itself."
[6] Rohner fails to note that this court was, in those transactions, interpreting the prior version of § 226.23(f)(2). Moreover, as Rohner later notes, it was not using either the H-9 or the H-8 model form which "got [Consumer] into trouble" in Jones and Tucker, but using a hybrid form which inaccurately disclosed the parties' rights in the transaction. See Rohner, supra, ¶ 8.03[1][b], n. 126, at S8-16. Consumer's new form, though arguably a "hybrid," appears to be acceptable because it more accurately discloses the practice of Consumer in taking security in "refinancing" prior loans.
[7] But see Steinbrecher, 110 B.R. at 165-66 (Judge Fox nevertheless allows the debtor to rescind all loans in a series of transactions because of an error in the first in the series of loans which he holds impacts upon the later loans in the series).
[8] We recognize that the definition of the term "refinancing" generally, see 12 C.F.R. § 226.20(a), is broader than the definition posited here. The Regulation in issue, 12 C.F.R. § 226.23(f)(2), and this discussion refers only to the scope of transactions exempt from the right of rescission because they are a "refinancing."
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85 F.3d 623
Shubbiev.Buffington**
NO. 95-40817
United States Court of Appeals,Fifth Circuit.
Apr 19, 1996
Appeal From: E.D.Tex., No. 5:94-CV-30
1
DISMISSED.
**
Conference Calendar
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"pile_set_name": "FreeLaw"
} |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RONALD E. DUBERRY, et al., :
:
Plaintiffs, : Civil Action No.: 14-1258 (RC)
:
v. : Re Document Nos.: 53, 55
:
DISTRICT OF COLUMBIA, :
:
Defendant. :
MEMORANDUM OPINION
DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT; GRANTING PLAINTIFFS’ CROSS-
MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
The Law Enforcement Officers Safety Act (“LEOSA”) authorizes active and retired
“qualified law enforcement officer[s]” with suitable identification to carry a concealed firearm
interstate, contrary state or local law notwithstanding. 18 U.S.C. §§ 926B, 926C. This case,
back to this Court on remand from the D.C. Circuit and presently before the Court on cross
motions for summary judgment, concerns whether three former District of Columbia Department
of Corrections (“DCDOC”) officers meet certain statutory prerequisites to be considered
“qualified retired law enforcement officer[s]” under LEOSA. Finding that Plaintiffs meet the
statutory preconditions at issue in this case—including, that they each “served as a law
enforcement officer for an aggregate of 10 years or more” and had “statutory powers of arrest”
before separating from DCDOC, id. § 926C(c)(2), (3)(A)—the Court grants Plaintiffs’ motion
for summary judgment and denies the District of Columbia’s motion for the same.
II. BACKGROUND
A. Statutory Framework
Before 2004, a patchwork of state laws governed whether out-of-state current or former
law enforcement officers could carry a concealed firearm within a particular state’s borders. See
H.R. Rep. No. 108-560, at 3 (2004). Beginning in 1992, lawmakers introduced legislation aimed
at permitting concealed carry nationwide for certain law enforcement officers. See H.R. 218,
107th (2001); H.R. 218, 106th Cong. (1999); H.R. 218, 105th Cong. (1997); H.R. 218, 104th
Cong. (1995); H.R. 1277, 103d Cong. (1993); H.R. 4897, 102d Cong. (1992). Efforts succeeded
in 2004 with the enactment of the Law Enforcement Officers Safety Act, known as “LEOSA.”
See LEOSA, Pub. L. 108-277, 118 Stat. 865 (2004) (codified at 18 U.S.C. §§ 926B, 926C); see
also S. Rep. No. 108-29, at 2–3 (2003) (describing efforts to enact legislation similar to
LEOSA).
LEOSA mandates that all active and retired law enforcement officers be able to carry a
concealed firearm anywhere in the United States subject to certain conditions, overriding most
contrary state and local laws. 1 See S. Rep. No. 108-29, at 4. The Act’s purpose was two-fold—
to protect active and retired officers and their families from “vindictive criminals,” and to enable
such officers to “respond immediately” to crimes spanning multiple jurisdictions. Id.; see also
H.R. Rep. No. 108-560, at 4. LEOSA provides that, “[n]otwithstanding any other provision of
the law of any State or any political subdivision thereof,” a “qualified law enforcement officer”
or “qualified retired law enforcement officer” “may carry a concealed firearm that has been
1
LEOSA does not supersede laws prohibiting the possession of firearms on state or local
government properties or laws permitting private persons to bar the possession of concealed
firearms on their property. 18 U.S.C. §§ 926B(b), 926C(b).
2
shipped or transported in interstate or foreign commerce,” so long as the individual also carries
the requisite identification. 18 U.S.C. §§ 926B(a), 926C(a).
Section 926B(c) establishes six conditions that a current employee of a governmental
agency must satisfy to be considered a “qualified law enforcement officer” under LEOSA. Id. §
926B(c). First, the employee must be legally authorized “to engage in or supervise the
prevention, detection, investigation, or prosecution of, or the incarceration of any person for, any
violation of law,” and must have “statutory powers of arrest” or powers of apprehension under
10 U.S.C. § 807(b). 18 U.S.C. § 926B(c)(1). The individual must also be authorized by the
agency to carry a firearm; must meet any standards established by the agency for employees to
qualify to use a firearm; must not be under the influence of alcohol or drugs; must not be the
subject of any disciplinary action by the agency that might result in suspension or “loss of police
powers”; and must not be prohibited by federal law from receiving a firearm. Id. § 926B(c)(2)–
(6). Section 926B also establishes that, in order to take advantage of LEOSA rights, a qualified
law enforcement officer must carry “photographic identification issued by the governmental
agency for which the individual is employed that identifies the employee as a police officer or
law enforcement officer of the agency.” Id. § 926B(a), (d).
Section 926C sets forth the requirements to be considered a “qualified retired law
enforcement officer,” which differ in some respects from the qualifications for active officers.
See id. § 926C(c). To qualify for LEOSA rights, a retired employee must have “separated from
service in good standing . . . with a public agency as a law enforcement officer.” Id. §
926C(c)(1). The individual must also meet the relevant standards for qualification in firearms
training; must not have been found unqualified for reasons related to mental health; must not be
under the influence of alcohol or another intoxicating substance; and must not be prohibited by
3
federal law from receiving a firearm. Id. § 926C(c)(4)–(7). In addition, before separating from
the agency, the individual must have “served as a law enforcement officer for an aggregate of 10
years or more”; must have had legal authority to “engage in or supervise the prevention,
detection, investigation, or prosecution of, or the incarceration of any person for, any violation of
law”; and must have had either “statutory powers of arrest” or powers of apprehension pursuant
to 10 U.S.C. § 807(b). 18 U.S.C. § 926C(c)(2)–(3). Qualified retired law enforcement officers
must carry “photographic identification issued by the agency . . . that identifies the person as
having been employed as a police officer or law enforcement officer.” Id. § 926C(d)(1), (2)(A).
And, if the agency-issued identification does not indicate that the retired officer has completed
the appropriate firearms training, the officer must carry a separate certification form so
establishing. Id. § 926C(d)(2).
B. Factual Background and Procedural History
Before their retirements, Plaintiffs Ronald E. Duberry, Maurice Curtis, and Robert L.
Smith worked as correctional officers in the District of Columbia Department of Corrections,
each beginning in the 1970s or 1980s and serving for at least sixteen years. 2 See Pls.’ Statement
of Undisputed Material Facts (“Pls.’ SUMF”) ¶ 1, ECF No. 59-2; Def. District of Columbia’s
Statement of Undisputed Material Facts (“Def.’s SUMF”) ¶¶ 22–25, ECF No. 53-19. As
corrections officers, Plaintiffs were responsible for, among other things, the treatment, custody,
counseling, and supervision of individuals incarcerated at DCDOC-operated correctional
institutions, including the Lorton Correctional Complex in Lorton, Virginia. See Position
Descriptions, Exs. 12–14, Def.’s SUMF, ECF Nos. 53-31, 53-32, 53-33; Decl. of Robert Smith
2
Harold Bennette, who participated as a plaintiff in earlier stages of this litigation, died
during the pendency of this action. See Statement Noting a Party’s Death, ECF No. 40.
4
(“Smith Decl.”) ¶ 1, ECF No. 59-5; Decl. of Ronald Duberry (“Duberry Decl.”) ¶ 1, ECF No.
59-4; Decl. of Maurice Curtis (“Curtis Decl.”) ¶ 1, ECF No. 59-3.
Beginning in November 2012, Plaintiffs individually sought to enjoy the concealed carry
right that they believed LEOSA afforded them. See Corr. Am. Compl. ¶¶ 48–59, ECF No. 15.
Because each Plaintiff purportedly has photographic identification classifying them as retired
employees of DCDOC, see Corr. Am. Compl. ¶ 56—identification that they believe satisfies the
requirements of subsection (d)(2)(A)—they focused on securing firearm certification to meet the
requirement of subsection (d)(2)(B). In Prince George’s County, Maryland (where Mr. Duberry
and Mr. Curtis reside) and in the District of Columbia (where Mr. Smith resides), an individual
must submit a prior employment certification form completed by the law enforcement agency for
which he previously worked before seeking firearm certification. See Corr. Am. Compl. ¶ 47.
On this certification form, the agency must answer a series of questions by checking boxes for
“yes” or “no.” See Ex. 1, Corr. Am. Compl. One question asks whether the applicant, while
employed, possessed various authorizations enumerated in subsection (c)(2) of LEOSA,
including “statutory powers of arrest.” Certification of Prior Law Enforcement Employment,
Pls.’ Ex. B, ECF No. 23-2. Relatedly, another question asks whether the applicant was
“regularly employed as a law enforcement officer” for the indicated duration of time.
Certification of Prior Law Enforcement Employment, Pls.’ Ex. B.
In response to both of these questions on Mr. Duberry’s prior employment certification
form, a DCDOC human resources officer checked the boxes for “no” and wrote that Mr. Duberry
was “not a law enforcement officer.” Certification of Prior law Enforcement Employment, Pls.’
Ex. B; see also Corr. Am. Compl. ¶¶ 49–51, 55, 57. DCDOC took the same position with
respect to the other Plaintiffs, with the agency’s former director explaining to Plaintiffs’ counsel
5
that the agency does not believe that active or retired correctional officers of DCDOC meet all of
the LEOSA requirements. See Email from Thomas Faust to William J. Phelan (Feb. 28, 2013) at
DC Duberry001748, Ex. 1, Def.’s SUMF, ECF No. 53-20; Email from Marie D. Oliveria to
William J. Phelan (May 21, 2014) at DC Duberry001760–61, Ex. 1, Def.’s SUMF, ECF. No. 53-
20.
In July 2014, Plaintiffs initiated this action against the District of Columbia, former
Mayor Vincent Gray in his official capacity, and former Director of DCDOC Thomas Faust in
his official capacity. See Compl., ECF No. 1. Plaintiffs’ amended complaint alleged that
Defendants’ actions had denied them rights under LEOSA in violation of 42 U.S.C. § 1983. See
Corr. Am. Compl. ¶¶ 5, 80–96. Plaintiffs contended that they met all of the LEOSA conditions,
including that they had “statutory powers of arrest.” In support of this claim, Plaintiffs asserted
that they were given identification cards stating that they had such powers under D.C. Code § 24-
405. See Corr. Am. Compl. ¶¶ 61, 66, 71. Plaintiffs sought injunctive and declaratory relief
requiring Defendants to recognize them as retired law enforcement officers for purposes of
LEOSA. See Corr. Am. Compl. ¶¶ 89, 96. In addition, Plaintiffs asked this Court to make any
order with regard to their status applicable to all retired DCDOC officers—and all DCDOC
officers who would retire in the future—who otherwise meet the qualification of LEOSA. See
Corr. Am. Compl. at 17. Defendants subsequently moved to dismiss Plaintiffs’ amended
complaint. See Defs.’ Mot. to Dismiss 2d Am. Compl., ECF No. 19.
In a prior opinion, this Court granted Defendants’ motion to dismiss. See Duberry v.
District of Columbia, 106 F. Supp. 3d 245, 270 (D.D.C. 2015). This Court first found that,
contrary to Defendants’ arguments, Plaintiffs had standing to seek declaratory and injunctive
relief as to themselves. See id. at 253. However, the Court agreed with Defendants that
6
Plaintiffs did not have standing to bring claims as to future retired correctional officers. See id.
This Court then dismissed individual Defendants Gray and Faust from the action, reasoning that
claims asserted against them were duplicative of claims against the District. Id. at 260–61.
Finally, the Court dismissed Plaintiffs’ remaining claims. See id. at 261–70.
The Court explained that, pursuant to the Supreme Court’s decision in Blessing v.
Firestone, 520 U.S. 329 (1997), a federal statute creates a right enforceable under 42 U.S.C. §
1983 when (1) Congress intended that the provision in question benefit the plaintiff, (2) the right
assuredly protected by the statute is not so “vague and amorphous” that its enforcement would
strain judicial competence, and (3) the statute imposes a mandatory obligation on the states. Id.
at 261–62. Interpreting Plaintiffs’ complaint as seeking “the right to have [DC]DOC classify
them as retired ‘law enforcement officers’ under subsection (c)(2) for purposes of completing
their application[s] for [] concealed carry permit[s],” id. at 265, the Court could not say that
Congress intended to confer upon Plaintiffs the right that they sought to enforce in this action.
Id. at 266–68. Rather, the Court construed LEOSA as conferring only one right—the right to
carry a concealed firearm—and doing so only with respect to individuals who already have status
as “qualified retired law enforcement officer[s]” and who already possess the identification
documents required by subsection (d). Id. at 268–70. Accordingly, this Court explained that
even if the District had misclassified Plaintiffs—an issue that this Court did not reach—Plaintiffs
could not seek to correct that error through § 1983. See id.
Plaintiffs appealed, and the D.C. Circuit reversed this Court’s decision and remanded the
matter for further proceedings. See Duberry v. District of Columbia (“Duberry I”), 824 F.3d
1046, 1057 (D.C. Cir. 2016). The Circuit concluded that Plaintiffs had, in fact, alleged a right
remediable under § 1983. See id. In the Circuit’s view, the LEOSA right that Plaintiffs’ sought
7
to vindicate satisfied each prong of Blessing. See id. First, the Circuit explained that the text of
LEOSA supported Plaintiffs’ claim that Congress intended LEOSA to benefit individuals like
them directly. See id. at 1052. Specifically, the LEOSA right reached not only police officers,
but also “correctional officers and parole authorities who ‘engage[d] in . . . the incarceration of
any person for[] any violation of law.’” Id. (quoting 18 U.S.C. § 926C(c)(2)).
On appeal, the District had “question[ed] whether [Plaintiffs] are entitled to claim any
right under LEOSA because as correctional officers they were not ‘trained to determine whether
probable cause exists to make a warrantless arrest for any crime in the community,’ and therefore
lack the requisite statutory power of arrest.” Id. at 1052–53 (quoting Appellee’s Br. at 12, 25).
The Circuit offered two responses. Assuming that the matter of whether Plaintiffs had statutory
powers of arrest presented a factual question, the Circuit explained that such an issue would not
provide a basis for dismissing Plaintiffs’ claims. See id. at 1053. Plaintiffs had alleged in their
complaint that they had such powers and had claimed that DCDOC had provided them with
identification cards stating as much. See id. Those allegations were sufficient to permit
Plaintiffs to survive a motion to dismiss. Assuming that the matter of Plaintiffs’ statutory powers
of arrest instead presented a legal question, the Circuit explained that “[g]iven the breadth of
Congress’s definition, the reference to ‘statutory powers of arrest’ necessarily means some
statutory power of arrest such as a power to arrest parole violators, and not, as the District of
Columbia suggests, only the police power to arrest upon probable cause.” Id. (citing Appellee’s
Br. at 25). Thus, Plaintiffs’ claims still were not subject to dismissal. The Circuit also noted that
“contrary to the District of Columbia’s suggestion at oral argument, the LEOSA does not require
that, prior to retiring, a law enforcement officer’s job required carrying a firearm in order to be a
‘qualified retired law enforcement officer[].’” Id. (alteration in original).
8
The Circuit next found that the right that Plaintiffs sought to vindicate was not vague or
amorphous, satisfying the second prong of Blessing. See id. Because Congress had provided
statutory criteria for defining the LEOSA right and for establishing eligibility for rights under the
statute, the scheme was subject to judicial enforcement. See id. Looking to Congress’s
“categorical preemption of state and local law standing in the way of the LEOSA right to carry,”
the Circuit concluded that states have a “mandatory duty” to “recognize the right” LEOSA
establishes, meeting the third Blessing prong. Id. The Circuit observed that Congress did not
afford states the discretion to “redefine either who are ‘qualified law enforcement officers’ or
who is eligible for the LEOSA right.” Id. at 1053–54.
Having already concluded that Plaintiffs stated claims under § 1983, the Circuit cited
additional support for its decision in the form of legislative history. See id. at 1054. The Circuit
then addressed the possibility that this Court had determined that Plaintiffs were not those
Congress intended LEOSA to benefit until they obtained the subsection (d)(2)(B) firearms
certification. The Circuit explained that “the firearms certification requirement does not define
the right itself but is rather a precondition to the exercise of that right.” Id. at 1055. 3
On remand, this Court modified and reinstated aspects of its dismissal order that were not
inconsistent with the Circuit’s opinion. See Order Granting Defs.’ Consent Mot. to Modify &
Reinstate Order Granting Defs.’ Mot. to Dismiss, ECF No. 37. Specifically, this Court dismissed
the former mayor and the former Director of DCDOC as parties to this action and dismissed
portions of Plaintiffs’ complaint that sought relief on behalf of future retired DCDOC officers
who otherwise meet the qualification of LEOSA. See Order Granting Defs.’ Consent Mot. to
3
Judge Henderson dissented from the panel opinion, stating that she would have
affirmed this Court’s dismissal order on the ground that the Court lacked subject matter
jurisdiction. See Duberry, 824 F.3d at 1057–61 (Henderson, J., dissenting).
9
Modify & Reinstate Order Granting Defs.’ Mot. to Dismiss. The matter is now before the Court
on cross motions for summary judgment. See Pls.’ Opp’n to Def.’s Mot. Summ. J. & Cross-Mot.
Summ. J., ECF No. 55; Def. District of Columbia’s Mot. Summ. J., ECF No. 53.
III. LEGAL STANDARD
A court may grant summary judgment when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A “material” fact is one capable of affecting the substantive outcome of the
litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is
“genuine” if there is enough evidence for a reasonable jury to return a verdict for the non-
movant. See Scott v. Harris, 550 U.S. 372, 380 (2007).
The principal purpose of summary judgment is to streamline litigation by disposing of
factually unsupported claims or defenses and determining whether there is a genuine need for
trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). The movant bears the initial
burden of identifying portions of the record that demonstrate the absence of any genuine issue of
material fact. See Fed. R. Civ. P. 56(c)(1); Celotex, 477 U.S. at 323. In response, the non-
movant must point to specific facts in the record that reveal a genuine issue that is suitable for
trial. See Celotex, 477 U.S. at 324. In considering a motion for summary judgment, a court must
“eschew making credibility determinations or weighing the evidence[,]” Czekalski v. Peters, 475
F.3d 360, 363 (D.C. Cir. 2007), and all underlying facts and inferences must be analyzed in the
light most favorable to the non-movant, see Anderson, 477 U.S. at 255. Nevertheless,
conclusory assertions offered without any evidentiary support do not establish a genuine issue
for trial. See Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999).
10
IV. ANALYSIS
Plaintiffs, three retired DCDOC corrections officers, seek to compel the District of
Columbia to acknowledge their status as “law enforcement officers,” a prerequisite to Plaintiffs’
enjoyment of the federally conferred right to carry a concealed firearm that is available to
“qualified retired law enforcement officers” under the Law Enforcement Officers Safety Act, 18
U.S.C. § 926C. The District contends that Plaintiffs are not entitled to such recognition, arguing
that (1) they did not possess “statutory powers of arrest” prior to separating from DCDOC, (2)
they were not “law enforcement officers for an aggregate of 10 years,” and (3) they lack suitable
photographic identification necessary to avail themselves of LEOSA rights. As explained below,
the Court finds that, contrary to the District’s assertions—many of which were already rejected
by the D.C. Circuit at an earlier stage of this litigation—Plaintiffs meet the relevant statutory
requirements.
A. Plaintiffs Had “Statutory Powers of Arrest”
Plaintiffs contend that they had “statutory powers of arrest” sufficient to meet the
requirement of LEOSA subsection (c)(2). Specifically, Plaintiffs maintain that D.C. Code § 24-
405 authorized them to execute warrants for the arrest of parole violators, and that the Circuit
expressly recognized in Duberry I that such a power of arrest meets the LEOSA requirement.
Mem. L. Supp. of Pls.’ Opp’n to Def.’s Mot. for Summ. J. & Cross-Mot. Summ. J. (“Pls.’
Mem.”) at 15–31, ECF No. 55. Plaintiffs also assert that, in practice, they acted as “police”
within the DCDOC correctional facilities, possibly satisfying the statutory requirement and
reinforcing their position that Congress intended for LEOSA to cover them. See Pls.’ Mem. at
38–45.
11
The District disagrees, arguing that “statutory powers of arrest” as used in LEOSA is a
term of art that refers to authority to make a warrantless arrest within the meaning of the Fourth
Amendment for commission of a crime. Mem. Supp. of Def. District of Columbia’s Mot.
Summ. J. (“Def.’s Mem.”) at 17–36, ECF No. 53. According to the District, D.C. Code § 24-405
does not qualify and neither does any other provision that Plaintiffs cite as authorizing them to
make arrests. Def.’s Mem. at 17–36, 43–45. The District also appears to contend that, even if
D.C. Code § 24-405 qualifies as a “statutory power[] of arrest,” only a select group of DCDOC
corrections officers were, in practice, asked to execute warrants, thus, only those corrections
officers qualify as having had “statutory powers of arrest” under D.C. Code § 24-405 for
purposes of LEOSA. See Def.’s Mem. at 38–42. The Court agrees with Plaintiffs that the
Circuit already rejected the definition of “statutory powers of arrest” that the District offers now.
And, to the extent that the District’s arguments are not foreclosed by Duberry I, the Court finds
them unpersuasive on the merits. The Court concludes that D.C. Code § 24-405 extended to
Plaintiffs a “statutory power[] of arrest” sufficient to satisfy the LEOSA requirement.
i. Under Duberry I, D.C. Code § 24-405 Qualifies as a “Statutory Power[] of Arrest”
Before addressing the parties’ arguments about whether Plaintiffs had “statutory powers
of arrest” under LEOSA, the Court must assess whether—and, if so, to what extent—the
Circuit’s decision in Duberry I already resolved questions about the interpretation of this term.
Finding that Duberry I rejected the District’s proffered interpretation and explicitly mentioned
the authority to execute a warrant for the arrest of a parole violator as sufficient to meet the
statutory requirement, the Court concludes that D.C. Code § 24-405 qualifies as a “statutory
power[] of arrest” under LEOSA.
12
Under the law-of-the-case doctrine, “a court involved in later phases of a lawsuit should
not re-open questions decided . . . by that court or a higher one in earlier phases.” Crocker v.
Piedmont Aviation, Inc., 49 F.3d 735, 739 (D.C. Cir. 1995); see also Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 815–16 (1988) (explaining that the law-of-the-case doctrine
“posits that when a court decides upon a rule of law, that decision should continue to govern the
same issues in subsequent stages in the same case”). The doctrine “promotes the finality and
efficiency of the judicial process by ‘protecting against the agitation of settled issues.’” Id.
(quoting Moore’s Federal Practice ¶ 0.404[1] (1984)). When a case is considered by a district
court on remand from the court of appeals, “an even more powerful version of the doctrine,”
sometimes called the “mandate rule,” applies. LaShawn A. v. Barry, 87 F.3d 1389, 1393 n.3
(D.C. Cir. 1996). The mandate rule “requires a lower court to honor the decision of a superior
court in the same judicial system.” Id. In doing so, the lower court may not revisit issues
decided “either explicitly or by necessary implication” by the higher court. United States ex rel.
Dep’t of Labor v. Ins. Co. N. Am., 131 F.3d 1037, 1041 (D.C. Cir. 1997).
The Court agrees with Plaintiffs that the Circuit already rejected the District’s definition
of “statutory powers of arrest” and implicitly determined that D.C. Code § 24-405 qualifies as a
“statutory power[] of arrest” sufficient to satisfy the LEOSA requirement. Specifically, in the
course of determining whether Congress intended LEOSA to benefit Plaintiffs, the Circuit
explained that “the reference to ‘statutory powers of arrest’ necessarily means some statutory
power of arrest such as a power to arrest parole violators, and not, as the District of Columbia
suggests, only the police power to arrest upon probable cause.” Duberry I, 824 F.3d at 1053
(emphasis added) (citing Appellee’s Br. at 25). The Circuit could hardly have been clearer that,
in its view, a purported law enforcement officer need not have broad police powers to satisfy the
13
LEOSA “statutory powers of arrest” requirement, as the District argues here. And the Circuit
plainly cited the power to arrest parole violators, a power conferred by D.C. Code § 24-405, as
an example of an authority sufficient to meet the statutory requirement. See id.
Unhappy with the clear import of the Circuit’s decision, the District maintains that
Duberry I did not “completely” reject its interpretation. Def.’s Mem. at 19. According to the
District, the Circuit’s comments were mere nonbinding dicta. See Def.’s Mem. at 19–20. The
District also contends that the Circuit’s interpretation of the statutory language might have been
influenced by Plaintiffs’ claims that they held identification cards stating that they had statutory
powers of arrest pursuant to D.C. Code § 24-405. See Def.’s Mem. 15–19. The Court disagrees.
The Circuit’s comments responded directly to a legal argument offered by the District on
appeal. The District had argued that Plaintiffs had not shown that Congress intended LEOSA to
benefit them “because as correctional officers they were not ‘trained to determine whether
probable cause exists to make a warrantless arrest for any crime in the community,’ and therefore
lack the requisite statutory power of arrest.” Duberry I, 824 F.3d at 1052–53 (quoting
Appellee’s Br. at 12, 25). The Circuit rejected the notion that “statutory powers of arrest”
requires more than “some” power of arrest, citing the power to arrest parole violators as
sufficient to meet the condition. Id. at 1053. And the Circuit moored its conclusion to
Congress’s intent that LEOSA apply broadly and not to any particular allegation made by
Plaintiffs in this case. See id. Accordingly, the Court concludes that it is bound by the Circuit’s
implicit determination that D.C. Code § 24-405, which confers the authority to arrest parole
violators, qualifies as a “statutory power[] of arrest” under LEOSA. 4
4
Even if the mandate rule did not apply, the Court would reject the District’s
interpretation of “statutory powers of arrest” on the merits. The District argues that the plain
meaning of “statutory powers of arrest,” the structure and language of the LEOSA statute,
14
ii. D.C. Code § 24-405 Extended Arrest Authority to Plaintiffs
Having reiterated the Circuit’s implied conclusion that D.C. Code § 24-405 qualifies as a
“statutory power[] of arrest” for purposes of LEOSA, the Court next considers whether the
statute extended arrest authority to Plaintiffs in this case. The District appears to argue that D.C.
Code § 24-405 only extended arrest authority to those to whom arrest warrants were issued and
not to every DCDOC officer. Def.’s Mem. at 36–42. Because Plaintiffs admit that they were
never actually asked to execute a warrant pursuant to authority conferred by D.C. Code § 24-405,
the District contends that they never had arrest authority under that statute. Def.’s Mem. at 36–
42; see also Curtis Decl. ¶ 5; Duberry Decl. ¶ 5; Smith Decl. ¶ 5; Pl.’s Statement of Genuine
assorted case law, and the legislative history of LEOSA all support its interpretation. See Def.’s
Mem. at 20–36. The Court disagrees on all fronts.
First, the District’s argument that “statutory powers of arrest” must mean that a “statute
itself provides the authorization to make a warrantless arrest,” Def.’s Mem. at 34, is wholly
unavailing. “Warrantless” appears nowhere in the statutory scheme, and this Court will not add
statutory language that Congress omitted. Cf. Jawad v. Gates, 832 F.3d 364, 370 (D.C. Cir.
2016) (noting that courts “will not ‘read[] a phrase into the statute when Congress has left it
out’” (alteration in original) (quoting Keene Corp. v. United States, 508 U.S. 200, 208 (1993)).
Furthermore, “arrest” can refer to the execution of an arrest warrant issued under the statutory
authority of another. See, e.g., D.C. Code § 23-562(a)(1) (“A warrant issued pursuant to this
subchapter shall be executed by the arrest of the person named.” (emphasis added)). Thus, the
Court disagrees that “statutory powers of arrest” obviously excludes the authority to execute
arrest warrants.
Second, the Court is unpersuaded that the structure or language of LEOSA supports the
District’s construction. The District suggests, for example, that “statutory powers of arrest” must
mean something akin to “apprehension” under 10 U.S.C. § 807(b). Def.’s Mem. at 21. But the
District fails to mention that the “apprehension” language was added by amendment years after
the enactment of LEOSA, apparently in an effort to expand, not restrict, the group of people who
may qualify as law enforcement officers under LEOSA. See Pub. L. No. 112-239. Finally, the
legislative history of LEOSA does not offer much in the way of clear guidance regarding how to
interpret “statutory powers of arrest.” The parties each cherry pick from the several statements
made by witnesses or Congressmen and women that arguably supports their respective positions
about the proper interpretation of this particular provision. If the legislative history reveals
anything, it is what the Circuit already observed in Duberry I: that Congress wished for LEOSA
to apply broadly and to upend any conflicting state and local laws, which lends support to
Plaintiffs’ construction of the terms used in the statutory scheme.
15
Issues in Opp’n to Def.’s SUMF (“Pl.’s Disputed Facts”) ¶ 16, ECF No. 59-1. The Court agrees
with Plaintiffs that D.C. Code § 24-405 extended arrest authority to anyone to whom a warrant
could have been issued under the statute, including Plaintiffs.
D.C. Code § 24-405 provides:
If [the] Board of Parole . . . shall have reliable information that a
prisoner has violated his parole, said Board, . . . may issue a
warrant to any officer hereinafter authorized to execute the same
for the retaking of such prisoner. Any officer of the District of
Columbia penal institutions, any officer or designated civilian
employee of the Metropolitan Police Department of the District of
Columbia, or any federal officer authorized to serve criminal
process within the United States to whom such warrant shall be
delivered is authorized and required to execute such warrant by
taking such prisoner and returning or removing him to the penal
institution of the District of Columbia from which he was paroled
or to such penal or correctional institution as may be designated by
the Attorney General of the United States.
According to the District, none of the types of officers listed in the statute were
“authorized” to execute any warrants for the arrest of a parole violator until the Board of Parole
issued such a warrant to the officer. See Def.’s Mem. at 36–42. And, in practice, the only
DCDOC officers who issued such warrants were members of a select group known as the
Warrant Squad. See Def.’s Mem. at 41–42. The Court finds the District’s interpretation of the
statutory text unpersuasive and finds that the text extended arrest authority to Plaintiffs.
First, the statute makes clear that it empowers a certain group of officers—those
“hereinafter authorized”—to execute warrants for the arrest of parole violators. It appears to this
Court that the listed categories of officers have the authority to issue warrants under this
provision even if the occasion to do so never arises. Second, the language of the statute extends
this authority to “[a]ny officer of the District of Columbia penal institutions,” not only to officers
serving on the Warrant Squad or to any other designated group of DCDOC officers. Certainly,
16
this Court cannot interpret “any” as meaning only “a select few as designated by DCDOC
officials.” Cf. Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 220 (2008) (“Congress’ use of ‘any’
to modify ‘other law enforcement officer’ [in 28 U.S.C. § 2680(c)] is most naturally read to
mean law enforcement officers of whatever kind.”). That the statute then restricts the authority
to execute warrants to only certain “designated civilian employee[s] of the Metropolitan Police
Department of the District of Columbia” buttresses the notion that if the legislature had intended
to statutorily authorize only certain DCDOC officers to execute warrants, it knew how to do so.
Third, the District appears to read “to whom such warrant shall be delivered” as a
limitation on the authority of every category of officer mentioned in the statute, denying power
unless a warrant is issued. See Def.’s Mem. at 36–42. The Court disagrees. It seems that this
language instead describes the final category of officers to whom a warrant may be issued—“any
federal officer authorized to serve criminal process within the United States to whom such
warrant shall be delivered.” Fourth, the Court finds unavailing any argument that Plaintiffs had
to have utilized this authority to qualify for LEOSA benefits. See Def.’s Mem. at 36–42.
LEOSA requires only “statutory powers of arrest”; Congress did not include any requirement
that a retired law enforcement officer must have exercised arrest authority. 5 In sum, because the
record shows that Plaintiffs were “officer[s] of the District of Columbia penal institutions”—a
5
For the same reason, the Court need not address Plaintiffs’ contentions that in practice,
they exercised “police-like” powers within the DCDOC correctional facilities. See Pls.’ Mem. at
38–45. Congress moored the LEOSA requirement to a statutory power, not to practical
experience arresting alleged criminals. And whether D.C. Code § 24-405—the statute that
Plaintiffs have identified as conferring such power—authorized a particular officer to execute a
warrant for the arrest of a parole violator turns on whether he or she falls into one of the
enumerated categories of officers. Because there is no question that Plaintiffs were “officer[s] of
the District of Columbia penal institutions,” factual questions that might arise with regard to
purported members of other categories—for example, whether a civilian employee of the
Metropolitan Police Department was “designated” to execute warrants pursuant to this statute—
do not arise in this case.
17
fact that the District does not contest, see Def.’s SUMF ¶¶ 22–25—the Court concludes that D.C.
Code § 24-405 authorized them to execute warrants for the arrest of parole violators, satisfying
the LEOSA “statutory powers of arrest” requirement.
B. Each Plaintiff Was a Law Enforcement Officer for an Aggregate of 10 Years
The Court next considers whether Plaintiffs each “served as a law enforcement officer for
an aggregate of 10 years or more” before their respective separations from DCDOC. The
District argues that they did not, maintaining that an individual serves as a law enforcement
officer only on days that he or she is authorized to carry a firearm and explaining that DCDOC
officers are only authorized to carry firearms while on particular assignments. See Def.’s Mem.
at 15; District of Columbia’s Opp’n Pls.’ Mot. Summ. J. & Reply in Supp. of Its Cross-Mot.
Summ. J. (“Def.’s Reply”) at 6, ECF No. 57. The District asserts that Plaintiffs cannot show that
they were each placed on assignments on which they would have been authorized to carry a
firearm for a total of 3650 days. See Def.’s Mem. at 13–17; Def.’s Reply at 6 (suggesting that
Plaintiffs must provide “a calculation of the days their officials duties required the use of a
firearm”). The District also seems to suggest that to be a law enforcement officer, an employee
must have had broad law enforcement authority and general duties. See Def.’s Mem. at 13.
Plaintiffs argue that LEOSA features no requirement that retired officers must have been
authorized to carry a weapon, let alone any requirement that involves demonstrating that they
were so authorized each day for a total of ten years. See Pls.’ Mem. at 4, 34. Plaintiffs also
assert that, in any event, they were trained to use and authorized to carry firearms as part of their
job duties, even if they were not necessarily placed on ten years’ worth of assignments on which
they actually carried firearms. See Pls.’ Mem. at 36–37. In addition, Plaintiffs note that “law
enforcement officer” is used differently in different statutory schemes. See Pls.’ Mem. at 36.
18
And they assert that the LEOSA statute does not mandate that an officer have had general duties
and broad powers. See Pls.’ Mem. at 36. The Court concludes that Plaintiffs have the better of
the argument.
Except under circumstances inapplicable here, in order to be a “qualified retired law
enforcement officer” under LEOSA, a former employee must have “served as a law enforcement
officer for an aggregate of 10 years or more” before separating from a public agency. 6 18 U.S.C.
§ 926C(c)(3)(A). Citing Thorne v. United States, 55 A.3d 873 (D.C. 2012), a District of
Columbia Court of Appeals opinion, the District contends that “the ordinary understanding of
policemen and law enforcement officers is that these terms describe professionals with general
duties,” including “the authority to carry a firearm at all times,” and “broad authority.” Def.’s
Mem. at 13 (quoting Thorne, 55 A.3d at 878–79 (internal quotation marks omitted)). According
to the District, LEOSA conforms to this understanding of law enforcement officers. See Def.’s
Mem. at 14. The District notes that § 926B of LEOSA explicitly requires that an active
employee be authorized to carry a firearm to be considered a “qualified law enforcement
officer,” and argues that this same requirement is implicitly applicable to retired officers seeking
certification under § 926C too. See Def.’s Mem. at 14. The Court disagrees.
First, it bears mentioning that the Circuit appears to have rejected the District’s argument
in Duberry I, explaining that “contrary to the District of Columbia’s suggestion at oral argument,
the LEOSA does not require that, prior to retiring, a law enforcement officer’s job required
carrying a firearm in order to be a ‘qualified retired law enforcement officer[].” Duberry I, 824
6
A former employee who did not serve as a law enforcement officer for an aggregate of
10 years or more nonetheless qualifies if he or she separated from service, after completing any
applicable probationary period, due to service-connected disability. See 18 U.S.C. §
926C(c)(3)B).
19
F.3d at 1053 (alteration in original). But, to the extent that any daylight exists between the
argument that the Circuit rejected and the one that the District offers here, this Court rejects the
District’s contentions. The plain text of § 926C includes no requirement that a retired officer
must have been authorized to carry a firearm. See generally 18 U.S.C. § 926C. And, as
mentioned above, this Court will not “read[] a phrase into [a] statute when Congress has left it
out.” Jawad, 832 F.3d at 370 (first alteration in original) (quoting Keene Corp., 508 U.S. at
208).
Interpreting the statutory language as written does not, as the District contends, produce
an absurd result. See Def.’s Mem. at 14. As the D.C. Circuit has explained, “[t]he Supreme
Court has equated an absurdity with an outcome so bizarre, illogical, or glaringly unjust that
Congress could not plausibly have intended that outcome.” Stovic v. R.R. Ret. Bd., 826 F.3d 500,
505 (D.C. Cir. 2016) (internal quotation marks and citations omitted). There is nothing remotely
absurd about Congress requiring an active officer to be authorized to use a firearm without
expecting the same from a retired officer who served in a law enforcement role for at least ten
years. Furthermore, the schemes do not feature identical requirements, thus, the Court has no
trouble imagining that Congress thoughtfully selected which requirements to include with
respect to each category of officers. Indeed, as the Circuit observed in Duberry I, Congress
enacted LEOSA in the face of dissenting statements on exactly the matter of the broad definition
of qualified retired law enforcement officer. See Duberry I, 824 F.3d at 1054 (“The practical
concerns extended to the broad definition of a qualified retired law enforcement officer to
include individuals whose jobs did not require them to carry a firearm and who therefore had not
been trained by their employer in the use of a firearm.” (citing S. Rep. No. 108–29, at 16; H.R.
Rep. No. 108–560, at 70)). Congress addressed these concerns, the Circuit explained, “by
20
requiring annual firearms training to ensure that all retired officers eligible to carry concealed
weapons received the same firearms training as active duty officers.” Id. (citing H.R. Rep. 108–
560, at 11, 59–60). The District may believe that, as a matter of policy, Congress should have
charted different requirements. But “federal courts do not sit as councils of revision, empowered
to rewrite legislation in accord with their own”—or the Government’s—“conceptions of prudent
public policy.” United States v. Rutherford, 442 U.S. 544, 555 (1979).
The District’s citation to Thorne as supporting its position is wholly unpersuasive. First,
the language that the District cites is drawn from a discussion about the meaning of a provision
of District of Columbia law, not the meaning of LEOSA or any other federal statute. See
Thorne, 55 A.3d at 878. Second, while this Court hardly disagrees that “law enforcement
officer” sometimes refers to officers with “general duties and broad authority,” this is not always
the case. For example, LEOSA was amended to clarify that its definition of “law enforcement
officer” includes the Amtrak Police, the Federal Reserve Police, and others. See Pub. L. No.
111-272, 124 Stat. 2855 (2010). And members of the Federal Reserve Police, which is charged
with “act[ing] as law enforcement officers to protect and safeguard the premises, grounds,
property, personnel . . . and operations conducted by or on behalf of the Board or a reserve
bank,” 28 U.S.C. § 248(q)(1), are only “authorized while on duty to carry firearms.” Id. §
248(q)(3). Moreover, they may only make arrests for either offenses committed against the
United States in their presence or for felonies committed or being committed against the United
States within the buildings and grounds of the Federal Reserve Board. See id. They do not
appear to have the sort of general duties and broad authority that the District says that LEOSA
mandates. Third, as Plaintiffs note, some other federal statutory definitions of “law enforcement
officer” explicitly include DCDOC officers, undercutting the notion that Congress certainly
21
could not have intended to cover such officers under LEOSA. See Pls.’ Mem. at 36 (citing 5
U.S.C. § 8331(20) (defining “law enforcement officer” for purposes of determining eligibility for
certain retirement benefits to include certain DCDOC officers)). 7
Here, it is undisputed that each Plaintiff worked as DCDOC corrections officer—a role in
which they “engage[d] in or supervise[d] . . . the incarceration of . . . [people],” 18 U.S.C. §
926C(c)—for at least ten years. Accordingly, the Court concludes that each Plaintiff has met the
requirement outlined in subsection (c)(3)(A) of LEOSA.
C. The Court Need Not Determine Whether Plaintiffs Have Photographic Identification
That Satisfies Subsection (d)
Finally, the District contends that Plaintiffs do not possess photographic identification
required by 18 U.S.C. § 926C(d) to lawfully carry a firearm under LEOSA. Def.’s Mem. at 44–
45; Def.’s Notice of Suppl. Authority at 2–3, ECF No. 64. The District cites two recent opinions
in which federal district courts determined that plaintiffs could not prevail on LEOSA claims
asserted under 42 U.S.C. § 1983 because they lacked the requisite identification. See Def.’s
Notice of Suppl. Authority at 1 (citing Burban v. City of Neptune Beach, Fla., No. 3:17-cv-262-
J-34JBT, 2018 WL 1493177 (M.D. Fla. Mar. 27, 2018), and Henrichs v. Ill. Law Enf’t Training
7
Though, as explained above, a retired law enforcement officer need not show that he
was authorized to carry a weapon while on duty to be eligible for LEOSA rights, Plaintiffs offer
persuasive evidence that they were so authorized. They note that to qualify for their corrections
officer positions, they had to demonstrate proficiency in the use of firearms. See Pls.’ SUMF ¶
7; see also Ex. E-3, Job Description DC-007-09, ECF No. 55-8; Ex. E-4, Job Description DC-
007-09, ECF No. 55-8. They also explain that, as DCDOC officers, they received “extensive”
pre-service firearms training. Furthermore, throughout their respective tenures, they were each
tested and qualified annually or semi-annually in the use of a pistol, a shotgun, and an M-14
semi-automatic rifle. See Pls.’ SUMF ¶¶ 3, 7. And they were authorized to carry firearms in
responding to escapes and escorting prisoners. See Pls.’ SUMF ¶¶' 27–29, 32–34. As the above
analysis of “statutory powers of arrest” demonstrates, the question of whether or not Plaintiffs
had authority to carry a weapon does not necessarily turn on whether Plaintiffs exercised that
authority.
22
& Standards Bd., No. 15 C 10265, 2018 WL 572708 (N.D. Ill. Jan. 26, 2018)). The Court rejects
the District’s argument that Plaintiffs must prove that they have photographic identification that
satisfies subsection (d) before the Court can grant their motion for summary judgment.
First, such a determination is a logical extension of the Circuit’s reasoning in Duberry I.
In its prior opinion, the Circuit explicitly rejected the notion that Plaintiffs might “lack the
[LEOSA] right until they obtain the subsection (d)(2)(B) firearms certification.” Duberry I, 824
F.3d at 1055. In the Circuit’s view, “the firearm certification requirement does not define the
right itself but is rather a precondition to the exercise of [the LEOSA] right.” Id. The District
appears to offer a different version of this argument, asserting that Plaintiffs must prove that they
meet other preconditions for exercising LEOSA rights before they can be deemed “qualified
retired law enforcement officers” to whom Congress conferred LEOSA rights. See Def.’s Mem.
at 44–45. This Court thinks that, just as the firearm certification did not define the LEOSA right,
the possession of a photographic identification that is required to exercise the right does not
define the LEOSA right. Other district courts have reached a different conclusion. But, of
course, those courts were not bound by or acting in light of binding precedent from a higher
court. Indeed, both of the district court opinions that the District cites rejected the D.C. Circuit’s
reasoning in Duberry I. See Burban, 2018 WL 1493177, at *7–8; Henrichs, 2018 WL 572708,
at *5.
Second, Plaintiffs note explicitly that they have not asked this Court to address whether
they have identification that satisfies the requirements of subsection (d). See Pls.’ Mem. at 4–5.
And the Court accepts Plaintiffs’ representations about the scope of their complaint. Cf.
Caterpillar Inc. v. Williams, 482 U.S. 386, 395 (1987) (observing that plaintiffs are the “masters
of the complaint”). The Court agrees that whether or not Plaintiffs have sufficient identification
23
is irrelevant for purposes of determining whether they have met certain statutory preconditions to
be considered “qualified retired law enforcement officers.” The Court concludes that each of the
relevant disputed requirements is met and that Plaintiffs are entitled to summary judgment. 8
V. CONCLUSION
For the foregoing reasons, Plaintiffs’ motion for summary judgment (ECF No. 55) is
GRANTED, and the District of Columbia’s motion for summary judgment (ECF No. 53) is
DENIED. An Order consistent with this Memorandum Opinion is separately and
contemporaneously issued.
Dated: June 7, 2018 RUDOLPH CONTRERAS
United States District Judge
8
This Court does not conclude that Plaintiffs are unalterably “qualified retired law
enforcement officers” for purposes of LEOSA. This is because some of the statutory
preconditions for “qualified retired law enforcement officers” are mutable characteristics. For
example, no court could accurately declare on the basis of motions and responses filed months
prior that a retired officer certainly is not “under the influence of alcohol or another intoxicating
or hallucinatory drug or substance” such that he meets the requirements of subsection (c)(7).
Instead, this Court only concludes that Plaintiffs meet the requirements listed in subsection
(c)(1)–(3). Specifically, Plaintiffs each separated from service in good standing with a public
agency as a law enforcement officer; before such separation, they each were authorized to
engage in or supervise the incarceration of persons and they had statutory powers of arrest; and
before separation, they each served as a law enforcement officer for an aggregate of 10 years or
more.
24
| {
"pile_set_name": "FreeLaw"
} |
FILED
DECEMBER 19,2013
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DMSION THREE
HOSPICE OF SPOKANE, a Washington ) No. 31116-3-111
non-profit corporation, )
)
Appellant, )
)
v. )
)
WASHINGTON STATE DEPARTMENT ) PUBLISHED OPINION
OF HEALTH, a Washington governmental )
agency, SECRETARY MARY )
SELECKY, Secretary of Washington's )
Department ofHealth in her official and )
individual capacity, FAMILY HOME )
CARE CORP., a Washington corporation, )
)
Respondents. )
KULIK, J. - The Washington State Department of Health (Department) approved
Family Home Care's (FHC) certificate of need application to provide hospice services in
Spokane County. Hospice of Spokane (HOS), an existing hospice provider, requested
administrative review of the decision, contending that the Department incorrectly
interpreted the six-step methodology in WAC 246-310-290(7) used to determine whether
an additional hospice provider is needed in a particular planning area. Specifically, HOS
No. 31116-3-111
Hospice ofSpokane v. Dep't ofHealth
maintained that projected need must be established within one year of the application,
instead of the three-year planning horizon used by the Department and set forth in
WAC 246-310-290(6). An Administrative Health Law Judge (HLJ) adopted the
Department's interpretation and granted the certificate of need. The decision was
affirmed by the superior court. HOS appeals. We affirm the HLJ's decision granting the
certificate of need.
FACTS
In October 2006, FHC applied to the Department for a certificate of need to
establish a MedicarelMedicaid eligible hospice agency in Spokane County. Two
approved providers already existed in Spokane County: Horizon Hospice and HOS.
Although FHC was already operating a hospice in Spokane County, it was unable to serve
MedicarelMedicaid patients without approval from the Department.
The Department initially denied FHC's application for lack of need. FHC did not
show the Spokane planning area required an additional MedicarelMedicaid facility to
provide hospice services. In response, FHC requested an adjudicative proceeding to
review the Department's denial. HOS requested permission to intervene in the
adjudicative proceeding.
2
No. 31116-3-111
Hospice ofSpokane v. Dep 't ofHealth
After a stay and a series of subsequent decisions, an adjudicative proceeding
finally occurred in March 2011. By this time, the Department agreed that FHC met the
applicable certificate of need criteria. However, HOS continued to contest that FHC
established need. An HLJ then reviewed FHC's application to determine whether the
application met the certificate of need criteria.
The HLJ applied the six-step need projection methodology in WAC 246-310
290(7). The methodology used past statistical data to project the need for a service
provider into a future "'planning horizon. '" Clerk's Papers (CP) at 71.
At issue was the extent of the planning horizon to be used for WAC 246-310
290(7). HOS contended that WAC 246-310-290(7) contained a one-year planning
horizon that corresponded with the date of application. However, the HLJ determined
that the three-year planning horizon in WAC 246-310-290(6) was to be harmonized with
the methodology in WAC 246-310-290(7) to project need. Thus, the need methodology
required a projected showing of an average of 3 5 hospice patients per day by the third
year of operation. The HLJ found that FHC could show a daily average of 35 before the
end of its third full year of operation. Ultimately, the HLJ concluded that FHC met the
certificate of need criteria and issued an order approving FHC's certificate of need
application.
3
No. 31 I 16·3-III
Hospice ofSpokane v. Dep't ofHealth
HOS appealed the order to superior court. The court agreed with the HLJ's
position that WAC 246-310-290(6) and WAC 246-310-290(7) were dependent on one
another. The court found that a three-year projection analysis promoted good planning
for health care services. The court affirmed the approval of the application.
HOS appeals to this court. HOS challenges the HLJ's interpretation of WAC 246
310·290(7), specifically the HLJ's incorporation of WAC 246-310-290(6) as part of the
need projection methodology.
ANALYSIS
The Three-Year Planning Horizon in WAC 246-310-290(6) and The Need
Projection Methodology in WAC 246-310-2900). Washington's Administrative
Procedure Act (APA), chapter 34.05 RCW, governs judicial review of administrative
agency decisions. RCW 34.05.510. Pertinent here, two grounds on which this court shall
grant relief from an agency order in an adjudicative proceeding is (I) if the agency has
erroneously interpreted or applied the law, or (2) if the order is arbitrary and capricious.
RCW 34.05.570(3)(d), (i). The burden of demonstrating invalidity of the agency's action
is on the party asserting invalidity. RCW 34.05.570(l)(a). The appellate court "sits in the
same position as the superior court, applying the standards of the [JAP A directly to the
4
No. 31116-3-111
Hospice ofSpokane v. Dep't ofHealth
record before the agency." Tapper v. Emp 't Sec. Dep't, 122 Wn.2d 397, 402,858 P.2d
494 (1993).
When detennining if an error of law has occurred as a result of an agency
interpretation, the appellate court applies de novo review. Children's Hosp. & Med. Ctr.
v. Dep't o/Health, 95 Wn. App. 858, 864, 975 P.2d 567 (1999). The agency's
-'Or,,,,," _
interpretation is given substantial weight when the interpretation falls within the agency's
expertise. Id. (quoting Purse Seine Vessel Owners Ass 'n v. Dep 't ofFish & Wildlife, 92
Wn. App. 381, 389, 966 P.2d 928 (1998)). Even so, the reviewing court has the ultimate
responsibility of detennining whether the regulation is applied consistently with its
underlying policy. Id. at 864-65 (quoting Nielsen v. Emp'tSec. Dep't, 93 Wn. App. 21,
29, 966 P.2d 399 (1998)).
An agency action is arbitrary and capricious when the action is a "'willful and
unreasoning action in disregard of facts and circumstances.'" Id. at 864 (quoting Wash.
Waste Sys., Inc. v. Clark County, 115 Wn.2d 74,81,794 P.2d 508 (1990)).
Hospice providers wishing to enter into the Washington State health care market
must first acquire a certificate of need from the Department of Health before beginning
operation. King County Pub. Hosp. Dist. No.2 v. Dep't afHealth, 178 Wn.2d 363, 418
19,309 P.3d 416 (2013) (citing RCW 70.38.l05(4)(a), .025(6)). The provider must
5
No. 31116-3-111
Hospice ofSpokane v. Dep't ofHealth
submit an application to the Department to begin the certificate of need review process.
WAC 246-31 0-090( 1)(a); WAC 246-310-290(3). The applicant must show the proposed
project is needed, will foster containment of costs of health care, is financially feasible,
and will meet the structure and process of care. See WAC 246-31 0-200( 1).
For hospice agencies applying for a certificate of need, the applicant "must
demonstrate that they can meet a minimum average daily census (ADC) of thirty-five
patients by the third year of operation. An application projecting an ADC of under thirty-
five patients may be approved if the applicant: (a) Commits to maintain medicare
certification; (b) Commits to serve one or more counties that do not have any medicare
certified providers; and (c) Can document overall financial feasibility. " WAC 246-310
290(6).
A six-step methodology in WAC 246-310-290(7) is used to project the need for
hospice services. The methodology uses past statistical data to project the unmet need for
hospice services into the future. WAC 246-310-290(7). The six steps are:
(a) Step 1. Calculate the following four statewide predicted hospice
use rates using [Centers for Medicare and Medicaid Services] and
department of health data or other available data sources.
(i) The predicted percentage of cancer patients sixty-five and over
who will use hospice services. This percentage is calculated by dividing the
average number of hospice admissions over the last three years for patients
the age of sixty-five and over with cancer by the average number of past
three years statewide total deaths sixty-five and over from cancer.
6
No. 31 116-3-III
Hospice a/Spokane v. Dep't a/Health
(ii) The predicted percentage of cancer patients under sixty-five who
will use hospice services. This percentage is calculated by dividing the
average number of hospice admissions over the last three years for patients
under the age of sixty-five with cancer by the current statewide total of
deaths under sixty-five with cancer.
(iii) The predicted percentage of noncancer patients sixty-five and
over who will use hospice services. This percentage is calculated by
dividing the average number of hospice admissions over the last three years
for patients age sixty-five and over with diagnoses other than cancer by the
current statewide total of deaths over sixty-five with diagnoses other than
cancer.
(iv) The predicted percentage of noncancer patients under sixty-five
who will use hospice services. This percentage is calculated by dividing the
average number of hospice admissions over the last three years for patients
under the age of sixty-five with diagnoses other than cancer by the current
statewide total of deaths under sixty-five with diagnoses other than cancer.
(b) Step 2. Calculate the average number of total resident deaths
over the last three years for each planning area.
(c) Step 3. Multiply each hospice use rate determined in Step I by
the planning areas average total resident deaths determined in Step 2.
(d) Step 4. Add the four subtotals derived in Step 3 to project the
potential volume of hospice services in each planning area.
(e) Step 5. Inflate the potential volume of hospice service by the
one-year estimated poput'ation growth (using [Office of Financial
Management] data).
(f) Step 6. Subtract the current hospice capacity in each planning
area from the above projected volume of hospice services to determine
unmet need.
(g) Determine the number of hospice agencies in the proposed
planning area which could support the unmet need with an ADC of thirty
five.
WAC 246-310-290(7).
7
No. 31116-3-II1
Hospice ofSpokane v. Dep't ofHealth
The application is open for public review and comment. WAC 246-31O-290(3)(e).
If the Department denies the application, the party requesting the certificate of need has
the right to an adjudicative proceeding governed by the APA. The proceeding is
conducted by a HLJ, who reviews the application and issues a final order regarding
approval of the application. King County Pub. Hosp., 178 Wn.2d at 418. At the hearing,
any competing health care provider that participated in the public hearing shall
be allowed to present testimony regarding the new application. Id. at 418-19 (quoting
RCW 70.38.115(1 O)(b)(iii); WAC 246-310-610).
Here, HOS challenges the HLJ's finding that FHC met the need criteria set forth in
WAC 246-310-290(7). HOS does not dispute the underlying calculations by the HLJ.
Instead, HOS contends the trial court erroneously interpreted WAC 246-310-290(7) by
finding that the regulation incorporated the three-year planning horizon set forth in
WAC 246-310-290(6). HOS maintains that WAC 246-310-290(7) establishes a one-year
planning horizon that is separate and distinct from WAC 246-310-290(6).
First, we conclude that the plain language of WAC 246-310-290(7)(e), Step 5, is
ambiguous as to the number of years for which the applicant is to inflate the potential
volume of hospice service by the one-year estimated population growth. While the
language of this section gives a detailed, complex formula for establishing quantitative
8
No. 31116-3-III
Hospice ofSpokane v. Dep't ofHealth
need, it does not include a planning horizon to establish the time frame by which need
must be shown. Indeed, this is not the first time that the methodology in WAC 246-310
290(7) has been considered ambiguous. In Odyssey Healthcare Operating B, LP v.
Department ofHealth, 145 Wn. App. 131, 141, 185 P.3d 652 (2008), the court agreed
with the Department and the intervenors that the Washington Administrative Code
methodology is complex and ambiguous when read as a whole. While Odyssey
Healthcare addressed WAC 246-31 0-290(7)(b), Step 2 of the methodology, the court
noted, "[T]here is ample room for disagreement about various interpretations of the
formula used to calculate unmet hospice care 'need' for each county. The WAC 246-310
290(7) methodology in its entirety is a complex formula, not a simple numerical
computation." Odyssey Healthcare, 145 Wn. App. at 143. The methodology in
WAC 246-310-290(7) is ambiguous, specifically in reference to the planning horizon.
This ambiguity requires us to give great deference to the Department's interpretation of
its own regulation. Odyssey Healthcare, 145 Wn. App. at 145 n.6.
Harmonizing the provisions of WAC 246-310-290, we also conclude that the
three-year planning horizon established in WAC 246-310-290(6) applies to the need
projection methodology in WAC 246-310-290(7). The rules of statutory construction
apply equally to administrative regulations; a rational, sensible construction must be given
9
No. 31116-3-111
Hospice ofSpokane v. Dep't ofHealth
to the regulation. Children's Hosp., 95 Wn. App. at 864 (quoting State v. McGinty, 80
Wn. App. 157, 160,906 P.2d 1006 (1995)). "In construing statutes, the goal is to carry
out the intent of the Legislature." Seven Gables Corp. v. MGMlUA Entm 't Co., 106
Wn.2d 1,6, 721 P.2d 1 (1986). The duty of the court is to give purpose and effect to the
statute. Id. The court should avoid interpretations that render an unreasonable and
illogical consequence. Id. "Thus, in attempting to effect the intent of the Legislature, an
act must be construed as a whole, harmonizing all provisions to ensure proper
construction." Id.
In reading the provisions as a whole, the HLJ concluded that WAC 246-310
290(7) provides the method used to project need, while WAC 246-310-290(6) provides
the required planning horizon of three years. Thus, the methodology requires a showing
of an ADC of 35 hospice patients by the third full year of operation.
The HLJ's conclusions are supported by the statutory construction of WAC 246
310-290. To ascertain the meaning of WAC 246-310-290(7), '''a term in a regulation
should not be read in isolation but rather within the context of the regulatory and statutory
scheme as a whole.'" Odyssey Healthcare, 145 Wn. App. at 142 (quoting City ofSeattle
v. Allison, 148 Wn.2d 75, 81-82,59 P.3d 85 (2002)). WAC 246-310-290(6) enacts a
substantive requirement for certificate of need applicants by stating that hospice agencies
10
No. 31116-3-111
Hospice o/Spokane v. Dep't 0/Health
must demonstrate that they can meet an ADC of35 patients by the end of the third year of
operation. WAC 246-310-290(7) then gives steps to calculate the need projection, with
the end result being a determination of whether an ADC of35 is met. A reasonable
reading of WAC 246-310-290 incorporates the three-year planning horizon for reaching
the Department's ADC goal into the steps to use to actually calculate need based on this
same ADC goal. As such, to determine whether the need projection has been met in
WAC 246-310-290(7), a certificate of need application must demonstrate an unmet need
of an ADC of35 patients by the third full year of operations. The methodology in
WAC 246-310-290(7) incorporates the three-year planning horizon in WAC 246-310
290(6).
HOS offers contrary interpretations of WAC 246-310-290(6) and WAC 246-310
290(7). First, HOS contends that incorporating the three-year planning horizon in
WAC 246-310-290(6) is erroneous because WAC 246-31O-290(7)(e), Step 5, contains its
own one-year planning horizon. HOS's interpretation was rejected by the HLJ and is a
misguided reading of the regulation. WAC 246-310-290(7)(e), Step 5, requires the
inflation of potential volume of hospice services by the "one-year estimated population
growth." In other words, completing this step requires the Department to determine the
"one-year population growth" and use that number to increase the potential volume of
11
No. 311 16-3-III
Hospice a/Spokane v. Dep 't a/Health
hospice services. It does not instruct the Department to inflate the volume only one year
into the future. There is no planning horizon in WAC 246-310-290(7)( e).
The harmonization of WAC 246-310-290 avoids superfluous language. We
interpret statutes to give effect to all language in the statute and to render no portion
meaningless or superfluous. State v. J.P., 149 Wn.2d 444,450, 69 P.3d 318 (2003)
(quoting Davis v. Dep't a/Licensing, 137 Wn.2d 957, 963, 977 P.2d 554 (1999)). To
read WAC 246-310-290(7) as having its own planning horizon would render WAC 246
310-290(6) meaningless. If a need of 35 ADC must be shown within the first year after
the application date for approval, as suggested by HOS, then there would be no reason to
also require an applicant to also demonstrate a 35 ADC in the third year of operation.
HOS contends that WAC 246-310-290(6) would not be rendered superfluous
because it provides a separate performance standard that an applicant must meet to
demonstrate need. This standard is distinct from the methodology in WAC 246-310
290(7) and requires the applicant to demonstrate a business plan confirming that the
applicant will be able to meet hospice service needs of 35 patients per day by the third
year of its operation.
Despite HOS's contention, WAC 246-310-290(6) does not contain languag~ that
would support an operational or performance standard. Also, the interpretation of an
12
No. 31116-3-111
Hospice ofSpokane v. Dep't ofHealth
additional requirement is not supported when looking at other provisions of WAC 246
310-290. Specifically, WAC 246-310-290(8) identifies the additional standards that an
applicant must meet for approval. "In addition to demonstrating need under subsection
(7) of this section, hospice agencies must meet the other certificate of need requirements
including WAC 246-310-21 O-Determination of need, WAC 246-310-220
Determination of financial feasibility, WAC 246-31 0-230-Criteria for structure and
process of care, and WAC 246-3 10-240-Determination of cost containment."
WAC 246-310-290(8). While WAC 246-310-290(8) expressly identifies the requirement
to demonstrate need under WAC 246-310-290(7), it does not identify a performance
standard under WAC 246-310-290(6). A complete reading of WAC 246-310-290 does
not support the interpretation that WAC 246-310-290(6) imposes a separate and distinct
requirement from WAC 246-310-290(7), but rather incorporates the planning horizon
from WAC 246-310-290(6) into WAC 246-310-290(7).
The HLJ's interpretation incorporating a three-year planning horizon best
effectuates the statutory purpose of the certificate of need process. If alternative
interpretations of a regulation are possible, the interpretation that best advances the
overall legislative purpose should be adopted. Anderson v. Morris, 87 Wn.2d 706, 716,
558 P.2d 155 (1976).
13
No. 31116-3-II1
Hospice ofSpokane v. Dep't ofHealth
The purpose of the certificate of need process is to promote public
health by providing accessible health services and facilities, while controlling costs.
RCW 70.38.015(1). The three-year planning horizon provides greater access to health
care by permitting additional providers to assist patients if need is found. The three-year
planning horizon recognizes the value in planning for future health care needs. At the
same time, the three-year planning horizon is not contrary to the purpose of the certificate
of need process. The limited time frame still controls the number of providers entering
the market and therefore controls the cost.
To the contrary, limiting a planning horizon to one year significantly increases the
possibility of a lapse in available providers. Considering the time it takes from
submission to approval of a certificate of need-over six months minimally under
WAC 246-31 0-290(3)-there would be no time to prepare for unmet need. By the time
the certificate of need is approved, the projected need is more likely to become an unmet
present need. A one-year interpretation would frustrate the purpose of the certificate of
need process.
Other certificate of need programs under chapter 246-310 WAC also incorporate a
three-year planning horizon, with some programs implementing a five-year planning
horizon. See WAC 246-31 0-270(9)(b )(i) (three-year planning horizon for ambulatory
14
No. 31116-3-III
Hospice ofSpokane v. Dep 't ofHealth
surgery centers); WAC 246-310-284(6) (three-year planning horizon for kidney dialysis
facilities); WAC 246-310-261(5)(c) (four years for open heart surgery), WAC 246-310
263(9)(c) (four years for pediatric open heart surgery); and WAC 246-310-745(3),
(4) (five years for percutaneous coronary intervention). When taking these planning
horizons for other health care services, the three-year planning horizon for hospice
services is not unreasonable.
HOS contends that the legislative history of WAC 246-310-290 suggests a one-
year planning horizon. HOS cites to advisory committee reports that expressly rejected a
three-year planning horizon in favor of a one-year planning horizon. For ambiguous
statutes, we resort to the aids of construction, including legislative history. City of
Olympia v. Drebick, 156 Wn.2d 289,295,126 P.3d 802 (2006) (quoting Dep't ofEcology
v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 12,43 P.3d 4 (2002)).
The committee draft reports are not helpful to determine the planning horizon in
this situation. The reports relied on by HOS were drafts. The record for enactment of
WAC 246-310-290 does not contain any final comments on the planning horizon. While
the legislative history provides insight into the early considerations of WAC 246-310-290,
it provides little guidance on the correct interpretation of the regulation.
15
No. 31116-3-III
Hospice ofSpokane v. Dep't ofHealth
In sum, we defer to the Department's interpretation of its regulations. The
Department reasonably interpreted the need projection methodology in WAC 246-310
290(7) when it determined that the methodology incorporated the three-year planning
horizon in WAC 246-31 0-290(6). Thus, to meet the need projection methodology in
WAC 246-310-290(7), FHC's certificate of need application required a projected
showing of an ADC of 35 hospice patients by the third full year of operation. The
undisputed calculations by the HLJ establish that FHC met this requirement. Thus, the
HLJ did not err by granting FHC's certificate of need application to establish hospice
services in Spokane County.
We affirm the HLJ's decision.
Kulik, 1.
WE CONCUR:
Siddoway, A.C.J. Fearing, J.
16
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963 So.2d 31 (2007)
Mark SYKES, Appellant
v.
Christopher EPPS, Commissioner and Mississippi Department of Corrections, Appellees.
No. 2006-CP-01149-COA.
Court of Appeals of Mississippi.
August 14, 2007.
Mark Sykes, pro se.
Office of the Attorney General by Jane L. Mapp, attorney for appellees.
Before LEE, P.J., IRVING and CHANDLER, JJ.
IRVING, J., for the Court.
¶ 1. Mark Sykes appeals from a judgment of the Circuit Court of Sunflower County which affirmed a decision of the Mississippi Department of Corrections (MDOC), finding that Sykes was ineligible for parole.
¶ 2. We find no error; therefore, we affirm the decision of the trial court.
FACTS
¶ 3. On October 1, 2001, Sykes was convicted of armed robbery in the Circuit Court of Amite County, Mississippi, and was sentenced to thirty years in the custody *32 of the MDOC. During his imprisonment, Sykes requested administrative relief from the MDOC concerning his parole eligibility and earned time allowance. The MDOC responded and informed Sykes that he was not eligible for parole, and would not be eligible for meritorious earned time and trusty time until after he had served ten years of his thirty-year sentence.[1]
¶ 4. Sykes filed a civil complaint against the MDOC and its Commissioner, Christopher Epps. In his complaint, Sykes alleges that the MDOC denied him due process of law by failing to provide him with a parole eligibility date and by refusing to give him earned time allowance.
¶ 5. On May 25, 2006, the MDOC filed a motion to dismiss, arguing that Sykes was ineligible for parole, pursuant to Mississippi Code Annotated section 47-7-3(1)(d)(ii) (Supp.2006).[2] On June 9, 2006, the circuit court dismissed Sykes's petition, finding that the MDOC had correctly determined that Sykes's armed robbery conviction prevents him from being eligible for parole. It is from this decision that Sykes appeals.
ANALYSIS AND DISCUSSION OF THE ISSUE
¶ 6. This issue presents a question of law, which this Court reviews de novo. DeLoach v. State, 722 So.2d 512, 518(¶ 12) (Miss.1998) (citing Rose v. State, 586 So.2d 746, 751 (Miss.1991)). Sykes claims that Mississippi Code Annotated section 47-7-3(1)(d)(ii) should not apply to his case to deprive him of parole or earned time, because it was not amended until 2004.[3] Finding Sykes's contention incorrect, we disagree. The circuit court properly found Sykes ineligible for parole as section 47-7-3(1)(d)(ii) applies to Sykes's case because he was convicted after October 1, 1994.
¶ 7. We note that the response that Sykes received from the MDOC officials informing him that he would be eligible for meritorious earned time and trusty time after serving ten years of his sentence was incorrect. This information would have been correct had Sykes been convicted under section 47-7-3(1)(d)(i) (Supp.2006); however this section is clearly inapplicable because Sykes was convicted of armed robbery after September 30, 1994.[4] Further, *33 section 47-5-139(1)(e) (Rev.2004) provides that "[a]n inmate shall not be eligible for the earned time allowance if: The inmate has not served the mandatory time required for parole eligibility for a conviction of robbery or attempted robbery with a deadly weapon." Therefore, because Sykes must serve his entire sentence, his argument that he is entitled to earned time lacks merit. In Thomas v. State, 881 So.2d 912, 916(¶ 11) (Miss.Ct.App.2004), this Court held that "[Section 47-5-139] indeed forecloses armed robbers convicted after October 1, 1994, from parole eligibility." Thus, the MDOC correctly points out that "since an offender serving a sentence for an armed robbery committed on or after October 1, 1994 can never serve the mandatory time required for parole eligibility, he is not eligible to accrue earned time credits."
¶ 8. THE JUDGMENT OF THE CIRCUIT COURT OF SUNFLOWER COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO SUNFLOWER COUNTY.
KING, C.J., LEE AND MYERS, P.JJ., CHANDLER, GRIFFIS, BARNES, ISHEE, ROBERTS AND CARLTON, JJ., CONCUR.
NOTES
[1] The information regarding Sykes's eligibility for meritorious time and trusty status is incorrect, as Sykes is not eligible for either. We defer further discussion of this issue until later in this opinion.
[2] Section 47-7-3(1)(d)(ii) provides in part:
No person shall be eligible for parole who shall, on or after October 1, 1994, be convicted of robbery . . . through the display of a firearm. . . . The provisions of this sub-paragraph (d)(ii) shall also apply to any person who shall commit robbery . . . on or after October 1, 1994, through the display of a deadly weapon;
(emphasis added).
[3] Sykes also raises two issues in his reply brief; however, those issues are procedurally barred, as they were not raised in the trial court. Johnson v. State, 508 So.2d 1126, 1127 (Miss.1987).
[4] Section 47-7-3(d)(i) provides in part:
No person shall be eligible for parole who shall, on or after January 1, 1977, be convicted of robbery or attempted robbery through the display of a firearm until he shall have served ten (10) years if sentenced to a term or terms of more than ten (10) years or if sentenced for the term of the natural life of such person. If such person is sentenced to a term or terms of ten (10) years or less, then such person shall not be eligible for parole. The provisions of this paragraph (d) shall also apply to any person who shall commit robbery . . . on or after July 1, 1982, through the display of a deadly weapon. This subparagraph (d)(i) shall not apply to persons convicted after September 30, 1994. . . .
(emphasis added).
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93 N.W.2d 132 (1958)
Wayburn E. JOHNSTON, Plaintiff (Appellee),
v.
DISTRICT TOWNSHIP OF ELLSWORTH, EMMET COUNTY, Iowa, Also Known As the School Township of Ellsworth in the County of Emmet, State of Iowa, Defendant (Appellant).
No. 49340.
Supreme Court of Iowa.
November 18, 1958.
Rehearing Denied January 16, 1959.
*133 Fitzgibbons & Fitzgibbons, Estherville, for appellant.
Gamble, Read, Howland, Gamble & Riepe, Des Moines, Kennedy & Clark, Estherville, and C. J. Eisler, Minneapolis, Minn., for appellee.
LINNAN, Justice.
On June 9, 1905, Martin Sheley, the then owner of the Southeast Quarter (SE¼) of Section Fourteen (14), Township One Hundred (100) North, Range Thirty-three (33), West of the Fifth P.M., executed to the defendant school district a deed to a tract of land in the southeast corner of said quarter section described by metes and bounds containing 75/100 acres for a consideration of $1, which deed recited: "Said conveyance being made for school house site." It was stipulated that the defendant school district went into possession of said tract and constructed and maintained thereon a school house until May of 1954, when the school was abandoned and the school building was sold and removed.
Plaintiff, the present owner of the Southeast Quarter (SE¼) of Section Fourteen (14), Township One Hundred (100) North, Range Thirty-three (33), claims the right to said tract upon the payment of the sum of $1, relying upon the statutes in force at the time of the conveyance by Sheley.
Defendant school district contends that the statutes in force at the time of the abandonment of said school are applicable.
We are confronted with three propositions:
I. Plaintiff contends that the Sheley deed conveyed only a limited estate. We do not agree. It is our opinion that the words, "said conveyance being made for school house site," merely expressed the purpose for which the conveyance was made and do not in any way limit the title conveyed by the terms of the warranty. The authorities cited by appellant support this position. The deed in question was an absolute conveyance and contained no conditions or restrictions. In the case of Boone Biblical College v. Forrest, 223 Iowa 1260, 275 N.W. 132, 138, 116 A.L.R. 67, a conveyance was made by warranty deed to Boone Biblical College, which deed, following the description of the land, contains the statement:
"Said land to be used for educational purposes and religious purposes only."
One of the heirs of the original grantor claimed title upon the ground that the land was no longer being used for the expressed purpose. The lower court quieted title in Boone Biblical College and this was affirmed on appeal. The court said:
"In our opinion, therefore, the estate conveyed to the appellee by the deed here in question was not restricted by either a limitation or a condition subsequent, and the appellant, Forrest, did not derive any right or interest in the land by his deed from Charles Davis, and has no right or interest in the land which can in any way affect the appellee's title thereto."
II. Appellee's second proposition is that because the defendant school district had the right of eminent domain, the conveyance by Sheley conferred only an easement. We are unable to agree with this contention. The railroad cases cited by appellee are governed by specific statutes which have no application to the case at bar.
*134 III. The rights of reversion to school house sites are wholly statutory and hence are subject to such changes as the Legislature may make. At the time of the abandonment of this particular school house site, section 297.15 et seq., I.C.A., were in full force and effect and should be followed. The cases of Waddell v. Board of Directors, 190 Iowa 400, 175 N.W. 65, and Independent School District of Des Moines v. Smith, 190 Iowa 929, 181 N.W. 1, have settled the question. We see no reason for changing the law as therein announced. The case is, therefore, reversed.
All Justices concur.
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FILED
NOT FOR PUBLICATION JUL 16 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DONROY B. WALKER, No. 12-35478
Petitioner - Appellant, D.C. No. 1:09-cv-01414-CL
v.
MEMORANDUM*
MARK NOOTH,
Respondent - Appellee.
Appeal from the United States District Court
for the District of Oregon
Owen M. Panner, Senior District Judge, Presiding
Submitted July 11, 2013**
Portland, Oregon
Before: PREGERSON, MURGUIA, and CHRISTEN, Circuit Judges.
An Oregon jury convicted Walker of first-degree sexual abuse and first-
degree unlawful sexual penetration. After exhausting his state remedies, Walker
filed a federal habeas corpus petition, which the district court denied. We have
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
jurisdiction over Walker’s appeal pursuant to 28 U.S.C. §§ 1291 and 2253, and we
affirm.
The Oregon courts’ decision that Walker was not “in custody” for Miranda
purposes was not “so lacking in justification that there was an error well
understood and comprehended in existing law beyond any possibility of
fairminded disagreement.” Harrington v. Richter, 131 S. Ct. 770, 786–87 (2011).
Rather, that decision fell well “within the matrix” of clearly established Supreme
Court authority. Yarborough v. Alvarado, 541 U.S. 652, 665 (2004). The
detectives drove an unmarked police car and approached Walker with a congenial
tone; Walker consented to the interview; the detectives did not transport Walker to,
or ask him to appear at, the police station; the interview took place in a large
parking lot in Walker’s neighborhood in the middle of the day; the detectives told
Walker that he was not under arrest and was free to leave at any time; and the
detectives let Walker leave at the end of the interview. See generally Howes v.
Fields, 132 S. Ct. 1181, 1189 (2012) (compiling the Supreme Court’s “in custody”
cases).
AFFIRMED.
2
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Filed 5/13/16 P. v. Woods CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THE PEOPLE, D069451
Plaintiff and Respondent,
v. (Super. Ct. No. FSB1303214)
CORNELIUS DESHAWN WOODS,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of San Bernardino County,
Annemarie G. Pace, Judge. Affirmed.
Patricia L. Brisbois, under appointment by the Court of Appeal, for Defendant and
Appellant.
Kamala D. Harris, Attorney General, Gerald A. Engler, Chief Assistant Attorney
General, Julie L. Garland, Assistant Attorney General, A. Natasha Cortina and Meagan J.
Beale, Deputy Attorneys General, for Plaintiff and Respondent.
In this gang-related murder case involving the shooting death of Eddie Barnes, Jr.,
a jury convicted Cornelius Deshawn Woods of first degree murder (count 1: Pen. Code,1
§ 187, subd. (a)), unlawful possession of a firearm by a felon (count 2: § 29800, subd.
(a)), and active participation in a criminal street gang (count 3: § 186.22, subd. (a)). The
jury found to be true allegations that in committing the murder Woods personally used
and discharged a firearm, causing death (§ 12022.53, subds. (b)-(d)) and that he
committed the murder and unlawfully possessed the firearm (a handgun) for the benefit
of, in association with, or at the direction of a criminal street gang with the specific intent
to promote, further or assist in criminal conduct by gang members (§ 186.22, subds.
(b)(1)(A), (C)). In a bifurcated proceeding, the court found to be true allegations that
Woods had suffered a prior serious felony conviction (assault with a firearm in violation
of § 245, subd. (a)(2)) within the meaning of section 667, subdivision (a)(1), which also
was a strike within the meaning of the Three Strikes law (§§ 667, subds. (b)-(i), 1170.12,
subds. (a)-(d)). The court sentenced Woods to an aggregate state prison term of 80 years
to life.
Woods appeals his conviction, asserting five contentions. First, the court abused
its discretion and violated his federal constitutional due process right to a fair trial by
admitting evidence through the People's gang expert that he had committed prior gang-
related shootings in 2005 and 2006. Second, the court violated his federal constitutional
due process right to a fair trial by admitting evidence of his conviction of assault with a
1 All further statutory references are to the Penal Code unless otherwise specified.
2
firearm as a predicate offense to support the active-participation-in-a-criminal-street-gang
charge and enhancement allegation. Third, the court committed prejudicial instructional
error and violated his federal constitutional due process right to a fair trial by failing to
instruct the jury sua sponte under CALCRIM No. 335 that Anthony Walker was an
accomplice in the active-participation-in-a-criminal-street-gang crime as a matter of law
and that the jury could not rely on Walker's testimony without independent corroborating
evidence. Fourth, defense counsel provided ineffective assistance in violation of
Woods's Sixth Amendment rights by failing to object to (1) the reliance of the People's
gang expert on the evidence of Woods's 2006 conviction of assault with a firearm to form
his opinion that Woods was a shooter for the Hoover criminal street gang; (2) the
prosecution's use of that 2006 conviction as one of six predicate offenses to prove that the
Hoover gang is a criminal street gang, and (3) the prosecutor's statements during closing
argument that the 2005 and 2006 prior shootings showed Woods's motive as a shooter for
the Hoover gang. Fifth, cumulative error requires reversal of the judgment. We affirm
the judgment.
FACTUAL BACKGROUND
A. The People's Case
1. The murder, Walker's incriminating testimony, and the surveillance video
evidence
Late in the evening on June 7, 2013, Eddie Barnes, Jr., who was a member of a
Blood gang, was shot and killed in the living room of his friend Tanya Cooper's
apartment. Barnes, who also was known as Bishop, had been staying with Cooper for a
3
few weeks. Cooper testified that Barnes sold drugs out of her apartment. That night,
Cooper retired to her bedroom after five men who were members of the rival Hoover
gang came to the apartment. At trial, Cooper identified those men as Andre "Dre" Davis,
Davis's brother Jovan "Puna" Smith, Anthony "Ace" Walker, Arbet "Flash" Brown, and
another man she did not know at that time but whom she identified at trial as Woods
because of the tattoos on his face that she had seen when he was in her apartment and
which she later described to Detective Albert Tello of the San Bernardino Police
Department. Cooper testified that some of the men entered her apartment, and others
remained outside on the balcony.
At some point, from her bedroom, Cooper heard Walker say to Barnes, "Hey,
Bishop, I need that." Barnes replied by saying something in a low voice, but Cooper
could not make out what he said. At trial, Cooper testified she did not remember telling a
police officer that she heard Barnes say, "Okay man, okay." She also did not remember
telling the officer she then heard Barnes mumble, "Oh, shit."
Cooper testified she heard gunshots after Barnes mumbled something, and she
"froze" and then quickly hid in her closet. She heard "maybe four or five" additional
gunshots. Cooper then heard Walker say "a[h] fuck" in a panicked, frightened voice.
Cooper testified that it "sound[ed] like [Walker] was shocked." Cooper also testified she
left her bedroom closet shortly thereafter and saw Barnes's body as she walked through
the living room and left her apartment. Cooper saw Davis when she left the apartment
complex.
4
Barnes's cousin, Davis, testified he heard Cooper and Barnes arguing earlier that
evening. Barnes had been using cocaine and was still "amped up." Sometime after 9:40
p.m.─when only Cooper, Davis, and Barnes were in Cooper's apartment─Woods,
Walker, Brown, and Davis's brother, Smith, came to the apartment.
Davis identified Woods at trial as one of the men who arrived at Cooper's
apartment that night. Davis testified he overheard Walker talk with Barnes about buying
some drugs. Walker said he needed a "quarter of cocaine" and a "quarter of rock
cocaine." Davis left the apartment and went downstairs as Smith and Brown were
leaving. Davis heard six or seven gunshots and ran back up to the apartment. He saw
Barnes lying on the floor in the apartment near the front door. Davis also saw Cooper
come out of her room, grab her purse, and leave. Davis yelled for paramedics and also
left. He later identified Woods when Detective Tello showed him a photographic lineup.
a. Walker's incriminating testimony and the surveillance video clips
Before the trial began, Walker pleaded guilty in this case to being an accessory
after the fact to Barnes's murder and to being an active participant in a criminal street
gang. He testified for the prosecution as part of his plea bargain.2 Walker admitted he
was a member of the Hoover gang, and he testified he had various tattoos on his body and
face related to both that gang and a subset clique known as Five Deuce. He described his
gang tattoos as a "five deuce" on his left hand, a star on his right hand, and a star on the
2 The range of punishment was a maximum of 12 years in prison to a minimum of
three years' probation.
5
right side of his face. Walker testified that Woods, Brown and Smith also were Hoover
gang members.
Walker indicated that when Detective Tello first interviewed him about two weeks
after the shooting he was not completely truthful with Detective Tello because he was
afraid of being charged with murder, but he told the detective at that time he thought
Woods was the shooter. During that interview, Walker also identified Woods in a
photographic lineup that Detective Tello showed him.
Walker testified that Smith and Brown picked him up in Brown's SUV earlier in
the evening on June 7, 2013. They drove to a liquor store and then picked up Woods
before they went to Cooper's apartment. Walker planned to see his former girlfriend,
who lived in another apartment, and then buy drugs from Barnes.
Walker testified that when Woods first got in the SUV, he asked Walker and the
others whether they had "a thing," meaning a gun. Woods then got out of the SUV and
went somewhere. When he returned to the SUV a couple of minutes later, the group
continued on to the apartments.
Walker further testified that he, Woods, Smith and Brown all got out of the SUV
when they arrived at the apartment complex, and they all walked up the staircase near
apartments Nos. 39 and 42. Walker went up first and the others followed him. Walker
went to his former girlfriend's apartment, No. 42. He went inside and talked to her.
When Walker left her apartment, he did not see Woods, Smith, or Brown. Walker then
walked to Cooper's apartment, No. 39, went inside, and spoke with Barnes about
purchasing some drugs. Davis was present when Walker talked to Barnes about drugs.
6
At trial, Walker indicated he did not see Woods, Smith, or Brown in Cooper's apartment
when he was talking to Barnes about drugs. He did not see Cooper at all that night.
Walker also testified that a man known as "Car Wash" came inside Cooper's
apartment for a couple of minutes, Walker gave him a drink from a bottle of gin he
(Walker) had, and Walker and Barnes used cocaine. After Car Wash left, Walker saw
Woods, whose street names are "LS" and "Little Stone," standing by the window outside
the front door of the apartment. Walker was able to see him through the window because
the blinds were pulled back.
As Walker was talking to Barnes, Woods motioned to Walker and told him,
"Come on. Let's go." Walker testified that, as he walked out of the apartment, he saw
Woods "standing on the side of the door" with a black gun in his right hand. As Walker
walked away from Cooper's apartment toward the stairs to go down to the SUV, Woods
walked past him toward Cooper's apartment.
Walker testified he then heard one gunshot, and he started running. Walker was
"shocked" when he heard the first gunshot, and he yelled out, "What the fuck." He then
heard Barnes gasping inside the apartment. Walker also testified that when he started
running, he "took a quick glance back" over his left shoulder and saw Woods standing "at
the edge" of the front door of Cooper's apartment. Walker did not see where Woods's
hands were. Walker heard three or four more gunshots as he ran, but he did not see who
was shooting. Walker testified that when the shooting occurred, Davis was "standing
right outside the door," smoking a cigarette "[o]n the other side of the door."
7
Walker testified he ran down the stairs toward the SUV and Woods ran down the
stairs behind him. Walker testified he was not running fast because he was holding the
gin bottle and also holding up his pants, and he did not stop running until he reached the
SUV.
Surveillance camera video clips from the apartment complex, which were played
for the jury while Walker was testifying, showed Walker running down the stairs holding
the gin bottle in his right hand and holding up his pants with his other hand. The videos
also showed Woods, with his hands in his pockets, running down the stairs behind
Walker and exiting the apartment complex with him.3 One of the videos showed the
SUV passing by. Walker testified that Brown and Smith were in the SUV, and Brown
was driving.
Walker also testified that he and Woods got into the SUV. Walker also testified
that as they were driving away Woods giggled and said to everyone, "That was easy."
Walker, who was in protective custody during the trial, further testified that
Woods told him not to testify against him. He also testified that, although he had not
been threatened as a result of this case, he could be killed in prison for testifying because
"snitching" is a "no-no" in gang culture.
The prosecutor asked Walker whether he shot Barnes, and Walker replied, "No, I
didn't." The prosecutor also asked Walker, "Did you know this was going to happen to
3 During his closing argument, the prosecutor suggested that Woods's running down
the stairs in "an unusual posture" with his hands in his pockets, as shown in one of the
video clips, showed that Woods had put the handgun in his pocket.
8
[Barnes]?" Walker answered, "No." Walker estimated that a couple of minutes passed
between his telling Barnes "I need that" in Cooper's apartment and the shooting.
b. Barnes's gunshot wounds, bullet trajectory evidence, Woods's facial tattoos,
and additional surveillance video evidence
Barnes was shot five times, including twice in the back of his head while he was
lying on the living room floor in Cooper's apartment. The parties stipulated he died from
multiple gunshot wounds to the head.
Detective William Flesher, who responded to the scene on the night of the
shooting and investigated the murder, testified that the five expended nine-millimeter
shell casings recovered from the crime scene were fired from the same semiautomatic
handgun. Based on his investigation and his experience as a homicide detective,
Detective Flesher opined that the bullet trajectories were consistent with the bullets
having been fired from the threshold of the apartment door. Barnes had currency in
various denominations on his person, which was consistent with his having engaged in
the sale of narcotics. No firearm was found on Barnes's person.
Detective Albert Tello of the San Bernardino Police Department testified that he
reviewed the surveillance camera video clips, and the clips, which were played while he
was testifying, showed Walker─followed by Smith, Woods and Brown─going up the
stairs and to the left toward Cooper's apartment. Detective Tello testified that another
video clip showed the man identified as Car Wash thereafter going up the stairs to
Cooper's apartment. Other video clips, also played during Detective Tello's testimony,
9
showed Walker, followed by Woods, running down the stairs and going out of the
apartment complex to the SUV.
Detective Tello also testified that he spoke with Cooper about 12 hours after the
shooting. Cooper described several distinctive tattoos she saw on the face of the man she
saw on the balcony outside her apartment, who she did not know but later was identified
as Woods. Specifically, Cooper described Woods's tattoos as a star with an H on his
face, and some sort of cursive writing above his left eye. During that first interview,
Cooper told Detective Tello she heard Walker say, "Hey Bishop, I need that." She also
told Detective Tello she heard Barnes say, "Okay," and then, "Oh, shit," just before he
was shot. Cooper also said she then heard gunshots and heard Walker say, "Oh, fuck,"
and Davis say, "[O]h, my God."
Detective Tello also testified that he interviewed Walker, who described seeing
Woods extending his arm forward toward Barnes, while holding a gun, over the door
threshold of Cooper's apartment.
2. Woods's arrest in Las Vegas and his self-incriminating statement to the police
On August 8, 2013, Woods was arrested in Las Vegas. Before Detective Tello
read Woods his Miranda4 rights, Woods said he wanted a lawyer and did not want to talk
with the detectives. The detectives did not ask any questions, but Woods asked what it
was all about, and Detective Tello told him he was being arrested for Barnes's murder.
4 Miranda v. Arizona (1966) 384 U.S. 436.
10
Woods quickly responded that he did not know anything about it and he had been in Las
Vegas since April.
3. Woods's recorded self-incriminating telephone call from jail
A recording of a phone call Woods made from jail in early October 2013, which
was transcribed, was played for the jury. Woods initially spoke with a woman named
Bria about needing some "dollars" and then he asked her whether she had seen "Flash"
(Brown). Bria replied she had not seen him, but she had heard he had been arrested. An
unidentified male then got on the phone and spoke to Woods. The male told Woods that
some people who were supposed to "holler" at him came and talked about "who doing the
little talking and all types of shit, man like shit ugly." Woods replied as follows that he
knew who was "talking" and who were "in it": "Yeah, I know, I see I know who talking
and shit, I know who all in it, man I know, I know. You know what I'm talking about?"
Woods said, "They ain't got shit on me cause I didn't do shit. I ain't even been out here
fool." Woods also said he needed someone to contact "Toots" and tell her to "holler at
the investigator" and "let [the investigator] know" where Woods was on the night of the
murder. Woods gave Toots's phone number to the male he was talking to. Woods then
said he had sent a letter to Toots, and the investigator would call Toots and "ask her like
where [he (Woods)] been at and shit." Woods again spoke with Bria during this phone
call. Woods told her an alibi was "all I need." He then told Bria, "All they need is an
alibi and I'm walking up out this bitch."
11
4. Prosecution's gang expert testimony
Detective Joshua Simpson of the City of San Bernardino Police Department's gang
unit testified as the prosecution's gang expert. He has personal experience with, and
training about, the Hoover gang, a criminal street gang in San Bernardino that originated
in Los Angeles. The Hoover gang has more than 2,500 documented members and even
more associates. More than 100 Hoover gang members live in the City of San
Bernardino.
Detective Simpson testified that the Hoover gang has nine subsets or "cliques."
"Five Deuce," which stands for 52nd Street, is one of those cliques. The Hoover gang
started as a Crip-based gang, but is no longer aligned with either Crips or Bloods.
However, some Hoover gang members have aligned themselves with members of the
Grape Street gang, which is a Crip-based gang. The Hoover gang and the East Coast
Crips are rivals.
The Hoover gang's common symbols are "H" and a five-pointed star, the gang's
colors are blue and orange, and its primary activities are narcotic sales, possession of
firearms, assaults with firearms, and murder.
Detective Simpson testified about six predicate offenses committed by Hoover
gang members, including one by Woods, that show the Hoover gang has engaged in a
pattern of criminal activity. Specifically, (1) Woods was convicted of assault with a
firearm, with personal use of a firearm, stemming from an incident in 2006; (2) Puna
Smith was convicted of unlawful possession of a firearm with a finding he committed this
offense for the benefit of a criminal street gang in 2007; (3) Melvin "Melly Mel" Craig
12
was convicted of carrying a loaded firearm in 2008; (4) James "Pooka" Jackson was
convicted of possession of cocaine base for sale stemming from an incident in 2010; (5)
Flash Brown was convicted of assault with a deadly weapon stemming from an incident
in 2011; and (6) Jaquawn "Baby Stone" Oates was convicted of transportation of a
controlled substance stemming from an incident in 2013. Detective Simpson opined that
all six of these men were Hoover gang members.
Detective Simpson indicated he was familiar with Barnes, and testified that Barnes
was associated with the Compton Cross Atlantic Piru gang, which is an "offshoot of the
Blood set gang." Detective Simpson was familiar with Brown, and testified that Brown
is a Hoover gang associate. Detective Simpson testified he also was familiar with Walker
and indicated that Walker is a Hoover gang member. Walker had numerous Hoover gang
tattoos, about which Walker testified in this case.
Detective Simpson opined that Woods was an active member of the 52nd Street or
Five Deuce Hoover criminal street gang. He based his opinion in part on Woods's
numerous gang-related tattoos, which include (among others) a five-pointed star with the
letter H on his right cheek, the letters "YHG" for "young Hoover gangster" on his left
cheek, stars on his upper right shoulder, the numbers "5" and "2" on the right side of his
neck that refer to the 52nd Street or Five Deuce clique, the initials "HGC" on his neck
that stand for "Hoover gangster criminal," a five-pointed star above his eyebrow, a
diamond with the letter H for "Hoover" on his chest, a "52" on his upper abdomen
representing the 52nd Street or clique, and another "52" on his left triceps muscle.
13
Detective Simpson also based his opinion in part on a photograph of Woods
showing him using his right hand to give the Hoover gang sign, which is a representation
of the letter H for Hoover, and on Woods's inmate classification form in which he
indicated to Deputy Sanchez that he was a 52nd Street Hoover gang member. Detective
Simpson testified he also considered information he reviewed pertaining to Woods's
juvenile adjudication for felony discharging a firearm (§ 246.3) involving a case in which
Woods and Oates were confronted in 2005 by a man who objected to their selling drugs
in front of his home, Oates punched the man, and Woods fired a gun into the ground near
the man to instill fear in him.5 During this incident Woods was wearing orange shorts,
which Detective Simpson opined were gang clothing because orange is the Hoover gang's
color.
Detective Simpson also considered circumstances relating to Woods's adult
conviction for felony assault with a firearm stemming from a 2006 incident involving
Grape Street gang members during which Woods introduced himself by saying "Westside
5 Before Detective Simpson testified about this 2005 incident, the court gave the
following limiting instruction: "This evidence that you're about to hear can only be used
for a limited purpose. You cannot use this as evidence that the defendant has a
propensity to commit crime or anything like that. It is to consider the basis of the
officer's opinion, whether or not the defendant had a motive to commit the offenses that
[are] alleged in this case or act with the intent to assist, further, or promote criminal
conduct by gang members in this case. You may consider it for those purposes and not
any others. Specifically, you cannot consider this evidence to conclude that the
defendant is a bad character or is disposed to commit crime."
14
Hoover," he made a sign of disrespect, and then he got into a car with other gang
members and participated in a drive-by shooting of a rival gang member.6
Detective Simpson also opined that Woods's role in the Hoover gang was that of a
shooter and testified that he based this opinion on his reading about "[Woods's] past
criminal activity" and information that "he has been known to carry firearms and shoot at
people." Detective Simpson also opined that Walker's role in the Hoover gang was
selling narcotics.
Detective Simpson further testified that the current offenses were gang-related
because they were committed in the presence of gang members and
associates─specifically, Walker, Davis, and the victim, Barnes─and they were the type of
offenses that enhance both the shooter's and the Hoover gang's reputation. When asked a
question based on a hypothetical set of facts paralleling the facts of the case, Detective
Simpson opined that such facts showed the person's reputation as the shooter, someone
willing to commit murder for the gang to instill fear.
B. Defense Case
The defense presented no affirmative evidence. During his closing argument,
defense counsel argued that Walker shot Barnes.
6 Before Detective Simpson testified about this 2006 incident, the court alluded to
its earlier limiting instruction (see fn. 5, ante), and told the jury: "Again, this is limited
only for those purposes I told you about this incident."
15
DISCUSSION
I. ADMISSION OF EVIDENCE OF WOODS'S TWO PRIOR
GANG-RELATED SHOOTINGS
Woods first contends his convictions must be reversed because the court abused its
discretion and violated his federal constitutional due process right to a fair trial by
admitting under Evidence Code section 1101, subdivision (b) (hereafter Evidence Code
section 1101(b)), evidence through the People's gang expert that he had committed two
prior gang-related shootings. We reject this contention.
A. Background
1. Current charge of active participation in criminal street gang (count 3) and the
gang enhancement allegations (counts 1-2)
As pertinent here, count 3 of the amended information charged Woods in this case
with the commission of the crime of active participation in criminal street gang in
violation of section 186.22, subdivision (a) (§ 186.22(a)) by unlawfully and actively
participating in a criminal street gang with knowledge that its members engage in or have
engaged in a pattern of criminal gang activity, and by promoting, furthering or assisting
in felony criminal conduct by gang members. The amended information also alleged he
committed the other two charged offenses─murder (count 1) and unlawful possession of
a firearm by a felon (count 2)─for the benefit of, in association with, or at the direction of
a criminal street gang with the specific intent to promote, further or assist in criminal
conduct by gang members in violation of section 186.22, subdivision (b)(1).
16
2. Prosecution's motion in limine seeking admission of evidence of Woods's prior
two gang-related shootings)
The prosecutor brought a motion in limine asking the court to allow, under
Evidence Code section 1101(b), the introduction of evidence of Woods's two prior gang-
related shooting offenses for the purpose of proving his motive, knowledge, and intent in
actively participating in a criminal street gang (count 3) in this case and in committing
the murder and possession of a firearm by a felon for the benefit of, in association with,
or at the direction of a criminal street gang within the meaning of the gang enhancement
allegations (§ 186.22, subd. (b)) alleged in counts 1 and 2. Specifically, the prosecution
sought to introduce evidence that in 2005, when Woods was a juvenile wearing orange
gang colors,7 he and a fellow Hoover gang member (Oates) were selling drugs in a
residential neighborhood, a homeowner asked them to sell the drugs elsewhere, Oates
struck him, and Woods pointed a handgun at the victim and then fired the gun into the
ground. The prosecution also sought to introduce evidence that, as a result of this
incident, Woods was adjudicated a juvenile offender for unlawfully possessing a firearm
and brandishing a firearm. In addition, the prosecution sought to introduce evidence that
in a later incident, in 2006, Woods exchanged gang affiliations with another man and,
learning that the other man (the victim) was from a rival gang, got into a car, yelled
"Westside Hoover," and fired multiple shots at the victim. The prosecution also sought to
introduce evidence that, as a result of this incident, Woods was convicted of assault with
7 The prosecutor argued that orange was "the primary color worn by the 52 Hoover
gang."
17
a firearm (§ 245, subd. (a)(2)) with a true finding that he personally used a firearm in
committing that offense (§ 12022.5, subd. (a)). The prosecutor argued the evidence
would show the 2006 shooting occurred within two blocks of the 2005 shooting, and both
of those shootings took place within three miles of the scene of the fatal shooting of
Barnes in this case.
In support of this motion, the prosecutor argued the prior acts evidence was
relevant under Evidence Code section 1101(b) to prove Woods "ha[d] shown a specific
intent in all incidents to promote, further, and assist in criminal conduct of gang
members." The prosecutor also argued that "[b]ecause [Woods] had committed a prior
violent crime in the presence of the other fellow gang associates in the earlier cases as
well as having committed the prior case with a specific intent to benefit his criminal
street gang, this show[ed] not only [his] knowledge of what he had planned but also that
he intended to shoot and/or kill[] the victims in all cases to benefit his gang." The
prosecutor further argued the prior acts evidence showed Woods's motive to "benefit the
gang and enhance his own reputation in the gang by shooting an individual in the
presence of other gang members," as well as his knowledge of the consequences of
shooting at a victim before he decided to shoot Barnes.
In addition, the prosecutor argued the prior acts evidence was probative as it
tended to show the lengths to which Woods was willing to go for the gang by shooting
and attempting to murder individuals. He also argued the evidence of the two prior
shooting incidents was "not more prejudicial" than the evidence of the shooting of Barnes
in this case, the evidence of those 2005 and 2006 shootings was "not too remote [in time]
18
to be admitted," and the evidence of those shootings would "show more than ample
similarity" for the purpose of proving Woods's intent. Citing People v. Zepeda (2001) 87
Cal.App.4th 1183 (Zepeda), the prosecutor argued there were "overwhelming reasons for
admitting evidence of the uncharged act[s]," including the "similarity in [Woods's]
motive to benefit the gang, specifically as a shooter for the gang," because he "ha[d]
shown a willingness . . . to promote the gang's primary activities of narcotics sales, and to
promote the gang's reputation against rival gang members."
During the hearing on the motion in limine, the court characterized the
prosecutor's argument as seeking to introduce the prior acts evidence "essentially to prove
intent. Not necessarily intent to kill, but [specific] intent . . . for the gang allegation."
Defense counsel did not file a written opposition, but he opposed the motion at the
hearing, stating that "[t]he danger of [Evidence Code section] 352 is because he's used a
gun before that you know that he's used a gun again." Defense counsel argued that a
limiting instruction would be needed and introduction of such evidence was "very
dangerous." Defense counsel also argued (among other things) that there was a danger of
confusing the jury and that the jury might conclude, "Well, he did it before, here he is
doing it again." Woods's counsel further argued there was no evidence to show Woods
knew the victim's gang status or affiliation, there was no evidence anyone called out the
gang's name before Barnes was shot, and there was generally a lack of evidence to show
the killing was gang-related. Rather, defense counsel argued, the evidence just tended to
show Barnes was a drug dealer. Defense counsel summed up his argument up by
reiterating the proffered evidence was "obviously prejudicial" and the biggest danger was
19
that it would be "used for the absolute wrong reasons . . . . He shot before, he shot again.
That's exactly what it can't be used for." The court agreed, stating, "That's what it cannot
be used for."
The prosecutor responded that the People were using the evidence of the prior
shootings "so that the jury can derive what the specific intent was" and that a limiting
instruction "would cure any improper use." The court asked the prosecutor whether the
People's gang expert would be relying on the prior acts as the basis for his opinion, and
the prosecutor responded, "Yes. Absolutely. Whether it's to benefit the gang or in
association with a gang, yes."
a. The court's findings and ruling
Noting that Zepeda, supra, 87 Cal.App.4th 1183, was "quite informative," the
court found that the "similarity prong ha[d] been met" because the evidence "involve[d]
shootings in a relatively limited part of the city," the prior shootings were not too remote
in time, and the "substantial" probative value of the evidence was "not outweighed by the
prejudice in this case" for purposes of Evidence Code section 352. The court ruled the
evidence of the prior shootings was admissible under Evidence Code section 1101(b).
The court also ruled it would give a limiting instruction to the jury as requested by the
defense.
3. The court's limiting instructions at trial
At trial, when the prosecution's gang expert, Detective Simpson, was testifying
about the basis for his opinion that Woods was an active member of the Hoover gang and
he had committed the crimes for the benefit of that gang, the court─before Detective
20
Simpson described the circumstances of Woods's 2005 gang-related shooting─gave the
following limiting instruction to the jury regarding use of the evidence of the prior
shootings:
"This evidence that you're about to hear can only be used for a
limited purpose. You cannot use this as evidence that the defendant
has a propensity to commit crime or anything like that. It is to
consider the basis of the officer's opinion, whether or not the
defendant had a motive to commit the offenses that [are] alleged in
this case or act with the intent to assist, further, or promote criminal
conduct by gang members in this case. You may consider it for
those purposes and not any others. Specifically, you cannot consider
this evidence to conclude that the defendant is a bad character or is
disposed to commit crime." (Italics added.)
Later, before Detective Simpson testified about Woods's 2006 shooting offense,
the court alluded to its earlier limiting instruction and told the jury: "Again, this is
limited only for those purposes I told you about this incident."
During final instructions, the court instructed the jury with CALCRIM No. 303:
"During the trial, certain evidence was admitted for a limited purpose. You may consider
that evidence only for that purpose and for no other."
B. Applicable Legal Principles
a. Evidence Code section 1101
Evidence Code section 1101, subdivision (a) "prohibits admission of evidence of a
person's character, including evidence of character in the form of specific instances of
uncharged misconduct, to prove the conduct of that person on a specified occasion."
(People v. Ewoldt (1994) 7 Cal.4th 380, 393 (Ewoldt).) Thus, evidence of other crimes or
21
bad acts is inadmissible when it is offered to show that a defendant had the criminal
disposition or propensity to commit the crime charged. (Evid. Code, § 1101, subd. (a).)
Evidence Code section 1101(b) "clarifies, however, that this rule does not prohibit
admission of evidence of uncharged misconduct when such evidence is relevant to
establish some fact other than the person's character or disposition." (Ewoldt, supra, 7
Cal.4th at p. 393, fn. omitted.) Specifically, Evidence Code section 1101(b) provides that
nothing in that section "prohibits the admission of evidence that a person committed a
crime, civil wrong, or other act when relevant to prove some fact (such as motive,
opportunity, intent, preparation, plan, knowledge, identity, absence of mistake or accident
. . .) other than his or her disposition to commit such an act."
The admissibility of evidence under Evidence Code section 1101(b) depends on
the degree of similarity between the uncharged act and the charged offense. (Zepeda,
supra, 87 Cal.App.4th at p. 1210, citing Ewoldt, supra, 7 Cal.4th at p. 402.) The
California Supreme Court has explained that for evidence of uncharged acts to be
admissible under Evidence Code section 1101(b) to prove such facts as motive, intent,
identity, or common design or plan, the charged offenses and uncharged acts must be
"sufficiently similar to support a rational inference" of these material facts. (People v.
Kipp (1998) 18 Cal.4th 349, 369.) "The least degree of similarity (between the
uncharged act and the charged offense) is required in order to prove intent." (Ewoldt,
supra, 7 Cal.4th at p. 402.) To be admissible to prove intent, the uncharged misconduct
need only be "sufficiently similar [to the charged offense] to support the inference that
the defendant '"probably harbor[ed] the same [or similar] intent in each instance."'"
22
(Ibid.; see People v. Memro (1995) 11 Cal.4th 786, 864-865 (Memro) [evidence of
defendant's uncharged conduct of possessing sexually explicit photographs of young
males ranging from prepubescent to young adult admissible as probative to show intent to
sexually molest young boy].)
b. Evidence Code section 352
If the trial court determines that uncharged misconduct is admissible under
Evidence Code section 1101(b), it must then determine whether the probative value of the
evidence is " 'substantially outweighed by the probability that its admission [would] . . .
create substantial danger of undue prejudice, of confusing the issues, or of misleading the
jury.' " (Ewoldt, supra, 7 Cal.4th at p. 404; Evid. Code, § 352.) "The principal factor
affecting the probative value of an uncharged act is its similarity to the charged offense.
Other factors affecting the probative value include the extent to which the source of the
evidence is independent of the charged offense, and the amount of time between the
uncharged acts and the charged offense. The factors affecting the prejudicial effect of
uncharged acts include whether the uncharged acts resulted in criminal convictions and
whether the evidence of uncharged acts is stronger or more inflammatory than the
evidence of the charged offenses." (Zepeda, supra, 87 Cal.App.4th at p. 1211.) "The
probative value of the evidence is enhanced if it emanates from a source independent of
evidence of the charged offense." (People v. Tran (2011) 51 Cal.4th 1040, 1047 (Tran).)
"On the other hand, the prejudicial effect of the evidence is increased if the uncharged
acts did not result in a criminal conviction. This is because the jury might be inclined to
punish the defendant for the uncharged acts regardless of whether it considers the
23
defendant guilty of the charged offense and because the absence of a conviction increases
the likelihood of confusing the issues, in that the jury will have to determine whether the
uncharged acts occurred." (Ibid.) "The potential for prejudice is decreased . . . when
testimony describing the defendant's uncharged acts is no stronger or more inflammatory
than the testimony concerning the charged offense." (Ibid.)
"The prejudice which exclusion of evidence under Evidence Code section 352 is
designed to avoid is not the prejudice or damage to a defense that naturally flows from
relevant, highly probative evidence. '[A]ll evidence which tends to prove guilt is
prejudicial or damaging to the defendant's case. The stronger the evidence, the more it is
"prejudicial." The "prejudice" referred to in Evidence Code section 352 applies to
evidence which uniquely tends to evoke an emotional bias against the defendant as an
individual and which has very little effect on the issues. In applying [Evidence Code]
section 352, "prejudicial" is not synonymous with "damaging." ' " (People v. Karis
(1988) 46 Cal.3d 612, 638 (Karis).)
c. Standard of review
We review the trial court's rulings under Evidence Code sections 1101 and 352 for
an abuse of discretion. (People v. Lewis (2001) 25 Cal.4th 610, 637.) We will not
disturb the trial court's exercise of discretion except upon a showing that it "exercised its
discretion in an arbitrary, capricious, or patently absurd manner that resulted in a
manifest miscarriage of justice." (People v. Rodriguez (1999) 20 Cal.4th 1, 9-10.)
24
C. Analysis
The court did not abuse its discretion or violate Woods's federal constitutional due
process right to a fair trial by admitting under Evidence Code section 1101(b) the
evidence that Woods committed the 2005 and 2006 shootings. The evidence of Woods's
two prior gang-related shootings (discussed, ante) was material and highly probative on
the issues of his intent and motive with respect both to the substantive count 3 charge in
this case that he actively participated in a criminal street gang—the Hoover gang—in
violation of section 186.22(a)), and to the gang enhancement allegations
(§ 186.22(b)(1)(A) & (C)) in counts 1 and 2. As already discussed, the least degree of
similarity between an uncharged act and a charged offense is required in order to prove
intent, and—to be admissible to prove intent—the uncharged misconduct need only be
sufficiently similar to the charged offense to support the inference that the defendant
probably harbored the same or similar intent in each instance. (Ewoldt, supra, 7 Cal.4th
at p. 402; see Memro, supra, 11 Cal.4th at pp. 864-865.) Although motive normally is
not an element of any crime, evidence of motive is always relevant because it "'makes the
crime understandable and renders the inferences regarding defendant's intent more
reasonable.'" (People v. Riccardi (2012) 54 Cal.4th 758, 815, abrogated on another point
by People v. Rangel (2016) 62 Cal.4th 1192, 1216.)
Here, apart from the independent evidence of the prior shootings that Woods
committed in 2005 and 2006, the evidence at trial regarding the three crimes charged in
this case─murder, unlawful possession of a firearm by a felon, and active participation in
a criminal street gang─showed no obvious reason why Woods shot Barnes, because there
25
was no evidence of any fight, confrontation, or provocation. However, as discussed in
detail, ante, in the factual background, the prosecution presented substantial evidence that
Woods was a member of the Hoover criminal street gang, that Barnes was a member of a
rival Blood gang, and that Woods went with his fellow Hoover gang members to
Cooper's apartment where Barnes was staying and selling narcotics. The evidence of the
two prior shootings admitted under Evidence Code section 1101(b) supported a
reasonable inference that, in shooting Barnes, Woods was actively and knowingly
participating in, and promoting, the criminal activity of his gang within the meaning of
Penal Code section 186.22(a), and that he shot Barnes for the benefit of his gang with the
specific intent to promote the criminal activity of its members and enhance his own
reputation in the gang. As discussed in greater detail, ante, the evidence of the 2006
shooting incident shows Woods introduced himself to the victim by saying "Westside
Hoover," and shot the victim after learning he was from a rival gang. The evidence of the
2005 shooting incident shows that Woods, who was wearing Hoover gang colors and
selling narcotics with another member of the Hoover gang, pulled out a firearm and fired
bullets near the victim, who had asked Woods and his gang companion to not sell drugs
in front of his home.
Thus, the challenged evidence of the two prior shooting incidents was relevant to
prove Woods's intent and motive. In this regard the Zepeda case, on which the court
relied, is illustrative. In Zepeda, the shooting victim, who was a member of a gang, had
been killed in an apparent gang-related drive-by shooting. (Zepeda, supra, 87
Cal.App.4th at p. 1190.) The defendant belonged to a rival gang. (Id. at p. 1190.) The
26
trial court admitted, under Evidence Code section 1101(b), evidence of the defendant's
involvement in a prior gang-related shooting, ruling the incident was relevant to show
defendant's motive and intent because it would show "'an intention upon the part of the
defendant to engage in hostile action for no particular reason other than that the recipient
of the hostile action is a member of an opposing gang. And it show[ed] certainly more
than an average degree of motivation to follow the dictates of the gang in this regard to
pursue gang policy.'" (Zepeda, at p. 1211.) Affirming the defendant's murder conviction,
the Zepeda court upheld the trial court's ruling that the evidence of the defendant's
involvement in the prior gang-related shooting incident was "relevant to prove
defendant's intent and motive" because "[t]he fact that [the] defendant previously
committed a drive-by shooting, under circumstances indicating that he did so for gang-
related purposes, helped show that he likely committed the instant drive-by shooting for
gang-related purposes." (Id. at p. 1212.)
Similarly here, the evidence of Woods's prior gang-related assaults on others with
a firearm in response to minimal or nonexistent confrontation, provocation, or challenge
to Woods's Hoover gang was relevant and admissible to prove his motive and intention to
engage in hostile action against a rival gang member for no reason other than to benefit or
promote his gang and his own gang reputation, and to "'follow the dictates of the
gang . . . to pursue gang policy.'" (Zepeda, supra, 87 Cal.App.4th at p. 1211.) The
similarity requirement is met because the evidence showed the prior shooting incidents
were gang-related and were sufficiently similar to the charged offenses─murder with a
gang enhancement allegation and active participation in a criminal street gang─to support
27
the inference that Woods probably harbored the same or similar intent, and acted with a
similar motivation, in each instance. (See Ewoldt, supra, 7 Cal.4th at p. 402; Memro,
supra, 11 Cal.4th at pp. 864-865.)
We also conclude the court did not abuse its discretion by ruling that the probative
value of the challenged evidence was "not outweighed by the prejudice in this case" for
purposes of Evidence Code section 352. Regarding probative value, we have concluded
that the prior gang-related shooting incidents are sufficiently similar to the charged
offenses of murder with a gang enhancement allegation and active participation in a
criminal street gang. Also, "[t]he fact that the evidence of the prior incident[s] had an
independent source from the evidence of the charged offense increased [their] probative
value." (Zepeda, supra, 87 Cal.App.4th at p. 1212.) In addition, the prior incidents
occurred in September 2006 and August 2005, about seven and eight years, respectively,
before this shooting in June 2013. Although these amounts of time are somewhat greater
than the five years that had elapsed in Zepeda, here, as in that case, the probative value of
the prior shootings was not affected "[a]s 'only a few years elapsed'" (Zepeda, at p. 1212)
between the prior shootings and the current shooting. (See Ewoldt, supra, 7 Cal.4th at p.
405; cf. People v. Harris (1998) 60 Cal.App.4th 727, 739 ["[a]lthough there is no bright-
line rule," remoteness of 23-year-old prior incident "weighs strongly in favor of
exclusion"].)
Regarding the prejudicial effect of the evidence of the prior gang-related
shootings, that evidence was undoubtedly damaging. However, as already discussed,
"prejudicial" is not synonymous with "damaging" for purposes of Evidence Code section
28
352, and the "prejudice" referred to in that section "'applies to evidence which uniquely
tends to evoke an emotional bias against the defendant as an individual and which has
very little effect on the issues.'" (Karis, supra, 46 Cal.3d at p. 638.) Here, the prejudicial
effect of the challenged evidence is diminished because, as Detective Simpson testified,
the two prior shootings resulted in convictions. (See Tran, supra, 51 Cal.4th at p. 1047.)
The prejudicial effect is also diminished because the evidence describing Woods's prior
gang-related acts─firing a bullet near the first victim to instill fear, and shooting, but not
executing, the second victim─was no stronger or more inflammatory than the evidence
concerning the shooting of Barnes, who (as discussed, ante, in the factual background)
was shot five times and died from execution-style gunshot wounds to the back of his head
while lying on the floor of Cooper's apartment. In addition, as we have noted, the court
gave limiting instructions to the effect that the jury could not use the evidence of the prior
shootings to conclude that Woods has a bad character or is disposed to commit crime.
We reject Woods's claim that the evidence of his prior shootings was improperly
used to prove his identity as the shooter in this case. In any event, the California
Supreme Court has rejected a contention that evidence of uncharged prior crimes or
misconduct is inadmissible for a purpose other than proving identity if the identity of the
perpetrator is in dispute. (People v. Foster (2010) 50 Cal.4th 1301, 1332-1333.)
II. ADMISSIBILITY OF EVIDENCE OF ONE OF WOODS'S TWO PRIOR
CONVICTIONS AS A PREDICATE OFFENSE
Woods also contends the court violated his federal constitutional due process right
to a fair trial by allowing the prosecution's gang expert, Detective Simpson, to testify
29
about Woods's prior conviction of assault with a firearm, which stemmed from the 2006
shooting incident (discussed, ante), as one of six predicate offenses supporting both the
charge that Woods actively participated in a criminal street gang and the gang
enhancement allegations. We reject this contention.
A. Background
The amended information charged Woods in count 1 with Barnes's murder (§ 187,
subd. (a)), in count 2 with possession of a firearm by a felon (§ 29800, subd. (a)), and in
count 3 with active participation in a criminal street gang (§ 186.22(a)). As pertinent
here, counts 1 and 2 contained gang enhancement allegations that Woods committed the
murder and was in possession of a firearm by a felon for the benefit of, at the direction of,
or in association with, a criminal street gang with the specific intent to promote, further
or assist in criminal conduct by gang members in violation of section 186.22,
subdivisions (b)(1)(A) and (C).
"The California Street Terrorism Enforcement and Prevention Act [(§ 186.20 et
seq.)] criminalizes active participation in a criminal street gang (§ 186.22[(a)])." (Tran,
supra, 51 Cal.4th at p. 1044.) "A criminal street gang is any ongoing association that has
as one of its primary activities the commission of certain criminal offenses and engages
through its members in a 'pattern of criminal gang activity.'" (Ibid., quoting § 186.22,
subd. (f).) "A pattern of criminal gang activity is 'the commission of, attempted
commission of, conspiracy to commit, or solicitation of, sustained juvenile petition for, or
conviction of two or more' specified criminal offenses within a certain time frame, 'on
30
separate occasions, or by two or more persons'" (Tran, at p. 1044, quoting § 186.22, subd.
(e)), which are referred to as "predicate offenses." (Tran, at p. 1044.)
"[A] predicate offense may be established by evidence of an offense the defendant
committed on a separate occasion." (Tran, supra, 51 Cal.4th at p. 1044, italics added.)
"[T]hat the prosecution may have the ability to develop evidence of predicate offenses
committed by other gang members does not require exclusion of evidence of a
defendant's own separate offense to show a pattern of criminal gang activity." (Ibid.)
Here, in order to meet their burden of proving both the substantive count 3 charge
that Woods actively participated in a criminal street gang and the gang enhancement
allegations in counts 1 and 2, the People presented─through their gang expert, Detective
Simpson─evidence of six predicate offenses committed by Hoover gang members,
including one by Woods, to prove the Hoover gang was a criminal street gang because it
had engaged in a pattern of criminal activity. (See § 186.22, subds. (e) & (f).) In
testifying about the predicate offenses, Detective Simpson did not discuss the details of
those crimes; he only testified to the nature of each offense, the identity of the offender,
and the offender's relationship with the Hoover gang. Specifically, as pertinent here,
Detective Simpson testified that Woods was a member of the Hoover gang and he had
been convicted of assault with a firearm, with a finding he had personally used the
firearm, stemming from a 2006 shooting incident. The five other predicate offenses
committed by members of the Hoover gang, about which Detective Simpson testified,
included a felony committed by Woods's codefendant Puna Smith during a 2007 incident,
31
and another felony committed by Woods's codefendant Flash Brown during a 2011
incident.
B. Analysis
Woods contends that because there was "ample other evidence" to show his gang
affiliation and to establish that the Hoover gang is a criminal street gang within the
meaning of section 186.22, the prosecutor did not need to rely on his prior felony
conviction for assault with a firearm as a predicate offense to support the gang charge and
gang enhancement allegations under section 186.22. Stating that his "admission to gang
membership and tattoos were sufficient . . . to show his affiliation with the gang," Woods
also contends that "[t]he circumstances of the prior assault were not similar to the
charged crimes and its prejudicial effect should have tipped the balance in favor of
exclusion" under Evidence Code section 352.8 We reject these contentions.
As already discussed, the California Supreme Court held in Tran that "a predicate
offense may be established by evidence of an offense the defendant committed on a
separate occasion." (Tran, supra, 51 Cal.4th at p. 1044, italics added.) "Further," the
Tran court explained, the fact "that the prosecution may have the ability to develop
evidence of predicate offenses committed by other gang members does not require
exclusion of evidence of a defendant's own separate offense to show a pattern of criminal
8 Under Evidence Code section 352, evidence is properly excluded if its probative
value is "substantially outweighed by the probability that its admission
will . . . necessitate undue consumption of time or . . . create a substantial danger of
undue prejudice, of confusing the issues, or of misleading the jury." (Evid. Code, § 352;
People v. Cudjo (1993) 6 Cal.4th 585, 609.)
32
gang activity." (Ibid.) Noting that "Evidence Code section 352 requires the exclusion of
evidence . . . when its probative value is substantially outweighed by its prejudicial
effect" (italics omitted), the Supreme Court acknowledged that, "[w]ithout doubt,
evidence a defendant committed an offense on a separate occasion is inherently
prejudicial." (Id. at p. 1047.) However, "the inherent prejudice from a defendant's
separate gang-related offense typically will be less when the evidence is admitted to
establish a predicate offense in a prosecution for active participation in a criminal street
gang, than when it is admitted to establish an intermediary fact from which guilt may be
inferred." (Id. at p. 1048.)
Here, for reasons discussed, ante, we have already concluded that the court, in
admitting Detective Simpson's testimony regarding Woods's 2005 and 2006 gang-related
shootings, did not abuse its discretion by ruling that the probative value of that evidence
was "not outweighed by the prejudice in this case" for purposes of Evidence Code section
352. For the same reasons, which we need not repeat here, we reject Woods's contention
that the court should have excluded, as unduly prejudicial under Evidence Code section
352, Detective Simpson's brief testimony regarding Woods's prior felony conviction for
assault with a firearm, which stemmed from the 2006 shooting incident, to establish the
predicate offenses for the substantive gang charge and gang enhancement allegations.
We also reject Woods's suggestion that the court also erred in admitting evidence
of his prior felony conviction for assault with a firearm because proof of six predicate
offenses was prejudicially cumulative. As noted, when Detective Simpson testified about
the six predicate offenses, he did not discuss the details of those crimes; he only testified
33
to the nature of each offense, the identity of the offender, and his expert opinion that each
of the six offenders was a member of the Hoover gang. We conclude the court did not
abuse its discretion or violate Woods's federal constitutional due process right to a fair
trial by allowing Detective Simpson to testify about those six crimes to establish the
predicate offenses for the substantive gang charge and gang enhancement allegations.
(See People v. Hill (2011) 191 Cal.App.4th 1104, 1138-1139 [no bright-line limit on
number of predicate offenses; proof of eight predicate offenses not cumulative or unduly
prejudicial].)
III. ASSERTED ERROR IN ACCOMPLICE JURY INSTRUCTIONS
Woods next contends the court committed prejudicial instructional error, and
violated his federal constitutional due process right to a fair trial, by failing to instruct the
jury sua sponte under CALCRIM No. 335 that Walker was an accomplice as a matter of
law, and that the jurors could not rely on Walker's testimony to find Woods guilty of
Barnes's murder without sufficient corroborating evidence to show that Walker's
testimony was reliable and credible. We reject this contention.
A. Background
1. Charges against Woods and Walker
a. Woods
As previously noted, Woods was charged with murder (count 1: § 187, subd. (a)),
possession of a firearm by a felon (count 2: § 29800, subd. (a)), and active participation
in a criminal street gang (count 3: § 186.22(a)).
34
Counts 1 and 2 contained gang enhancement allegations that Woods committed
the murder and the possession of a firearm by a felon for the benefit of, at the direction
of, or in association with, a criminal street gang with the specific intent to promote,
further or assist in criminal conduct by gang members in violation of section 186.22,
subdivisions (b)(1).
b. Walker
Walker, who was one of Woods's codefendants named in the felony complaint,
was charged in count 3 of the complaint with active participation in a criminal street gang
(§ 186.22(a)), and in count 4 with being an "ACCESSORY AFTER THE
FACT─(KNOWLEDGE OF CRIME)" in violation of section 32. As pertinent here,
count 4 charged that Walker, "having knowledge that the crime of Murder . . . had been
committed by [Woods], did harbor, conceal, and aid [Woods], with the intent that [he]
might avoid and escape from arrest, trial, conviction, and punishment for said felony."
Count 4 contained a gang enhancement allegation that Walker, in committing the
"above offense" of being an accessory to Barnes's murder, acted "for the benefit of, at the
direction of, or in association with a criminal street gang with the specific intent to
promote, further or assist in criminal conduct by gang members" in violation of section
186.22, subdivision (b)(1).
2. Walker's guilty plea and trial testimony
Before Woods's trial began, Walker pleaded guilty to being an active participant in
a criminal street gang as charged in count 3, and to being an accessory to Barnes's
murder as charged in count 4. He also admitted the truth of the count 4 gang
35
enhancement allegation that, in committing the offense of being an accessory to Barnes's
murder, he acted "for the benefit of, at the direction of, or in association with a criminal
street gang with the specific intent to promote, further or assist in criminal conduct by
gang members" in violation of section 186.22, subdivision (b)(1). During Woods's trial,
Walker testified for the prosecution pursuant to his plea bargain.
Walker's lengthy trial testimony is summarized, ante, in the factual background.
The issue of whether Walker participated as a principal in the commission of Barnes's
murder, and thus whether Walker was an accomplice and not just an accessory to the
murder, was disputed. Specifically, the prosecutor asked Walker, at the end of his direct
examination of Walker, whether he shot Barnes, and Walker replied, "No, I didn't." The
prosecutor also asked Walker, "Did you know this was going to happen to [Barnes]?"
Walker answered, "No."
3. CALCRIM Nos. 334 (given by the court) and 335 (not given)
a. CALCRIM No. 334
The court instructed the jury under CALCRIM No. 334 ("Accomplice Testimony
Must Be Corroborated: Dispute Whether Witness Is Accomplice"), directing the jurors
to decide─before considering Walker's testimony "as evidence against [Woods]
regarding the crime of murder" (italics added) ─"whether [Walker] was an
accomplice to that crime" (italics added), murder.
The court then instructed the jury under CALCRIM No. 334 on the meaning of
"accomplice." Specifically, the court told the jurors:
36
"A person is an accomplice if he or she is subject to prosecution for
the identical crime charged against the defendant. Someone is
subject to prosecution if: [¶] 1. He or she personally committed the
crime; [¶] OR [¶] 2. He or she knew of the criminal purpose of the
person who committed the crime; [¶] AND [¶] 3. He or she intended
to, and did in fact. aid, facilitate, promote, encourage, or instigate the
commission of the crime or participate in a criminal conspiracy to
commit the crime."
The court also instructed the jurors that, if they decided Walker was an
accomplice (to Barnes's murder), they "[could] not convict [Woods] of murder based on
[Walker's] testimony alone," and they "[could] use [Walker's testimony] to convict
[Woods] only if: [¶] 1. [Walker's testimony] [was] supported by other evidence [they]
believe[d]; [¶] 2. That supporting evidence [was] independent of [Walker's testimony];
[¶] AND [¶] 3. That supporting evidence tend[ed] to connect [Woods] to the commission
of the crime."
As pertinent here, the court's instruction under CALCRIM No. 334 also told the
jurors it was Woods's burden "to prove that it [was] more likely than not that [Walker]
was an accomplice" and that, if they decided Walker was an accomplice to Barnes's
murder, the independent evidence supporting Walker's testimony could be "slight," it
"[did] not need to be enough, by itself, to prove that [Woods] [was] guilty of the charged
crime" (murder), and Walker's testimony "should be viewed with caution."
b. CALCRIM No. 335
By claiming on appeal that the court erred in giving CALCRIM No. 334 and in
failing to sua sponte give CALCRIM No. 335 ("Accomplice Testimony: No Dispute
Whether Witness Is Accomplice"), Woods implicitly acknowledges his trial counsel did
37
not ask the court to instruct the jury under CALCRIM No. 335, which would have
informed the jurors that Walker was an accomplice as a matter of law, and that they could
use Walker's testimony to convict Woods only if his accomplice testimony was supported
by other credible evidence, even if that evidence was "slight," that was independent of
Walker's testimony and tended to connect Woods to Barnes's murder. (See CALCRIM
No. 335.)
B. Applicable Legal Principles
"A conviction cannot be had upon the testimony of an accomplice unless it be
corroborated by such other evidence as shall tend to connect the defendant with the
commission of the offense." (§ 1111.)
"'Corroborating evidence may be slight, may be entirely circumstantial, and need
not be sufficient to establish every element of the charged offense.'" (People v. Gonzalez
and Soliz (2011) 52 Cal.4th 254, 303.) "'The [corroborating] evidence is 'sufficient if it
tends to connect the defendant with the crime in such a way as to satisfy the jury that the
accomplice is telling the truth.'" (Ibid.)
Section 1111 defines an accomplice as "one who is liable to prosecution for the
identical offense charged against the defendant on trial in the cause in which the
testimony of the accomplice is given." (§ 1111, italics added.)
For a witness to be chargeable with an "identical offense" for purposes of
determining whether the witness is an accomplice within the meaning of section 1111, he
or she "must be considered a principal under section 31." (People v. Lewis (2001) 26
Cal.4th 334, 368-369, fn. omitted.) Section 31 defines principals as "[a]ll persons
38
concerned in the commission of a crime, whether . . . they directly commit the act
constituting the offense, or aid and abet in its commission . . . ." (§ 31, italics added.)
"An aider and abettor is one who acts with both knowledge of the perpetrator's criminal
purpose and the intent of encouraging or facilitating commission of the offense."
(People v. Avila (2006) 38 Cal.4th 491, 564 (Avila), italics added.) Thus, "[a]n
accomplice must have '"guilty knowledge and intent with regard to the commission of the
crime."'" (People v. Lewis, supra, 26 Cal.4th at p. 369, italics added.)
The term "accomplice" does not include an accessory. (People v. Boyer (2006) 38
Cal.4th 412, 467 (Boyer).) Section 32 defines an accessory as "[e]very person who, after
a felony has been committed, harbors, conceals or aids a principal in such felony, with
the intent that said principal may avoid or escape from arrest, trial, conviction or
punishment, having knowledge that said principal has committed such felony or has been
charged with such felony or convicted thereof . . . ." (Italics added.)
Whether a witness is an accomplice within the meaning of section 1111 is a
factual question for the jury to decide unless there can be no dispute concerning the
evidence or the inferences to be drawn from the evidence on this question. (People v.
Whalen (2013) 56 Cal.4th 1, 58-59 (Whalen), disapproved on another ground in People v.
Romero and Self (2015) 62 Cal.4th 1, 44, fn. 17; Avila, supra, 38 Cal.4th at p. 565.)
"Thus, a trial court can determine 'as a matter of law whether a witness is or is not an
accomplice only when the facts regarding the witness's criminal culpability are "clear and
undisputed."'" (Avila, at p. 565.)
39
"'If there is evidence from which the jury could find that a witness is an
accomplice to the crime charged, the court must instruct the jury on accomplice
testimony.'" (People v. Lewis, supra, 26 Cal.4th at p. 369; see Boyer, supra, 38 Cal.4th at
p. 466 ["The court need give such instructions [on accomplice testimony] only where
there is substantial evidence that the witness was an accomplice."].)
C. Analysis
1. Attorney General's forfeiture claim
We first reject the Attorney General's claim that Woods forfeited his claim of
instructional error. The California Supreme Court has explained that, "'[g]enerally, a
party may not complain on appeal that an instruction correct in law and responsive to the
evidence was too general or incomplete unless the party has requested appropriate
clarifying or amplifying language.'" (People v. Guiuan (1998) 18 Cal.4th 558, 570
(Guiuan), italics added.)
Here, the Attorney General asserts that Woods "forfeited any objection to the
instruction"—CALCRIM No. 334 (discussed, ante)—"as given by failing to request the
modification or clarification that Walker was an accomplice . . . ." However, the
Attorney General misunderstands Woods's claim of instructional error. Woods is not
claiming that the court's instruction under CALCRIM No. 334 was correct in law but too
general or incomplete, and he is not claiming the court erred by failing to give sua sponte
a modifying or clarifying instruction that Walker was an accomplice. Woods essentially
is claiming that (1) the court's instruction under CALCRIM No. 334 was not correct in
law because (he maintains) Walker was an accomplice "as a matter of law"; and, thus, (2)
40
the court erred by giving CALCRIM No. 334 and by failing to instruct the jury sua
sponte under CALCRIM No. 335. Thus, we conclude the forfeiture rule is not applicable
here. (Guiuan, supra, 18 Cal.4th at p. 570.)
2. Merits
We reject Woods's claim of instructional error, which is based on his contention
that the court erred by giving CALCRIM No. 334─under which the jury, before
considering Walker's testimony, was required to decide whether he was an accomplice to
Barnes's murder─and by failing to instruct the jury sua sponte under CALCRIM No.
335─under which the court would have directed a finding that Walker was an accomplice
to the murder─because (Woods asserts) Walker was an accomplice "as a matter of law."
As already discussed, whether a witness is an accomplice within the meaning of section
1111 is a factual question for the jury to decide unless there can be no dispute concerning
the evidence or the inferences to be drawn from the evidence on this question. (Whalen,
supra, 56 Cal.4th at pp. 58-59; Avila, supra, 38 Cal.4th at p. 565.) Thus, in this case, the
court could determine Walker was an accomplice to Barnes's murder as a matter of law,
and so instruct the jury under CALCRIM No. 335 rather than under CALCRIM No. 334,
only if the facts regarding Walker's criminal culpability as an accomplice were clear and
undisputed. (See Avila, at p. 565.)
Here, the question of whether Walker was an accomplice to Barnes's murder, and
not just an accessory, was disputed. For purposes of section 1111, the term "accomplice"
does not include an accessory. (Boyer, supra, 38 Cal. 4th at p. 467.) "An accomplice
must have '"guilty knowledge and intent with regard to the commission of the crime."'"
41
(People v. Lewis, supra, 26 Cal.4th at p. 369, italics added.) Before Woods's trial began,
Walker pleaded guilty to being an accessory after the fact to the murder as charged in
count 4 of the felony complaint. Walker also admitted the truth of the count 4 gang
enhancement allegation that, in committing the offense of being an accessory to Barnes's
murder, he acted for the benefit of, at the direction of, or in association with a criminal
street gang with the specific intent to promote, further or assist in criminal conduct by
gang members. During Woods's trial, the prosecutor asked Walker whether he shot
Barnes, and Walker replied, "No, I didn't." The prosecutor also asked Walker, "Did you
know this was going to happen to [Barnes]?" Walker answered, "No." Through this
testimony, Walker essentially disputed both that he was a principal in the commission of
Barnes's murder, and that he was an accomplice to that crime. (People v. Lewis, supra,
26 Cal.4th at pp. 368-369.)
Because the question of whether Walker was an accomplice to Barnes's murder
was disputed at trial, the court properly instructed the jury under CALCRIM No. 334, and
properly refused to instruct the jury under CALCRIM No. 335. (See Bench Notes to
CALCRIM No. 335 (2016 ed.) p. 107 ["If there is a dispute about whether the witness is
an accomplice, give CALCRIM No. 334, Accomplice Testimony Must Be Corroborated:
Dispute Whether Witness Is Accomplice."].) The court did not violate Woods's federal
constitutional right to a fair trial.
IV. CLAIMS OF INEFFECTIVE ASSISTANCE OF COUNSEL
Woods also contends his defense counsel provided ineffective assistance in
violation of Woods's Sixth Amendment rights by failing to object to (1) the reliance of
42
the People's gang expert, Detective Simpson, on the evidence of Woods's 2006
conviction of assault with a firearm (discussed, ante) to form his opinion that Woods was
a shooter for the Hoover criminal street gang; (2) the prosecution's use of Woods's 2006
conviction of assault with a firearm as one of six predicate offenses to prove that the
Hoover gang is a criminal street gang, and (3) the prosecutor's statements during closing
argument that the 2005 and 2006 prior shootings showed Woods's motive as a shooter for
the Hoover gang.
In response, the Attorney General argues that defense counsel's performance was
not deficient because (1) counsel "made appropriate strategic decisions while providing a
vigorous defense"; (2) "[w]hen the trial court ruled on the admissibility of [Woods's]
prior convictions, he considered the use of the prior convictions as evidence of [Woods's]
intent and motivation and as a basis for the [People's] expert's opinion"; (3) "[t]he
analysis he conducted was equally applicable to [the] use of [Woods's] prior conviction
[of assault with a firearm] as a predicate offense proving that [the Hoover gang] was a
criminal street gang"; (4) the "evidence of [Woods's] prior shootings was properly
admitted at trial"; and (5) "the prosecutor referred to [Woods's] prior actions only in the
proper context of his motivation and intent to benefit the gang and as the basis for the
expert's opinion." The Attorney General argues also argues that, "in light of the strong
evidence against [Woods], there was no reasonable likelihood that [he] would have
received a more favorable result if his counsel had made further objections."
For reasons we shall explain, we reject Woods's claim that his trial counsel
provided ineffective assistance of counsel.
43
A. Applicable Legal Principles
To prevail on a claim of ineffective assistance of counsel, a defendant must show
that (1) his counsel's performance was below an objective standard of reasonableness
under prevailing professional norms, and, of particular importance here, (2) the deficient
performance prejudiced the defendant. (Strickland v. Washington (1984) 466 U.S. 668,
687-688; People v. Ledesma (1987) 43 Cal.3d 171, 216-217.) To show prejudice, the
defendant must show a reasonable probability she would have received a more favorable
result had her counsel's performance not been deficient. (Strickland, at p. 694; Ledesma,
at pp. 217-218.)
B. Analysis
In his reply brief, Woods acknowledges that, "[i]f no additional objections were
necessary to preserve the issues raised on appeal relating to the characterizations of [him]
as the shooter for the gang or to the admission of the prior assault with a firearm
conviction as a predicate offense, the [he] agrees, [defense] counsel did his job."
However, he also asserts that, "if [defense] counsel should have objected and at least
made further record of the prejudicial harm to [him] by the various uses of his prior
convictions at trial, then he rendered constitutionally deficient performance."
We conclude no additional defense objections were necessary at trial to preserve
the issues Woods has raised on appeal, and thus his trial counsel's failure to raises such
additional objections did not constitute ineffective assistance of counsel. We discussed in
detail, ante, the People's motion in limine to admit under Evidence Code section 1101(b)
evidence of Woods's prior two gang-related shootings, as well as defense counsel's
44
vigorous and thorough objections to that motion, the parties' arguments during the
hearing on that motion, and the court's findings and rulings. We also have discussed the
proper limiting instruction the court repeatedly gave to the jury. On this record, it
appears additional defense objections were unnecessary and would have been futile.
V. CLAIM OF CUMULATIVE ERROR
Last, Woods contends cumulative error requires reversal of the judgment. We
reject this contention.
"'[A] series of trial errors, though independently harmless, may in some
circumstances rise by accretion to the level of reversible and prejudicial error.'" (People
v. Cunningham (2001) 25 Cal.4th 926, 1009.) A defendant is "entitled to a fair trial but
not a perfect one." (Ibid.)
Here, we have concluded there was no error. Thus, there were no errors that could
rise by accretion to the level of reversible and prejudicial error. Woods received a fair
trial. Accordingly, we affirm the judgment.
DISPOSITION
The judgment is affirmed.
NARES, Acting P. J.
WE CONCUR:
McINTYRE, J.
O'ROURKE, J.
45
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197 F.2d 290
STANOLIND OIL & GAS CO.v.GILES.
No. 13698.
United States Court of Appeals Fifth Circuit.
June 6, 1952.
William A. Griffis, Jr., San Angelo, Tex., for appellant.
John F. Sutton, Jr., San Angelo, Tex., E. C. Grindstaff, E. B. Underwood, Ballinger, Tex., for appellee.
Before BORAH, RUSSELL and RIVES, Circuit Judges.
RIVES, Circuit Judge.
1
Stanolind Oil & Gas Company has appealed from a judgment rendered against it in favor of J. M. Giles for the destruction of Giles' water well. Trial was to the court without a jury, and the Court stated its findings of fact in a brief oral opinion as follows:
2
"I find, gentlemen, as facts, that the plaintiff had a satisfactory well of water, which had served his six-hundred-and-some-odd acre farm for a great many years, for stock water, for water in his home, and for irrigation purposes.
3
"That in the year 1949, while that was the situation, the defendant set off an extensive charge of explosive, 646 feet from this particular well.
4
"That following these explosive discharges, the well ceased to furnish water, and is now a practically dry well, merely having a moist bottom, where there was water.
5
"That that geophysical discharge was not on the plaintiff's property, but was just across the public road from it.
6
"That the charge which was set off would have its wave effect, as far as 1741 feet, in any and all directions. I find, as a matter of fact, that that so setting off in that proximity was negligence, and the proximate cause of the damage to the plaintiff in the sum being sued for, to-wit, $3,175.00.
7
"As a conclusion of law, it must follow, of course, from what I have said, judgment goes for the plaintiff for that sum."
8
The appellant's contentions upon this appeal go to the sufficiency of the evidence in the three essentials: 1, to support a finding that appellant was negligent in discharging the explosives in question; 2, to support a finding that the damage to plaintiff's water well was the proximate result of any negligent act or omission of defendant; and 3, to support the judgment as to the amount of plaintiff's damages. The sufficiency of the evidence to support the allegations of negligence appellant terms the principal question presented by this appeal.
9
Plaintiff alleged his cause of action in the alternative. One theory of recovery was predicated upon res ipsa loquitur, while the other was based on allegations of negligence in terms so general and broad as to cover practically every possible ground of negligence, i. e.: (1) using high explosives in the ground in close proximity to plaintiff's water well; (2) using excessively large charges of explosives; (3) failing to take the proper precautions to prevent the destruction of plaintiff's water well by such explosives. In this state of the pleadings we do not think that anything said by this court in Mitchell v. Swift & Co., 5 Cir., 151 F.2d 770, 771 would preclude the plaintiff from relying upon a rule of evidence substantially equivalent to res ipsa loquitur.
10
Whether under the facts admitted or shown by the evidence that rule was available to the plaintiff is a question to be determined by the state law. Ramsel v. Ring, 8 Cir., 173 F.2d 41, 42, 43.1 The plaintiff in this case did not attempt to rely upon the rule of absolute liability as to the storage and use of explosives laid down in Rylands v. Fletcher, L.R. 3, H.L. 330, and it seems to be conceded that under the law of Texas the liability asserted in this case must be based upon negligence. See Turner v. Big Lake Oil Co., 128 Tex. 155, 96 S.W.2d 221; Stanolind Oil & Gas Co. v. Lambert, Tex.Civ.App., 222 S.W.2d 125; McKay v. Kelly, Tex.Civ. App., 229 S.W.2d 117.
11
The res ipsa loquitur doctrine, as it exists in Texas, is succinctly stated in Honea v. Coca Cola Bottling Co., 143 Tex. 272, 183 S.W.2d 968, 969, 160 A.L.R. 1445;
12
"Res ipsa loquitur is a rule of evidence whereby negligence of the alleged wrongdoer may be inferred from the mere fact that the accident happened, provided (1) the character of the accident and the circumstances attending it lead reasonably to the belief that, in the absence of negligence, it would not have occurred, and (2) the thing which caused the injury is shown to have been under the management and control of the alleged wrongdoer." See also Stokes v. Burlington-Rock Island R. Co., Tex.Civ.App., 165 S.W. 2d 229, 231; Vol. 26 Texas Law Review, p. 269.
13
In Stanolind Oil & Gas Co. v. Lambert, supra, the doctrine was held inapplicable because the proof was deficient in failing to show that the accident was such as in the ordinary course of things does not happen if those who have the management or control use proper care. On the other hand, in the later case of McKay v. Kelly, the Austin Court of Civil Appeals said:
14
"We believe it to be a matter of general knowledge that blasting by the use of explosives will not cause damage to adjacent property unless negligently conducted. Witness the many excavations in large cities for the construction of buildings, houses, streets, sewer and water lines and for other purposes in which the use of high explosives is made as a matter of course and without the slightest damage to adjacent or nearby property.
15
"In Wichita Falls Traction Co. v. Elliott, 125 Tex. 248, 81 S.W.2d 659, 663, the court approvingly quoted the following from 45 C.J., p. 1200: `The doctrine of res ipsa loquitur, now a familiar rule of practice in the trial of negligence cases, which is frequently recognized and applied without specifically naming it is not a rigid or arbitrary formula but a rule that adjusts itself to circumstances. However, as it is not the naked injury but the manner and attending circumstances of the accident that justify the application of the doctrine in an action for the negligent breach of an ordinary duty, it follows, as a matter of course, that the applicability of the doctrine must depend upon the peculiar facts and circumstances of each individual case.'
16
"We believe the facts and circumstances of this case make the applicability of the rule of res ipsa loquitur very appropriate. If a person in, say, blasting stumps sets off an explosion which levels his neighbor's house several hundred feet away, it would be rather ridiculous to require proof of the exact amount of explosive used in order to show that he used too much." 229 S.W.2d 120.
17
The Supreme Court of Texas granted a writ of error in that case on the point of whether the rule of res ipsa loquitur could properly be applied, but upon full consideration found it unnecessary to decide that question "because there was some evidence offered by the plaintiffs which would reasonably sustain a judgment in their favor, without the aid of the rule of res ipsa loquitur". Kelly v. McKay, Tex. Sup., 233 S.W.2d 121, 122.
18
The matter upon which the proof was held deficient in Stanolind Oil & Gas Co. v. Lambert, supra, and which was assumed as a matter of general knowledge in McKay v. Kelly, supra, was affirmatively proved by the defendant itself in the present case. Its expert witness, Dart Wantland, testified that the maximum charge of explosive claimed to have been used, namely a 50 pound charge of gelatin explosive, discharged at a distance of 600 feet (46 feet closer than the distance involved here) will have a tremor effect of only 4/1000ths of an inch, and will not have any effect on a well or on the water supply flowing to it. It would seem to follow that if in fact the plaintiff's well was injured as a proximate result of the explosion that there must have been some negligence on the part of the defendant. Under the peculiar facts and circumstances of this case therefore, the evidence was sufficient to prove the negligence charged in the complaint, if it was sufficient to prove the causal connection between the explosion and the damage to plaintiff's well.
19
We come then to the appellant's second contention as to whether the evidence was sufficient to support a finding that the damage to plaintiff's water well was the proximate result of the explosion. See Young v. Massey, 128 Tex. 638, 101 S.W. 2d 809. We think that there was substantial evidence that the blasting by defendant was a proximate cause of plaintiff's damages. For 32 years prior to the blasting the waterwell had been an unusually strong well. It had "sanded in" in 1943, not because of a loss of water, but because the cylinder became clogged up so that the available water could not be produced. When it was cleaned out on that occasion the well produced as much water as ever. On the present occasion, within ten days after the blasting, or apparently when the stored water was used up, it was discovered that the well had gone dry. It has never produced water again although nearly two years elapsed prior to trial.
20
As its third and last contention, the appellant insists that there was not sufficient evidence as to the amount of plaintiff's damages to support the judgment of the district court. An expert witness as to the values of real estate in that vicinity testified that the reasonable market value of the plaintiff's land at that time was about $75.00 an acre, and that after the water well went dry the reasonable market value of that land would be about $65.00 an acre. The defendant offered no evidence to dispute this testimony. The plaintiff had prayed for a recovery of only $3,175.00 and his recovery was so limited.
21
We think that there was sufficient evidence to authorize the court to find that plaintiff's land had suffered a permanent injury. Although the well had been an unusually good well since 1917 it went dry in 1949 shortly after defendant's nearby blasting and remained dry until the time of trial. A little seep spring close by was also dry with only stagnant water. Water in that area is difficult to locate by putting down new wells. The plaintiff had previously drilled two deep wells in the nearby vicinity without success. We do not think that there was any necessity or reason to clean out the well because it had not caved in, the water supply had simply disappeared. The plaintiff tried to obtain another water supply by building a large surface tank but this source of water was inadequate and since 1949 it has been necessary to have water hauled to the plaintiff's land from Winters, Texas, ten miles away, at a cost of $3.50 per load. The only other available water is a small surface stock tank on the other side of the farm. We conclude that the evidence was sufficient to show that the plaintiff's land had been permanently injured and that if claimed a larger recovery would have been justified.
22
Finding no error in the record, the judgment is affirmed.
Notes:
1
We think that the opinion in Ramsel v. Ring, supra is also correct when it states, 173 F.2d at p. 42
"Whether a complaint states a cause of action calling for the application of the doctrine of res ipsa loquitur is a procedural question controlled by federal law."
This court did not hold to the contrary in Mitchell v. Swift & Co., supra. What was there said as to when the pleadings were in such form as to permit reliance on res ipsa loquitur in Texas courts was not necessary to the decision because the evidence excluded any application of that doctrine.
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69 F.3d 545
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.L. Anna T. REITZ, Defendant-Appellant.
Nos. 94-50274, 94-50312.
United States Court of Appeals, Ninth Circuit.
Submitted Oct. 16, 1995.*Decided Oct. 26, 1995.
1
Before: POOLE and O'SCANNLAIN, Circuit Judges, and MARQUEZ,** District Judge.
2
MEMORANDUM***
3
In these consolidated cases, L. Anna T. Reitz appeals her 70-month sentence imposed following guilty pleas for two counts of armed bank robbery in violation of 18 U.S.C. Sec. 2113(a), (d). Reitz contends that the district court erred by: (1) refusing to depart downward based upon her imperfect duress defense and gambling addiction; and (2) denying her Fed.R.Crim.P. 35(c) motion to correct her sentence based upon an alleged miscalculation of the applicable Guidelines range. We affirm.
4
Initially, the government contends that the notice of appeal is untimely as to Reitz's downward departure argument. Even assuming without deciding that Reitz properly preserved this issue for appeal, we lack jurisdiction to review a district court's discretionary refusal to depart downward. See United States v. Robinson, 958 F.2d 268, 272 (9th Cir.1992). The record reveals that the court did exercise its discretion in refusing to depart downward; therefore, this issue is not reviewable. See id.
5
The government also contends that the district court lacked jurisdiction to consider Reitz's Rule 35(c) motion because the court acted outside the seven-day period prescribed by Rule 35(c). We decline to reach this issue. Even assuming without deciding that the court properly acted on the motion, the relief sought under Rule 35(c) was properly denied. See Fed.R.Crim.P. 35(c) advisory committee's notes on 1991 amendment (Rule 35(c) "is not intended to afford the court the opportunity to reconsider the application ... of the ... guidelines or for the court simply to change its mind about the appropriateness of the sentence."); see also United States v. Portin, 20 F.3d 1028, 1030 (9th Cir.1994) (district court's authority to correct sentencing errors under Rule 35(c) does not allow the court to reconsider "issues previously resolved under the guidelines where there is no error"). At sentencing, Reitz did not challenge the calculation of the applicable Guidelines range; therefore Rule 35(c) is inapplicable. See Portin, 20 F.3d at 1030.
6
AFFIRMED.
*
The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
The Honorable Alfredo C. Marquez, Senior United States District Judge for the District of Arizona, sitting by designation
***
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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579 P.2d 20 (1978)
Elliott P. JOHNSON, Petitioner,
v.
STATE of Alaska, Respondent.
No. 3456.
Supreme Court of Alaska.
May 19, 1978.
*21 William H. Babcock, Sitka, for petitioner.
James L. Hanley, Asst. Dist. Atty., Larry R. Weeks, Dist. Atty. and Avrum M. Gross, Atty. Gen., Juneau, for respondent.
Sue Ellen Tatter, Asst. Public Defender and Brian Shortell, Public Defender, Anchorage, amicus curiae.
Before BOOCHEVER, C.J., and RABINOWITZ, CONNOR, BURKE and MATTHEWS, JJ.
OPINION
MATTHEWS, Justice.
This petition for review presents questions as to the admissibility of statements made by Elizabeth Johnson, the victim of a beating, who subsequently died as the result of her injuries.[1] Four statements were made. The first was made shortly after Mrs. Johnson's admission to the hospital on December 30, 1975 to a licensed practical nurse, Vera Marvin. Substantially the same information was conveyed by a second statement made to Dr. Michael Silver, the attending physician. The motion to suppress these statements was denied by the superior court on the basis that they were admissible as statements made for the purpose of medical diagnosis or treatment. We have concluded that the court erred in denying the motion insofar as these statements pertained to the identity of the assailant.
The other two statements were made on January 2 and 5, 1976 just prior to and three days subsequent to the victim undergoing surgery. The trial judge found that those statements were not made under such a sense of impending death as to justify their admission under the dying declaration exception to the hearsay rule. We have concluded that the court applied an unduly restrictive standard in deciding this question and that when the proper standard is used at least the January 5 statement should be admitted.
The defendant below, Elliott P. Johnson, petitioned for review of the portion of the court's ruling that denied suppression of the first statement, and the State cross-petitioned for review from the part of the court's order suppressing the other two statements. We granted review because of the importance of the statements to the disposition of the case. There apparently are no direct witnesses to the alleged beating of Mrs. Johnson. The order pertaining to the suppression motion involves a controlling question of law as to which there is substantial ground for difference of opinion, and an immediate and present review of the order may materially advance the ultimate termination of the litigation. Postponement of review can result in unnecessary delay and expense. Thus, the requirements of Appellate Rules 23 and 24 for granting review have been fulfilled.
I
THE STATEMENTS TO MEDICAL PERSONNEL
On December 30, 1975, Mrs. Johnson was taken by ambulance to the emergency room at Mt. Edgecumbe Hospital. She was attended by Vera Marvin who found Mrs. Johnson having trouble breathing and in considerable pain. Initially, due to the extent of her injuries, Ms. Marvin thought that Mrs. Johnson might have been run over by an automobile. In answer to inquiries, however, Mrs. Johnson indicated that she had been at a house party and was beaten by another man. Ms. Marvin testified:
I think that both the doctor and myself, you know it was hard to believe that it was done by a person, by beating because it looked like a car ran over her and we kept asking I kept asking Elizabeth so finally I told Elizabeth the doctor has to know what happened to you. And like I *22 said, it looked like a car ran over her, so finally she took my wrist and pulled me over by her and she said I promised that, I promised my husband that I wouldn't tell who did it, that the story that they told was the story that they were going to stick to. She told me then that her husband beat her. Then I turned around and told the doctor and Mrs. Vinsant he had beat her.
Subsequently, Mrs. Johnson gave Dr. Silver essentially the same information.
The trial judge denied the motion to suppress this testimony based on an exception to the hearsay rule for statements made for the purpose of medical diagnosis or treatment. The exception is set forth in Rule 803(4) of the Federal Rules of Evidence as follows:
Rule 803. HEARSAY EXCEPTIONS: AVAILABILITY OF DECLARANT IMMATERIAL. The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
.....
(4) Statements for purposes of medical diagnosis or treatment. Statements made for purposes of medical diagnosis or treatment and describing medical history, or past or present symptoms, pain, or sensations, or the inception or general character of the cause or external source thereof insofar as reasonably pertinent to diagnosis or treatment.
The Alaska Supreme Court is presently considering the adoption of evidence rules containing a provision identical to this rule.
Statements of a patient as to presently existing body conditions are generally admitted as evidence of the facts stated because there is a high likelihood of truthfulness resulting from the patient's belief that the doctor will rely on such statements in his diagnosis and treatment.[2] Where statements going to the cause of a patient's condition relate information desirable for diagnosis and treatment, they are also admissible based on the same indicia of reliability.[3] Thus, the trial court was correct in admitting Mrs. Johnson's statements as to the general cause of her condition. The statements, however, also revealed the identity of her alleged assailant. This information did not relate to diagnosis or treatment, and as to that portion of the statements, the court's denial of the motion to suppress was erroneous. The situation presents the same distinction identified by McCormick and the commentary on the Federal Rules of Evidence, between general statements made going to the cause of injury which are important to diagnosis and treatment, and statements entering the realm of fixing fault.[4] Since statements fixing fault and indicating the identity of an assailant are not relevant to medical diagnosis or treatment,[5] they lack assurances of reliability and should be excluded.[6]
*23 II
DYING DECLARATIONS
On January 2, 1976, Mrs. Johnson's condition worsened, with increased abdominal pain and signs of internal bleeding. It was decided that surgery was required. Because of her critical condition and the possibility that she might not survive surgery, a consulting physician, Dr. George Longenbaugh, called the Sitka Police Department to inform them of the situation. Dr. Longenbaugh told Mrs. Johnson that her condition was very serious and that she might not survive surgery. He testified:
Q Do you feel that she was in a condition such that she could understand what you were saying to her?
A I believe so. Her uh she was (Indiscernible) appropriately and seemed clearer mentally than she had at the time of the first examination.
Q Do you have an opinion as to whether or not at that time following your explanation, Elizabeth Johnson would have been laboring under a sense of impending death?
A I believe so. I certainly warned her of the gravity of the situation. Yes.
Sgt. Edgar Thornton of the Sitka Police Department interviewed Mrs. Johnson in mid-afternoon on January 2, 1976, shortly before she underwent surgery. Mr. Johnson was present. Sgt. Thornton testified:
A Well, I asked her who had beaten her up and she stated she didn't know. I then asked her if she and her husband had had an argument and she said I think so. I asked her if she and her husband had had a fight and she said yes. I asked if her husband had hit her and she stated she didn't know or didn't remember. I then asked her if she was married to Elliott Johnson and she stated that they had been married in March 1974. I asked her if Elliott Johnson had beaten her up and she stated he may have, we were alone and started drinking. I also asked her if she knew what her condition was. She said she did.
Q Did she indicate if she knew whether or not she was hurt if she was hurt slightly or badly?
A She indicated to me that she knew she was seriously hurt.
The surgery revealed that among other injuries, Mrs. Johnson's pancreas had been ruptured. Upon discovering this, Dr. Longenbaugh believed that it was extremely unlikely that she would survive.
Dr. Longenbaugh told Mrs. Johnson after her surgery that she was gravely ill and that her chances of survival were not good. He testified that he regarded it as generally unsound medical practice to tell a patient he was absolutely certain to die, since that would depress him and further reduce his already small chances of recovery. Dr. Silver agreed with Dr. Longenbaugh that Mrs. Johnson was in very grave condition following surgery, and personally told her that before January 5. She was then, according to Dr. Silver, aware that there was a good possibility that she would die.
On January 5, 1976, three days after the surgery, Sgt. Thornton again interviewed Mrs. Johnson. Sgt. Thornton testified that, prior to the taping of her interview, Mrs. Johnson advised him that she had consulted a priest. The tape recording of that interview revealed the following:
Q ... Elizabeth Marie Johnson, do you know the seriousness of your condition?
A Yes, Dr. Longenbaugh explained it to me.
Q Dr. Longenbaugh told you how serious it could be?
A Yah, he told me I was (Indiscernible)... .
Q Did your husband, Elliott Johnson, beat you like this?
A I think so. Like I said before, we were talking the next morning and he *24 told me if I told him where the money was he wouldn't have beat me up. So I guess he did.
Q Did you hide the money from him?
A Yes, before we went out drinking, I took just enough to get a car. We had to meet some friends and we went to their place.
Q And when you got back did you tell me awhile ago that you forgot where you hid the money?
A Yah.
Q What was the last thing you remember?
A That's the only.
Q You just remember him hitting you?
A No, after I woke up at 9:00 o'clock the next morning... .
Q Do you remember what morning that was?
A No I don't. It was the same morning I came over here.
Q The same morning?
A Yah.
Q Did you say anything to him at the time?
A I kept asking him to take me to the hospital.
Q Did you know that you had been beaten up then?
A Yah, I had a black eye and could hardly breathe.
Q Did he make a statement to you then?
A No.
Q Did he tell you that it wouldn't have happened if you had given him the money?
A Yah, all he said. My mouth is dry, can I take this out for awhile? It sure dries out my throat.
As we have indicated previously, the trial court granted the motion to suppress these two statements.
The admission of dying declarations, under certain conditions, is a well-recognized exception to the rule excluding hearsay testimony. Two basic reasons have been advanced for admission of such testimony: necessity, because of the witness' death, and a belief that the approach of death removes ordinary motives to misstate.[7]
In Hewitt v. State, 514 P.2d 6 (Alaska 1973), we discussed the subject of dying declarations. The facts in the case revealed that Hicks and Hewitt shot each other in a gunfight. A doctor informed Hicks that he would probably die unless he was operated on, and that he might die anyway. Immediately before surgery, a police officer took a statement from Hicks in which he blamed defendant Hewitt for starting the shooting. Three days after the surgery, Hicks contradicted his previous statement, saying that he, rather than Hewitt, was responsible for starting the shooting. The trial judge admitted the statement taken before surgery as a dying declaration, but refused to admit the subsequent statement in which he took the blame himself. On appeal, four justices participated. Justice Connor, joined by Justice Boochever, held that the statement given to the police officer was not a dying declaration, and indicated that the proper standard required abandonment of all hope of recovery:
To be admissible as a dying declaration, the utterance must be that of a person laboring under a sense of impending death, who has abandoned all hope of recovery.
Id. at 8.
Justice Erwin, with whom Justice Rabinowitz joined, held that there was no error in admitting the statement made to the police officer. He indicated no basic disagreement with Justice Connor's statement of the law concerning dying declarations, but expressed the applicable standard as "laboring under a sense of impending *25 death" without also requiring that the declarant abandon all hope of recovery. Id. at 12. Justice Erwin stated:
Rarely is medical testimony absolute on the issue of impending death. Further, there is a natural constraint present in such situations which causes hesitancy in stating to the victim that there is no chance of recovery for fear of destroying whatever fragile hope of survival the will to live will provide.
Id.
It is the state's contention that the trial court erred by applying an incorrect standard. It argues that a requirement that one must abandon all hope of recovery is not realistic because doctors rarely indicate to a patient that there is no hope of recovery.
The recently enacted Federal Rules of Evidence no longer require abandonment of all hope of recovery. Rule 804(b)(2) provides:
(b) Hearsay exceptions. The following are not excluded by the hearsay rule if the decedent is unavailable as a witness:
.....
(2) Statements under belief of impending death In a prosecution for homicide or in a civil action or proceeding, a statement made by a declarant while believing that his death was imminent, concerning the cause or circumstances of what he believed to be his impending death.
The proposed Alaska Rules of Evidence 804(a)(2) similarly demands only that the statement be made "by a declarant while believing that his death was imminent."
We believe that to require that the declarant have abandoned all hope of recovery is overly demanding.[8] In light of modern medical science it is rare indeed that all hope of recovery is abandoned, yet a victim may be aware of the probability that his death is impending to the extent necessary to create sufficient solemnity to give adequate assurance of the trustworthiness of his testimony. What is required for a dying declaration to be admissible is that the declarant have such a belief that he is facing death as to remove ordinary worldly motives for misstatement. In that regard, the court may consider the totality of the circumstances including the presence or absence of motive to falsify and the manner in which the statement was volunteered or elicited.
The trial judge in his decision on the motion to suppress in this case expressed his conclusions in terms of the "abandonment of all hope" standard.
... . I just can't as a finder of fact establish that first of all ... that all hope was abandoned.... I just do not feel the facts are strong enough to say that she was overwhelmed by the death possibility... .
We believe that when the proper standard is used awareness of impending death the admission of at least the recorded statement made by Mrs. Johnson on January 5 is required.[9] It was then extremely *26 unlikely that she would survive and she had been advised by two physicians of the gravity of her condition. She was conscious and alert. In the opinion of the only physicians asked to express an opinion, she was laboring under a sense of impending death. She had consulted a priest.[10] Further we find no evidence tending to show that she was not aware that there was a high probability that she would soon die.[11]
Petition for Review granted. Trial court order affirmed in part and reversed in part. Remanded for proceedings consistent with this opinion.
CONNOR, Justice, concurring.
I concur in the holding that Elizabeth Johnson's statements on January 5, 1976, and afterward were admissible as dying declarations.
However, I think this case can be brought within the traditional criterion of "abandoned hope" which was stated in Hewitt v. State, 514 P.2d 6, 8 (Alaska 1973). In the case at bar the declarant did not have the same motive to fabricate as did the declarant in Hewitt. Moreover, the circumstances here present a much greater probability as to the imminence of death, and from these circumstances we can infer that Elizabeth Johnson was aware of the severity of her injuries and of the great likelihood that she might not survive. In my opinion a sufficient circumstantial showing was made to permit the inference that she spoke "with the consciousness of a swift and certain doom." Shepard v. United States, 290 U.S. 96, 100, 54 S.Ct. 22, 24, 78 L.Ed. 196, 199 (1933).
We should not adhere to a rigid formalism in applying the rules of evidence. But it is not because of blind adherence to formalism that the "abandonment of hope" limitation should be retained. Rather, it is that the principles underlying this exception to the hearsay rule should cause us to adhere to traditional requirements.
The dying declaration rule rests upon certain assumptions about human nature which may in themselves be highly questionable. Like many such rules it evolved historically, and it has become considerably ossified within narrow limits.[1] But at least those limits render the rule easy to apply except in a few marginal situations.
The rule assumes that the declarant will be more truthful than others, without reference to the personal characteristics of the declarant. The judicially created limitations on the use of dying declarations have their origins, no doubt, in the inherent danger of giving too much credence to the assumptions underlying the rule. As Professor McCormick observed:
"It is arguable that a belief in the mere probability of impending death would make most men strongly disposed to tell the truth and hence guarantee the needed special reliability. But belief in the certainty of impending death, not its mere likelihood or probability, is the formula insisted on and rigorously applied. Perhaps this limitation reflects some lack of confidence in the reliability of `deathbed' statements generally."
C. McCormick, Handbook of the Law of Evidence § 282, at 680 (2d ed. 1972). Until we substitute by positive enactment a new rule,[2] I see no reason to discard the common *27 law criteria of admissibility. Those criteria reflect a certain accumulated wisdom about the dangers of admitting dying declarations too readily. Until convinced of the desirability of a new rule, I would adhere to all of the elements of the traditional rule.
BOOCHEVER, Chief Justice, with whom RABINOWITZ, Justice, joins, dissenting.
I agree with the opinion that the exception to the hearsay rule of statements made for medical diagnosis or treatment is inapplicable where a statement is made for the purpose of revealing the identity of an assailant.
I also agree as to the requirements for admission of dying declarations. To the extent that Hewitt v. State, 514 P.2d 6 (Alaska 1973), may be construed as requiring that the utterance be made by one who has abandoned all hope of recovery, it should be overruled. It is rare indeed that all hope of recovery is abandoned, and a victim's general awareness that his death is impending can create sufficient solemnity to assure the trustworthiness of the testimony. Of course, death is always impending in one sense, for everyone:
But at my back I always hear
Time's winged charriot hurrying near.[1]
There must be a belief that the likelihood of death is so imminent as to remove ordinary worldly motives for misstatement. I further agree that the court may consider the totality of the circumstances including the presence or absence of motive to falsify and the manner in which the statement was volunteered or elicited. Of course, the fact that the declarant is not available for cross-examination and demeanor observation must also be considered.
The trial judge in his decision on the motion to suppress in this case appropriately endeavored to make findings of fact as to the deceased's state of mind at the time she made the declarations. He considered the pain she was undergoing. As a countervailing factor, he noted that the internal nature of the injury to the pancreas might not create an awareness of its critical nature. Judge Craske stated:
... I just can't as a finder of fact establish that first of all there was that all hope was abandoned. I think that it's agreed that lack of situation really wasn't conveyed to the decedent by the doctors, .... But I don't find both in terms of when the death actually occurred, I think it was on February 2, that the total mental structure of the deceased at that time was so focused on death that the statements made would lose any relevance to her returning to a marital state with the defendant. One always has to be careful in these situations that the animosity or motives of the victim would enter into what you (garbled) might say... .
The decision as to whether a dying declaration has been made with awareness of impending death is for the trial judge to resolve, and not the jury.[2] In reviewing that decision, we must give great weight in favor of the correctness of his ruling, since he has had the opportunity of observing the witnesses. We shall apply the same standard of review as for other findings of fact made by a trial judge: such findings will not be set aside unless clearly erroneous. A finding is not clearly erroneous unless the reviewing court is left with the firm conviction on the entire record that a mistake has been committed.[3]
The majority believes that the circumstances surrounding the January 5 statement, made almost a month prior to Mrs. Johnson's death, compel a finding that it was made under an appropriate awareness of impending death. In other words, the majority takes the position that there exists no issue to be decided by the trier of fact.
*28 Certainly, Sgt. Thornton's statement that Mrs. Johnson had advised him that she had consulted a priest would normally be strong evidence of awareness of impending death, but the reasons for the consultation were not brought out. There is no indication that last rites were performed or requested, and the statement pertaining to the priest was not included in Mrs. Johnson's taped interview. The doctors advised her of the seriousness of her condition, but still gave her hope of recovery. The nature of her actual awareness of impending death must be determined from inferences. The portions of the taped interview involving Mrs. Johnson's impression of Dr. Longenbaugh's advice unfortunately is garbled. Moreover, the significant portions of the statement pertaining to the involvement of her husband were at one time denied by Mrs. Johnson and eventually were elicited by leading questions. While a review of the facts of this case presents circumstances from which a trier of fact could well conclude that Mrs. Johnson had such an awareness of impending death as to justify admission of the declarations, I conclude that the question should properly be left to the trier of fact who has the opportunity of observing the witnesses.
Because Judge Craske seemed to rely on the "abandonment of hope test" referred to in Hewitt, I would remand the matter to the superior court for reconsideration of its ruling, in light of the standard set forth in the majority opinion.
NOTES
[1] The court has been assisted by scholarly briefs prepared by the Public Defender Agency as amicus curiae and the Office of Attorney General in reply.
[2] See McCormick's Handbook of the Law of Evidence § 292, at 690-92 (2d ed. 1972).
[3] See Cestero v. Farrera, 110 N.J. Super. 264, 265 A.2d 387, 392-93 (1970).
[4] McCormick states:
On the other hand, when statements as to causation enter the realm of fixing fault it is unlikely that the patient or the physician regarded them as related to diagnosis or treatment. In such cases, the statements lack any assurance of reliability and would properly be excluded.
McCormick, supra note 2, at 691. The Advisory Committee's Note to Federal Rule of Evidence 803(4) states in part:
Statements as to fault would not ordinarily qualify under this latter language. Thus a patient's statement that he was struck by an automobile would qualify but not his statement that the car was driven through a red light. Under the exception the statement need not have been made to a physician. Statements to hospital attendants, ambulance drivers, or even members of the family might be included.
Moore's Federal Practice, Rules Pamphlet Part 2, Federal Rules of Evidence, at 834 (1975).
[5] We do not reach the question of statements made to a psychiatrist which may be relevant to psychiatric diagnosis or treatment.
[6] We have been presented with no criminal case in which statements pertaining to the identity of an assailant have been admitted into evidence under this exception to the hearsay rule. The case of People v. Gant, 58 Ill.2d 178, 317 N.E.2d 564, 569 (1974), cited by the state, permitted testimony of a doctor as to statements of the victim as to the nature of her wound and the fact that she knew the assailant. The statement did not reveal the identity of the assailant; and to the extent that it did not deal with the general cause of the wound, we do not believe it should have been admitted under this exception to the hearsay rule.
[7] V Wigmore, Evidence, § 1431, 1438 (Chadbourn rev. 1974); McCormick, supra note 2 at 680-81, 2 Wharton's Criminal Evidence, § 315 (13th ed. 1972). The advisory committee on the Federal Rules of Evidence noted, concerning the latter reason:
"While the original religious justification for the exception may have lost its conviction for some persons over the years, it can scarcely be doubted that powerful psychological pressures are present."
[8] In adopting a more inclusive dying declaration standard we are influenced in part by those authorities holding that all statements of deceased persons, not merely dying declarations, should generally be excepted from the hearsay rule. See Wigmore, supra note 7, §§ 1427, 1576 and 1577. This approach was adopted in different forms by the American Law Institute in the Model Code of Evidence, Rule 503(a), and the Commissioners on Uniform State Laws in the Uniform Rules of Evidence, Rule 63(4)(c). The Uniform Rules have been adopted in modified form in Kansas, New Jersey and Utah. Id. § 1577 at n. 15. Proposed Federal Rule of Evidence 804(b)(2) encompassed the same concept; while this proposed rule was not accepted by Congress, it was adopted by the states of Arkansas, New Mexico and Wisconsin. Id. § 1577 at n. 16 (Supp. 1977).
In civil cases in Alaska involving the personal representatives of deceased persons, statements of deceased persons are generally admitted pursuant to Alaska Civ.R. 43(g)(4). Variants of the same rule exist in Connecticut, Rhode Island, California, Massachusetts, Oregon and Virginia. Id. § 1576, at 531-533.
[9] Because Mrs. Johnson's medical situation was not known to be so grave on January 2 when she made her first statement to Sgt. Thornton, the question whether that statement is admissible as a dying declaration is closely balanced. We leave its resolution to the trial judge.
[10] This has been regarded as an important factor. See Conner v. State, 225 Md. 543, 171 A.2d 699 (1961); Carver v. United States, 164 U.S. 694, 17 S.Ct. 228, 41 L.Ed. 602 (1897); and other cases collected at 2 Wharton's Criminal Evidence § 324 at 144 n. 11 (13th Ed. 1972).
[11] Before Mrs. Johnson's statement is presented to the jury, the trial judge may wish to give a cautionary instruction similar to that given in Beech Aircraft Corp. v. Harvey, 558 P.2d 879, 890 (Alaska 1976).
[1] Some of these limits may have resulted from a mishandling of precedent. See C. McCormick, Handbook of the Law of Evidence §§ 282-83 (2d ed. 1972); V Wigmore, Evidence §§ 1431-32 (Chadbourn rev. 1974).
[2] The rule could be broadly modified, or the hearsay rule as to declarations by deceased persons concerning their assailants could be abandoned altogether.
[1] Andrew Marvell, To His Coy Mistress (1650-52).
[2] 2 Wharton's Criminal Evidence, § 345 at 173 (13th ed. 1972); V Wigmore on Evidence, § 1451 at 317 (Chadbourn ed. 1974).
[3] Beech Aircraft v. Harvey, 558 P.2d 879, 886-87 (Alaska 1976); Love v. State, 457 P.2d 622, 630-31 (Alaska 1969).
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186 Ariz. 300 (1996)
921 P.2d 703
STATE of Arizona, Appellee,
v.
Kenneth George KNORR, Appellant.
No. 1 CA-CR 94-0415.
Court of Appeals of Arizona, Division 1, Department A.
July 2, 1996.
*301 Grant Woods, Arizona Attorney General by Paul J. McMurdie, Chief Counsel, Criminal Appeals Section, R. Wayne Ford, Assistant Attorney General, Phoenix, for Appellee.
Lisa Marie Martin, Phoenix, for Appellant.
OPINION
CONTRERAS, Presiding Judge.
Appellant Kenneth George Knorr (defendant) appeals from his conviction, after a jury trial, of aggravated assault, a class 3 dangerous felony, and from the resulting enhanced sentence of fifteen years imprisonment. Two issues are raised on appeal:
1. Did the trial court commit fundamental error in failing to submit a verdict form to the jury finding defendant not guilty of aggravated assault?
2. Did the trial court erroneously enhance defendant's sentence as a repetitive nondangerous offender pursuant to A.R.S. § 13-604(D)?
FACTUAL AND PROCEDURAL BACKGROUND
By indictment dated January 9, 1992, defendant was charged with one count of manslaughter, a class 3 felony, by recklessly causing the death of the victim. The state subsequently filed enhancement allegations, pursuant to A.R.S. § 13-604, that the offense was dangerous in that it involved the use of a motor vehicle and that defendant had six prior nondangerous felony convictions.
The evidence at trial established that, on May 26, 1991, a motor vehicle defendant was operating struck the victim's vehicle, resulting in serious spinal cord injuries. The victim was rendered a quadriplegic, and died almost four months later from respiratory and heart failure related to his quadriplegia. Analysis of a blood sample taken from defendant at the accident indicated that defendant had a .28% blood alcohol content. Defendant was also observed speeding and weaving through traffic at the time of the accident.
The state filed a motion to give the jury an instruction on the "necessarily included offense" of aggravated assault, which the court granted. The jury found defendant not guilty of manslaughter but guilty of aggravated assault, a dangerous offense. At a subsequent hearing, the jury determined that defendant had six prior felony convictions. After the trial court sentenced defendant to an aggravated repetitive sentence of 15 years imprisonment, defendant timely appealed.
DISCUSSION
1. Forms of Verdict
The trial court provided the jury with the following four forms of verdict:
(1) We, the Jury duly empaneled and sworn in the above-entitled action, upon our oaths, find the defendant guilty of manslaughter.
We find this ____ is ____ is not a dangerous offense.
(2) We, the Jury duly empaneled and sworn in the above-entitled action, upon our oaths, find the defendant not guilty of manslaughter.
(3) We, the Jury duly empaneled and sworn in the above-entitled action, upon our oaths, find the defendant not guilty of manslaughter but guilty of negligent homicide.
We find this ____ is ____ is not a dangerous offense.
(4) We the Jury duly empaneled and sworn in the above-entitled action, upon our oath, find the defendant not guilty of manslaughter but guilty of aggravated assault.
We find this ____ is ____ is not a dangerous offense.
(Emphasis added.)
Regarding these verdict forms, the trial court instructed the jury as follows:
The crime of manslaughter requires the State to prove beyond a reasonable doubt that the defendant recklessly caused the death of another person.
The crime of manslaughter includes the less serious crimes of negligent homicide or aggravated assault. You may find the *302 defendant guilty of negligent homicide or aggravated assault if you find unanimously the State has failed to prove manslaughter beyond a reasonable doubt but has proved either negligent homicide or aggravated assault beyond a reasonable doubt.
The crime of negligent homicide requires proof that the defendant by criminally negligent conduct caused the death of another person.
The crime of aggravated assault requires the State to prove beyond a reasonable doubt that the defendant recklessly caused a serious physical injury to another person.
.... [Definitions of mental states omitted]
The distinction between manslaughter and negligent homicide is: For manslaughter, the defendant must have been aware of a substantial risk and consciously disregarded the risk that his conduct would cause death. Negligent homicide only requires that the defendant failed to recognize the risk.
If you determine the defendant is guilty of either manslaughter or negligent homicide but you have a reasonable doubt as to which it was, you must find the defendant guilty of negligent homicide.
Defense counsel did not object either to the forms of verdict or the instructions given to the jury.[1]
On the second day of deliberations, the jurors returned the following note to the trial judge:
We have failed to reach a unanimous verdict, and at this time it does not seem possible that we will be able to do so. We are deadlocked with a four-four vote on the manslaughter charge, and according to the jury instructions, we cannot find the defendant guilty of a lesser charge if we cannot unanimously agree on the manslaughter charge.
On stipulation of counsel, the court ordered the jurors to re-read all their instructions.
After a recess, the jury returned a second note:
There is no possibility we can reach a unanimous decision on any of the four verdicts given to us.
The trial court excused the jurors for the day and ordered them to return the following afternoon. The next day, after conferring with counsel, the court gave the jurors the following additional instructions:
The first issue you should be addressing in this case is to determine whether or not the defendant's conduct caused either serious physical injury or death.
If you determine the defendant's conduct did not cause either serious physical injury or death, you should return a verdict of not guilty of manslaughter.
If you find the defendant's conduct caused either serious physical injury or death, then you need to determine which one it was unanimously.
If you determine the defendant caused serious physical injury only but not death, then the next issue you address is whether the defendant's conduct was reckless.
If you unanimously determine that the defendant's conduct was reckless, then you should determine that the defendant was guilty of aggravated assault.
If you unanimously determine that the defendant's conduct was not reckless, or if his conduct was something less than reckless, then you should return a verdict of not guilty of manslaughter.
After a brief bench conference with defense counsel, the court further instructed the jury:
Ladies and gentleman, I have a correction to make:
If you find the State failed to prove the defendant acted recklessly, then you are to return a verdict of not guilty of manslaughter.
If you have found unanimously that the defendant's conduct caused death, then the next issue you are to resolve is whether the defendant acted the State has proved *303 the defendant acted recklessly or the State has proved that the defendant acted with criminal negligence or the State failed to prove either of those.
If you find that the State has proven the defendant acted recklessly, then you should find him guilty of manslaughter.
If you find the State has proved the defendant acted with criminal negligence, you should find the defendant guilty of negligent homicide.
If you find the State has failed to prove the necessary elements for either acting recklessly or with criminal negligence, then you are to find the defendant not guilt[y] of manslaughter.
If you find the State has proven that the defendant acted either recklessly or with criminal negligence but you are not sure which it is, you should return the verdict form that says not guilty of manslaughter but guilty of negligent homicide.
After deliberating further, the jury returned a verdict finding defendant not guilty of manslaughter but guilty of aggravated assault, a dangerous offense. The court, on its own motion, polled the jurors individually to determine that each had found, beyond a reasonable doubt, that (1) defendant acted recklessly, and (2) that defendant caused serious physical injury to the victim.
On appeal, defendant argues that the verdict forms and instructions given to the jury were erroneous because the jury was not given a verdict form by which to find him not guilty on the aggravated assault charge, and was not instructed to find defendant not guilty on that charge if the state had not established both recklessness and serious physical injury.[2] Because defense counsel did not object to the verdict forms or instructions at trial, we apply fundamental error analysis to this issue. Rule 23.3, Arizona Rules of Criminal Procedure; State v. Eastlack, 180 Ariz. 243, 258, 883 P.2d 999, 1014 (1994), cert. denied, ___ U.S. ___, 115 S.Ct. 1978, 131 L.Ed.2d 866(1995)(jury instructions); State v. Moya, 140 Ariz. 508, 510, 683 P.2d 307, 309 (App. 1984)(forms of verdict).
It is well-established that, when a trial court submits verdict forms to the jury, the forms must show every choice of verdict that the jury could return. State v. Sanchez, 135 Ariz. 123, 124, 659 P.2d 1268, 1269 (1983). In this case, the jury was not provided with a verdict form that gave it the choice to find defendant not guilty of aggravated assault.
The state argues that because the indictment charged defendant with only one offense manslaughter only one not guilty verdict form was necessary, and that, if the jury had found defendant not guilty of manslaughter, it "would, by necessity, find him not guilty of both the lesser offenses." We disagree.
In this case, the jury did find defendant not guilty of manslaughter. However, its choices after that initial decision were ambiguous and confusing. Having rejected the "guilty of manslaughter" verdict form, the jury was left with three choices of verdict form, two of which would have found defendant guilty of another offense, and none of which explicitly included a verdict of not guilty of aggravated assault.
The parties have not cited, and we have not found, an Arizona case in which the jury was not given a verdict form that gave it the choice of unambiguously acquitting a defendant of both the offense charged in the indictment as well as any other necessarily-included or lesser-included offenses on which the jury was instructed. Other courts, however, have concluded that merely including a verdict form that acquits a defendant of the charged offense does not give the jury the automatic option of acquittal on any lesser offense. See, e.g., State v. Halsey, 232 Neb. 658, 441 N.W.2d 877, 881 (1989)(acquittal of principal offense does not automatically result in acquittal of lesser offense); Dyke v. State, 716 P.2d 693, 698 (Okla. Crim. App. 1986)(two forms of not guilty verdicts are necessary when jury is instructed on two separate offenses). Thus, we reject the *304 state's contention that the jury could have automatically acquitted defendant of the lesser charge of aggravated assault by returning the verdict form indicating it found defendant "not guilty of manslaughter."
We cannot find this omission harmless in view of the juror confusion that is apparent from this record. Nor can we say that the trial court's jury instructions or supplemental instructions cured the ambiguity.[3] From both the wording of the verdict forms and the instructions, the jurors could have reasonably believed that, were they to find that the state had not proven manslaughter in this case, they were to find defendant guilty of one of the other lesser offenses instead. Such an inference is clearly improper. See Braley v. Gladden, 403 F.2d 858, 860 (9th Cir.1968)(absence of not guilty form could reasonably create inference that judge intended only one verdict; such an oversight is "so significantly irregular as to require a new trial"). Even if we found that, based on the evidence, it was extremely unlikely that the jury would have acquitted defendant of aggravated assault, we cannot say that the omission of the proper verdict forms did not deprive him of a fair trial. See Commonwealth v. Edwards, 394 Pa. 335, 147 A.2d 313 (1959)(even though defendant admitted crime, failure to give jury not guilty verdict required new trial). The Edwards court reasoned:
To say that a judge need not charge on an indispensable requirement in the law because the defendant is assuredly guilty is to hang that accused first and indict him afterwards. It is the trial and the trial alone which decides whether a defendant is assuredly guilty. The presumption of innocence is not merely a papier-mache figure for dramatic display in the courtroom; it is a reality without which trials become mere playacting with the verdict residing in the judge's pocket before the jury is sworn. Even if, in a hypothetical case, the evidence of guilt piles as high as Mt. Everest on Matterhorn, even if the District Attorney conscientiously believes the defendant to be as guilty as Cain, and no matter with what certainty the Judge views the culpability of the accused at the bar, the defendant is still entitled to all the safeguards of a fair trial as announced in the Constitution and the law of the land.
Id. 147 A.2d at 313-314. In the same interest of fairness, we conclude that a new trial is required in which the jury is given the choice of acquitting defendant of aggravated assault whether or not that is its ultimate verdict.
We therefore conclude that the omission of a verdict form enabling the jury to find defendant not guilty of aggravated assault is clearly fundamental error. See, e.g., State v. Sanchez, 135 Ariz. 123, 124-25, 659 P.2d 1268, 1269-70 (1983)(failure to give jury verdict form of "not guilty by reason of insanity" reversible error); State v. Flores, 140 Ariz. 469, 474, 682 P.2d 1136, 1141 (App. 1984)(fundamental error to fail to give verdict form on unlawful imprisonment as lesser-included offense of kidnapping); State v. Reynolds, 9 Ariz. App. 131, 133-34, 449 P.2d 968, 970-71 (1969)(fundamental error for forms of verdict to suggest that jury's verdict must be the same on all three counts).
In Reynolds, the jury was given two forms of verdict, one finding the defendant guilty of counts 1, 2, and 3, and the other finding him not guilty of the same three counts. The Reynolds court concluded that this was fundamental error for the following reasons:
In the instant case the defendant may have been found guilty on one or more than one count without any factual inconsistency. It would be error, however, for the Court to instruct or suggest in some manner to the jury that their verdict must be the same on all three counts....
Each of the counts in this case was a separate offense. Nothing appears in the instruction which apprises the jury of the fact that if they found the defendant guilty of one count, they were not necessarily required to find him guilty of the other counts, or that the prosecution had the *305 burden of proof as to each count. Absence of these instructions, and the verdict forms being made out the way they were, it is highly possible that the jury may have believed that they were required either to find the defendant guilty of all three counts, or else let him go completely. This would obviously have been an erroneous impression to leave with the jury, and prejudicial.
....
We recognize that the defendant, usually through his attorney, has the duty to request explanations and clarifications of misleading instructions. In the instant case, however, the instructions given, coupled with the verdict forms provided, were so misleading as to be fundamental error, requiring reversal regardless of whether explanatory instructions were requested or not. In a criminal trial the jury instructions must cover all of the possible verdicts in order to be a sufficient charge.
Id. (emphasis added).
Although Reynolds involved multiple counts grouped together in a single verdict form and this case involves a single count with multiple verdict forms for alternative included offenses, we do not find that this distinction changes the underlying principle on which we rely. Because the jury was given neither a verdict form nor instruction to enable it to find defendant simply not guilty of aggravated assault, and because the juror confusion is evidenced on this record from the jury notes to the trial court, we find fundamental error that requires a new trial in this case.
2. Enhanced Sentence
Defendant also contends that he was improperly sentenced as a repetitive offender because his prior felony convictions were non-dangerous and this offense was his first "dangerous" offense. See generally A.R.S. § 13-604.[4] In this case, the state filed enhancement allegations of both the dangerous nature of the present felony and that defendant was a repetitive nondangerous prior felon. The jury determined both that the offense was dangerous pursuant to A.R.S. § 13-604(G) and that defendant had six prior felony convictions pursuant to A.R.S. § 13-604(D). Although this issue has been mooted by our reversal of defendant's conviction, we address it because of the likelihood that it might occur on remand if defendant is convicted after a new trial.
Prior to sentencing, the state moved to dismiss the allegation of dangerousness and defense counsel made the following objection:
[PROSECUTOR]: I wanted to move to dismiss the allegation of dangerousness in this case.
[DEFENSE COUNSEL]: Well, your Honor, I object to that.
The jury found this matter to be a dangerous offense. That was submitted to the jury. I think it's inappropriate to submit that to the jury with all of the danger of prejudice that in entails in suggesting to the jury that it is a dangerous offense and then dismissing it later on. I don't think there is any basis for that, and I would object to it....
THE COURT: ... [A]m I correct that when one considers the sentencing range regarding dangerous with no prior dangerous offenses and dangerous with repetitive offenses, it adds nothing? The allegation of dangerousness?
....
[PROSECUTOR]: Absolutely, that's correct, your Honor.
THE COURT: [Defense counsel], why in heaven's name do you object to the dismissal of the allegation?.... I mean, bottom line sentencing, it makes no difference.
[DEFENSE COUNSEL]: Bottom line sentencing, it does make a difference, your Honor.
*306 THE COURT: It doesn't. There is case law.
[DEFENSE COUNSEL]: The State wants you to treat this as a nondangerous offense with two prior convictions.
THE COURT: I have the ability to do that under the case law.
[DEFENSE COUNSEL]: It's a different sentencing range than a dangerous offense with no prior convictions.
THE COURT: That's right.
[DEFENSE COUNSEL]: My position is you should be bound by the jury's determination that it was a dangerous offense.
THE COURT: I'm bound by their determination that it was a repetitive offense.
[DEFENSE COUNSEL]: I objected to that on the basis that they had found him guilty of a dangerous offense and that there were no dangerous, repetitive offenses for them to consider and that the priors, therefore, were irrelevant to the charge upon which he had been convicted.
THE COURT: Well, the sentencing range that I find applicable in this case is a Class 3 felony with two prior felony convictions under the nondangerous portion of the sentencing chart. I don't know that I need to dismiss the allegation of dangerousness.
On appeal, defendant argues that the trial court erred in sentencing him as a repetitive nondangerous offender because A.R.S. § 13-604(D) provides that its provisions are superseded when an allegation of dangerousness is found by the jury.[5] This argument has previously been considered and rejected by Division Two of this court:
We find nothing in conflict in these statutes as argued by appellant. As a first offender of a dangerous offense, appellant certainly was subject to the sentencing provisions of A.R.S. § 13-604(G). Since his prior convictions were nondangerous in nature, he was not subject to the enhanced punishment provisions of that subsection. However, there is nothing in the statute which implies that he could not be sentenced as a repeat offender under A.R.S. § 13-604(D). To hold otherwise would lead to the absurd result which appellant seeks. By committing robbery without a gun there is no question that appellant would have been subject to the sentencing provisions of A.R.S. § 13-604(D) and would have faced a possible sentence of fourteen to twenty-eight years. He argues that because he used a gun, he must be punished as a first offender of a dangerous offense under A.R.S. § 13-604(G) and thus be subject to a sentence of no less than seven no more than twenty-one years. In essence, his argument is that by using a deadly weapon he assured a lesser sentence than had he not used a deadly weapon. We will not presume that the legislature intended this absurd result.
State v. Laughter, 128 Ariz. 264, 269, 625 P.2d 327, 332 (App. 1980)(emphasis added); see also State v. Smith, 171 Ariz. 54, 56, 828 P.2d 778, 780 (App. 1992)("We find no merit to appellant's contention that the trial court is required to ignore his two prior felony convictions simply because the armed robbery conviction is his first dangerous nature conviction"). We find no error in the enhancement of defendant's sentence for his prior convictions pursuant to A.R.S. § 13-604(D).
CONCLUSION
We conclude that fundamental error occurred in the failure to submit a verdict form to the jury that would have found defendant not guilty of aggravated assault. For that reason, we reverse and remand for a new trial. We also conclude that defendant's sentence could properly be enhanced as a nondangerous repetitive offender under A.R.S. § 13-604(D) despite the jury's finding of the dangerous nature of the offense.
Reversed and Remanded.
WEISBERG and TOCI, JJ., concur.
NOTES
[1] Although defense counsel initially objected to the inclusion of aggravated assault as a necessarily-included offense, he withdrew that objection when the trial court agreed to allow him to argue that the victim's quadriplegia was not caused by the vehicle collision but by subsequent emergency intubation at the hospital.
[2] Defendant also objects on appeal to defects in the verdict forms and instructions regarding the charge of negligent homicide. However, because defendant was not convicted on that charge, we need not address those contentions.
[3] Nor do we find sufficient the trial court's belated attempt to poll the jury to ascertain that they had found every necessary element of aggravated assault. At that point, whatever prejudice the ambiguous verdict forms caused had been accomplished, and it is unlikely that any resulting prejudice to defendant would be cured by a poll of the jury after it determined its verdict.
[4] Under the sentencing scheme in effect at the time, defendant was facing the following enhanced sentencing ranges:
(a) As a first-time dangerous class 3 felony: 5 year minimum, 7.5 year presumptive, 15 year maximum;
(b) As a repetitive nondangerous class 3 offender with at least two priors: 10 year minimum, 11.25 year presumptive, 20 year maximum.
See A.R.S. §§ 13-604(D), (G), -701(C), -702(C), (D), (E).
[5] The provision that defendant relies on is that "[e]xcept as provided in subsection G ... of this section ..." A.R.S. § 13-604(D) requires that a repetitive offender shall serve at least twice but not more than four times the sentence authorized for a first-time offender, and shall not be eligible for early release until two-thirds of the sentence has been served.
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770 F.2d 1075
Sears, Roebuck & Co.v.Prochaska
84-5295
United States Court of Appeals,Third Circuit.
5/13/85
D.N.J.,
Barry, J.
AFFIRMED
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27 F.Supp. 121 (1938)
EASTERN STATES PETROLEUM CO., Inc.,
v.
ASIATIC PETROLEUM CORPORATION et al.
District Court, S. D. New York.
November 30, 1938.
*122 Root, Clark, Buckner & Ballantine, of New York City, for plaintiff.
Cravath, deGersdorff, Swaine & Wood, of New York City, for defendants.
Bigham, Englar, Jones & Houston, of New York City, for witness Karel Van Zonneveld.
PATTERSON, District Judge.
The motion is to compel a witness to permit the plaintiff to inspect papers in his possession, as an incident to the taking of the deposition of the witness.
The action is a civil one under the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note, for injunction and treble damages. The complaint, after charging that the plaintiff is in the business of purchasing crude oil, refining it and selling the refined products to purchasers abroad, that the plaintiff purchases the greater part of its crude oil from the Mexican Government, and that oil wells of a company affiliated with the defendant companies have been expropriated by the Mexican Government, goes on to charge that the defendants have combined and conspired to prevent the plaintiff from selling its products in foreign commerce by inducing the plaintiff's customers to break contracts and to refuse to make further purchases of the plaintiff's products, by threatening to seize the plaintiff's products in foreign countries, and by other measures set forth in the complaint. On December 9, 1938, coincident with commencement of the action, the plaintiff obtained an order under Rule 26, 28 U.S.C.A. following section 723c, for taking the deposition of one Van Zonneveld. Van Zonneveld, a resident of Great Britain temporarily here on business, is a director of Harris & Dixon, Ltd., a British company under contract to purchase oil products from the plaintiff for use in Great Britain. On examination he testified freely concerning conferences he had had with representatives of some of the defendants as well as with officials of the British Government, refreshing his memory from papers in his possession. He testified that although urged on various grounds to cease taking the plaintiff's products his company had finally determined to continue performance of the contract with the plaintiff. On advice of his attorneys he refused to permit the plaintiff to inspect memoranda made by him containing comments on what was discussed at the conferences and correspondence passing between him and other officers of his company. The refusal being presented to the court, an order was made that the papers be impounded with the attorneys for the witness, to await further order of the court. The witness returned to Great Britain. The plaintiff promptly made the present motion, asking for inspection of the impounded papers. The defendants and the attorneys for the witness oppose the motion. Two points have been argued: first, whether the court has power to compel inspection of papers belonging to a stranger to the action; second, whether the power, if it exists, should be exercised in the present case.
Rule 34 deals with discovery and inspection of documents independently of deposition. By that rule only documents in possession or control of a party to the action may be reached. But it seems plain that by virtue of other rules, Rule 26 and Rule 45, inspection of documents in possession of one who is not a party may be ordered as an adjunct to the deposition of the person who has the documents. Rule 45 deals with subpoenas, and in paragraph (d) it provides: "A subpoena commanding the production of documentary evidence on the taking of a deposition shall not be used without an order of the court." This is the same as saying that on order of the court the production of documents on the taking of a deposition may be compelled by appropriate subpoena. There is no express restriction to documents in possession of a party, and no reason exists for implying such a restriction. It necessarily follows that where a witness has documents with him at the deposition, in obedience to subpoena duces tecum, and a controversy arises whether he must reveal them, the court has power to compel the witness to permit inspection. I take it then that I have power to direct that Van Zonneveld's papers bearing on the controversy be made available for the plaintiff's inspection, inspection having been demanded *123 when the deposition was taken and the demand being now repeated.
The question remains whether the power should be exercised here and now, over the protest of the witness that he as well as his company will be embarrassed and prejudiced by inspection of the papers. Rule 30 makes it clear that all phases of depositions on oral examination are to be subject to control by the court, to the end, among others, that a witness may be immune from undue annoyance, embarrassment or oppression.
The facts of this case are unusual. The plaintiff concedes that papers of the kind here involved, private papers made by the witness for his own use, will not be admissible in evidence at the trial, except to the extent that they may tend to show the state of mind of a customer said to have been subjected to pressure by the defendants. Greater New York Live Poultry Chamber of Commerce v. United States, 2 Cir., 47 F.2d 156. But the state of mind of this customer is of little significance, so far as presently appears, since it is shown by the deposition that any threats that may have been made by the defendants in this instance were of no avail. There is no contention that the witness is a hostile one and that use of the papers may impeach his testimony. His deposition does not show him to be a witness friendly to the defendants. Whether these infirmities in the plaintiff's claim for inspection should alone suffice to defeat the present motion need not be decided. An additional element in the case is that the witness may be seriously embarrassed by an inspection. It is borne in mind that the papers, while probably not covered by a privilege recognized by law, do consist of confidential memoranda made by the witness for his own use and confidential reports passing between him and other officers of his company. A number of them bear on conferences held with officials of his own government regarding policies of that government in international matters. There is substance to the claim that the witness may be gravely embarrassed abroad if his private papers are spread before the parties to this action. Nothing in the case suggests that the protest of the witness comes from any favor felt by him for the defendants. A balancing of the need of the plaintiff for inspection against the interest of the witness in the privacy of his thoughts, comments and criticisms committed to paper indicates that the weight is with the witness. The motion for inspection will accordingly be denied, the papers meanwhile to remain with the attorneys for the witness to await further developments in the case.
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345 F.2d 1013
Application of Philip M. CARABATEAS.
Patent Appeal No. 7266.
United States Court of Customs and Patent Appeals.
May 27, 1965.
Laurence & Laurence, Washington, D. C. (Dean Laurence, Herbert I. Sherman, Washington, D. C., of counsel), for appellant.
Clarence W. Moore, Washington, D. C. (J. E. Armore, Washington, D. C., of counsel), for the Commissioner of Patents.
Before WORLEY, Chief Judge, and RICH, MARTIN, SMITH, and ALMOND, Judges.
RICH, Judge.
1
This appeal is from the decision of the Board of Appeals affirming the examiner's rejection of claims 1 and 2 in patent application serial No. 860,368, filed December 18, 1959, for "Compositions and their Preparation." Product claim 7 has been allowed.
2
Appellant's invention, in its composition aspect, which is all we are concerned with in this appeal, is described in the specification as "residing in the concept of a composition having a molecular structure in which a lower-acyloxy substituent is attached to the remaining 4-position of 4-aryl-1-[omega-aromatic-omega-oxo-(lower - alkyl)]-piperidines." A stated object of the invention is "to provide useful * * * substituted-piperidines having a novel combination of substituents attached to the 1- and the 4-positions of the piperidine ring." Whereas appellant acknowledges the existence of piperidines having a variety of substituents, including aryl and lower-acyloxy, in the 4-position and piperidines having an omega-aromatic-omega-oxo-(lower-alkyl) group in the 1-position, it in his contention that the invention, for the first time, provides piperidines bearing all three of these substituents, and that these piperidines are not only structurally unobvious but possess unobvious or unexpected beneficial properties.
3
The subject matter on appeal and its relation to the prior art can best be described by the following structural formula, wherein the ring positions are designated by arabic numbers:
4
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
5
Claim 1 defines the compound wherein R is hydrogen, that is, 1-(3-oxo-3-phenyl-propyl) -4- phenyl -4- propionoxypiperidine. Claim 2 defines the compound wherein R is CH3, that is, 3-methyl-1-(3-oxo-3-phenyl-propyl) - 4- phenyl -4-propionoxypiperidine. Both claims have been treated together, below and in this court. We will continue to treat them together and refer hereinafter to the claimed compounds simply as "appellant's compounds." It will be observed that the "4-aryl," discussed above, is 4-phenyl and the "1-[omega-aromatic-omega-oxo-(lower-alkyl)]" is 1-(3-oxo-3-phenylpropyl), the "3" in this expression meaning the third or "omega" (end) carbon atom in the "propyl" group counting from the piperidine ring, as opposed to the "3-position" in that ring.
6
For the most part, all of the above discussed portions of appellant's compounds can be ignored since structurally speaking they differ from the compounds of the primary reference in the nature of the substituent in the "other" 4-position, that being propionoxy in appellant's compounds.
7
Although not per se part of the instant appeal, the so-called "process aspect" of appellant's invention is described in the specification "as residing in the concept of reacting a 4-aryl-1-[omega-aromatic-omega-oxo- (lower-alkyl)] -4- piperidinol with a lower-acylating agent," an acyl anhydride or an acyl halide being preferred. This is admitted to be a well known type reaction for preparing "esters," which appellant's compounds are, and should be observed as involving a rather large alcohol, the piperidinol, and a smaller (relatively speaking) acyl compound as reactants. Thus, the compound of claim 1 is prepared by reacting 1-(3-oxo-3-phenylpropyl) -4- phenyl -4- piperidinol hydrochloride with propionic anhydride and the compound of claim 2 is prepared by reacting 3-methyl-1-(3-oxo-3-phenylpropyl)-4-phenyl-4-piperidinol hydrochloride with propionyl chloride, the product in each case being treated with aqueous sodium hydroxide solution in order to convert it to the free base form, as it appears in the claim. The point about process is mentioned only because appellant makes the argument that his compounds are sometimes termed "simple esters" by reason of their having been prepared from a rather complex alcohol and a small acyl compound, citing a footnote in our In re Ward decision, 329 F.2d 1021, 51 CCPA 1132, and that this renders his compounds structurally unobvious over the art compounds since the latter comprise a rather simple alcohol moiety and a large acid or acyl moiety. Furthermore, so the argument goes, "all students of organic chemistry"
8
O
| |
know that an ester, R-C-OR', cannot be
9
expected to behave like, or have properties like, the "reverse"1
O
| |
ester R-O-C-R', unless R and R' are closely similar in structure.
We will answer this contention below.
10
Appellant's compounds "possess the inherent applied use characteristics of exerting a pronounced analgesic effect in animal organisms, as evidenced by pharmacological evaluation in rats according to standard tests procedures." Specifically, the compounds of claims 1 and 2 have been shown to possess, respectively, 9 times and 6 times the analgesic activity of the compound of the primary reference cited by the examiner. The results of this showing have been admitted by the examiner, the board, and the Patent Office Solicitor.
The prior art of record is:
11
Elpern I 2,846,437 Aug. 5, 1958
Elpern II 2,850,500 Sept. 2, 1958
Pohland II 2,904,550 Sept. 15, 1959
Pohland III 2,951,080 Aug. 30, 1960
Cutler et al. 2,962,501 Nov. 29, 1960
Braenden et al., "Bull. World Health Organ.,"
Vol. 13, pp. 956 and 962 (1955)
12
Cutler, the primary reference, relates generally to a class of N-substituted piperidine compounds which are "highly potent analgesics." They are prepared through a sequence of steps, the first intermediate products being a group of compounds which includes the ethyl ester of N-substituted-4-phenyl-4-piperidine-carboxylic acid. Structurally, this compound is the "reverse ester" of the compound of claim 1, it is specifically named in the reference (as its hydrochloride salt), and the intermediates of which it is a member are said to "themselves have a high degree of analgesic activity" and "are themselves potent analgesics." No particular test results or data in this regard are given.
13
In an effort to establish that esters, closely related to2 and of the type represented by the appealed claims, frequently exhibit substantially equivalent analgesic properties with respect to their "reverse esters," the examiner cited two pairs of secondary references, Elpern I and II and Pohland II and III.
14
Elpern I discloses lower alkyl 4-phenyl-1-(substituted-alkyl) piperidine-4-carboxylates, i. e., compounds of the formula
15
NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
16
wherein X is a lower alkylene group, Z can be oxygen, and Ar can be phenyl. The compounds are said to be "many times more potent as analgesics than meperidine * * *." Specifically, ethyl 4-phenyl-1-(3-phenoxypropyl) piperidine-4-carboxylate (as its hydrochloride salt) was found to be approximately twelve times as effective an analgesic as meperidine hydrochloride. The "1-(2-phenoxy-ethyl)" homolog was found to be about six times as effective as the same standard compound and the "1-(4-phenoxy-butyl)" homolog three times as effective as meperidine hydrochloride. In each of these tests, the compound was administered intraperitoneally in aqueous solution.
17
Elpern II discloses, inter alia, the "reverse esters" of Elpern I, hence of the type on appeal. They are described as being "many times more effective than the commercial analgesic meperidine hydrochloride" and it is further said that they "can be formulated in the manner conventional for potent analgesics * * *." The compound 1-(3-phenoxy-propyl)-4-acetoxy-4-phenylpiperidine, as its hydrochloride salt, was found to be approximately 180 times as potent an analgesic as meperidine hydrochloride when measured subcutaneously, and 24 times as potent as meperidine hydrochloride when measured intraperitoneally. In addition, the Elpern II compounds are said to possess "a relatively low toxicity * * *."
18
The Pohland references are, we believe, cumulative to the showing of the above discussed secondary references and accordingly will not be considered since it is believed unnecessary to a decision in this appeal.
19
We think the disclosure in the Elpern patents refutes appellant's contention, supra, that "reverse esters" cannot be expected to behave alike, or to have like properties, unless their "R" groups are closely similar in structure. It has been amply demonstrated that, however accurate that statement may be as a general proposition, it does not apply as regards analgesic activity in esters of the type with which we are here dealing. Not only do the "reverse esters" of the Elpern patents possess the same kind of pharmacological activity, but, in addition, they are both found to be potent analgesics. Admittedly, the term "potent" is somewhat nebulous but we believe there are disclosed sufficient data from actual tests, some of which has been set out above, to support our conclusion that these particular "reverse esters", i. e., 1-substituted-4-phenylpiperidines having the ester group in the other 4-position, would be expected to have somewhat like properties as far as analgesic behavior is concerned.
20
We now consider what appellant himself says to be the "major" issue in the appeal, viz., whether an affidavit3 showing the compounds of claims 1 and 2 to be respectively nine times and six times more active as analgesics than the compound of the Cutler primary reference is persuasive evidence of unobviousness and patentability of these compounds. These figures were arrived at by finding, first, that the compounds were, respectively, 1350 times and 900 times more effective than meperidine hydrochloride on a molar basis in terms of the bases, using the same standard technique as was used by the patentees Elpern and Pohland, viz., the Bass-Vanderbrook modification of the D'Amour-Smith method.4 The compounds were administered subcutaneously. Having found that the Cutler compound (i. e., the "reverse ester" of the compound of claim 1) was, using exactly the same test and basis of reporting, about 150 times more potent than meperidine, appellant then calculated his compounds to be nine and six times more effective than the Cutler compound. There has been no challenge to this evidence as such; it is unequivocally before us. The issue, rather, is what is its legal significance.
21
The solicitor contends the differences in activity shown by the affidavit to be mere differences of degree, not of kind, and that the latter sort of difference must be present before the compounds can be unobvious under the statute. The appellant contends that the board, at the time of its decision, "was following the practice specifically held to be erroneous by this Court in In re Papesch," 315 F.2d 381, 50 CCPA 1084, and that that case is controlling here. Appellant goes on to say:
22
In the instant case appellant's showing was made on a utility which the prior art compound was known to possess, i. e. the prior art compound was known to have analgesic activity. The Papesch case did not deal with the situation where the particular property on which the showing was based was present in the prior art compound, but where the magnitude of improvement was such that it amounted to a difference in kind rather than a mere difference in degree. Yet, philosophically, Papesch cannot be distinguished on that basis. It seems clear, from subsequent cases, this Court meant Papesch to be applied broadly to lead to a return to the former Haas-Henze showing practice in all situations.
23
* * * * * *
24
When considering that minor advances in activity are eagerly sought in pharmaceutical chemistry, a showing of nine and six times more activity than the most active compound of the art is indeed most significant, representing a different order of magnitude, and is proof of unobviousness and unexpected beneficial properties in a new compound.
25
* * * * * *
26
Certainly relief of pain represents an area in which any improvement in effectiveness is especially significant and a six-fold advantage or a nine-fold advantage is very real and a greatly desired advantage, at least to one in pain. Clearly, the test of convincing evidence of substantially greater effectiveness has been met, and any apparent obviousness has been amply rebutted.
27
We think appellant's contentions have merit and, under proper circumstances, would be persuasive of a favorable holding.5 Suffice it to say that the following passage from In re Lohr, 317 F.2d 388, 50 CCPA 1274, which, in effect, agrees with appellant's position here is still apropos:
28
When a new compound so closely related to a prior art compound as to be structurally obvious is sought to be patented based on the alleged greater effectiveness of the new compound for the same purpose as the old compound, clear and convincing evidence of substantially greater effectiveness is needed. [Emphasis ours.]
29
Thus we indicated in Lohr that it is possible to obtain a patent where the showing proves substantially greater effectiveness. See also, In re De Groote, 333 F.2d 247, 51 CCPA 1508; In re Lorenz, 333 F.2d 908, 51 CCPA 1522; In re Grier, 342 F.2d 120, 52 CCPA ___. We affirmed in Lohr because of a deficiency in the evidence produced.
30
Here the record presents "clear and convincing evidence" that the claimed compounds have substantially greater analgesic effectiveness than one of the most, if not the most, active analgesic compound of the art; and, if the record showed simply this, appellant's compounds might be found to be unobvious even though structurally similar to the art compound. However the record contains other evidence which we believe compels a holding that appellant's invention, considered as a whole, is suggested.
31
Referring to the Elpern patents, it will be seen that the Elpern II "1-(3-phenoxypropyl)-4-acetoxy-" compound, which has the same sort of ester structure as appellant's compounds, possesses twice the analgesic activity of the Elpern I ethyl (3-phenoxypropyl) piperidine-4-carboxylate. Compared with the Elpern I ethyl (2-phenoxyethyl) piperidine-4-carboxylate and ethyl (4-phenoxybutyl) piperidine-4-carboxylate esters, this same Elpern II compound, albeit not the exact "reverse ester" but instead a homolog thereof, is, respectively, four and eight times more effective as an analgesic. We believe this amply suggests that esters having the structure of appellant's compounds will possess greater analgesic activity than their "reverse esters." Accordingly, a showing that appellant's compounds are six and nine times more effective than the Cutler "reverse ester" is not sufficient to establish patentability. Under these circumstances, we hold that appellant's compounds are obvious, within the meaning of 35 U.S.C. § 103.
32
We observe, finally, that the Braenden et al. publication, while listed in the examiner's answer and used therein to "refute arguments," apparently presented in appellant's brief before the board, discloses the results of various pharmacological studies on meperidine, and, more importantly, the effect of varying certain substituents thereon. On
33
page 962 it is shown that in changing from the carboxylate
O
| |
structure, ring-C-O-C2 H5, to the "reverse" structure,
O
| |
ring-O-C-C2 H5, the substituent being in the
34
4-position of the ring and the remainder of the molecule being kept the same, a five to ten-fold increase in analgesic activity is observed. The conclusion must be that this change in structure is solely responsible for the resultant change in activity. However, although the record is not clear on this point, we are inclined to view this reference as one upon which the examiner did not base his rejection, and, consequently, will not apply it to our holding, for to do so would, we think, amount to our making a new ground of rejection. See In re Nygard, 341 F.2d 924, 52 CCPA ___.
35
The decision of the board is affirmed.
36
Affirmed.
Notes:
1
The expression "reverse ester" will be used throughout the opinion as a convenient way to designate this relationship. Technically, of course, both compounds are "esters" and there is no such thing as a "reverse" ester
2
The relationship is certainly as close, structurally at least, as that between the Cutler compound and meperidine ("Demerol"), which compounds appellant's counsel stated at oral hearing to be "closely related." The difference in each instance resides in the nature of the N-substituent. In meperidine the N-substituent is methyl
3
Of general interest, but having no significance otherwise, is the fact that the results of this affidavit were disclosed in the application at the time of filing
4
Also of general interest is the fact that allowed claim 7, which reads "1-(3-Oximino -3- phenylpropyl) -4- phenyl -4-propionoxypiperidine," which compound was prepared by reacting the compound of claim 1 with hydroxylamine hydrochloride "utilizing operating conditions ordinarily employed for converting a ketone into its oximino derivative," was found to be 300 times as potent an analgesic as meperidine hydrochloride on a molar basis in terms of the bases
5
Our reasons as towhy we believe an applicant is entitled to patent protection on compounds per se, as opposed to method claims, where outstanding properties are shown, have been fully explained in our recent decision in In re Ruschig, 343 F.2d 965, 52 CCPA ___, and will not be repeated here.
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91 N.J. 527 (1982)
453 A.2d 850
STATE OF NEW JERSEY IN THE INTEREST OF R.D.
The Supreme Court of New Jersey.
September 28, 1982.
Petition for certification denied.
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"pile_set_name": "FreeLaw"
} |
939 F.2d 1558
19 U.S.P.Q.2d 1500
UNIQUE CONCEPTS, INC., and Floyd M. Baslow, Plaintiffs-Appellants,v.Kevin BROWN d/b/a Creative Walls, Templar and Schram, andWorld Plastics Extruders, Inc., Defendants-Appellees.
No. 90-1378.
United States Court of Appeals,Federal Circuit.
July 19, 1991.
Maurice B. Stiefel and Stephen P. Gilbert, Bryan, Cave, McPheeters and McRoberts, New York City, for plaintiffs-appellants.
William J. Thomashower, Kaplan, Thomashower & Landau, New York City, argued for defendants-appellees.
Before RICH, MAYER and LOURIE, Circuit Judges.
LOURIE, Circuit Judge.
1
Unique Concepts, Inc. and Floyd M. Baslow (collectively "Unique") appeal from the May 4, 1990, final judgment of the United States District Court for the Southern District of New York, holding that certain products produced by defendants Kevin Brown (d/b/a Creative Walls, Templar and Schram) and World Plastics Extruders, Inc. (collectively "Brown") do not infringe Unique's patent. Unique Concepts, Inc. v. Brown, 735 F.Supp. 145, --- USPQ2d ---- (S.D.N.Y.1990). We affirm.
BACKGROUND
A. The Patent in Suit
2
Unique is the exclusive licensee under U.S. Patent 4,108,260 ('260 patent), entitled "Fabric Wall Coverings," issued April 19, 1977, and owned by Floyd M. Baslow. Contrary to its title, the patent is not directed to wall coverings themselves, but to an "assembly of border pieces" used to attach a fabric wall covering to a wall. The assembly is made up of a number of "right angle corner border pieces" and "linear border pieces" which are arranged so as to form a frame around the area of a wall to be covered.
3
Below is Fig. 2 from the '260 patent, showing an exploded view of the assembly of border pieces forming the framework.
4
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE
5
The '260 patent issued from application Serial No. 680,703, filed April 27, 1976 (Baslow application), which as originally filed contained 14 claims. Claim 1, the only independent claim, recited an assembly comprising "linear border pieces and right angle corner border pieces," each of the border pieces having a raised face, a storage channel, and a keyway. The original claims of the Baslow application were rejected by the Patent and Trademark Office (PTO) as being unpatentable in view of various references. The Examiner found that the references "show frames including corners in arrangements similar to that of applicant...."
6
In response, the applicant amended his claims and argued against the references, stating that "[t]he main advantage of the present invention is that it greatly simplifies the mounting of a fabric covering.... Thus an amateur can practice the present invention...."
7
The next item in the file history is a notice of allowability together with an examiner's amendment cancelling claims 1-3 and 5-14, and amending claim 4 to depend from claim 15. Application claims 15-17 and 4 issued as claims 1-4 of the '260 patent, respectively. Claim 1, the sole independent claim, reads:
8
1. An assembly of border pieces for creating a framework attachable to a wall or other flat surface for mounting a fabric sheet which is cut to dimensions at least sufficient to cover the surface, said assembly comprising linear border pieces and right angle corner border pieces which are arranged in end-to-end relation to define a framework that follows the perimeter of the area to be covered, each piece including a raised face, a storage channel running adjacent the outer edge of the piece and having a narrow inlet communicating with said face, the portion of the selvage of said sheet which includes fabric material in excess of that necessary to cover said surface being stuffed in said storage channel so that the exposed selvage of the sheet lies against said face to present a smooth appearance which extends to said inlet and is directly adjacent said perimeter, said linear pieces being formed of an integral one piece plastic material of sufficient elasticity to permit dilation of said inlet whereby said inlet may be temporarily expanded to admit said excess material and then contracted to retain said excess material in said storage channel.
9
(Emphasis added).
B. The Proceedings in the District Court
10
Unique brought the present suit in 1986, alleging that certain products made by Brown infringed claims 1-3 of the '260 patent, as well as another patent owned by Floyd Baslow. Brown denied infringement and filed counterclaims based on breach of contract, unfair competition, and antitrust.
11
After some initial maneuvering, the parties entered into an extensive "Stipulation and Order," which substantially narrowed the issues for trial. Pursuant to the stipulation, the sole issue which remained was whether two of Brown's products (the "regular flat track with heel" and the "cove track") infringed claims 1-3 of the '260 patent. Validity was not at issue; the stipulation prevented a claim interpretation which would render the claims invalid.
12
Brown maintained that its accused products do not infringe for two reasons. First, the accused products do not have corner pieces which were preformed at a right angle, but instead employ two linear pieces which are each mitered, i.e., cut at a 45 degree angle, and then placed together to form a right angle. Second, the accused products do not employ a keyway. While recognizing that the language of the claims does not expressly recite a keyway, Brown urged that its omission from the claims was an error by the PTO, and that such a limitation must be read into the claims; otherwise, it was urged, the claims would be invalid in view of the prior art, primarily U.S. Patent 3,657,850 (the Billerant patent). Brown reasoned that since the stipulation prevented a claim interpretation which would render the claims invalid, the keyway must be read in to "save" the claims.
13
A trial was held, at which each party, by agreement, presented as its only witness a patent expert. After hearing the testimony, the judge entered judgment for Brown, finding that (1) the keyway feature was inadvertently omitted from claim 1 by the examiner and must be read into the claim to avoid anticipation by Billerant, and (2) the mitered linear pieces used by Brown do not meet the claim language "right angle corner border pieces," either literally or under the doctrine of equivalents. Unique appealed.
DISCUSSION
14
The '260 patent claims a framework for mounting a fabric sheet "comprising linear border pieces and right angle corner border pieces." The district court found the patent not infringed because, inter alia, the language "right angle corner pieces" is limited to preformed corner pieces, whereas the mitered linear pieces used by Brown do not meet this limitation either literally or under the doctrine of equivalents.
15
Unique argues that the district court erred in finding that the claims do not literally cover assemblies having mitered corners. Claim construction is an issue of law, which we review de novo. ZMI Corp. v. Cardiac Resuscitator Corp., 844 F.2d 1576, 1578, 6 USPQ2d 1557, 1559 (Fed.Cir.1988). To ascertain the meaning of claims, we consider three sources: the claims, the specification, and the prosecution history. Loctite Corp. v. Ultraseal, Ltd., 781 F.2d 861, 867, 228 USPQ 90, 93 (Fed.Cir.1985).
16
The language of claim 1 makes unambiguous reference to two distinct elements of the claimed structure: linear border pieces and right angle corner pieces. If, as Unique argues, linear border pieces of framing material, whose ends are mitered, are the same as linear border pieces and a right angle corner piece, the recitation of both types of pieces is redundant. Unique's argument for merging the two types of claim elements into one also violates the oft-quoted "all elements rule," the essence of which is that to prove infringement, every element in the claim must be found in the accused device either literally or equivalently. See SmithKline Diagnostics, Inc. v. Helena Laboratories Corp., 859 F.2d 878, 889, 8 USPQ2d 1468, 1477 (Fed.Cir.1988). The district court thus correctly held that the plain language of the claim includes two distinct types of elements, including right angle corner border pieces, thereby precluding literal infringement.
17
The specification also shows that the claim language "right angle corner border piece" means a single preformed piece. The specification repeatedly refers to the preformed pieces 15 and 16, using only the words "right angle" border pieces or "corner pieces." In addition, the drawings show only preformed corner pieces and no mitered pieces.
18
The specification does refer once to "improvise[d] corner pieces" as an alternative to the preformed pieces:
19
Instead of using preformed right-angle corner pieces of the type previously disclosed, one may improvise corner pieces by miter-cutting the ends of a pair of short linear border pieces at right angles to each other and providing a space between the cut ends to define the necessary storage slot. For this purpose, a temporary spacer may be used to provide exactly the right amount of storage space. The advantage of such corner pieces resides in the fact that linear pieces may be mass-produced at low cost by continuous extrusion, whereas preformed corner pieces must be molded or otherwise fabricated by more expensive techniques. On the other hand, a preformed corner piece is somewhat easier for a do-it-yourselfer to work with.
20
Col. 8, lines 28-41 (emphasis added). However, this reference does not negate the claim language clearly reciting right angle corner pieces. This paragraph, rather than providing an illustration of a right angle corner border piece, as the dissent indicates, provides an alternative to it. The language right angle corner border piece is too clear to encompass linear pieces that are not right angle corner pieces. The fact that mitered linear border pieces meet to form a right angle corner does not make them right angle corner pieces, when the claim separately recites both linear border pieces and right angle corner border pieces. Such an interpretation would run counter to the clear meaning of the language. Linear border pieces are not right angle corner border pieces. Both types of pieces are required by the claim.
21
The statute requires that an inventor particularly point out and distinctly claim the subject matter of his invention. 35 U.S.C. Sec. 112 (1988). It would run counter to this statutory provision for an applicant for patent to expressly state throughout his specification and in his claims that his invention includes right angle corner border pieces and then be allowed to avoid that claim limitation in a later infringement suit by pointing to one paragraph in his specification stating an alternative that lacks that limitation, and thus interpret the claim contrary to its plain meaning. Such a result would encourage an applicant to escape examination of a more broadly-claimed invention by filing narrow claims and then, after grant, asserting a broader scope of the claims based on a statement in the specification of an alternative never presented in the claims for examination.
22
The claims as granted contain the right angle corner border piece limitation. All the limitations of a claim must be considered meaningful, Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1532-33, 3 USPQ2d 1321, 1324-25 (Fed.Cir.1987), and Brown's avoidance of that limitation avoids literal infringement.
23
It is also well-established that subject matter disclosed but not claimed in a patent application is dedicated to the public. Edward Miller & Co. v. Bridgeport Brass Co., 104 U.S. 350, 352, 26 L.Ed. 783 (1881). That is what occurred here. If Unique intended to claim mitered linear border pieces as an alternative to its right angle corner border pieces, it had to persuade the examiner to issue such a claim. As will be shown below, Unique failed to do so.
24
The prosecution history also supports the district court's decision. During the prosecution of the '260 patent, the examiner understood the right angle corner pieces of Claim 1 to be distinct from mitered linear pieces, because he initially rejected the claims, citing and referring to other references as showing preformed, right angle corner pieces or braces. The applicant overcame the rejection by arguing the advantage of simplification for the do-it-yourselfer. As noted in the specification, a preformed corner piece is one of the advantages of the invention making it attractive to the do-it-yourselfer.
25
There then occurred a telephone interview between the attorney and the examiner, following which the Examiner cancelled certain claims. Among the cancelled claims was original Claim 9, which depended from original Claim 1 (also cancelled) and recited short linear mitered pieces as forming a right angle corner piece.
26
The dissent relies upon Claim 9 to construe what is now Claim 1 as including linear pieces which are mitered to form a corner piece. It interprets "linear pieces whose ends are mitered" to be a species of generic Claim 1's "right angle corner border pieces," and therefore within its scope. Such a construction is unjustified because the language of Claim 1 is clear and is inconsistent with Claim 9 being dependent thereon.
27
The record contains no indication of what transpired in the interview and why Claim 9 was cancelled. A plausible reason is that Claim 9 was cancelled because it was not properly dependent upon original Claim 1. The court referred to Brown's expert, who stated that the claim was cancelled because it did not encompass an invention suitable for a do-it-yourselfer. The dissent finds this expert testimony to be "wholly incredible." We do not know why Claim 9 was cancelled and cannot speculate on the reasons for the cancellation; we can only interpret the clear language of the claims as granted.
28
When the language of a claim is clear, as here, and a different interpretation would render meaningless express claim limitations, we do not resort to speculative interpretation based on claims not granted. See White v. Dunbar, 119 U.S. 47, 52, 7 S.Ct. 72, 75, 30 L.Ed. 303 (1886) ("The claim is a statutory requirement, prescribed for the very purpose of making the patentee define precisely what his invention is; and it is unjust to the public, as well as an evasion of the law, to construe it in a manner different from the plain import of its terms."). Our interpretation gives full effect to the recitation of two distinct elements in the claimed structure: linear border pieces and right angle corner border pieces. It also gives full effect to the specification and the expert testimony, and a reasonable interpretation of the prosecution history. See Perini America, Inc. v. Paper Converting Mach. Co., 832 F.2d 581, 584, 4 USPQ2d 1621, 1624 (Fed.Cir.1987).
29
With respect to infringement by equivalents, since Brown conceded that the "result" of the right angle corner piece of the accused device is substantially the same as that of Claims 1, 2, and 3, the district court held that "the result is substantially the same; however, the means and function of the patented and accused devices are not the same, negating a finding of equivalents." 735 F.Supp. at 147. Unique argues that the district court erred as a matter of law by omitting the word "substantial" in its conclusory statement regarding infringement by the doctrine of equivalents. We disagree.
30
The issue of law on this point is whether the trial court understood and properly applied the requisite elements for finding infringement by equivalence, i.e., determining whether the '260 patent and Brown's structure are substantially the same in function, way and result. See Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 934, 4 USPQ2d 1737, 1739 (Fed.Cir.1987) (en banc), cert. denied, 485 U.S. 961, 108 S.Ct. 1226, 99 L.Ed.2d 426 (1988). On review of the record, we conclude that the court understood and correctly applied the appropriate test. The court-appointed expert told the judge that a finding of infringement by equivalents requires a determination whether the accused devices achieve substantially the same result and substantially the same function of the claimed invention, in substantially the same way. At trial, Unique's expert similarly testified. Brown's expert repeated the test, with short-hand reference to "the same " instead of substantially the same. However, there is no indication that the judge (or either party) misunderstood this short-hand reference and eliminated the word "substantially" from his analysis. Brown's counsel recounted the substantially the same test while examining its witness. Unique's counsel did not cross-examine Brown's expert on this point. In the opinion itself, the judge's use of "substantially," taken in context, refers to all of the factors in a doctrine of equivalents analysis.
31
The determination whether an accused device infringes the claims of a patent is one of fact, reviewed under the clearly erroneous standard. Lemelson v. United States, 752 F.2d 1538, 1547, 224 USPQ 526, 530 (Fed.Cir.1985). Therefore, we may reverse the district court's finding of no infringement only if we are left with a "definite and firm conviction that a mistake has been committed" by the trial court. U.S. v. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). The court explained that because Brown's device performs the function and achieves the result in a substantially different way, there was no infringement by Brown's frame of the '260 patent:
32
One of the main objects of the invention was stated to be to make something useful for a do-it-yourselfer. In fact, claim 9, as originally presented, expressly called for mitered pieces and was cancelled because it was not something that a do-it-yourselfer could do, according to [Brown's] expert witness. The accused device has a different and complicated way of doing what the right-angle piece does in the patented device. It is a lot simpler for the do-it-yourselfer to use the preformed right-angle pieces of the patented device and far more difficult to create corners by the mitered means used and the function of the accused device.
33
735 F.Supp. at 147 (emphasis added). This finding is supported by the testimony of Brown's expert as to the difference between mitered corners and preformed corners:
34
In this particular case it is more than simply cutting two pieces because you have to cut four pieces to make two mates. You have the channel and the inlet that has to be made also.
35
Additionally, you have to have a spacer and make the proper space so you can shove the little piece of selvage that's left over at the end and make a nice fine product.
36
Additionally, you have to put that corner piece up in the right place in the right section. It is simply quite a different procedure to do all of this and to end up with the same result as a right-angle corner piece. I think you are doing something in a completely different way.
37
(Emphasis added). On review of the record, we see no clear error in the district court's findings.
CONCLUSION
38
The district court was correct in concluding that the claim language "right angle corner border pieces," properly construed with reference to the specification and prosecution history, requires a preformed corner piece. The district court did not clearly err in finding that the '260 patent does not literally cover Brown's corners formed by aligning two mitered straight pieces. Moreover, the district court did not clearly err in finding that Brown's accused frame does not infringe under the doctrine of equivalents because it does not perform in the same way. In view of this result, we do not review the district court's holding with respect to the keyway issue. For the foregoing reasons, the decision of the district court is
39
AFFIRMED.
40
RICH, Circuit Judge, dissenting.
41
As the majority opinion states, this appeal comes to us with two issues, both relating to infringement of the claims in suit, claims 1-3, plus a stipulation which inhibited the trial court from considering validity or so construing the claims as to render them invalid for any reason. The issues, then, are (1) whether a "keyway" limitation must be read into the claims, which do not refer to a keyway, in order to save them from invalidity and (2) whether the claims in suit are not infringed because they must be construed as limited to preformed one-piece corner border pieces which defendants do not use.
42
The majority rests its decision on issue (2) and therefore does not reach issue (1), agreeing with defendants' contentions and the district court. On this issue of claim construction, I am constrained to disagree with both the district court and the majority for the following reasons. I do agree that the majority, having reached its decision on issue (2), albeit incorrectly as a matter of claim construction, was justified in not reaching issue (1). Since I would hold to the contrary on issue (2), I would feel obliged to pass on issue (1) and would hold that under long-established precedent too well settled to require citation it is not permissible to read limitations into claims which they clearly do not contain. In sum, I would hold claim 1 infringed, as did the court-appointed expert or "master," though I would hold it literally infringed. (This assumes that defendants' assemblies have both corner border pieces (as distinct from "linear" border pieces) and linear border pieces, which I do not know to be the fact.)
43
Parties cannot, by stipulation, make invalid claims valid nor can they require this or any other court to violate established principles of claim construction. Validity and infringement are unrelated questions. Invalid claims can perfectly well be infringed, which is simply a matter of construing the words of the claim and then determining whether they can be read on the accused structure. Courts constantly hold claims infringed but invalid. Validity vel non should have no effect on how the infringement issue is decided. The district judge did not seem to understand that. The stipulation that the claims must be so construed for infringement purposes as to assure their actual validity is not binding on courts. Parties cannot require courts to decide legal questions, which are reviewable de novo, a certain way. If they wish to settle their cases, they should do just that.
44
In the present posture of this appeal, the sole question is whether the majority has correctly construed the meaning of a single limitation in claim 1, which claim is set forth in full in its opinion. That limitation is: "right-angle corner border pieces." I simply disagree with the majority's conclusions and with its attempted supporting reasoning. We arrive at different "plain meanings."
45
I fully agree with the majority's statement of the law respecting claim construction, a question of law we review de novo. We construe claims in the light of the language of the claim itself, the specification on which it is based, and the whole prosecution history. The majority has not properly done this and, in my judgment, has demonstrably come to a wrong conclusion. Significant statements in the specification and prosecution history are misapplied. I shall begin with the specification.
46
As the majority states, the specification first describes and illustrates the one-piece corner pieces 15 and 16, outside and inside corners respectively. True, these are the only corner pieces shown in drawings. Then the specification contains the significant statement quoted in the majority opinion from the patent at col. 8, lines 28-41. (My emphasis):
47
Instead of using preformed right-angle corner pieces of the type previously disclosed, one may improvise corner pieces by miter-cutting the ends of a pair of short linear border pieces placed at right angles to each other and providing a space between the cut ends to define the necessary storage slot. For this purpose, a temporary spacer may be used to provide exactly the right amount of storage space. The advantage of such corner pieces resides in the fact that linear pieces may be mass-produced at low cost by continuous extrusion, whereas preformed corner pieces must be molded or otherwise fabricated by more expensive techniques. On the other hand, a preformed corner piece is somewhat easier for a do-it-yourselfer to work with.
48
Perhaps this is a matter, on both sides, of seeing what you choose to see. Beyond question, however, the specification discloses two species of right-angle corner border pieces: (1) preformed one-piece and (2) mitered, short, linear pieces, arranged at right angles and properly spaced at their junction. The latter are to be joined to longer linear pieces. No drawing is needed to make (2) clear. In any case, there are always, in a single assembly, both corner pieces and linear pieces, even when the second species of corner is used.
49
Now I turn to the contents of the file-wrapper. From day one when the application was filed these two kinds of corners were not only described but claimed and we look to this, equally with the specification, to determine the correct construction of the claim 1 language. Original claim 1, as filed, used exactly the same terminology as patent claim 1, "right-angle corner border pieces." There were 14 original claims on day one. Among them was claim 9, depending from claim 1, reading:
50
9. An assembly as set forth in claim 1, wherein said right-angle corner pieces are formed by a pair of short linear pieces whose ends are mitered and spaced from each other to define a slot therebetween to receive the pucker of the selvage when the selvage is locked into the keyway. [My emphasis.]
51
Note that claim 9 is referring back to "right angle" corners as described in claim 1 and is thus defining a species of that genus. Now, what does that tell one skilled in the art about the meaning of "right-angle corner border pieces"? It tells one that the claim 1 phrase is, and was clearly intended by the applicant to be, broad enough to cover the species recited in claim 9, which the majority says it does not cover. There is a genus-species relationship between the phrase in claim 1, which never changed throughout the prosecution, and the particular form of corner piece recited in claim 9.
52
I have to disagree with the majority's criticism or downplaying of my use of claim 9 as a construction aid in several particulars. The majority seems to start with an a priori assumption of what the "clear" language of claim 1 means. On the other hand, I am looking at the genealogical record of that claim to find out what it means.
53
The majority says, "we ... cannot speculate on the reasons for the cancellation" of claim 9 because we have no idea of the content of the 'phone conversation between the examiner and the attorney which led to cancellation, along with many other claims. I agree. The majority then speculates that it may have been an improper dependent claim, though it is not apparent why and the majority gives no reason. I don't care why (or whether) claim 9 was cancelled--it was simply part of the original application and sheds a bright light on what claim 1 was intended to mean.
54
I see no significance to the fact that claim 9 was cancelled because it is part of the prosecution history, all of which is clearly before us. The majority correctly states that we must consider the prosecution history, of which claim 9 is a significant part.
55
The majority opines that the alternative corner piece described in claim 9 has not been claimed and is therefore dedicated to the public. This strange position begs the question. Of course it has not been claimed specifically. The question, however, is whether it is covered by or included in claim 1, which I say it is. Therefore, its subject matter is not "dedicated to the public."35 U.S.C. Sec. 112, which requires claims, is irrelevant to a consideration of what claims mean. Since Brown's so-called "expert"--expert only in the sense he was a patent lawyer--knew no more than the members of this panel, his speculations are of no value to us. The citation of cases is also of no help in finding out what claims mean.
56
To me, claim 9 is the only evidence of record, except for the specification itself, which is of any value in construing claim 1, and I think it is of great value.
57
The majority seems to say that my construction of claim 1 "would render meaningless express claim limitation." I await enlightenment on what those "express limitations" are. I have already said that I read both corner pieces and linear pieces in claim 1. The debate here is over the kinds of corner pieces claim 1 covers. It is clear that it is not limited to unitary or preformed or one-piece corner pieces as shown in the drawings at 15 and 16. That much is truly "clear."
58
Much has been made of the contention that using short mitered corner pieces is something that a "do-it-yourselfer"--an "amateur"--is unable to do. Defendants' expert speculated, with no support whatsoever, that, in his opinion, the examiner required claim 9 to be cancelled because "it was simply not something that a do-it-yourselfer could do." Both defendants and the district court relied heavily on this testimony. I find this opinion testimony to be wholly incredible. The sole basis given by the expert for his opinion was the fact that claim 9 was cancelled while claim 4 was not. However, there is absolutely nothing in the record showing why the examiner allowed certain claims and cancelled certain other claims.
59
The fact is that this whole "do-it-yourselfer" argument has been blown way out of proportion. The specification does not state that do-it-yourselfers are incapable of using mitered corner pieces; it merely states, as quoted above, that preformed corner pieces are "somewhat easier for a do-it-yourselfer to work with." Furthermore, the only reference to do-it-yourselfers during prosecution is a statement that certain known prior art arrangements are difficult for a do-it-yourselfer to use because the fabric must be cut precisely to size whereas according to the invention of the '260 patent, the fabric need merely be cut roughly to size, with the excess fabric being stuffed in the storage channel. This is equally true as to either kind of corner. To infer from this one statement that the claims must be limited to features not recited in the claims (i.e., "preformed " corner pieces) is contrary to established patent law practice.
60
Let us consider next another lesson about meaning to be learned from the specification. In the quotation above from column 8, in the opening sentence the drafter of the specification exhibits a clear consciousness of the distinction between "preformed right-angle corner pieces" and those made by mitering and placing at right angles two short pieces of linear border pieces. Claim 1 does not contain the limiting word "preformed" yet the majority, without justification, is reading it into the claim in holding that the claim does not cover corner pieces which are made up as clearly described in the specification.
61
I also point out that the term "right-angle" is not a limitation to preformed unitary pieces since the specification makes clear that the made-up variety of corners are also right-angle corner pieces when assembled.
62
The majority's argument based on alleged violation of the "all elements" rule is untenable. It overlooks the fact that the teaching in the specification is clear about making "corner pieces" by using two "short linear border pieces" (my emphasis) and then using such "improvised" corner pieces in conjunction with linear pieces to make the complete wall frame. Of course, it is the all-elements rule on which the defendants rely for non-infringement, arguing that they have no "corner pieces" when in fact they have a type of corner piece which is disclosed and claimed as an element of the combination of claim 1. I am not "merging the two types of claim elements into one"--whatever that may mean. I am simply saying that the element defined in claim 1 as "right-angle corner border pieces" is, as clearly shown by the patent and its prosecution history, a limitation generic to two types of corner pieces disclosed in the patent which is broad enough to read on defendants' structure because it is clearly not limited to "preformed" or "unitary" corner pieces, as held below and by the majority. That is the sum and substance of my position and it calls for reversal.
63
The prosecution history contains nothing contradictory to my position and much to support it, as shown above. I have not found any evidence to contradict it or to support the district court opinion which demonstrates a dismal failure to comprehend many patent law fundamentals and accepts, as established fact, opinion statements of defendants' expert witness unsupported by the record. The reader should also be aware that the district judge made no separate "findings of fact." He wrote a short, confused opinion which he concluded with the escape clause saying "The foregoing shall constitute the Findings of Fact and Conclusions of Law in accordance with Rule 54(b) [sic] of the Fed.R.Civ.P."
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339 So.2d 96 (1976)
Henry BELL
v.
STATE.
4 Div. 443.
Court of Criminal Appeals of Alabama.
August 31, 1976.
Rehearing Denied October 5, 1976.
*97 Richard W. Whittaker and Warren Rowe, Enterprise, for appellant.
William J. Baxley, Atty. Gen., and Joel E. Dillard, Asst. Atty. Gen., for the State.
BOOKOUT, Judge.
First degree murder; sentence: life imprisonment.
The appellant was indicted, tried and convicted for the murder of Billy Ray Jones. The appellant pled self-defense. He now contends on appeal that the jury's verdict was against the great weight of the evidence.
In reaching its verdict, the jury could have reasonably found the following facts, which are set out in a light most favorable to the State, to be true. On the night of October 11, 1975, the appellant visited a night spot in Enterprise called the Club Casino. While there, he was accosted by the deceased who was the manager of the club. The deceased slapped the appellant, presumably because the appellant appeared to be sneaking liquor into the establishment, which in fact was not the case.
Upon being slapped, the appellant left the club and returned to his home. He had a shotgun in his car, but the only shells he had contained birdshot. His purpose in returning home was to obtain shells containing buckshot. After loading his gun with buckshot, he returned to the Club Casino in the early morning of October 12, 1975.
Upon his return, the appellant engaged in a conversation with the deceased in the parking lot of the club. The appellant then walked to his car and removed the shotgun. Appellant yelled to his brother, who was standing by the deceased, to move. Appellant then fatally shot the deceased.
The deceased was known to habitually carry a pistol, and he was carrying a pistol on this occasion. When confronted by the shotgun brandishing appellant, the deceased attempted to draw his pistol. From the physical evidence, it was probable that the deceased pulled his pistol and had it pointed in the appellant's direction when the appellant fired.
Although it is not an indispensably crucial point, the jury could have reasonably concluded that the deceased never fired his pistol. An expert witness, Dale Carter, testified that the deceased's pistol had been damaged and that the cylinder had been jammed shut. The damage was caused by projectiles which were consistent with those recovered from the body of the deceased. Carter testified that the pistol would not fire and that it was fully loaded when he received it. He also testified that in his opinion the pistol had not been opened nor reloaded because of the way in which it was jammed. It took Mr. Carter, working under ideal conditions, from twenty to thirty minutes to unjam the pistol in order to remove the bullets.
*98 The appellant put on evidence which, if believed by the jury, controverted, denied and conflicted with the evidence as set out above.
I
It is not our function to examine the record in order to satisfy ourselves that the appellant is guilty beyond a reasonable doubt. Our function, where sufficiency of the evidence is before us, is to examine the record and determine if the State put on sufficient evidence from which a jury might have found the accused guilty. We must allow all reasonable presumptions for the correctness of the verdict, bearing in mind that conflicting testimony presents a question for the jury. Only when the preponderance of the evidence against the verdict is so decided as to convince this Court that it was wrong and unjust will the verdict be overturned. Morton v. State, 58 Ala.App. ___, 338 So.2d 423 (1976).
The jury in this case had evidence before it from which it could reasonably conclude that the appellant did not act in self-defense. The jury would have been justified in believing that the appellant could have safely driven away from the scene instead of getting his gun and shooting the deceased. In addition, it is obvious that there was sufficient evidence from which the jury could conclude that the appellant was not free from fault in initiating the shootout.
II
The appellant contends that the trial judge erred in admitting the deceased's pistol into evidence because there was an alleged break in the chain of evidence relating to the pistol. In order to admit the pistol or testimony relating to the pistol, it must be shown that the pistol was in substantially the same condition as at the time of the shooting. Dennison v. State, 259 Ala. 424, 66 So.2d 552 (1953).
There is only one point at which the appellant could reasonably argue that the chain of custody of the pistol was broken. When the police arrived at the scene, a large crowd had gathered. There was fear on the part of the police that the evidence might be disturbed. An Officer Braum was told to pick up the pistol and put it in the trunk of his car. He proceeded towards his car and returned in, at most, two minutes. The investigating officer, J. D. McDaniels, arrived during this period and accompanied Braum to Braum's car where Braum unlocked the trunk and handed McDaniels a pistol. McDaniels received the pistol a maximum of five minutes after Braum removed it from the scene. As Braum was with his wife, who was hospitalized in Montgomery at the time of the trial, he did not testify.
The purpose in establishing a chain of custody is to show a reasonable probability that the pistol was not tampered with. 22A C.J.S. Criminal Law § 709. Such a reasonable probability was certainly established in the present case. It is obvious that the damage done to the pistol resulted from it being struck by shotgun pellets. There is not an iota of evidence that Braum damaged the pistol after picking it up. In order to support the appellant's contention, it should be shown that Braum had both a motive and opportunity to tamper with the pistol. Neither was shown. There is no evidence concerning a motive and all the evidence concerning opportunity is in the State's favor. Braum would have had two minutes in which to pry open the pistol, then load it, and then pry it shut again. The State's expert testified that in his opinion this could not be done and in fact, it took the expert at least twenty minutes to open the pistol.
The appellant sets great store in accounts by his witnesses that they saw the deceased fire. The trial judge, in his discretion, could have chosen to disbelieve the appellant's witnesses on this point. He also could have concluded that the witnesses saw a flash of light come from the deceased's pistol which might have appeared to the witnesses to be the result of the pistol being fired. The trial judge could have decided such a state of facts was consistent *99 with a flash which resulted from shotgun pellets striking the pistol, especially since the overwhelming evidence indicated the pistol had not been fired.
While the better practice would have been to have had Officer Braum testify, there was sufficient independent evidence to support the trial court's ruling. We thus hold that the trial judge did not abuse his discretion in admitting evidence concerning the pistol. From the evidence, it appears that there was a reasonable probability that the pistol was not tampered with.
III
The State introduced the results of an atomic absorption test to show that the deceased had not fired a pistol on the morning in question. Concerning such a test, see Chatom v. State, 1 Div. 688 (Ms. August 31, 1976) Ala.App.
In the instant case, no error resulted from the admission of the results of the test for three reasons. First, the appellant's counsel effectively elicited from the State's expert that the results of the test did not prove that the deceased had not fired the pistol. Secondly, there was overwhelming independent evidence from which the jury could conclude that the deceased had not fired the pistol. Finally, the introduction of the results of the test was not objected to at trial nor on appeal.
AFFIRMED.
All the Judges concur.
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556 F.2d 756
INLAND CREDIT CORPORATION, Plaintiff-Appellant-Cross Appellee,v.M/T BOW EGRET, her engines, machinery, nets, tackle,apparel, and furniture, in rem, and Bow EgretTanker Corporation, her owner, inpersonam, Defendants,v.Constance R. EARLE, Intervenor-Appellee-Cross Appellant,v.Peter KENNARD, Intervenor-Appellee-Cross Appellant.
No. 74-3195.
United States Court of Appeals,Fifth Circuit.
July 29, 1977.
J. Michael Mahaffey, Corpus Christi, Tex., for Inland Credit.
Ben H. Sheppard, Jr., Houston, Tex., for Earle.
H. T. Hermansen, Jr., Corpus Christi, Tex., for Kennard.
J. Donald Stillwell, Houston, Tex., for M/T Bow.
Joel Pensley pro se.
Robert M. Julian, Houston, Tex., for Shell Oil.
Appeals from the United States District Court for the Southern District of Texas.
On Petition for Rehearing
(Opinion May 27, 1977, 5 Cir., 1977, 552 F.2d 1148)
Before TUTTLE, GOLDBERG and CLARK, Circuit Judges.
PER CURIAM:
1
1. We adhere to our view of the jurisdictional issue. We continue to feel that modern jurisdictional thinking properly focuses on the presence of those minimum contacts with the forum that make the assertion of jurisdiction comport with due process. This philosophy has recently been confirmed, although in a quite different context, by the Supreme Court, which held in Shaffer v. Heitner, --- U.S. ----, 97 S.Ct. 2569, 53 L.Ed.2d 683, 4849 (June 24, 1977), that states' assertion of in rem jurisdiction must satisfy the same "minimum contacts standard" applied to in personam jurisdiction.
2
2. Inland requests that we clarify the rate of interest which Earle and Kennard should receive. As we have observed, Earle and Kennard may receive interest on two bases as holders of the Bow Egret Tanker Corporation's notes, and as, in effect, lien claimants against the Bow Egret herself. While the calculation of the sums due on either basis presents some difficulty, we emphasize that in any event Earle and Kennard are not entitled to a double recovery.
3
As lien claimants, Earle and Kennard would presumably be entitled to interest at the same 6% rate awarded by the district court to other lien claimants. This interest would ordinarily accrue from the date of their loss. (In dealing with the other lien claims, however, the district court decided to allow interest from what it considered the date of the filing of the claims. This decision was certainly within its discretion.) We note, however, that the grant of pre-judgment interest is a matter in the discretion of the trial court. While we perceive no circumstances justifying a denial of this relief, we modify our opinion to indicate that award of pre-judgment interest to Earle and Kennard as lien claimants does remain a decision for the trial court.
4
In their status as holders of promissory notes, Earle and Kennard of course can recover at the rate provided in the notes, 2.08% per month. The district court's judgment of November 27, 1974 awarded Earle and Kennard interest at this rate, from the date of their loans "until paid." But in findings of fact and conclusions of law signed on July 11, 1974, the court granted the 2.08% rate only from the loan date until date of judgment. The notes themselves did not explicitly call for interest beyond the date when the principal was due, June 29, 1974. Again, we leave to the district court the clarification of the amount due on the notes, repeating, however, that double interest is not to be allowed.
5
In accordance with Federal Rule of Appellate Procedure 37, we direct that the date of the original judgment below be used as the date of entry of judgment, should the date of entry of judgment be relevant to calculations of the amount of interest due. See Coyle Lines v. United States, 198 F.2d 195 (5th Cir. 1952).
6
3. On page 1153 of 552 F.2d 1148, in the first paragraph, line 7 of that paragraph, the figure $61,653.88 is inaccurate. The correct figure is $61,721.69. See note 1 supra.
7
4. For purposes of clarification, we strike that part of the second full paragraph on page 1155 (no. 8-9) that reads as follows: "Earle and Kennard were only entitled to participate in the distribution of the res proceeds, therefore, to the extent of the principal and interest on their loans. So far as attorneys' fees are concerned, their only recovery would have been in personam." In place of such language, the opinion is modified to read as follows: "The district court apparently would have awarded Earle and Kennard an in personam recovery of attorneys' fees, based on their status as lien claimants. We need not consider the correctness of this proposition, because we conclude that an in personam recovery can be based on the promissory notes."
8
The petition for rehearing is DENIED.
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COURT OF APPEALS FOR THE
FIRST DISTRICT OF TEXAS AT HOUSTON
ORDER
Appellate case name: In re Troy Lee Christensen
Appellate case number: 01-16-00893-CV
Trial court case number: 2015-43169
Trial court: 246th District Court of Harris County
Real party in interest, Christina Christensen, has filed a “Motion Requesting
Approval of Proposed Order After Mandamus.” The motion is denied.
It is so ORDERED.
Judge’s signature: /s/ Russell Lloyd
Acting for the Court
Panel consists of Chief Justice Radack and Justices Brown and Lloyd
Date: May 25, 2017
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T.C. Memo. 2003-159
UNITED STATES TAX COURT
DALLAS R. HALL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10308-01. Filed May 29, 2003.
Dallas R. Hall, pro se.
Kelley A. Blaine, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: Petitioner moves the Court for an award of
administrative costs under section 7430(a)(1). We decide whether
he is entitled to an award of any of those costs. We hold he is
not. Section references are to the applicable versions of the
Internal Revenue Code.
-2-
FINDINGS OF FACT
Many facts were stipulated. We incorporate herein by this
reference the parties’ stipulations of fact and the exhibits
submitted therewith. We find the stipulated facts accordingly.
Petitioner resided in Ketchum, Idaho, when his petition was
filed.
Petitioner is a licensed real estate and mortgage broker who
conducts a money-lending operation (operation) through his sole
proprietorship (sole-proprietorship) and his wholly owned
corporation (corporation). In the operation, third party
investors (investors) lend money to the sole-proprietorship, the
sole-proprietorship lends money to the corporation, and the
corporation lends money to real estate developers and other
contractors (collectively, developers).
Petitioner filed a 1994 Form 1040, U.S. Individual Income
Tax Return. Petitioner reported on Schedule C, Profit or Loss
From Business, of that return that the sole-proprietorship had
gross receipts of $16,807, total expenses of $102,989, and a net
loss of $86,182. Petitioner claimed as one of the expenses
“Other Interest” of $77,872 for interest paid to the investors.
Petitioner claimed as the other expenses “bad debts”, “car and
truck expenses”, “depreciation”, “legal and professional
services”, “travel”, “meals and entertainment”, and “other
expenses”.
-3-
The Commissioner selected petitioner’s 1994 tax return for
examination and mailed to petitioner a letter scheduling an
initial appointment for the examination. Petitioner did not
appear for that appointment. Subsequently, on April 24, 1996,
the Commissioner issued to petitioner a 30-day letter disallowing
all amounts claimed for “bad debts”, “interest”, “travel”, “meals
and entertainment”, and “other expenses”,1 and determining that
petitioner was liable for an accuracy-related penalty for
negligence and an addition to tax for failure to file timely.
The 30-day letter provided generally that the expenses were
disallowed because petitioner had not established that: (1) He
had paid them and (2) they were ordinary and necessary business
expenses. The 30-day letter informed petitioner that he could
discuss these changes on May 13, 1996, with a representative of
the Internal Revenue Service (IRS).
At the scheduled time, petitioner met with a tax auditor
named Zora Christian (Christian). Christian requested
substantiation for the disallowed deductions. Petitioner
informed her that he did not have with him any of the requested
substantiation for the bad debt or interest expenses. Christian
delivered to petitioner an information document request (IDR)
specifically requesting that information. The IDR set a reply
1
In all, respondent disallowed $97,330 of the deductions
which petitioner claimed on Schedule C.
-4-
date of May 23, 1996. Petitioner first delivered some of the
information to the Commissioner on June 4, 1996.
On July 15, 1996, Christian met with petitioner’s
representative, Dan Jones (Jones). Jones did not have a power of
attorney from petitioner, and Christian declined to discuss with
him the specifics of petitioner’s case. Christian later issued
to petitioner a second IDR requesting a breakdown of his Schedule
C gross receipts. Whereas this IDR requested a reply by July 25,
1996, the Commissioner received the requested information on
August 12, 1996. On August 13, 1996, Christian revised her
examination report to reflect that information and sent the
revised report to petitioner with a notice advising him that he
could respond to the revised report within 10 days. Petitioner
did not respond to the revised report. On September 9, 1996, the
Commissioner issued to petitioner a notice of deficiency that
reflected the adjustments in the revised report.
Petitioner subsequently requested from the Commissioner
further consideration of his 1994 tax return. The Commissioner
honored that request by scheduling a meeting for October 22,
1996. At the scheduled time, petitioner met with a tax auditor
named Shirley Finn (Finn). Petitioner gave to Finn: (1) A rough
explanation of his sole-proprietorship’s business, but not
containing any reference to the corporation or to the flow of
funds from the investors to the developers, and (2) certain other
-5-
documents related to the interest expense. Finn verified from
this information that petitioner had in fact paid $47,737 of the
claimed interest expense but questioned petitioner’s claimed
deduction of this interest as business interest.
The case was reassigned to another revenue agent, Pamela
Carter (Carter). Carter also questioned the deductibility of the
interest as business interest and questioned whether petitioner
had issued information returns (Forms 1099) to the people to whom
he had paid the interest. On November 13, 1996, Carter faxed an
IDR to Jones requesting Forms 1099 issued to the payees of the
interest and certain other information related to the interest’s
characterization. Two days later, Carter spoke with Jones, and
he gave to her some of the requested information. Jones did not
mention that the corporation was an intermediary in petitioner’s
operation.
Carter met with Jones on November 22, 1996. During the
meeting, Carter determined that petitioner had actually paid
$61,752.86 of interest. Carter asked Jones for additional
information on the corporation and issued to petitioner an IDR
requesting documentation of petitioner’s loans to the corporation
and an allocation of his interest between business, personal, and
investment pursuits. Carter also requested that petitioner
identify where on the return he had reported certain items of
income, and she requested that petitioner furnish to her either
-6-
copies of Forms 1099 for interest paid to investors, or an
explanation why no Forms 1099 were filed or required. On
November 25, 1996, Jones responded to part of the IDR by
telephone and indicated that he would call Carter back on the
next day with other information. Jones never did so. Carter
closed the case with no change to the adjustments detailed in the
notice of deficiency.
Petitioner did not petition this Court with respect to the
notice of deficiency, and, on February 10, 1997, respondent
assessed the deficiency shown in that notice. Approximately 2
months later, petitioner asked the Commissioner to reconsider the
adjustments underlying that deficiency. On March 4, 1998, Dennis
Duggan (Duggan), a revenue agent, notified petitioner that Duggan
was assigned to reconsider those adjustments and requested from
petitioner the books and records of the sole-proprietorship and
the corporation. Petitioner and Duggan met on June 11, 1998.
Petitioner did not provide the requested books and records (or
any other new information) to Duggan. Duggan concluded his
reconsideration with no change and forwarded the case to Appeals
for its consideration.
Lydio Sison (Sison), an Appeals officer, considered the case
on behalf of Appeals. During a conference with Sison, petitioner
discussed the role that his corporation played in his operation.
Petitioner did not at the conference produce to Sison
-7-
documentation regarding the use of the money that he had
borrowed, nor did he produce to Sison a note from the corporation
or other documents which Sison desired. Following the appeals
conference, petitioner wrote a letter to Sison on September 15,
1998, in an attempt to explain his operation. The letter did not
mention the corporation, and it did not discuss the corporation’s
role in the operation. Sison asked John Keegan (Keegan), whom
petitioner had hired to represent him on or about September 15,
1998, to present to Sison the books and records to support
petitioner’s argument. Keegan declined to do so. Following the
Appeals conference, Sison allowed certain reductions in the
adjustments listed in the notice of deficiency. Sison did so
because Sison believed that they had been allowed in the prior
reconsiderations, but not taken into account when the tax was
assessed.
Following the partial abatement of tax pursuant to Sison’s
recommendation, petitioner made a request under the Freedom of
Information Act (FOIA) for a copy of his 1992 and 1994
administrative files. On May 15, 1999, Keegan attended an IRS
“Problem Solving Day” and presented to representatives of the IRS
a narrative as to petitioner’s case. Keegan also presented the
representatives with copies of approximately 500 pages of
documents in the 1992 and 1994 administrative files which he had
received pursuant to the FOIA request. Keegan’s narrative
-8-
partially mentioned the role of the corporation in petitioner’s
operation but did not state that petitioner lent money to the
corporation.
Subsequent to May 15, 1999, the Commissioner’s Problem
Resolution Program (PRP) referred petitioner’s case to the
Commissioner’s examination division, which assigned the case to a
revenue agent named Michelle Ho (Ho). Ho received the case on
June 5, 1999, reviewed the file, and requested additional
information from Keegan on June 15, 1999. Keegan refused to
provide that information, and he declined to meet with Ho at that
time. Ho determined shortly thereafter that no change to the
prior findings would be appropriate.
Subsequently, pursuant to a request from PRP, Ho
reconsidered the case and sent to Keegan an offer to allow
petitioner to deduct his verified interest as an expense. Ho’s
offer conditioned that deduction on petitioner’s recognition of
an equal amount of Schedule C income. Ho and her manager,
Darline Farr, later met with Keegan on October 28, 1999, to
discuss Ho’s offer. Following a lengthy discussion between the
three, Ho and Farr agreed to allow the interest expense of
$44,481 without requiring the recognition of a corresponding
amount of income.
-9-
OPINION
Section 7430(a)(1) allows a taxpayer to recover reasonable
administrative costs incurred in certain administrative
proceedings before the Internal Revenue Service. The Court may
award such a recovery if the taxpayer: (1) Is the prevailing
party and (2) did not unreasonably protract the administrative
proceeding. Sec. 7430(a) and (b)(3). A taxpayer is not a
“prevailing party” if the Commissioner establishes that the
Commissioner’s position in the administrative proceeding was
substantially justified. Sec. 7430(c)(4)(B)(i). For purposes of
this case, respondent concedes that petitioner is entitled to an
award of reasonable administrative costs if the Commissioner’s
position in the administrative proceeding was not substantially
justified. The Commissioner is considered to have taken a
position in that proceeding as of the date of the notice of
deficiency. Sec. 7430(c)(7)(B).
The Commissioner’s position is substantially justified if it
had a reasonable basis in both law and fact, or, in other words,
was “justified to a degree that could satisfy a reasonable
person”. Pierce v. Underwood, 487 U.S. 552, 565 (1988); Han v.
Commissioner, T.C. Memo. 1993-386. We look to whether the
Commissioner’s position was reasonable given the legal precedents
and available facts and circumstances at the time the
Commissioner took his position. Maggie Mgmt. Co. v.
-10-
Commissioner, 108 T.C. 430, 443 (1997); DeVenney v. Commissioner,
85 T.C. 927, 930 (1985). The fact that the Commissioner
eventually concedes a case does not necessarily mean that his
position was unreasonable, Sokol v. Commissioner, 92 T.C. 760,
767 (1989), but remains a fact to be considered, Powers v.
Commissioner, 100 T.C. 457, 471 (1993), affd. in part, revd. in
part and remanded on another issue 43 F.3d 172 (5th Cir. 1995).
We conclude on the basis of the facts and circumstances at
hand that respondent’s position in the administrative proceeding
was substantially justified. We believe that the Commissioner
acted reasonably in seeking and evaluating information from
petitioner and his representatives as to the correctness of the
determination reflected in the notice of deficiency. Respondent
is entitled to maintain his position until adequate
substantiation, including oral testimony, is received and
verified. Sokol v. Commissioner, supra at 765. We believe that
it was reasonable for the Commissioner to not have conceded the
relevant portion of his determination until the meeting between
Keegan, Ho, and Farr.
All arguments of the parties have been considered. Those
arguments not discussed herein have been rejected as without
merit. Accordingly,
Decision will be entered
for respondent.
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People v Diaz (2016 NY Slip Op 00132)
People v Diaz
2016 NY Slip Op 00132
Decided on January 12, 2016
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 January 12, 2016
Mazzarelli, J.P., Friedman, Gische, Kapnick, JJ.
16637 995/13
[*1] The People of the State of New York, Respondent, —
vEric Diaz, Defendant-Appellant.
Robert S. Dean, Center for Appellate Litigation, New York (Mark W. Zeno of counsel), for appellant.
Robert T. Johnson, District Attorney, Bronx (Andrew J. Zapata of counsel), for respondent.
An appeal having been taken to this Court by the above-named appellant from a judgment of the Supreme Court, Bronx County (Steven L. Barrett, J.), rendered on or about November 15, 2013,
Said appeal having been argued by counsel for the respective parties, due deliberation having been had thereon, and finding the sentence not excessive,
It is unanimously ordered that the judgment so appealed from be and the same is hereby affirmed.
ENTERED: JANUARY 12, 2016
CLERK
Counsel for appellant is referred to
§ 606.5, Rules of the Appellate
Division, First Department.
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Court of Appeals
of the State of Georgia
ATLANTA,____________________
March 07, 2019
The Court of Appeals hereby passes the following order:
A19A1470. STANLEY MUHAMMAD v. KEITH B. LEWIS.
After a verdict and judgment in favor of defendant Keith B. Lewis, plaintiff
Stanley Muhammad filed a notice of appeal. After failing to perfect his appeal by
paying costs for the transmission of the record, the trial court granted Lewis’s motion
to dismiss the notice of appeal on October 1, 2018. Muhammad then filed his notice
of appeal from that order on November 1, 2018. We, however, lack jurisdiction.
A notice of appeal must be filed within 30 days of the entry of an appealable
judgment. OCGA § 5-6-38 (a). The proper and timely filing of a notice of appeal is
an absolute requirement to confer appellate jurisdiction on this Court. Rowland v.
State, 264 Ga. 872, 872 (1) (452 SE2d 756) (1995). Muhammad’s notice of appeal,
filed 31 days after entry of the order he seeks to appeal, was untimely. Consequently
– and pretermitting whether a direct appeal otherwise would lie from that order – we
lack jurisdiction over this untimely appeal, which is hereby DISMISSED.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____________________
03/07/2019
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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799 F.2d 923
Quincy WEST, Appellant,v.Samuel ATKINS; Rae McNamara; James B. Hunt, Appellees.
No. 85-6483.
United States Court of Appeals,Fourth Circuit.
Argued April 11, 1986.Decided Sept. 3, 1986.
Richard E. Giroux, North Carolina Legal Services, Inc., Raleigh, N.C., for appellant.
Jacob L. Safron, Sp. Deputy Atty. Gen. (Lacy H. Thornburg, Atty. Gen., Raleigh, N.C., on brief) for appellees.
Before HARRISON L. WINTER, Chief Judge, and MURNAGHAN and ERVIN, Circuit Judges.
MURNAGHAN, Circuit Judge.
1
Presented by a North Carolina prisoner, Quincy West, with a claim under 42 U.S.C. Sec. 1983 that he was deliberately denied adequate medical help by a physician under contract with the state to provide orthopedic care to prisoners, we find it premature to grant summary judgment simply on the grounds that Calvert v. Sharp, 748 F.2d 861 (4th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 2667, 86 L.Ed.2d 283 (1985), bars recovery because a private doctor under contract with the state could not be engaged in state action. "The professional obligations and functions of a private physician establish that such a physician does not act under color of state law when providing medical services to an inmate." Id. at 863.
2
The common law distinction between employee and independent contractor, while not wholly irrelevant, since some of the differences between those two statutes bear on the constitutional issue presented, nevertheless, for common law purposes had different objectives. Whether Dr. Samuel Atkins was or was not a state employee for common law purposes simply does not indisputably settle the question of whether what he did amounted to state action.
3
To clear the decks and concentrate on the claim against Atkins, we affirm the grant of summary judgment in favor of James B. Hunt, Jr., the then Governor of North Carolina, the doctrine of respondeat superior having no application in Sec. 1983 actions. Vinnedge v. Gibbs, 550 F.2d 926, 928 (4th Cir.1977). Rae McNamara, the Director of the prison system, on the other hand, according to the record before us, is shown to have received two complaining letters from West and to have conducted at least a cursory investigation. Any cause of action which may successfully be made out against her, therefore, stands on a basis of liability for her own acts. Consequently, if Atkins might be liable, grounds for requiring her to respond might also exist.
4
West was injured while playing basketball on July 30, 1983. The Achilles tendon on his left leg was torn. Atkins examined West and concluded that he should schedule surgery, but that he first wanted to see if the tendon would grow back together. Atkins placed West's leg in a series of casts and eventually West received medication for the pain. During September and October 1983 the leg remained swollen and pained West, but prison officials sanctioned West for refusing to work. West has alleged repeated, but frustrated, attempts to have proper attention paid to his torn Achilles tendon. He has allegedly gone without surgery to the present time.
5
West's action under Sec. 1983 claiming a denial of his right to be free from cruel and unusual punishment followed.
6
To recover West must overcome two hurdles. He must establish a) that Atkins acted "under the color of state law" and b) that Atkins' course of conduct in attending West's injury showed deliberate indifference to a serious medical need. Estelle v. Gamble, 429 U.S. 97, 104, 97 S.Ct. 285, 291, 50 L.Ed.2d 251 (1976). The second of those two hurdles has not been addressed in the district court, and there should be a remand for decision as to it.
7
While there may or may not be grounds for distinguishing Calvert v. Sharp, we perceive no need to rush to address that potentially troubling issue. Should it be determined, on remand, that the record does not permit a finding of deliberate indifference to a serious medical need, the case will be disposed of adversely to West, without the need for discussing the applicability vel non of Calvert v. Sharp.
8
Should the district court determine that there is evidence permitting an inference of deliberate indifference to a serious medical need, it will be time enough for that court, in the first instance, and then, in all probability, for us to address the question of whether action under color of state law could, on the record, be found to exist, bearing in mind that all inferences, on a summary judgment motion, are to be drawn in favor of the party opposed thereto.1
9
Accordingly, the grant of summary judgment in favor of James B. Hunt, Jr. is affirmed. The grants of summary judgment to Atkins and McNamara are vacated, and the case remanded to the district court for disposition in a manner consistent with this opinion.
10
AFFIRMED IN PART; REMANDED IN PART.
1
Calvert v. Sharp was careful to point out the fact-bound nature of the inquiry as to whether the defendant's action has been under color of state law. Id. at 862
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403 So.2d 118 (1981)
Michael SWANSON
v.
The ESTATE OF Arthur AUGUSTA, Central Mutual Insurance Company, and the State of Louisiana.
No. 12292.
Court of Appeal of Louisiana, Fourth Circuit.
July 30, 1981.
Rehearing Denied September 17, 1981.
Martzell, Montero & Lamothe, John R. Martzell and Harold M. Wheelahan, III, Harry C. Graham, III, New Orleans, for plaintiff-appellee.
Philip K. Jones, Norman L. Sisson, Marshall W. Wroten, Jesse S. Guillot, New Orleans, for Louisiana Dept. of Transp. and Development, defendant-appellant.
Before GULOTTA, GARRISON and CHEHARDY, JJ.
CHEHARDY, Judge.
The State of Louisiana, Department of Transportation and Development (formerly *119 The Department of Highways), appeals a district court decision in favor of plaintiff, Michael Swanson, and against that defendant, in the sum of $510,659 together with legal interest from the date of judicial demand until paid and all costs of the proceedings. The court also found the State was negligent and therefore liable to the plaintiff for damages suffered by him as a result of the accident in which he was involved.
The plaintiff has answered the defendant's appeal asking that the judgment of the district court be increased to $1,500,000 but that the judgment be affirmed in all other respects. In his argument, plaintiff has suggested an increase to $1,581,105.27.
In an amended judgment the district court also held that, in addition to the liability of the State, Arthur Augusta, pursuant to the stipulation of all parties, was negligent in his operation of the motorcycle in question and, therefore, the court found his estate also liable to the plaintiff for damages he suffered as a result of the accident. The court also held that, again, pursuant to the stipulation of all parties, Central Mutual Insurance Company, as liability insurer of Arthur Augusta, was liable to the plaintiff in the amount of $5,000. The judgment thereafter cast the defendants State of Louisiana and the Estate of Arthur Augusta in judgment in favor of the plaintiff, in solido, in the full sum of $510,659 together with legal interest from the date of judicial demand until paid and for all costs of the proceedings. The court further rendered judgment in favor of the plaintiff and against the defendant Central Mutual Insurance Company in the full sum of $5,000.
In his written reasons for judgment, the district court judge stated:
"Counsel for the State of Louisiana Department of Transportation and Development relied heavily on a defense that the operator of the motorcycle was grossly negligent because he allegedly had been `drinking beer for several hours prior to the accident'. This Court might have reached the same conclusion except that the legally admissible evidence did not support such a defense to the plaintiff's cause of action. The Court carefully considered the testimony of Mrs. Jacquelyn Lupo who happened to be travelling on the expressway leading to the site of the accident shortly prior to the unfortunate incident. Whereas she did state that the motorcycle changed lanes on more than one occasion she did not indicate at anytime that the operator was not in control of the motorcycle. On the contrary, she acknowledged that both the operator and the passenger (plaintiff) appeared to be `flirting with her' and the she responded, although passively, to the flirtation. But she further testified that these actions (characterized as `clear irresponsibility' and `inability to handle the motor bike' by counsel for defendant) took place at a considerable distance from the accident site.
"In further support of the defense of intoxication, Counsel for the State attempted to have an expert testify regarding the alcohol content of the body of the operator who was found dead at the scene of the accident. This Court concluded that the witness called to testify could do so only on the basis of inadmissible evidence. But even if this Court had permitted such testimony to be elicited, after hearing other experts regarding other aspects of the case, this Court is convinced that the intoxication of the operator of the motorcycle, if he was in fact intoxicated, was not the proximate cause of the injuries suffered by the plaintiff.
"Whereas other aspects of the evidence consumed most of the time spent hearing this cause, the most important evidence in support of the plaintiff's claim came when the Court became privy to the sketches of Trooper Netterville and the cogent testimony which led the Court to a rational reconstruction of the accident and the exact point of impact of the motorcycle and the guard-rail.
"The condition of the guard-rail at the point of impact was most compelling. It is undisputed that several feet of the permanent railing had been destroyed as *120 a result of a prior accident. The La. Department of Highways made temporary repairs to the damaged area. It is admitted by all of the experts that guard-rails, such as the one at this location, are designed to propel a vehicle back into the roadway when impacted by any vehicle leaving the roadway. However, the testimony adduced at trial shows that the repairmen at the time of making repairs to this site, installed large iron plates or beams perpendicular to the roadway. It is more probable than not (supported by expert testimony) that the plates or beams caused the motorcycle to come to a sudden stop and the bodies of the victims were propelled like trajectories almost seventy-eight feet to the ground below. This was the negligence of the Louisiana Department of Transportation and Development and this Court finds nothing in the record that relieves it of its liability to the plaintiff.
"This Court is very much concerned that the Louisiana Department of Transportation and Development has apparently failed to recognize that this portion of the highway system is fraught with danger. In this Court's view, for example, it is inexcusable that the Department would so callously remove the barrier divider at this location because certain (extraordinarily) large tractor trailers are not able to negotiate the curved area without striking the barrier. Even if one ignores the expert testimony of Engineer Robert Lipp, there is overwhelming support for the conclusion that this accident occurred at a dangerous curve in the roadway, be it `highway', `expressway' or `approachway'. It is admitted, even by the defendant, that this portion of the road does not meet today's `highway design standards'. BUT when one ADDS another factori. e., the improper temporary repairs to the guard-rail ... the motorist is confronted with a condition that put the plaintiff in peril not connected with or related to the actions of the host motorcycle operator, who died in this accident.
"This Court itemizes the damages suffered by plaintiff as follows:
Medical Expenses (already accrued) $ 23,659.00
Needed Psychiatric Treatment 25,000.00
Future Bladder Surgery 2,000.00
Pain, Suffering, Inconvenience, Embarrassment,
Loss of Sexual Capabilities,
etc. up to time of trial 100,000.00
Loss of Income for at least thirty (30)
years 90,000.00
Pain and Suffering and Physical impairment
at $500.00 per month for forty-five
(45) years 270,000.00
___________
TOTAL: $510,659.00
1The Court places a minimum valuation on the loss of wages of plaintiff since this Court believes it is very likely that he will learn to perform meaningful work as soon as his physical and mental condition are stable.
2The Court notes that the life expectancy of a white male in 1978 was 69 years."
The plaintiff was injured on the morning of April 2, 1978, at approximately 6:10, as he was riding on the back of a motorcycle driven by Arthur Augusta. Although the plaintiff remembered nothing of the accident, it was evident from the testimony of others who arrived at the scene shortly after the accident, that the motorcycle crossed lanes on the elevated portion of a loop ramp of Causeway Boulevard, going toward Jefferson Highway, where it struck either a part of the curbing or a part of the railing, projecting the driver and passenger over the side of the guardrail.
The investigating officer of the accident, Louisiana State Police Trooper Alden B. Netterville, testified he found the body of Augusta 78½ feet from the base of the overpass, and he determined the point of impact was where the braces or make-shift braces were on the outside guard railing.
Trooper Netterville noted that at the point of impact the temporary metal guard railing was defective, that it was "leaning out" and did nothing to restrain anyone who might be thrown against the the railing. He also stated it was darker than the rest of the railing making it more difficult to observe on approach. He added the roadway, due to a very slight mist, was a little bit slick on the morning of the accident.
*121 Lieutenant Lynn Bertaut, Jr., another State Trooper, testified he investigated a motorcycle accident at approximately the same location as that in the present case on March 28, 1978. He said the driver of the vehicle failed to negotiate the right hand turn and also went over the guardrail, which had been previously damaged. The trooper added that there was not a permanent structure there at the time and the majority of the street lights in the area were out. He said he had also investigated other accidents involving collisions with that particular guardrail.
James R. Fister, who was accepted by the court as an expert in highway safety design, traffic engineering and accident reconstruction, referred to a manual entitled "A Policy on Geometric Design on Rural Highways," published by the American Association of State Highway Officials, which was in effect at the time the subject highway was built, as well as the "as built" plans of the area of the highway involved in the present case, and also testified he had driven over the subject highway area. Fister characterized the accident site as an "interchange" and explained that it was deficient because it was a two-way roadway rather than one way; the degree of curvature was not according to standards; the rate of superelevation and superelevation runoff was deficient; the designed pavement width was not sufficient; the vertical control, or method in which a change in elevation is obtained, was not in accordance with suggested practices; it was signed improperly; the regulatory speed was incorrect; and the warning signs were not sufficient and were confusing to the driver. He also said a later manual recommended a median barrier also be placed on such areas as the one in the present case.
Fister explained the width of the loop should have been 32 feet whereas it was only 28 feet wide, distracting from the maneuverability of the driver. He added the sharp horizontal movement of the roadway coupled with the sharp vertical movement required much more attention from the driver, and the tendency of a vehicle was to go straight rather than make the turn, much as the cycle did in the present case. He described the situation as hazardous.
In continuance of his testimony, Fister added that the design speed of a roadway such as this one is 20.3 miles per hour but that the posted speed should be lower than the design speed. He noted that on the subject curve there was a 25-mile-per-hour posted speed limit, and the 20-mile-per-hour sign was not an actual speed limit sign.
Fister also reviewed work orders of the State stating that on February 10, 1978 the guardrail was repaired and some further work, without materials, was done on February 23, 1978, but no other repairs were made prior to the April 2, 1978 accident. He characterized this as an extreme amount of delay in such a serious situation. He also said the guardrail was sticking out over the structure allowing itself to project anything that hit it off the ramp rather than being contained within.
This expert also estimated the speed of the cycle as between 33 and 39 miles per hour as it hit the guardrail, and added that, assuming that particular speed, the design characteristics were responsible for the accident because the driver was assuming the roadway continued and was not physically warned or brought into the reality of what he was going to encounter.
Fister also testified, according to accident records, that there were 13 accidents at the site in 1978, and 65 to 70 percent had crossed over the median and hit the barrier in the opposite lane, as in the present case. For 1977, the records revealed 14 accidents in approximately the same area; but six of the drivers had been drinking and six had been exceeding the speed limit. In 1976, he noted, there were eight accidents involving 15 drivers, only one of which had been drinking and only three of which had been exceeding the posted 25-mile-per-hour speed limit. Fister explicitly stated the design deficiencies of the loop and absence of a median barrier had no relationship to the condition of the driver.
Dr. Olin K. Dart, a civil engineer who works primarily in the field of highway and *122 traffic engineering and analysis of traffic accidents, testified he had reviewed the scene of the accident, the police report and the "as built" plans of the site and said the minimum design standards in effect at the time the loop was designed were met by the facility. He also stated that although there was a roll curb in place as a lane divider on part of the loop, at points it had been broken out by traffic impacting it and had not been replaced. His opinion was that the primary cause of the accident was the excessive speed of the motorcycle, and he did not think the rail had anything to do with it.
Don L. Ivey, a civil engineer and highway safety researcher, stated the degree of curvature and superelevation of the loop met the minimum standards in effect at the time of construction and that the superelevation runoff is better than the minimum standards. He said the design speed of 20 miles per hour was appropriate for the interchange and estimated the speed of the cycle on impact at 40 to 45 miles per hour. He felt the signing of the intersection was reasonable and his opinion was that excessive speed and reckless driving was the cause of the accident.
Geometric design engineer Patsy Miller and traffic operations engineer Boyd L. Gautreaux, employees of the Department of Transportation and Development, both felt the subject loop met design standards as of the date of its construction. Gautreaux, however, admitted that in 1971 and 1973 there were recommendations to repair the median curb barrier in the general area of this accident. He also stated that in April of 1976 a request was made by him for a study to make the structure one way, but he indicated in the report that should only be done as a last resort and other measures exhausted first to reduce the serious accidents. He said that after the subject accident he recommended the speed limit at the site be reduced to 20 miles per hour and that an overhead blinking light be installed with a 180-degree loop sign on it. He also had advised that chevrons be placed on the curve of the ramp to guide drivers around it. He did not advise a substantial barrier, however, because he felt it would take away from the width necessary to accommodate tractor-trailer vehicles.
Sharon Olman testified that both Augusta and the plaintiff entered a bar where she worked at about midnight on the evening before the accident occurred and that they drank approximately three or four beers apiece before leaving the premises at 3:15 a. m. She said that upon leaving both men appeared sober and were not driving recklessly; she added that neither ever drank mixed drinks or was a heavy drinker.
Jacqueline Lupo testified that immediately prior to the accident, the subject men on the motorcycle were proceeding ahead of her on West Metairie toward Causeway Boulevard and that she was traveling at a speed of 40 to 45 miles per hour. She said she slowed down when she reached the ramp and lost sight of the bike so that she could not say how fast the vehicle was traveling at that point or at the time of impact.
During the time she was following the motorcycle, Lupo said the driver, on occasion, switched lanes and also swerved within the lane and that the driver and passenger attempted to get her attention. She also said she did not think the cycle was being driven as carefully as it could have been.
In Breaux v. Louisiana Dept. of Highways, 347 So.2d 1290 (La.App. 1st Cir. 1977), the court said at 1293:
"It is generally accepted that `the Department of Highways is not responsible for every accident which occurs on state highways. It is not a guarantor of the safety of travelers thereon, or an insurer against all injury or damage which may result from defects in the highways. The duty of the Department of Highways is only to see that state highways are reasonably safe for persons exercising ordinary care and reasonable prudence. The Department is liable for damages only when it is shown (1) that the hazardous condition complained of was patently or obviously dangerous to a reasonably careful *123 and ordinarily prudent driver, and (2) that the Department had notice, either actual or constructive, of the existence of the defect and failed within a reasonable time to correct it.' * * *"
In regard to the question of when constructive knowledge of a dangerous condition exists, the court said in Gayle v. Department of Highways, 205 So.2d 775, 780-781 (La.App. 1st Cir. 1967):
"One is presumed to have constructive notice of a defect or dangerous condition when it is shown to have existed for such a long period of time that knowledge thereof can be presumed, or that it can be said that one ought to have had knowledge of the condition."
This court also noted in the recent case of Besnard v. Department of Highways, 381 So.2d 1303 (La.App. 4th Cir. 1980), at 1308:
"The decision of whether a condition of a highway actually is a dangerous and hazardous one to an ordinary prudent driver is a factual one, and the court should consider physical aspects of the roadway, frequency of accidents at that place in the highway and testimony of expert witnesses in arriving at this factual determination."
The case of Rue v. State, Department of Highways, 372 So.2d 1197, 1199 (La.1979), is also noteworthy for purposes of analysis of the present case:
"Under a simple `but-for' analysis the accident would not have occurred had either the Highway Department not been negligent in failing to maintain the shoulder or the plaintiff not been negligent (and for present purposes we assume her inadvertent meandering was negligence) in moving the vehicle onto the shoulder. But this does not conclude the inquiry. Focusing on plaintiff's `substandard' conduct the question is whether the risk of injury from striking an unexpected, negligently maintained highway shoulder was a risk reasonably related to plaintiff's failure to drive entirely on the paved portion of the highway. We conclude that it was not. A motorist has a right to assume that a highway shoulder, the function of which is to accommodate motor vehicles intentionally or unintentionally driven thereon, is maintained in a reasonably safe condition. Conversely the Highway Department's duty to maintain a safe shoulder encompasses the foreseeable risk that for any number of reasons, including simple inadvertence, a motorist might find himself travelling on, or partially on, the shoulder.
"We conclude that plaintiff's conduct if indeed it was substandard is no bar to her recovery of damages occasioned chiefly because the Highway Department negligently failed to maintain a safe highway shoulder. * * *"
It has also been held in U. S. F. & G. Co. v. State, Dept. of Highways, 339 So.2d 780 (La.1976), at 785:
"* * * The general rule has been recognized in our jurisprudence that a motorist using a public highway has a right to presume, and to act upon the presumption, that the highway is safe for usual and ordinary traffic, either in daytime or at night, and that he is not required to anticipate extraordinary danger, impediments, or obstructions, to which his attention has not been directed and of which he has not been warned. * * *"
Regarding the duty of the Highway Department in a case such as the present one, the court also said in U. S. F. & G. Co., supra, at 785:
"* * * In the performance of this duty, the character of the road and the probable traffic must be kept in view, as the requirement of reasonable safety implies reasonable safety for any lawful or proper purpose. Kilpatrick v. State, 154 So.2d 439 (La.App.2d Cir. 1963). In order to hold the Department of Highways liable for an accident caused by an unsafe or hazardous condition it must be shown that the Highway Department had prior notice, either actual or constructive, of the dangerous condition and had sufficient opportunity to remedy same or at least to alert and warn motorists of its presence and failed to do so. Coleman v. Houp, 319 So.2d 831 (La.App.3d Cir. 1975)." (Emphasis ours.)
*124 This court is also aware that in Townsend v. State, Department of Highways, 322 So.2d 139 (La.1975), the court said at 141-142:
"It is well settled that the plaintiff has the burden of proving causation by a preponderance of the evidence. It is only necessary that the evidence show that it is more probable than not that the harm was caused by the tortious conduct of the defendant. Jordan v. Travelers Insurance Company, 257 La. 995, 245 So.2d 151 (1971); Perkins v. Texas & New Orleans Railroad Company, 243 La. 829, 147 So.2d 646 (1962). This burden of proof may be satisfied by direct or circumstantial evidence. Lombard v. Sewerage & Water Board of New Orleans, 284 So.2d 905 (La.1973); Jordan v. Travelers Insurance Company, supra; Naquin v. Marquette Casualty Company, 244 La. 569, 153 So.2d 395 (1963). It suffices if the circumstantial evidence excludes other reasonable hypotheses only with a fair amount of certainty so that it is more probable than not that the harm was caused by the tortious conduct of the defendant. Boudreaux v. American Insurance Company, 262 La. 721, 264 So.2d 621 (1972), on rehearing."
In the present case this court can find no error in the district court's determination that the State of Louisiana, Department of Transportation and Development, was responsible for the injuries of the plaintiff. In spite of some expert testimony to the contrary, and some testimony that the conduct of the driver of the motorcycle may have been somewhat substandard, we hold the plaintiff established it was more probable than not that the harm done to him was the result of a hazardous highway condition caused by improper signing of the site, deficient design (in relation to the standards in effect at the time of construction) and improper maintenance of the area (in regard to the railing and the median barrier) and that this condition, as borne out by accident statistics of the area, was hazardous to an ordinary prudent driver. We also find, due to the previous years' accident statistics in connection with the site, as well as the testimony of Gautreaux that the State had notice of the dangerous conditions existing on the loop and, although it had sufficient opportunity, before the present accident occurred, to correct these conditions or at least warn motorists of them through sufficient signing and lowered speed limits, it failed to do so. Accordingly, we find the trial court's holding that the State of Louisiana and the Estate of Arthur Augusta were in solido liable to the plaintiff was a proper determination.
Neither does this court find error in the district court's refusal to admit evidence in the form of a pathology report of a urine test which was offered to determine the alcoholic content in the urine from the body of Arthur Augusta. As noted by the trial court judge, the State failed to offer the proper foundation for the admission of that report due to the fact that the witness called to introduce the document could not assure the court that proper testing procedures had been followed, that the receptacles in which the specimens were placed had not been washed out with ethyl alcohol, nor that precautions were taken to make sure the specimen, once removed, had not become contaminated. Before any such test result can be admitted in any civil or criminal case, the party seeking to introduce such evidence must first lay a proper foundation for its admission by connecting the specimen with its source, showing that it was properly taken by an authorized person, properly labeled and preserved, properly transported for analysis, and properly tested. Pearce v. Gunter, 238 So.2d 534 (La.App.3d Cir. 1970).
This court will now address itself to the issue of quantum. In regard to the actual physical injuries of the plaintiff, Dr. Richard McCall, an orthopedist, tested that after the accident Swanson was admitted to the hospital with multiple injuries which included spinal fractures, resulting in paraplegia from the level of thoracic eight down.
Dr. McCall explained he would assume the paraplegia is permanent and that he *125 performed surgery on the plaintiff inserting a Harrington rod in order to stabilize the fracture of the spine. He did a bony fusion of the back by use of a graft taken from the plaintiff's right buttock. The physician said Swanson will be confined to a wheelchair, although such patients, with monumental effort, occasionally can ambulate using crutches and braces. He added that the plaintiff will be totally impaired and it will be difficult for him to support himself in an upright sitting position, requiring that he brace himself with his arms for balance.
Dr. William Brannon, a urologist, testified that although there was no major urologic injury per se to the plaintiff due to the accident, the injury to his spinal cord caused a paralysis of his bladder so that it does not empty nor completely retain urine. He said the injury also has caused paralysis of the rectal area and both of these conditions are permanent. He added the plaintiff must use a catheter and an external device, but recommended surgery on the urethra, which will render him totally incontinent, in order to eliminate the source of infection which previously required a hospital stay of ten days. He also stated such an injury as the plaintiff's frequently eliminates sexual response.
Dr. James Bruce Johnson, a plastic surgeon, testified the plaintiff developed ulcers on both of his hips due to being in bed following his injury, which situation caused the breakdown of skin and tissue. He said he operated to provide a soft tissue cover over the bone, taking a piece of skin and the rectus femoris muscle, and he added the operation lasted approximately three hours. He stated the plaintiff was treated elsewhere for the other ulcer.
Dr. John C. Bowen, III, also testified that subsequent to the accident he performed surgery on the plaintiff to explore his abdomen in order to arrest suspected bleeding in that area; however, other than superficial lacerations of the liver no significant injuries were found. He stated the plaintiff also had a hemothorax, or blood in the chest, after the accident which required insertion of a chest tube.
Dr. George Guild, a psychiatrist, said on examination of the plaintiff he found he was maintaining psychic equilibrium through denial to himself of what has happened to him. He said plaintiff is suffering from severe depression, resulting from his situation and that he has a great deal of anxiety about his future. He added Swanson has lost interest in life and that if he began therapy, and his denial system broke down, there would probably evolve a very profound depression. As treatment, therefore, he recommended an in-hospital stay lasting from four months to a year or a year and a half. He said the hospital rate was approximately $150 per day and the five to six sessions of therapy required per week would cost $65 to $75 per hour.
Dr. Judy Feldman, a clinical psychologist, confirmed Dr. Guild's diagnosis and recommendations for treatment through tests performed on the plaintiff and she also said his intelligence quotient was in the dull normal range.
Susan L. Smith, an occupational therapist and vocational evaluator, said, after testing the plaintiff, that he would have difficulty using his hands freely in any work because of his limited sitting balance which requires him to use his arms for support. She stated he would be unable to meet the physical demands of a general carpenter, the work he had been doing before the accident, and that he was not a candidate to return to a formal education program. Although she was not familiar with the job market in the New Orleans area, she noted that many paraplegics do re-enter the work field.
Seymore S. Goodman, accepted by the court as an expert in economics, testified a carpenter's helper would earn $4 an hour and a carpenter's apprentice would be making approximately $7 an hour at the time of trial. He estimated the plaintiff's lost wages up until the trial date to be $12, 170.42, based on the $4 per hour figure. He also estimated, based on the plaintiff's age and life expectancy, that his prospective earnings loss would be $399,975.85. On cross-examination he did note the plaintiff's actual earnings for the first three months *126 of 1978, the year of the accident, were only $777; however, he stated that December, January and February are slack months in the construction trades.
Perhaps the most convincing testimony of the pain, suffering, humiliation and incapacity the plaintiff sustains was presented in the form of a video tape of his daily activities as explained by his mother at the trial court and which also leaves no doubt that he is physically dependent on other members of his household in order to perform most of the basic, routine activities of daily life. In spite of this we feel the district court judge's award of $370,000 to Swanson for past and future pain and suffering was not an abuse of the much discretion he is allowed in setting these damages. As to that court's awards for medical expenses, psychiatric treatment and surgery, we also hold these amounts were in accord with the expert testimony presented on those issues. The award of $90,000 for loss of wages this court also feels is realistic in spite of the limitations the plaintiff will encounter upon re-entering the job market.
For the reasons assigned, therefore, the trial court judgment is affirmed.
AFFIRMED.
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107 Ill. App.3d 337 (1982)
437 N.E.2d 789
EDWARD E. MUELLER et al., Plaintiffs-Appellants,
v.
HELLRUNG CONSTRUCTION COMPANY et al., Defendants-Appellees.
No. 81-169.
Illinois Appellate Court Fifth District.
Opinion filed June 10, 1982.
George R. Ripplinger, Jr., of Ripplinger, Dixon & Hoffman, of Belleville, for appellants.
Stephen J. Maassen and Al J. Pranaitis, both of Hoagland, Maucker, Bernard & Almeter, of Alton, for appellees Hellrung Construction Company, W.B. Wiggins, Jr., KSM Sheet Metal Co., Werner Brothers, Inc., and Kroger Company.
Judgment affirmed.
JUSTICE JONES delivered the opinion of the court:
This appeal again presents to the appellate court the question of whether Illinois recognizes an action by a minor child for the loss of parental society, companionship, love, affection and parental guidance.
In this action brought in part in negligence and in part under the Structural Work Act (Ill. Rev. Stat. 1979, ch. 48, par. 60 et seq.), plaintiff sought $6,000,000 in compensatory damages and $6,000,000 in punitive damages, plus costs of suit, for personal injuries suffered when he fell from the roof of a Kroger store then under construction in Alton, Illinois. He was an employee of Canham Sheet Metal Corporation, a subcontractor of one or more of the defendants named in the suit. In one count of the complaint his wife, plaintiff Geraldine Mueller, sought $4,000,000 for loss of consortium, and in another count his son, Michael Mueller, a minor, by his father and next friend, sought $2,000,000 for the loss of his father's "society, companionship, love, affection, and parental guidance." Separately the defendants moved to dismiss for failure to state a cause of action the count of the complaint wherein the minor sought to recover for the loss of parental companionship and society. Relying upon Koskela v. Martin (1980), 91 Ill. App.3d 568, 414 N.E.2d 1148, the trial court granted defendants' motions to dismiss that count. On appeal the minor raises two issues: (1) whether that count of the complaint states a cause of action and (2) whether dismissal of the count denies him equal protection of the laws.
*338 Of the several jurisdictions that have considered the question of whether a minor child may recover for the loss of a parent's companionship and society, that is to say, for the loss of what has been termed "parental consortium," nearly all, including Illinois in Koskela, have held that a minor child may not maintain such a cause of action. (See Annot., 69 A.L.R.3d 528 (1976).) Only Massachusetts (Ferriter v. Daniel O'Connell's Sons, Inc. (1980), ___ Mass. ___, 413 N.E.2d 690), Michigan (Berger v. Weber (1981), 411 Mich. 1, 303 N.W.2d 424) and, apparently, Iowa (Weitl v. Moes (Iowa 1981), 311 N.W.2d 259) allow a child to maintain a cause of action for the loss of parental companionship and society resulting from injury caused by the tortious act of a third party.
In Koskela an autistic child sought to recover for the loss of her father's services, companionship, society and affection after he was rendered unable, because of injury resulting from a collision with a garbage truck, to drive her to a special school, her mother being ill. Affirming the trial court's dismissal for failure to state a cause of action, the court expressed the concern, which we share, that recognition of a child's consortium action will result in increased litigation and multiple claims because each child has his or her own cause of action. As was said in Koskela,
"The possibility of multiple lawsuits may hinder settlement or increase the expense involved as such. Additionally, the social burden of providing damages for this loss will ultimately be borne by the public through increased insurance premiums or in the enhanced danger that accrues from the greater number of people who will choose to go without any insurance." 91 Ill. App.3d 568, 572, 414 N.E.2d 1148, 1151.
We agree with the court in Koskela that one of the consequences to be considered of allowing such a cause of action is the possibility of a defendant's greatly expanded liability. The court there noted the difficulty of drawing a line to end litigation "if all members of the household, such as cousins, grandchildren, and foster children, could have potential claims for loss of consortium." (91 Ill. App.3d 568, 572, 414 N.E.2d 1148, 1151.) Furthermore, it might be possible to draw that line so as to exclude children who are no longer minors from advancing a claim for the loss of a parent's companionship and society. As the dissent in Berger v. Weber pointed out,
"Parents often continue to provide their children with society, companionship, nurturance [sic] and guidance long after the children themselves become parents. Some children never leave their parents' homes. Other children, whether married or single, become the devoted caretakers and companions of aged parents, whose society and companionship play a prominent role in their *339 lives. The class of cases in which deprivation of parental consortium can be asserted is more extensive than might at first appear." (411 Mich. 1, 31, 303 N.W.2d 424, 433-34.)
The dissent there also observed, we think correctly, that
"[w]hile the creation of other new causes of action may have affected only a handful of cases and thus generated marginal additional costs, recognizing a separate right of recovery in members of a tort victim's family creates a potential for additional liability in a large number of cases. And a tort victim is likely to have more children than spouses." 411 Mich. 1, 39, 303 N.W.2d 424, 437.
In the dissent's analysis in Berger, if such a cause of action were allowed, given the place of both insurance and the automobile in our society, it is quite likely that those children suffering the greatest losses might well receive little or no compensation and that those suffering relatively slight losses would receive relatively greater compensation:
"Because few automobile drivers carry adequate liability insurance, most children who are deprived of a parent's companionship will not be benefitted. Policy limits are likely to be exhausted in the full or partial satisfaction of the injured parent's claim and the spouse's loss of consortium claim, without regard to children's claims for loss of parental consortium. Even fewer drivers have sufficient resources to satisfy such claims themselves. To be sure, some fortunate plaintiffs for example, a child whose parent happens to be injured in a collision with a common carrier's truck instead of an ordinary citizen's automobile, or in an industrial accident where a third party is responsible, or by a major manufacturer's product will be able to recover against `deep-pocket' defendants. But in the typical auto accident case, the less serious the parent's injury, the more likely it is that money will be available to pay claims for loss of parental consortium. The benefits of recognizing the child's cause of action will be unevenly and adventitiously distributed, more so than ordinarily." (411 Mich. 1, 40, 303 N.W.2d 424, 438.)
All things considered, we think that the balance must be struck against the creation of a new cause of action for loss of parental companionship and society. Although we appreciate the loss sustained by the minor child in the instant case, the loss is not one that in Illinois is actionable.
The minor maintains that "it is a violation of equal protection of the laws to allow a minor child to recover for the loss of consortium, companionship, society and affection of its parents if the parent dies of negligently inflicted injuries but to deny that same child those rights and cause of action if the parent survives. Such a distinction does not promote any compelling state interest * * *." Plaintiff submits further that there is *340 no rational basis for allowing one member of a family to maintain an action for loss of society, companionship, love and affection and denying that same cause of action to the remaining members of the family. Both of these arguments have been advanced unsuccessfully in other jurisdictions that do not recognize a child's cause of action for the loss of a parent's companionship and society. In Garza v. Kantor (1976), 54 Cal. App.3d 1025, 127 Cal. Rptr. 164, one of the issues presented was whether the constitutional mandate of equal protection compels recognition of this new tort. There the court reasoned,
"This mandate requires the law to treat alike those who are similarly situated. [Citation.] We do not regard the minor children in this case as situated similarly to the spouses to whom a cause of action for consortium is accorded. As we have just indicated, we view the relationships between spouses, on the one hand, and parent and child, on the other, as being essentially different. Secondly, although by statute (Code Civ. Proc., § 377) California grants a cause of action to certain beneficiaries (including minor children) of one wrongfully killed, the situation of such children differs from the position of the children before us. Those children are members of a statutory class and there is but a single recovery on behalf of all beneficiaries. Moreover, surviving children are totally deprived of parental consortium while the children before us are merely partially deprived." (54 Cal. App.3d 1025, 1028, 127 Cal. Rptr. 164, 166.)
In Russell v. Salem Transportation Co. (1972), 61 N.J. 502, 295 A.2d 862, the court found the equal protection argument without merit for two reasons:
"First, minor children of a deceased parent do not as such constitute the category of compensated parties under the wrongful death act. Rather does that category consist of the widow and next of kin of the decedent (`persons entitled to take any intestate personal property of the decedent'), although where some of those persons are dependent on the decedent they are the sole participating beneficiaries whether or not they or any of them are minor children of the decedent. N.J.S.A. 2A:31-4.
Second, there is no arbitrariness of treatment of the classes of children, even as hypothesized under plaintiffs' argument. A child is totally deprived of parental benefits when the parent is killed but not, except in unusual cases, when he survives." 61 N.J. 502, 508, 295 A.2d 862, 865.
In Illinois the amount recovered under the Wrongful Death Act (Ill. Rev. Stat. 1979, ch. 70, par. 2), with certain exceptions not applicable here, "shall be for the exclusive benefit of the surviving spouse and next of *341 kin of such deceased person * * *." Thus, minor children of a deceased parent do not constitute the category of beneficiaries compensated under the Wrongful Death Act. The two classifications here disputed are not composed of similarly situated individuals. Nor do we think that spouses, who may bring a cause of action for loss of consortium, may be said to be similarly situated with minor children. Hence, it cannot be said that those who are similarly situated have been treated dissimilarly under the law. Contrary to his assertion, the minor is not denied equal protection of the laws by the failure to recognize a cause of action for the loss of parental companionship and society.
Affirmed.
KASSERMAN and HARRISON, JJ., concur.
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936 F.2d 76
60 USLW 2032, 19 U.S.P.Q.2d 1223
Raymond BOYD, Plaintiff-Appellant,v.SCHILDKRAUT GIFTWARE CORPORATION and D & E TradingCorporation, Defendants-Appellees.
No. 919, Docket 88-7761.
United States Court of Appeals,Second Circuit.
Argued Feb. 6, 1991.Decided June 10, 1991.
Philip M. French, Stamford, Conn. (Alfred H. Hemingway, Jr., New York City, on the brief), for plaintiff-appellant.
Marvin E. Frankel, New York City (Terry D. Weissman, Kramer, Levin, Nessen, Kamin & Frankel, New York City, on the brief), for defendants-appellees.
Before TIMBERS, NEWMAN and ALTIMARI, Circuit Judges.
JON O. NEWMAN, Circuit Judge:
1
Of the many issues on this appeal in a patent licensing case, the only one of substance is determination of the circumstances under which the mismarking of a product with an inapplicable patent number will estop the user from denying that his product uses the patent. Raymond Boyd appeals from the July 29, 1988, judgment of the District Court for the Southern District of New York (Mary Johnson Lowe, Judge) dismissing his claim for royalties claimed to be due under a 1978 patent license. We conclude that, under the circumstances of this case, the rejection of marking estoppel was correct, and we therefore affirm.
Facts
2
Boyd invented a switch that turns on the lights inside a cosmetic compact when the cover of the compact is opened. The switch operates by means of a cam that rotates when the cover is opened, causing completion of an electrical circuit. Though Boyd originally applied for a patent covering any switch that automatically turns a compact's lights on and off, he was obliged, by virtue of the examiner's citation of a prior patent for a device that controls the electrical current in a compact by a different means, to narrow his claim to a switch operated by a rotating cam in the hinge of the compact.
3
In 1978, Boyd gave an exclusive license for his cam switch to defendant D & E Trading Corporation ("D & E"). The license covered the cam switch and any improvements of that invention (patent number 4,126,145). The agreement was to expire on August 31, 1980, subject to a clause specifying the conditions for renewal. Also in 1978, D & E acquired 50 percent of the stock of Schildkraut Giftware Corporation ("SGC"), and SGC undertook to arrange for manufacturing and marketing of compacts using the cam switch. Initially, compacts containing Boyd's cam switch enjoyed some success, but sales declined as product returns, prompted by malfunctioning of the cam switch, increased.
4
SGC's principal, an engineer, undertook to develop an alternative device for controlling the compact lights. He devised a wedge switch, which drove a wedge between two wires to break the circuit when the cover closed. In contrast, Boyd's cam switch aligned metal strips on the cam with the battery when the cover opened. By October 1979, D & E and SGC discontinued sales of compacts containing Boyd's cam switch and sold only compacts using the newly developed wedge switch. In November, D & E exercised its right under the 1978 license and terminated the agreement as of August 1980.
5
Thereafter, Boyd, D & E, and SGC entered into a new agreement dated March 1, 1980. The 1980 agreement provided that the 1978 agreement was terminated as of January 1, 1980, instead of August 31, 1980. The 1980 agreement also provided that Boyd would give defendants an exclusive license for a design patent for compacts if Boyd was successful in obtaining a design patent for which he had applied. The design patent never issued. In negotiating the 1980 agreement, defendants insisted that Boyd acknowledge that the wedge switch did not infringe the mechanical patent for the cam switch. Boyd's attorneys made that representation in writing in a letter on which Boyd noted his agreement.
6
Boyd's complaint made various allegations. He claimed that he was fraudulently induced to enter the 1980 agreement because defendants knew but failed to disclose that similar compact designs were on the market and that Boyd's design patent application was doomed. He also sought an accounting under the 1978 agreement and 1980 agreement, if the latter was determined not to be fraudulently induced. Finally, he claimed unjust enrichment for use of his trade secrets and know-how, in the event that all contractual agreements were deemed ended as of August 1980.
7
Judge Werker, to whom the case was originally assigned, granted Boyd's unopposed motion for partial summary judgment, ruling that Boyd was entitled under the 1978 agreement to royalties for all compacts sold by defendants with the patented cam switch. In subsequent rulings, Judge Werker made clear that under the 1978 agreement, Boyd was entitled to royalties only for compacts embodying the '145 patent. At a status conference after Judge Werker's death, Judge Lowe reconfirmed Judge Werker's ruling as to the scope of the 1978 license agreement and referred the matter to a magistrate judge for an accounting.
8
The magistrate judge also reconfirmed that Boyd was entitled to royalties only for compacts using the '145 patent and could not collect for compacts using the wedge switch. He also ruled that the appearance of the '145 number on a few compacts using the wedge switch was "entirely accidental and unintentional" and did not estop defendants from denying that the wedge switch compacts did not infringe the '145 patent and from declining to make royalty payments with respect to those compacts. He determined that Boyd was owed $76,789 in unpaid royalties. Judge Lowe confirmed the findings of the magistrate judge, except as to the amount of royalties. On the basis of what she concluded was undisputed evidence concerning the time periods of compact sales, she concluded that no royalties were unpaid.
Discussion
I. Patent Mismarking
9
Federal law makes patent mismarking a criminal offense. 35 U.S.C. Sec. 292 (1988). The offense includes placing a patent number on a product without the consent of the patentee "with the intent ... of deceiving the public and inducing them to believe that the thing was made or sold by or with the consent of the patentee...." Id. Sec. 292(a). The statute is enforceable by a qui tam remedy, enabling any person to sue for the statutory penalty and retain one-half of the recovery. Id. Sec. 292(b). The scienter element of the penal offense also applies to the qui tam remedy. See Brose v. Sears, Roebuck and Co., 455 F.2d 763, 768-69 & n. 8 (5th Cir.1972).
10
In the civil context, it has been held that placing a patent number on a product will estop a manufacturer from denying that his product embodies the patent for purposes of liability for both patent infringement damages, see Piaget Novelty Co. v. Headley, 108 Fed. 870, 872-73 (2d Cir.1901); Caanan Products, Inc. v. Edward Don & Co., 273 F.Supp. 492, 502 (N.D.Ill.1966), aff'd, 388 F.2d 540 (7th Cir.1968), and patent license royalties, see Gridiron Steel Co. v. Jones & Laughlin Steel Corp., 361 F.2d 791, 797 (6th Cir.1966).
11
Whether the scienter requirement of the mismarking offense is an element of marking estoppel has not been decided by this Court and has elicited varying views elsewhere. In Crane Co. v. Aeroquip Corp., 364 F.Supp. 547, 560 (N.D.Ill.1973), aff'd in part, rev'd in part without consideration of this point, 504 F.2d 1086, 1093 (7th Cir.1974), the Court endorsed the application of marking estoppel without a scienter requirement, explicitly refusing to import the wrongful intent element from section 292. By contrast, in Eastman Kodak Co. v. E.I. DuPont de Nemours & Co., Inc., 298 F.Supp. 718 (E.D.Tenn.1969), the Court declined to apply marking estoppel once it determined that "the error in mismarking was mistakenly and innocently made with no intent to deceive." Id. at 733. See also Dwight & Lloyd Sintering Co., Inc. v. American Ore Reclamation Co., 44 F.Supp. 401, 402 (S.D.N.Y.1941) (marking estoppel applied "in view of all the circumstances").
12
We think that marking estoppel, like other varieties of estoppel, should arise only when a consideration of all aspects of a defendant's pertinent conduct makes it inequitable for him to take a position contrary to his prior statements or actions. The act of impermissibly placing a patent number on a product, if limited in time and quantity, does not inevitably have such adverse effects for the patentee or the consuming public as to bar the mismarker from establishing that his product does not use the patent. Though a patentee or licensor normally will understandably have evidence only of sporadic instances of mismarking and need not identify widespread mismarking to raise a claim of estoppel, the accused mismarker should be able to defeat the claim by showing how inadvertent and limited the mismarking was. Of course, deliberate mismarking of even a limited nature or inadvertent mismarking over a prolonged period would justify an estoppel. See Gridiron Steel Co., 361 F.2d at 797 (mismarking for 12 years); Lathrop v. Rice & Adams Corp., 17 F.Supp. 622, 626 (W.D.N.Y.1936) (mismarking for five years).
13
In this case, the undisputed evidence showed that SGC instructed its Hong Kong manufacturer to reprint labels for the compacts using the wedge switch and delete the reference to Boyd's patent number. Because of a mistake made by non-English speaking employees, the first shipment of wedge switch cases were accidentally shipped with the old labels. The mistake was quickly noticed, the old labels were destroyed, and subsequent shipments bore no incorrect marking. Under these circumstances, the Magistrate Judge was entitled to conclude that the mismarking was "entirely accidental and unintentional" and "for a brief period," and did not provide a basis for marking estoppel.II. Other Issues
14
The remaining issues require little discussion. Boyd insists that the 1978 license agreement covered many aspects of the lighted compact, in addition to the patented cam switch. However, the agreement expressly conveys a license for "the Invention" and recites that Boyd has applied for a patent on "the Invention." The '145 patent covers the cam switch and nothing more. As Judge Werker and the Magistrate Judge ruled, Boyd gave a patent license, not a license to market a product. Cf. Aronson v. Quick Point Pencil Co., 440 U.S. 257, 99 S.Ct. 1096, 59 L.Ed.2d 296 (1979).
15
Boyd claims that he is due royalties under the 1978 and 1980 agreements with respect to compacts the defendants sold that use SGC's wedge switch. Preliminarily, we note that in rejecting this claim, the Magistrate Judge's finding of no infringement arguably raises an issue as to our appellate jurisdiction vis-a-vis the jurisdiction of the Court of Appeals for the Federal Circuit over claims arising under 28 U.S.C. Sec. 1338 (1988). See 28 U.S.C. Sec. 1295(a)(1) (1988). Though claims founded on section 1338 might arise in the course of litigation, thereby placing in doubt appellate jurisdiction outside the Federal Circuit, see Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 814-15, 108 S.Ct. 2166, 2176, 100 L.Ed.2d 811 (1988); id. at 822-24, 108 S.Ct. at 2180-81 (Stevens, J., concurring), the determination of no infringement in this case was a finding that royalties were not due under a license. That was an adjudication of a state law claim within the District Court's diversity jurisdiction, see Luckett v. Delpark, Inc., 270 U.S. 496, 510-11, 46 S.Ct. 397, 401-02, 70 L.Ed. 703 (1926), as to which our appellate jurisdiction is clear. On the merits, the claim was properly rejected in view of Boyd's explicit concession, in connection with the 1980 agreement, that the wedge switch did not infringe the '145 patent for the cam switch. The concession was well advised in view of the nearly certain preclusion of the claim by virtue of file wrapper estoppel.
16
Boyd's procedural objections are equally unavailing. Contrary to his claim, it was not improper for Judge Lowe, in effect, to grant partial summary judgment at the status conference she conducted following Judge Werker's death. Defendants had previously moved for summary judgment, and the matters not yet adjudicated by Judge Werker remained available for decision by Judge Lowe. Nor was there a denial of a jury trial by reason of the reference of the royalty computation issues to the Magistrate Judge. When Judge Lowe proposed referring the royalty calculations to a Magistrate Judge, she inquired of Boyd's counsel whether there was objection, and was told only that counsel would have to discuss the matter with his client. No objection was raised until the proceedings before the Magistrate Judge were well along. Even then, Boyd's counsel sought only to claim a jury trial on infringement as an issue purportedly distinct from the obligation to make royalty payments. Since the claim was for royalty payments, it was too late, after the royalty issues had been referred to the Magistrate Judge, to obtain a jury on the subsidiary issue of infringement, on which rested the royalty claim for the wedge switch compacts.
17
We have considered Boyd's remaining contentions and conclude that they lack merit for the reasons explained by the District Court.
18
The judgment of the District Court is affirmed.
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313 F.2d 52
In the Matter of David LIVINGSTON, as President of District65, Retail, Wholesale and Department Store Union,AFLCIO, Plaintiff-Appellant,v.JOHN WILEY & SONS, INC., Defendant-Appellee.
No. 101, Docket 27629.
United States Court of Appeals Second Circuit.
Argued Nov. 5, 1962.Decided Jan. 11, 1963.
Irving Rozen, New York City (Myron Nadler and Weisman, Allan, Spett & Sheinberg, New York City, on the brief), for plaintiff-appellant.
Charles H. Lieb, New York City (Robert H. Bloom and Paskus, Gordon & Hyman, New York City, on the brief), for defendant-appellee.
Before MEDINA, SMITH and KAUFMAN, Circuit Judges.
MEDINA, Circuit Judge.
1
District 65, Retail, Wholesale and Department Store Union, AFL-CIO appeals from an order of the District Court for the Southern District of New York denying its motion to compel arbitration under a collective bargaining agreement. The opinion below is reported at 203 F. Supp. 171.
2
Beginning in 1949 the Union entered into collective bargaining agreements with Interscience Publishers, Inc., the last one dated February 1, 1960, for a term of two years ending January 31, 1962. None of these agreements was stated in terms to be binding on Interscience 'and its successors.' On October 2, 1961 Interscience effected a consolidation for bona fide business reasons with another publishing firm, John Wiley & Sons, Inc. A dispute arose with respect to the effect of the consolidation on the status of the collective bargaining contract and the Union. Interscience before the consolidation, and Wiley thereafter took the position that the agreement was automatically terminated for all purposes by the consolidation, and that all rights of the Union and the employees arising out of the agreement were at an end. The Union adhered throughout the discussions and correspondence both before and after the consolidation to the view that the agreement was not terminated by the consolidation and that certain rights had become 'vested' which Wiley must recognize. The details of this controversy will be more fully described shortly. The upshot was that the Union demanded arbitration of the dispute, under Article XVI of the Agreement (set forth in full in the Appendix to this opinion), relating to 'Grievances: Adjustment of Disputes: Arbitration,' and on January 23, 1962, the Union commenced this action against Wiley to compel arbitration. The District Court assumed that the agreement survived the consolidation, but denied arbitration on two grounds: that the agreement should be so construed as 'to exclude from arbitration matters involving the entire collective bargaining unit, as distinguished from the individuals comprising it'; and that, even if not so limited, the Union has failed to avail itself of the grievance procedure described in the agreement and had thus abandoned any rights it might have had to arbitration of the dispute.
3
We think it clear that the District Court had jurisdiction of the case under Section 301 of the Labor Management Relations Act, 29 U.S.C. 185, and that the appeal by the Union is properly before us. Textile Workers Union v. Lincoln Mills, 1957, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972; General Electric Co. v. Local 205, United Electrical Workers, 1957, 353 U.S. 547, 77 S.Ct. 921, 1 L.Ed.2d 1028; Goodall-Sanford, Inc. v. United Textile Workers, AFL Local 1802, 1957, 353 U.S. 550, 77 S.Ct. 920, 1 L.Ed.2d 1031. We also hold, as matter of federal law, (1) that the agreement and rights arising thereform were not necessarily terminated by the consolidation, and that Wiley and the Union are proper parties to the arbitration proceeding; (2) that the terms of the agreement contemplated the arbitration of just such a dispute or controversy as the one before us and that the attempt to arbitrate here is not an improper effort to secure status as collective bargaining agent for the negotiation of a new contract, nor is it an attempt to secure allegedly proscribed 'quasi-legislative' arbitration' (3) that issues raised by Wiley arising out of the Union's alleged failure to comply with certain requirements of the agreement relative to so-called grievance procedure are matters to be decided by the arbitrator.
4
The facts, sketched above, may be stated more fully as follows:
5
On October 2, 1961 Interscience employed 80 persons, of whom 40 were covered by the 1960 contract; Wiley employed 300 persons. Interscience, with a single plant in New York City, did an annual business of $1,000,000; Wiley, an older company, had three substantially larger plants, and did an annual business of $9,000,000.
6
The Union learned of the proposed consolidation in June of 1961 and on June 27 wrote Interscience, stating its position that the contract would remain in force notwithstanding the consolidation. On September 19, 1961 Interscience initiated conversations with the Union, in the course of which Interscience insisted that the contract would end upon consolidation. On September 21, 1961 Interscience wrote its employees, stating its views on termination and offering jobs at the Wiley plant in New York City. On October 2, 1961, the effective date of the consolidation, Wiley wrote the Union stating that the contract was terminated.
7
All of Interscience's 80 employees were subsequently employed by Wiley, but 11 later resigned and received severance pay voluntarily granted by Wiley. The Union does not allege discrimination against these persons, but attributes their resignation to worsened working conditions. Wiley has placed the Interscience employees under its own pension plan, crediting them for past service with Interscience, but it does not recognize their seniority or other rights under the Interscience contract, nor does it recognize the appellant Union or any othre union.
8
The Interscience contract obliged Interscience to make quarterly payments into an employee pension fund. The Union contends that Interscience's payment for the third quarter of 1961 was inadequate, and that Wiley is obliged and has failed to make up this deficit and also to make the payment due for the fourth quarter. The total claim amounts to $8,000. The contract also contains provisions according to the Interscience employees rights regarding seniority, job security, grievance procedure, and vacation and severance pay.
9
On January 23, 1962 the Union commenced this action in the District Court to compel Wiley to arbitrate the dispute between the parties concerning the effect of the consolidation upon the contract and the so-called 'vested' rights of the Union and the employees to continued payments by Wiley to the Interscience employee pension fund and to seniority, job security, grievance procedure, and vacation and severance pay, 'now and after January 30, 1962.'
10
* The question of 'substantive arbitrability' is for the court not for the arbitrator to decide. Atkinson v. Sinclair Refining Co., 1962, 370 U.S. 238, 241, 82 S.Ct. 1318, 8 L.Ed.2d 462. The controlling law is not New York law but federal law. Textile Workers Union v. Lincoln Mills, supra, 353 U.S. at 456, 77 S.Ct. 912, 1 L.Ed.2d 972. The sources of that law, to be fashioned by judicial inventiveness, are the express provisions of the national labor laws, the basic policies underlying these law, 'state law, if compatible with the purpose of Section 301' and which 'will best effectuate the federal policy,' and accepted principles of traditional contract law. Id. at 457, 77 S.Ct. at 918; Local 174, Teamsters, etc. v. Lucas Flour Co., 1962, 369 U.S. 95, 105, 82 S.Ct. 571, 7 L.Ed. 593. See Jay, Arbitration and the Federal Common Law of Collective Bargaining Agreements, 37 N.Y.U.L.Rev. 448 (May, 1962); Comment, The Emergent Federal Common Law of Labor Contracts: A Survey of The Law under Section 301, 28 Univ.Chi.L.Rev. 707 (1961).
11
The Union tells us that under Section 90 of the New York Stock Corporation Law, McKinney's Consol.Laws, c. 59,1 the contract did not automatically terminate because the provisions of this statute are to the effect that the consolidated corporation is 'deemed to have assumed' and 'shall be liable' for 'all liabilities and obligations' of the constituent corporation just as if it 'had itself incurred such liabilities or obligations.' But this legislation is clearly not binding upon us, and we may or may not find taht the rule thus formulated, with or without qualifications or in some modified form, 'will best effectuate the federal policy.' We have found no case formulating a rule of federal law on the point at issue here, and none has been called to our attention. We must accordingly, to the best of our competence, and giving due weight to the legislation of the Congress in the area of labor-management relations and other sources relevant to the task, including the provisions of Section 90 of the New York Stock Corporation Law, fashion for the first time the rule of federal law that is to govern the decision of the first and preliminary question presented for our consideration: Did the consolidation abruptly terminate the collective bargaining agreement and the rights of the Union and the employees created or arising thereunder?
12
We think it clear and we decide and hold that the federal policy of promoting industrial peace and stability, especially with reference to arbitration procedures set up in collective bargaining agreements (Textile Workers Union v. Lincoln Mills, supra, 353 U.S. at 453-454, 77 S.Ct. 914, 1 L.Ed.2d 972; United Steelworkers of America v. Warrior & Gulf Navigation Co., 1960, 363 U.S. 574, 578, 80 S.Ct. 1347, 4 L.Ed.2d 1409; Local 174, Teamsters, etc. v. Lucas Flour Co., supra, 369 U.S. at 105, 82 S.Ct. 571, 7 L.Ed. 593; Drake Bakeries Inc. v. Local 50, 1962, 370 U.S. 254, 263, 82 S.Ct. 1346, 8 L.Ed.2d 474) can be fostered and sustained only by answering this question in the negative. And we reach this conclusion despite the fact that the agreement contains no statement that its terms are to be binding upon Interscience 'and its successors,' and the further fact that neither of the parties had a possible consolidation in mind when the terms of the agreement were negotiated and settled. Not only would a contrary rule involve manifest injustice, a circumstance not to be lightly disregarded or brushed aside; it would be a breeder of discontent and unharmonious relations between employer and employees, and a source of unnecessary and disrupting litigation.
13
A further principle, particularly applicable in the formulation of new segments of federal labor law, is, we think, the principle of restraint that requires us to formulate the rule that is decisive of the case before us, and to go no further.
14
Thus, while we do hold that the consolidation did not ipso facto terminate all rights of the Union and the employees created by or arising out of the collective bargaining agreement,2 we do not decide what those rights are. As will appear in a later portion of this opinion, the power and function of making a decision, or a series of decisions, with respect to these rights, have been reserved by the parties for the arbitrator in the course of the arbitration proceedings that will follow our reversal of the order appealed from. Cf. Goodall-Sanford, Inc. v. United Textile Workers, AFL Local 1802, 1 Cir., 1956, 233 F.2d 104, 110, affirmed, 1957, 353 U.S. 550, 77 S.Ct. 920, 1 L.Ed.2d 1031. Our decision, then, cannot be construed as holding generally that collective bargaining agreements survive consolidation. We merely hold that, as we interpret the collective bargaining agreement before us in the light of Supreme Court decisions enunciating the federal policy of promoting industrial peace and stability, especially with reference to arbitration procedures set up in collective bargaining agreements, we cannot say that it was intended that this consolidation should preclude this Union from proceeding to arbitration to determine the effect of the consolidation on the contract and on the rights of the employees arising under the contract.
15
Several additional objections to arbitration have been made on the ground of improper parties. Wiley contends that it cannot be made a party to the arbitration proceeding because it was not a party to the agreement and the arbitration clause was not binding upon it. We think that our discussion above disposes of this objection as well. When negotiating and before effectuating the consolidation of October 2, 1961, Wiley was aware of the existence of the collective bargaining agreement and of its obligations under the New York Stock Corporation Law, Section 90. In view of the national policy of promoting industrial peace and stability and the special function of arbitration in promoting these ends, above adverted to, we think and hold, in the exercise of our duty to fashion an appropriate rule of federal labor law, that it is not too much to expect and require that this employer proceed to arbitration with the representatives of the Union to determine whether the obligation to arbitrate regarding the substantive terms of the contract survived the consolidation on October 2, 1961, and, if so, just what employee rights, if any, survived the consolidation.3
16
Wiley also argues that the Union is not the proper party to present the claims of these employees. But the fact that the contract has now terminated does not of itself bar arbitration. United Steelworkers of America v. Enterprise Wheel & Car Corp., 1960, 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424. There is no showing that the Union here has been decertified. Glendale Mfg. Co. v. Local 520, etc. Garment Workers, 4 Cir., 1960, 283 F.2d 936, cert. denied, 1961, 366 U.S. 950, 81 S.Ct. 1902, 6 L.Ed.2d 1243; Modine Mfg. Co. v. Grand Lodge, etc. Machinists, 6 Cir., 1954, 216 F.2d 326. There is here no rival union, whose rights would be interfered with by the Union's pressing of these employee claims. Kenin v. Warner Bros. Pictures, Inc., S.D.N.Y., 1960, 188 F.Supp. 690. In short, there is no showing that the freedom of choice of any employee would in any way be infringed by the Union's pressing of the employee claims under a preexistion agreement, and we are aware of no reason why the Union may not enforce arbitration of a dispute or controversy concerning rights alleged to have arisen out of and pursuant to the terms of the collective bargaining agreement which it negotiated, especially where there appears to be no other preson or entity in a position legally to enforce arbitration.
II
17
The issues tendered by the Union for arbitration are:
18
(a) Whether the seniority rights built up by the Interscience employees must be accorded to said employees now and after January 30, 1962;
19
(b) Whether, as part of the wage structure of the employees, the Company (Wiley) is under an obligation to continue to make contributions to District 65 Security Plan and District 65 Security Plan Pension Fund now and after January 30, 1962;
20
(c) Whether the job security and grievance provisions of the contract between the parties shall continue in full force and effect;
21
(d) Whether the Company (Wiley) must obligate itself to continue liable now and after January 30, 1962 as to severance pay under the contract;
22
(e) Whether the Company (Wiley) must obligate itself to continue liable now and after January 31, 1962 for vacation pay under the contract. In its brief and on oral argument the Union characterized the rights claimed by it on behalf of itself and the employees it represents as 'property rights' or 'vested rights' built up by the employees 'during their long years of employment' in accordance with the terms of the collective bargaining agreement.4 Hence the essence of the proposed sebmission is that the arbitrator determine the nature of and proper remedy for implementing those rights, if any, as to seniority, pension plan, job security, grievance procedure, and vacation and severance pay. which he finds accrued during the term of the collective bargaining agreement. In other words, implicit in the submission is the possibility that the arbitrator may decide that no rights to seniority, pension plan, job security, grievance procedure, or vacation and severance pay, survived the consolidation or the date of expiration of the collective bargaining agreement. It is not our function to express any opinion on the subject, provided the agreement contemplates that such a question or congeries of questions was to be decided by arbitration. United Steelworkers of America v. American Mfg. Co., 1960, 363 U.S. 564, 567-569, 80 S.Ct. 1343, 4 L.Ed.2d 1403.5
23
We may note that it is just because the Union seeks to arbitrate the existence and nature of rights which it claims 'vested' during the term of the agreement, although maturing after the termination thereof, that arbitration here does not conflict with the rule above discussed, that a successor employer will not be required to continue to bargain with a union when there has been a substantial change in the nature of the employment enterprise. So too, it is because of this claim of 'vested rights' that our order of arbitration does not conflict with decisions, whose validity we need not pass upon, barring 'quasi-legislative' arbitration. See Boston Printing Pressman's Union v. Potter Press, D.Mass. 1956, 141 F.Supp. 553, affirmed, 1 Cir., 1957, 241 F.2d 787, cert. denied, 355 U.S. 817, 78 S.Ct. 21, 2 L.Ed.2d 34; Couch v. Prescolite Mfg. Corp., W.D.Ark., 1961, 191 F.Supp. 737; In re Valencia Baxt Express, Inc., D.P.R., 1961, 199 F.Supp. 103.
24
A careful scrutiny of the agreement discloses, we think, a perfectly clear intention that the questions propunded by the Union be arbitrated. A distinction is made, on the very face of the agreement, between ordinary grievances personal to individual employees, on the one hand, and other, perhaps more important disputes, such as the one before us, relative to 'matters affecting the entire bargaining unit,' both of which, however, are subjected to arbitration. Read as a whole the agreement clearly contemplates the arbitration of any 'difference' or 'dispute' between the Union and the employer 'arising out of or relating to this agreement, or its interpretation or application, or enforcement.' Arbitration is not limited to 'grievances.' This language, quoted from Section 16.0 of Article XVI, relating to 'Grievances: Adjustments of Disputes: Arbitration,' is plainly intended to be broad and comprehensive. And we must remember the teaching of United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 584-585, 80 S.Ct. 1347, 4 L.Ed.2d 1409, that the dispute is to be arbitrated unless it is perfectly clear that it is specifically and plainly excluded. The party claiming exclusion has a heavy burden. See Procter & Gamble Independent Union, etc. v. Procter & Gamble Mfg. Co., 2 Cir., 1962, 298 F.2d 644.
25
The exclusion clause relied upon here is Section 16.5(3) referring to 'matters not covered by this agreement.' Wiley would have us hold that, because the agreement does not mention the possibility of consolidation, the 'matter' in suit is not covered by the agreement. This is pure sophistry. This suit involves the Union's claim of rights to pension plan, seniority, vacation and severance pay and other matters that are covered by specific provisions of the agreement, and even if such claim is wrong or even untenable and frivolous, this does not bar arbitration. United Steelworkers of America v. American Mfg. Co., supra, 363 U.S. at 568-569, 80 S.Ct. 1343, 4 L.Ed.2d 1403. Moreover, the various specific references to matters reserved for the sole control of the employer and resting in his discretion, contained elsewhere in the agreement, merely emphasize the fact that no such specific exclusionary clauses make reference to any privilege on the part of the employer to consolidate with another company and cut off rights allegedly 'vested' in the employees, such as the right to payments to the welfare fund, to vacations, and to seniority. It is not probable that the Union would have agreed to any such exclusionary clause had the subject come up for discussion.
26
A further argument in support of the interpretation of the agreement given above is that as arbitration is described as 'the sole and exclusive' remedy of the parties and the employees, 'in lieu of any and all remedies, forums at law, in equity or otherwise,' 'for any claimed violations of this contract, and for any and all acts or omissions claimed to have been committed by either party during the term of this agreement' (Section 16.9), it is not reasonable to suppose that it was intended that the Union should have no right whatever to resort to arbitration in the event of a consolidation, but should be entirely at the mercy of the employer.
III
27
While the Supreme Court has clearly held that the question of 'substantive arbitrability' is for the court (Atkinson v. Sinclair Refining Co., supra, 370 U.S. at 241, 82 S.Ct. 1318, 8 L.Ed.2d 462), it has never expressly decided the question as to 'procedural arbitrability,' namely, whether or not adherence or lack of adherence to the grievance and arbitration procedure outlined in a collective bargaining agreement is for decision by the court or by the arbitrator. Nor do we discern such a ruling by implication in the fact, adverted to by Wiley, that one week after deciding the Steelworkers cases the Court denied certiorari in Brass & Copper Workers, etc. v. American Brass Co., 7 Cir., 1959, 272 F.2d 849, cert. denied, 1960, 363 U.S. 845, 80 S.Ct. 1609, 4 L.Ed.2d 1728, a case in which the Seventh Circuit had held that the question is for the court. So far as other authority is concerned, this Circuit has never spoken clearly on the issue, and there appears to be a difference of opinion on this point in the other Circuits, with more recent decisions holding that the question is for the arbitrator.6 The lower federal courts seem also to be split,7 and the commentators in general agree that the matter is for the arbitrator.8
28
This question of 'procedural arbitrability' is squarely before us now. By way of preliminary we must, we think, take note of the fact that 'substantive arbitrability' and 'procedural arbitrability' are separate and distinct matters. The Supreme Court has explained the rule that 'substantive arbitrability' is for the court in the following terms:
29
'The Congress * * * has by 301 of the Labor Management Relations Act, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to arbitrate.'
30
United Steelworkers of America v. Warrior & Gulf Co., supra, 363 U.S. at 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409; Atkinson v. Sinclair Refining Co., supra, 370 U.S. at 241, 82 S.Ct. 1318, 8 L.Ed.2d 462. However, as Professor Cox has correctly noted in his article in 72 Harvard Law Review, supra at 1511, 'the reason for giving the court power to decide what subject matter is within the arbitration clause does not extend' to the issue of 'procedural arbitrability,' for the court's duty to determine 'whether the reluctant party has breached his promise to arbitrate' is exhausted once it has been determined that 'the party seeking arbitration is making a claim which on its face is governed by the contract' or that 'the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made.' United Steelworkers of America v. American Mfg. Co., supra, 363 U.S. at 568, 80 S.Ct. 1343, 4 L.Ed.2d 1403; United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409. See Philadelphia Dress Joint Board, etc. v. Sidele Fashions, Inc., E.D.Pa., 1960, 187 F.Supp. 97, 100.
31
Thus the settled law on the issue of 'substantive arbitrability' does not control the decision of the separate problem now under discussion, and we think there is ample reason for holding that issues of compliance with grievance and arbitration procedure in the ordinary collective bargaining agreement are properly within the competence of the arbitrator. We find wholly unpersuasive the argument that questions of procedure in collective bargaining agreements involve 'largely a matter of contract construction' as to which 'the industrial context is irrelevant' and that consequently 'the courts' expertise in construing agreements seems to qualify them as the appropriate forum for determining procedural compliance.' 28 Univ.Chi.L.Rev., supra at 732. Rather we believe that a holding that this Court or any court should decide the merits of a dispute concerning procedural questions under an arbitration clause of a collective bargaining agreement would be quite inconsistent with the principles and policies enunciated by the Supreme Court to the effect that once it has been determined that the reluctant party has breached his promise to arbitrate, the matter must go to the arbitrator for determination on the merits. United Steelworkers of America v. American Mfg. Co., supra, 363 U.S. at 568, 80 S.Ct. 1343, 4 L.Ed.2d 1403; United Steelworkers of America v. Warrior & Gulf Co., supra, 363 U.S. at 581-582, 80 S.Ct. 1347, 4 L.Ed.2d 1409; United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 596, 80 S.Ct. 1358, 4 L.Ed.2d 1424.
32
What is fundamental to the teaching of these cases, as we read them, is the ruling that the parties have bargained for a decision by an arbitrator because they thus have the benefit of his creativity and expertise that are in no small measure due to his knowledge of and familiarity with the industry and shop practices constituting the environment in which the terms of collective bargaining agreement were negotiated and assented to. Surely, and especially under the conditions of the industrial world of today, this environment, and the concrete day-by-day relationships to which the agreement must be applied, includes the implementation of the arbitration clause and its procedural aspects. See Procedural Requirements of a Grievance Arbitration Clause: Another Question of Arbitrability, 70 Yale L.J. 611, 618 (1961); Cox, Reflections upon Labor Arbitration, 72 Harv.L.Rev. 1482, 1509-12; Gregory, The Law of the Collective Agreement, 57 Mich.L.Rev. 635, 646-9 (1959). Cf. Fleming, Problems of Procedural Regularity in Labor Arbitration, 1961 Wash. U.L.Q. 221. Indeed, it may well be that the arbitrator can make his most important contribution to industrial peace by a fair, impartial and wellinformed decision of these very procedural matters. To hold matters of procedure to be beyond the competence of the arbitrator to decide, would, we think, rob the parties of the advantages they have bargained for, that is to say, the determination of the issues between them by an arbitrator and not by a court. A contrary decision would emasculate the arbitration provisions of the contract.
33
The position just above outlined seems to us to be the only sound position to take, especially when we consider what are the particular procedural questions involved in this case. Accordingly, we shall summarize, as briefly as we can, the miscellaneous contentions of Wiley that are supposed to fall in the category of procedure and the way these contentions are dealt with by the Union. Thus Wiley claims the Union was required to follow Steps 1, 2 and 3, described in Section 16.0. The Union replies that these applied only to an 'affected employee,' and not to the controversy in this case which affects the entire bargaining unit. The Union also points to the fact that there was an orderly exchange of views, and says this surely was a substantial compliance with the contract. Cf. International Association of Machinists v. Hayes Corp., 5 Cir., 1961, 296 F.2d 238. With respect to Wiley's claim that there was a failure to comply with the requirement of Section 16.6 that 'any grievance must be filed with the Employer and with the Union Shop Steward within four (4) weeks after its occurrence or latest existence,' the Union replies that the question here is not a 'grievance' but a 'dispute' or 'difference' arising out of the agreement and that this Section has no application to a dispute over such a broad question as to whether all the employees had 'vested' rights under the contract inextinguishable by unilateral action by the employer; and that to say this is a 'grievance' to be filed 'with the Employer and with the Union Shop Steward' borders on absurdity. Moreover, the Union contends that, if some sort of notice of the dispute was required within four weeks after its 'occurrence or latest existence,' the letter of June 27, 1961, filed within four weeks after the Union learned of the proposed consolidation, was such notice. It is further argued by the Union that the dispute was plainly a continuing one. But the Union adds that even if all its ontentions as above stated were to be rejected, there was a clear waiver of procedural requirements by Wiley.
34
Is it to be supposed that the benefits of arbitration, duly bargained for, are to be indefinitely postponed, just because one of the parties tenders a miscellany of such contentions as these, and argues that no arbitration can be had until after a court has rejected them and they have also been passed upon by this Court?
35
It is of the essence of arbitration that it be speedy and that the source of friction between the parties be promptly eliminated. Robert Lawrence Co. v. Devonshire Fabrics, Inc., 2 Cir., 1959, 271 F.2d 402, 410, cert. granted, 1960, 362 U.S. 909, 80 S.Ct. 682, 4 L.Ed.2d 618, dismissed per stipulation, 364 U.S. 801, 81 S.Ct. 27, 5 L.Ed.2d 37. The numerous cases involving a great variety of procedural niceties already cited in the footnotes to this opinion make it abundantly clear that, were we to decide that procedural questions under an arbitration clause of a collective bargaining agreement are for the court, we would open the door wide to all sorts of technical obstructionism. This would be completely at odds with the 'basic policy of national labor legislation to promote the arbitral process as a substitute for economic warfare.' Local 174, Teamsters, etc. v. Lucas Flour Co., supra, 369 U.S. at 105, 82 S.Ct. 571, 7 L.Ed. 593. See In the Matter of Jacobson, D.Mass., 1958, 161 F.Supp. 222, 227 (opinion by Wyzanski, J.), reversed and remanded sub nom., Boston Mutual Life Ins. Co. v. Insurance Agents Union, supra. Cf. Procter & Gamble Independent Union, etc. v. Procter & Gamble Mfg. Co., supra, 298 F.2d at 645.
36
It is for this reason that we cannot agree to the distinction propounded by Judge Palmieri in his very excellent discussion in Carey v. General Electric Co., S.D.N.Y., 1962, 50 L.R.R.M. 2119, 45 CCH Lab. Cas. P17,599, between matters of procedural compliance requiring the expertise of the arbitrator for decision and those which the courts are capable of deciding on their own. If the court must first decide whether a particular procedural problem calls for the special abilities and knowledge of an arbitrator, there will be inevitable delay. Such a practice, if followed, would develop a whole new body of decisional law, with the usual distinctions and refinements. Moreover, we have serious doubts that the suggested distrinction between different types of procedural questions arising out of the arbitration clauses in collective bargaining agreements can be placed upon any tenable and rational basis. In any event, it is clear that the practical consequences of attempts by the courts to apply such a distinction would be delay and prejudice to the speedy and effective arbitration which we believe the national policy calls for.
37
Having thus decided that the question of 'procedural arbitrability' is for the arbitrator, we do not reach the merits of Wiley's contentions that the Union did not comply with the procedural requirements of the collective bargaining agreement.
38
Reversed with a direction to order arbitration.
APPENDIS
39
Article XVI: Grievances: Adjustments of Disputes: Arbitration.
40
Sec. 16.0. Any differences, grievance or dispute between the Employer and the Union arising out of or relating to this agreement, or its interpretation or application, or enforcement, shall be subject to the following procedures, which shall be resorted to as the sole means of obtaining adjustment of the difference, grievance, or dispute, hereinafter referred to as 'grievance':
41
Step 1: The grievance, when it first arises, shall be the subject of a conference between the affected employee, a Union Steward and the Employer, officer or exempt supervisory person in charge of his department. The grievance shall be presented orally. If, at this step, the grievance is resolved to the mutual satisfaction of the parties, a memorandum stating the substance of the settlement shall be prepared and signed by the Employer representative and the affected employee. Copies of the same shall be furnished to the Union's Shop Steward and the Employer. In the event that the grievance is not satisfactorily settled within two (2) working days after the conclusion of the conference stated above, the grievance shall be reduced to writing. It shall state the nature of the claim made and the objections raised thereto and shall be signed by the Employer representative and the affected employee.
42
Step 2: Within five (5) working days thereafter, the grievance shall be the subject of a conference between an officer of the Employer, or the Employer's representative designated for that purpose, the Union Shop Committee and/or a representative of the Union, at which conference the parties will endeavor to resolve and settle the grievance.
43
Step 3: In the event that the grievance shall not have been resolved or settled in 'Step 2', the grievance shall be referred and submitted to arbitration before an impartial arbitrator who shall be chosen by the mutual consent in writing by the Employer and the Union. All grievances not satisfactorily adjusted within two (2) weeks from their inception shall be referred to arbitration, unless such time shall be extended inwriting by Employer and the Union.
44
Sec. 16.1. In the event that the parties fail to agree upon an impartial arbitrator, as provided in 'Step 3', the impartial arbitrator, by the filing of a demand for arbitration by the aggrieved party, shall be selected and designated by the American Arbitration Association, pursuant to whose Rules for its Voluntary Labor Arbitration Tribunal, any and all arbitrations shall be conducted.
45
Sec. 16.2. The arbitrator finally designated to serve in that capacity, after receiving a written statement signed jointly by the Employer and the Union certifying to his selection and designation as aforesaid and containing a concise statement of the issue involved, shall conduct the arbitration in accordance with the Arbitration Law of the State of New York. The decision of the Arbitrator shall be final and binding upon the parties. All expenses incidental to the arbitrator's services, if any, shall be borne equally by the Employer and the Union.
46
Sec. 16.3. It is agreed that time is of the essence in any arbitration, and both parties will exert their best efforts to obtain a speedy decision.
47
Sec. 16.4. It is expressly agreed that there shall be no strike, slow-downs or suspension of work of any nature while a grievance is in the process of negotiation and disposition under the grievance and arbitration procedures of this Article.
48
Sec. 16.5. It is agreed that, in addition to other provisions elsewhere contained in this agreement which expressly deny arbitration to specific events, situations or contract provisions, the following matters shall not be subject to the arbitration provisions of this agreement:
49
(1) the amendment or modification of the terms and provisions of this agreement;
50
(2) Salary or minimum wage rates as set forth herein;
51
(3) matters not covered by this agreement; and
52
(4) any dispute arising out of any question pertaining to the renewal or extension of this agreement.
53
Sec. 16.6. The status in effect prior to the assertion of a grievance or the existence of any controversy or dispute shall be maintained pending a settlement or decision thereof. Notice of any grievance must be filed with the Employer and with the Union Shop Steward within four (4) weeks after its occurrence or latest existence. The failure by either party to file the grievance within this time limitation shall be construed and be deemed to be an abandonment of the grievance.
54
Sec. 16.7. Nothing contained in this Article shall be deemed to be a restriction or limitation of the rights of the Employer, or the Union, or an individual employee, or a group of employees, as specified in Section 9(a) of the Labor Management Relations Act, 1947, as amended. However, whenever any meetings or conferences are held with the Employer during business hours, the Union's employee-representatives shall be limited to only two (2) employees. During negotiations for the renewal of this agreement, the Union's negotiating committee shall be limited to no more than three (3) employees. Except in emergency situations, employees shall not discuss grievances with Stewards during regular working hours.
55
Sec. 16.8. Grievances or disputes arising out of this agreement shall not be combined or accumulated and submitted as a part of one case or arbitration proceeding. Accordingly, no arbitrator shall have the authority to hear or determine more than one (1) grievance, unless several grievances arise out of the same common state of facts, and are relevant and germane to one another. Whenever any provision in this agreement reserves to the Employer the right to exercise its sole discretion or judgment with respect to specific subjects, events, matters or situations, the exercise or nonexercise of such discretion or judgment shall not be arbitrable.
56
Sec. 16.9. Except for threatened breaches or actual breaches of the provisions of Article '25' of this agreement ('Strikes and Lockouts') the arbitration procedure herein set forth is the sole and exclusive remedy of the parties here-to and the employees covered hereby, for any claimed violations of this contract, and for any and all acts or omissions claimed to have been committed by either party during the term of this agreement, and such arbitration procedure shall be (except to enforce, vacate, or modify awards) in lieu of any and all other remedies, forums at law, in equity or otherwise which will or may be available to either of the parties. The waiver of all other remedies and forums herein set forth shall apply to the parties hereto, and to all of the employees covered by this contract. No individual employee may initiate an arbitration proceeding.
57
KAUFMAN, Circuit Judge (concurring).
58
In view of the extraordinarily complex problems raised in the case before us, all of which have been thoroughly and persuasively dealt with in the opinion of Judge MEDINA and so many of which will have broad ramifications in the growing and yet unshaped field of federal labor law, I deem it my responsibility to clarify what I interpret to be the holding of the court today. We hold that the collective bargaining agreement between Interscience and the Union does not clearly remove from the scope of arbitration the following questions: (1) Whether the collective bargaining agreement as a whole survived the consolidation of Interscience and Wiley; (2) If the agreement did survive the consolidation-- thereby imposing upon Wiley an obligation to arbitrate at the behest of the Union disputes arising before its natural termination on January 31, 1962-- whether the Union had to comport with the three-step grievance procedure, and if so, whether it did in fact comport with it ow was relieved from doing so; and (3) Whether certain Union and employee rights became 'vested' under the terms of the agreement.
59
Although the collective bargaining agreement contains no express provision making its obligations binding upon the successors of the parties, our decision today, in effect, permits the arbitrator to 'imply' such a provision into the agreement if, under the circumstances present here, such an implication is proper. In doing so, he will no doubt make an effort to extrapolate the probable intentions and expectations of the parties, to evaluate the change in the nature and scope of the employment unit and employer-employee relationships, the disruptive potential of implying such a clause, and other relevant factors. It is this power to read a successor clause into the collective agreement which makes Wiley a proper party defendant in the case before us. What we decide here is that since the arbitrator may find that the agreement was intended to bind successors, and that since Wiley is the successor of Interscience, then Wiley is a potential party to a binding arbitration decree. Our mere refusal to determine that Wiley is not a proper party defendant in this judicial proceeding does not preclude the arbitrator from determining that Wiley was not meant to be bound by the obligations in the collective agreement-- either the obligation to arbitrate or the obligation to respect the allegedly 'vested' rights of the employees. So too, the Union is a proper party plaintiff, even though the arbitrator may ultimately determine that, because the collective bargaining agreement was not intended to survive consolidation, the Union cannot compel arbitration.
60
With this interpretation of the court's holding in mind, I enthusiastically register my concurrence.
1
'Rights of creditors of consolidated corporations
'The rights of creditors of any constituent corporation shall not in any manner be impaired, nor shall any liability or obligation due or to become due, or any claim or demand for any cause existing against any such corporation or against any stockholder thereof be released or impaired by any such consolidation; but such consolidated corporation shall be deemed to have assumed and shall be liable for all liabilities and obligations of each of the corporations consolidated in the same manner as if such consolidated corporation had itself incurred wuch liabilities or obligations. The stockholders of the respective constituent corporations shall continue subject to all the liabilities, claims and demands existing against them as such, at or before the consolidation; and no action or proceeding then pending before any court or tribunal in which any constituent corporation is a party, or in which any wuch stockholder is a party, shall abate or be discontinued by reason of such consolidation, but may be prosecuted to final judgment, as though no consolidation had bedn entered into; or such consolidated corporation may be substituted as a party in place of any constituent corporation, by order of the court in which such action or proceeding may be pending.'
2
As this action was commenced prior to January 31, 1962, the termination date of the agreement, our decision is entirely consistent with Procter & Gamble Independent Union v. Procter & Gamble Mfg. Co., 2 Cir., 312 F.2d 181, where we held that grievances arising after the expiration of a collective bargaining agreement are not arbitrable
3
The National Labor Relations Board has specifically recognized that the rule (see N.L.R.B. v. Aluminum Tubular Corp., 2 Cir., 1962, 299 F.2d 595, 598) that a successor employer will not be required to continue to bargain with a union when there has been a substantial change in the nature of the employment enterprise, does not control the issue, presented in the instant case, of the binding character and meaning of contractual rights under a preexisting agreement. Cruse Motors, Inc., 1953, 105 N.L.R.B. 242, 248. This is because of the inapplicability of the rationale of the rule, which is that certification 'is an official pronouncement by the Board that a majority of the employees in a given work unit desire that a particular organization represent them in their dealings with their employer,' and that where there has been a substantial change in the nature of the employment enterprise 'there may well be a consequent change in the nature of the work required of the employees resulting in differences in their working condition problems. Thus the employees may feel that they can be better served by another employee organization.' N.L.R.B. v. Armato, 7 Cir., 1952, 199 F.2d 800, 803. See also N.L.R.B. v. Lunder Shoe Corp., 1 Cir., 1954, 211 F.2d 284, 286
Similarly inapplicable are cases holding that an existing agreement will not bar a Representation petition under Section 9 (c) of the Labor Management Relations Act when there has been a substantial change in the nature of the employment enterprise. The rationale of these cases, inapplicable here, is that 'sound and stable labor relations will best be served by allowing the employees in the reconstituted units to determine for themselves the labor organization which they now desire to represent them.' L.B. Spear & Co., 1953, 106 N.L.R.B. 687, 689. Cases involving enforcement of previously obtained orders of the National Labor Relations Board against a successor employer, which may or may not be favorable to Wiley's position (see Annot., 46 A.L.R.2d 592, 1956), are also without significant effect here because of the specific limitations imposed in those cases by Rule 65(d) of the Federal Rules of Civil Procedure (Regal Knitwear Co. v. N.L.R.B., 1945, 324 U.S. 9, 13-14, 65 S.Ct. 478, 89 L.Ed. 661) and the public policy that one should 'not be adjudged (guilty) of wrongdoing * * * without complaint, notice, full opportunity to present (one's) * * * defense and the other essential requirements of due process of law.' N.L.R.B. v. Birdsall Stockdale Motor Co., 10 Cir., 1953, 208 F.2d 234, 237, 46 A.L.R.2d 587.
Livingston v. Gindoff Textile Corp., S.D.N.Y., 1961, 191 F.Supp. 135, cited by Wiley, is also without application since the original employer there underwent a complete dissolution, rather than a consolidation, and was found to have no legal or substantial factual relationship with the successor employer. Nor was such a showing made in Office Employees International Union, Local 153, AFL-CIO v. Ward-Garcia Corp., S.D.N.Y., 1961, 190 F.Supp. 448.
4
In Goodall-Sanford, Inc. v. United Textile Workers, AFL Local 1802, supra, 233 F.2d at 110, the First Circuit recognized that:
Even without an express reference to that possibility in the contract, in view of the increasingly complex use of compensation in the form of 'fringe benefits,' some types of which inherently are not payable until a time subsequent to the work which earned the benefits, we believe that there may be terms within a union-employer contract whose effect is not necessarily limited to the continuance of the living relationship that exists while the business is being operated as a going concern.'
The possibility of such 'vested' rights has been recognized specifically with respect to vacation and severance pay (In re Wil-Low Cafeterias, 2 Cir., 1940, 111 F.2d 429, 432; Botany Mills, Inc. v. Textile Workers Union of America, AFL-CIO, 50 N.J.Super. 18, 141 A.2d 107 (1958); In re Potoker, 286 App.Div. 733, 146 N.Y.S.2d 616 (1st Dep't., 1955), affirmed sub nom. Potoker v. Brooklyn Eagle, Inc., 2 N.Y.2d 553, 161 N.Y.S.2d 609, 141 N.E. 2d 841 (1957)); seniority rights (Zdanok v. Glidden, 2 Cir., 1961, 288 F.2d 99); and pension plan rights (New York City Omnibus Corp. v. Quill, 189 Misc. 892, 894-896, 73 N.Y.S.2d 289, 291-293 (Sup. Ct.1947), modified on other grounds, 272 App.Div. 1015, 74 N.Y.S.2d 925 (1st Dep't., 1947), affirmed, 297 N.Y. 832, 78 N.E.2d 859 (1948); Roddy v. Valentine, 268 N.Y. 228, 197 N.E. 260 (1934)). Cases holding that no such rights in fact exist, such as Oddie v. Ross Gear & Tool Co., 6 Cir., 1962, 305 F.2d 143, 150, recognize that the matter is solely one of the 'construction of the agreement.' See Note, Termination of Collective Bargaining Agreements-- Survival of Earned Rights, 54 Nw.U.L.Rev. 646, 651 (1959).
5
We realize that there may be serious difficulties in giving to the Interscience employees special treatment in preference to the Wiley employees of long standing. Perhaps the arbitrator can work out some fair lump sum settlement which would avoid later friction. Be that as it may, the very fact that in the instant case we are presented with such difficult issues in a new and important field as yet largely unexplored, is ample reason why we must, as we do, leave the merits to the arbitrator whose creative role in the interpretation of collective bargaining agreements has been well remarked upon. United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 578-581, 80 S.Ct. 1347, 4 L.Ed.2d 1409; Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482, 1490-93 (1959)
Of course, if the arbitrator in deciding the merits should purport to establish and enforce rights accruing subsequent to the termination of the agreement, or if, although purporting to define and implement rights accruing under the contract although maturing thereafter, he should make an award which is completely without root and foundation in the collective bargaining agreement itself, we have no doubt that the courts would have no choice but to refuse enforcement of the award. The Supreme Court has clearly stated, United Steelworkers of America v. Enterprise Wheel & Car Corp., supra, 363 U.S. at 597, 80 S.Ct. at 1361:
'When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of the problem. This is especially true when it comes to formulating remedies. There the need is for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency. Nevertheless, an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance in many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.'
Appealing as it is, we cannot yield to the suggestion that we should now enunciate those standards which should guide the arbitrator in his determination of the existence, nature and remedy for implementing any employee rights accruing under and surviving the expiration of the collective bargaining agreement, so that he will know definitely whether any award he may make will 'draw its essence from the collective bargining agreement.' To do this would be to intrude in a domain not ours and to invert the whole order of procedure in this delicate field of labor relations.
6
Boston Mutual Life Insurance Co. v. Insurance Agents International, 1 Cir., 1958, 258 F.2d 516 (court function); Brass & Copper Workers v. American Brass Co., supra (court function); Radio Corp. of America v. Association of Professional Engineering Personnel, 3 Cir., 1961, 291 F.2d 105 (arbitrator function); International Association of Machinists, etc. v. Hayes Corp., 5 Cir., 1961, 296 F.2d 238 (citing cases which hold that it is the arbitrator's function)
7
Arbitrator's function: Philadelphia Dress Joint Board, etc. v. Sidele Fashious, Inc., E.D.Pa., 1960, 187 F.Supp. 97; Local 971, United Automobile Workers, AFL-CIO v. Bendix-Westinghouse Automotive Brake Co., N.D.Ohio, 1960, 188 F.Supp. 842; Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., W.D.Pa., 1959, 188 F.Supp. 225, affirmed, 3 Cir., 1960, 283 F.2d 93; United Cement, etc. Workers International Union, AFL-CIO v. Allentown-Portland Cement Co., E.D.Pa., 1958, 163 F.Supp. 816; Insurance Agents International Union, AFL v. Prudential Ins. Co., E.D.Pa., 1954, 122 F.Supp. 869 (purporting to apply state law)
Court function: Truck Drivers v. Grosshans & Petersen, D.Kan., 1962, 51 L.R.R.M. 2116; General Tire & Rubber Co. v. Local 512, United Rubber Workers of America, AFL-CIO, D.R.I., 1961, 191 F.Supp. 911, affirmed, 1 Cir., 1961, 294 F.2d 957; United Brick & Clay Workers, etc. v. Gladding, McBean & Co., S.D.Calif., 1961, 192 F.Supp. 64; Brass & Copper Workers, etc. v. American Brass Co., E.D.Wis., 1959, 172 F.Supp. 465, affirmed, 7 Cir., 272 F.2d 849, cert. denied, 1960, 363 U.S. 845, 80 S.Ct. 1609, 4 L.Ed.2d 1728; International Union of Operating Engineers, etc. v. Monsanto Chemical Co., W.D.Ark., 1958, 164 F.Supp. 406.
8
Cox, 72 Harv.L.Rev., supra at 1509-12; Gregory, The Law of the Collective Agreement, 57 Mich.L.Rev. 635, 646-9 (1959); Procedural Requirements of a Grievance Arbitration Clause: Another Question of Arbitrability, 70 Yale L.J. 611 (1961) Contra: 28 Univ.Chi.L.Rev., supra at 732
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166 Conn. 295 (1974)
LEWIS MACK
v.
JAMES CLINCH ET AL.
Supreme Court of Connecticut.
Argued March 8, 1974.
Decision released April 16, 1974.
HOUSE, C. J., COTTER, SHAPIRO, LOISELLE and MACDONALD, JS.
Herbert Watstein, with whom, on the brief, were Martin F. Stempien and Louis J. Mattioli, for the appellant (defendant Henry Perzanowski).
John P. McKeon, for the appellee (plaintiff).
PER CURIAM.
The plaintiff, Lewis Mack, was injured when he slipped and fell on an icy driveway located between a building owned by the named defendant and one owned by the defendant Henry Perzanowski in New Britain. After a trial to a jury a verdict was rendered in his favor against only the defendant Perzanowski (hereafter the defendant), who has taken this appeal from the judgment rendered thereon.
Although the defendant has filed six assignments of error, we find his attacks on the finding, which is *296 subject to correction,[1] and his challenge to the court's charge on the issue of "control" of the driveway to be dispositive of this appeal.
The finding, as corrected, discloses that substantial and conflicting evidence was introduced by all of the parties to this action relating to the issue of who had "control" of the driveway where the injury was sustained. Such "control" was, of course, a vital issue in the trial of this case, since liability can be predicated upon negligence in the control and possession of premises, as opposed to mere ownership thereof. See Panaroni v. Johnson, 158 Conn. 92, 97-100, 256 A.2d 246; Ziulkowski v. Kolodziej, 119 Conn. 230, 232, 175 A. 780.
The defendant introduced evidence relating to his claim of lack of control and specifically requested a charge on that issue, alerting the court to its presence in the case, but the court denied the request. Subsequent to the court's charge, the jury requested a clarification of the word "control" and the court, quoting Panaroni v. Johnson, supra, 98, responded with only the following definition: "The word `control' has no legal or technical meaning distinct from that given in its popular acceptation, and refers to the power or authority to manage, superintend, direct or oversee and maintain." The defendant claims that this response was insufficient.
*297 Although the defendant took no exception to the charge, his written request to charge on the issue of control nevertheless affords a ground of appeal. Practice Book § 249; Degnan v. Olson, 136 Conn. 171, 172, 69 A.2d 642. Nor are we limited to the specific question of whether the defendant's request to charge should have been granted. Having been informed of a material and important issue by the request, it was the duty of the court to charge correctly on that subject. Mei v. Alterman Transport Lines, Inc., 159 Conn. 307, 311, 268 A.2d 639; Seeley v. Litchfield, 49 Conn. 134, 138; see Stavola v. Palmer, 136 Conn. 670, 682, 73 A.2d 831.
The test of a charge is whether it is correct in law, adapted to the issues and sufficient for the guidance of the jury. Amato v. Sawicki, 159 Conn. 490, 494, 271 A.2d 80; Maltbie, Conn. App. Proc. § 76. "The primary purpose of the charge is to assist the jury in applying the law correctly to the facts which they might find to be established." Vita v. McLaughlin, 158 Conn. 75, 77, 255 A.2d 848. A charge should be more than a mere statement of legal principles; it should indicate to the jury the application of the law to the facts claimed to have been proved. Crane v. Hartford-Connecticut Trust Co., 111 Conn. 313, 315, 149 A. 782; Schiesel v. Poli Realty Co., 108 Conn. 115, 124, 142 A. 812. While "[t]he degree to which reference to the evidence may be called for lies largely in the discretion of the court"; Gorham v. Farmington Motor Inn, Inc., 159 Conn. 576, 583, 271 A.2d 94; reference to the evidence is required sufficient to guide the jury in their application of the stated law to the evidence before them. Vita v. McLaughlin, supra. These principles apply with particular force to situations such as that *298 presented here, where the jury, by its request for clarification, had indicated a degree of confusion concerning the issue of control. See Silvester v. Kerelejza, 158 Conn. 433, 436-38, 262 A.2d 157; Bottaro v. Schoenborn, 157 Conn. 194, 197, 251 A.2d 79.
The trial court, in merely quoting a brief portion of the Panaroni definition, failed to relate the definition of control to the claims of the parties, making its definitional response insufficient to guide the jury. In the very case quoted from in the trial court's response, this court applied the quoted definition to the claimed facts for several pages. See Panaroni v. Johnson, 158 Conn. 92, 98-100, 256 A.2d 246. Reading the definition, without any such discussion of the factual claims involved, failed sufficiently to instruct the jury.
There is error, the judgment is set aside and a new trial is ordered.
NOTES
[1] The defendant assigned error in the court's refusal to include in the finding sixteen paragraphs of his draft finding, which he claimed to be admitted or undisputed. We find it necessary to add only those paragraphs setting forth the court's response to the jury's request for a clarification of the word "control" as used by the court in its charge, paragraphs which are clearly not in dispute and are material to the issues involved in this appeal.
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 10a0499n.06
No. 09-5399 FILED
Aug 11, 2010
UNITED STATES COURT OF APPEALS LEONARD GREEN, Clerk
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
) ON APPEAL FROM THE
Plaintiff-Appellee, ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
v. ) DISTRICT OF TENNESSEE
)
DOUGLAS WHISNANT ) OPINION
)
Defendant-Appellant. )
BEFORE: COLE and MCKEAGUE, Circuit Judges; MAYS, District Judge.*
Cole, Circuit Judge. Defendant-Appellant Douglas Whisnant challenges his convictions
and 300-month sentence for being a felon in possession of firearms and ammunition, in violation of
18 U.S.C. § 922(g)(1), and possession of an unregistered machine gun, in violation of 26 U.S.C. §§
5841, 5861(d). We AFFIRM.
I. BACKGROUND
In February 2007, Jean Johnson, Whisnant’s former spouse, disappeared, and the
investigation of her disappearance immediately focused on Whisnant because of their tumultuous
relationship. As part of the investigation, law enforcement applied for and received a warrant to
search his property. The warrant, issued by a Tennessee state court judge on March 9, 2007,
*
The Honorable Samuel H. Mays, Jr., United States District Judge for the Western District
of Tennessee, sitting by designation.
No. 09-5399
United States of America v. Douglas Whisnant
authorized a search of “the entire premises, woods, fields, curtilage, the residence and all out
buildings and all vehicles and equipment” for “the body of . . . Jean Johnson . . . or portions thereof;
human blood; the purse and personal effects of Jean Johnson; Ford van keys; a pink suitcase; a small
security camera and video cassette tape; a .38 caliber Smith and Wesson pistol . . . bombs, gun
powder, explosives, and gun components.” (District Court Record (“R.”) 16, Resp. to Mot. to
Suppress, Ex. E: Search Warrant.)
Officers from several different agencies executed the search warrant, dividing into teams to
search the property. Captain Tommy Ray Jeffers of the Scott County Sheriff’s Department was
assigned to search the residence. On the porch, he noticed construction materials and plasterboard
used for drywalling. Once inside, he entered a room with a picture hanging over a fireplace and
noticed that the fireplace utensils were covered in a white powder that resembled drywall dust. He
also noticed that the paint surrounding the picture appeared to have been recently touched-up.
Realizing that the picture may have been hung in an effort to conceal evidence, Jeffers, joined by
other officers, removed it. The officers then could see that the wall recently had been patched. Next,
the officers cut a small hole in the patch through which Jeffers could see what appeared to be rolls
of cloth. The officers then enlarged the opening and discovered that the cloth actually was numerous
gun bags.
Because of Whisnant’s history of bomb-making, the officers were concerned that the area
inside the wall might be rigged with explosives. They therefore asked members of the bomb-squad
unit to remove the items. As members of the unit removed the items from the wall, they discovered
firearms, ammunition, and bomb-making materials. In addition to several rifles, shotguns, and
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No. 09-5399
United States of America v. Douglas Whisnant
pistols, a Sten machine gun and two pen guns were found. Also, a search of a workshop on
Whisnant’s property uncovered components of a Sten machine gun.
Less than two weeks later, on March 21, 2007, a grand jury indicted Whisnant on one count
of being a felon in possession of firearms and ammunition, in violation of 18 U.S.C. § 922(g)(1).
Whisnant filed a motion to suppress the firearms and ammunition found behind the wall of his home.
During the suppression hearing, the magistrate judge heard testimony from several officers, including
Detective Donnie Anderson, who was present during the search. After the district court denied the
motion to suppress, it came to light that Anderson had engaged in professional misconduct unrelated
to this case. Consequently, the magistrate judge conducted a second hearing without testimony from
Anderson. During the second hearing, Jeffers testified and explained the manner in which the search
was executed and described the circumstances leading to the decision to cut a hole in the wall. The
magistrate judge concluded that the “officers reasonably made access into the wall” to search for the
items listed in the “broadly worded search warrant,” and recommended denying the motion to
suppress. (R. 41, Report and Recommendation, 7.) The district court agreed and denied the motion.
On July 16, 2008, a grand jury returned a superseding indictment charging Whisnant with
knowingly possessing an unregistered machine gun, in violation of 26 U.S.C. §§ 5841, 5861(d), in
addition to the previous felon-in-possession charge.
The case against Whisnant proceeded to trial. A number of law enforcement officers testified
as to the items uncovered during the search of Whisnant’s residence. Agent Forest Webb of the
Bureau of Alcohol, Tobacco, and Firearms (“ATF”) testified that he was part of the team that
executed the search and had discovered components of a Sten machine gun. Agent Sean Knapp, a
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No. 09-5399
United States of America v. Douglas Whisnant
firearms specialist with the ATF, then explained to the jury that both a Sten gun and components of
a Sten gun qualify as a machine gun and must be registered under federal law. Knapp further
explained that, for purposes of federal law, Whisnant possessed three machine guns: “the functional
machine gun, the cut out receiver, and combination of parts from which a machine gun could be
assembled.” (R. 86, Trial Tr., 45-46.) The Government also introduced evidence under Federal Rule
of Evidence 404(b) that Whisnant previously had been convicted in state court for illegally
possessing a Sten machine gun. Finally, a fingerprint examiner testified that a fingerprint belonging
to Whisnant was found on the seized fully-assembled Sten gun.
Before resting, the Government read a number of stipulations into the record: (1) the
commercially manufactured firearms found on Whisnant’s property were manufactured outside the
State of Tennessee; (2) Whisnant was a convicted felon; and (3) none of the firearms found on
Whisnant’s property were registered. Whisnant offered no witnesses and was convicted on both
counts.
The United States Probation Office then prepared a Presentence Investigation Report
(“PSR”). The PSR determined that Whisnant was an Armed Career Criminal under 18 U.S.C. §
924(e)(2), and calculated an offense level of 34. The PSR placed Whisnant in criminal history
category IV, and, based on that category and the offense level of 34, set Whisnant’s advisory
guidelines range at 262 to 327 months of imprisonment. Whisnant did not object to the PSR.
On March 11, 2009, the district court held a sentencing hearing. After considering the factors
listed in 18 U.S.C. § 3553(a) and the Guidelines range, the district court sentenced Whisnant to a
within-Guidelines sentence of 300 months. The district court did so in part because Whisnant has
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No. 09-5399
United States of America v. Douglas Whisnant
an extensive criminal history, was on probation at the time of the offense, and since has pled guilty
to his former spouse’s murder.
Whisnant timely appealed.
II. ANALYSIS
On appeal, Whisnant argues that: (1) law enforcement violated his Fourth Amendment
rights; (2) 18 U.S.C. § 922(g)(1) is unconstitutional under the Second Amendment; (3) insufficient
evidence supported his convictions; and (4) the district court should have given him a below-
Guidelines sentence.
A. Fourth Amendment claim
Whisnant argues that law enforcement violated his Fourth Amendment rights. In particular,
he asserts that by cutting holes in the interior walls of his house, law enforcement seized the walls
and thus exceeded the scope of the search warrant. “When reviewing a district court’s decision on
a motion to suppress, we use a mixed standard of review: we review the findings of fact for clear
error and conclusions of law de novo.” United States v. See, 574 F.3d 309, 313 (6th Cir. 2009)
(internal quotation marks omitted). Whether a seizure is reasonable under the Fourth Amendment
is a question of law and thus is reviewed de novo. United States v. Evans, 581 F.3d 333, 340 (6th
Cir. 2009). In addition, when the district court has denied a motion to suppress, we “review[] the
evidence in the light most likely to support the district court’s decision.” United States v. Adams,
583 F.3d 457, 463 (6th Cir. 2009) (internal quotation marks omitted). Here, the district court
concluded that the search was reasonable, and we agree.
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No. 09-5399
United States of America v. Douglas Whisnant
The Supreme Court has held that “[a] lawful search of fixed premises generally extends to
the entire area in which the object of the search may be found and is not limited by the possibility
that separate acts of entry or opening may be required to complete the search.” United States v. Ross,
456 U.S. 798, 820-21 (1982). To illustrate, the Court offered the following example: “[A] warrant
that authorizes an officer to search a home for illegal weapons also provides authority to open
closets, chests, drawers, and containers in which the weapon might be found.” Id. at 821.
Admittedly, the interior of a wall does not fit precisely the definition of a container. Further, part
of Whisnant’s property—his wall—was damaged. But the Supreme Court has explained:
“[O]fficers executing search warrants on occasion must damage property in order to perform their
duty.” Dalia v. United States, 441 U.S. 238, 258 (1979). Moreover, like other Fourth Amendment
inquiries, “the manner in which a warrant is executed”—including the damage of property—“is
subject to later judicial review as to its reasonableness.” Id.; see also United States v. Ramirez, 523
U.S. 65, 71 (1998) (“The general touchstone of reasonableness which governs Fourth Amendment
analysis governs the method of execution of the warrant.” (internal citation omitted)).
Several facts support the conclusion that the officers in this case acted reasonably. First, the
warrant was worded broadly, permitting the officers to search “the entire premises.” Second, the
decision to cut a hole in the wall was based on the presence of drywall dust, the haphazard paint job
around the picture, and the recently plastered patch of drywall behind the picture. Third, the officers
first cut a small hole in the wall, only cutting a larger hole once it became clear that items were
hidden behind the wall. Finally, the damage to Whisnant’s property was slight, and “[t]here is no
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No. 09-5399
United States of America v. Douglas Whisnant
indication that [the officers’] intrusion went beyond what was necessary.” Dalia, 441 U.S. at 258
n.20.
Accordingly, we conclude that the execution of the warrant was reasonable. Cf. United
States v. Sloan, 17 F. App’x 759, 761 (10th Cir. 2001) (finding that officers acted reasonably by
digging up defendant’s yard after they discovered money protruding from the soil); United States v.
Weinbender, 109 F.3d 1327, 1329-30 (8th Cir. 1997) (holding that law enforcement acted reasonably
by removing drywall to find contraband); United States v. Gregory, No. 90-30327, 1991 WL 86885,
at *2 (9th Cir. May 13, 1991) (finding that officers acted reasonably by removing carpet in search
of narcotics); United States v. Becker, 929 F.2d 442, 444 (9th Cir. 1991) (holding that officers acted
reasonably by using a jackhammer to search beneath a concrete slab to find drug-making materials).
B. Second Amendment claim
Next, Whisnant relies on District of Columbia v. Heller, 128 S. Ct. 2783 (2008), to argue that
the federal statute prohibiting felons from possessing firearms and ammunition, 18 U.S.C. §
922(g)(1), violates the Second Amendment. Whisnant misreads the decision. In Heller, the
Supreme Court recognized an individual right to bear arms but also held that “the right secured by
the Second Amendment is not unlimited.” Heller, 128 S. Ct. at 2816. In particular, the Court noted
that “nothing in [the] opinion should be taken to cast doubt on longstanding prohibitions on the
possession of firearms by felons.” Id. at 2816-17.
Relying on that language from Heller, this Court has held that § 922(g)(1) comports with the
Second Amendment, stating that “prohibitions on felon possession of firearms do not violate the
Second Amendment,” and “Congress’s prohibition on felon possession of firearms is constitutional.”
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No. 09-5399
United States of America v. Douglas Whisnant
United States v. Carey, 602 F.3d 738, 741 (6th Cir. 2010) (citing United States v. Frazier, 314 F.
App’x 801, 807 (6th Cir. 2008)); see also United States v. Khami, 362 F. App’x 501, 507-08 (6th
Cir. 2010) (rejecting Second Amendment challenge to § 922(g)(1)). We therefore reject Whisnant’s
Second Amendment claim.
C. Sufficiency of the evidence
Whisnant also argues that the Government presented insufficient evidence to convict him of
either charge. When reviewing the sufficiency of the evidence, we “view[] the evidence in the light
most favorable to the prosecution,” and if “any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt,” we affirm. Jackson v. Virginia, 443 U.S. 307,
319 (1979).
1. 18 U.S.C. § 922(g)(1)
In order to secure a conviction under 18 U.S.C. § 922(g)(1), the Government must prove
three elements: (1) that the defendant had a previous felony conviction; (2) that the defendant
possessed a firearm; and (3) that the firearm traveled in or affected interstate commerce. United
States v. Gardner, 488 F.3d 700, 713 (6th Cir. 2007). At trial, the parties stipulated to the first and
third elements. Thus, the only disputed element was the second—whether Whisnant possessed the
firearm.
The possession requirement of § 922(g)(1) can be satisfied by showing that the defendant had
actual or constructive possession of the firearm. United States v. Kincaide, 145 F.3d 771, 782 (6th
Cir. 1998). “Constructive possession exists when a person does not have actual possession but
instead knowingly has the power and the intention at a given time to exercise dominion and control
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No. 09-5399
United States of America v. Douglas Whisnant
over an object, either directly or through others.” Id. (internal quotation marks omitted). In addition,
proof that the defendant “has dominion over the premises where the firearm is located” suffices to
establish constructive possession. Id. (internal quotation marks omitted).
The evidence at trial was sufficient to prove that Whisnant had constructive possession of
the seized firearms and ammunition. Whisnant admitted to living at the address where the items
were found, and other records confirm his address. Moreover, he has offered no evidence that
someone other than him cut a hole in his wall; stuffed the hole with firearms, ammunition, and gun-
making materials; patched the drywall; hung a picture over the patch; and painted the area
surrounding the picture.
2. 26 U.S.C. §§ 5841, 5861(d)
Sufficient evidence also supports Whisnant’s conviction for possession of an unregistered
machine gun. Sections 5841 and 5861(d) criminalize an individual’s possession of a machine gun
that has not been registered with the National Firearms Registration and Transfer Record. 26 U.S.C.
§§ 5841, 5861(d); Staples v. United States, 511 U.S. 600, 602 (1994). For purposes of § 5861(d),
a machine gun is defined as “any weapon which shoots, . . . or can be readily restored to shoot,
automatically more than one shot, without manual reloading, by a single function of the trigger. The
term shall also include the frame or receiver of any such weapon . . . .” 26 U.S.C. § 5845(b). To
prove a violation of § 5861(d), the Government must demonstrate not only that the defendant
possessed a machine gun but also that the defendant “knew of the features of his [gun] that brought
it within the scope of the Act.” Staples, 511 U.S. at 619.
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No. 09-5399
United States of America v. Douglas Whisnant
The parties stipulated that Whisnant had not registered any of the firearms on his property.
Thus, to establish a violation, the Government had to prove that: (1) Whisnant had possession of a
firearm; (2) that satisfies the statutory definition of a machine gun; and (3) he was aware of the
operation and features of the gun that render it a machine gun under federal law. As to the first
element, a fully-assembled Sten gun and components of a Sten gun were found on Whisnant’s
property. In addition, Whisnant’s fingerprint was found on the fully-assembled gun. With regard
to the second element, ATF Agent Knapp testified that the fully-assembled Sten gun fit the statutory
definition because it fired three five-round automatic bursts during a test-fire. Moreover, as Agent
Knapp explained to the jury, the Sten gun components found on Whisnant’s property also qualify
as a machine gun. Cf. United States v. Carter, 465 F.3d 658, 664 (6th Cir. 2006) (holding that
“possessing the frame or receiver of a machine gun and parts designed and intended for use in
converting a weapon into a machine gun” satisfies the definition of machine gun for purposes of
indicting an individual under § 5861(d)). To prove the final element—that Whisnant knew of the
features of his firearm that brought it within the Act—the Government offered evidence that
Whisnant manufactured Sten guns and component parts and previously had been convicted of
possessing a Sten gun, thus establishing the requisite knowledge.
D. Sentencing
Finally, Whisnant argues that the district court should have given him a below-Guidelines
sentence. In his brief, Whisnant provides only two sentences to make this argument and offers no
legal support or analysis. “Issues adverted to in a perfunctory manner, unaccompanied by some
effort at developed argumentation, are deemed waived.” El-Moussa v. Holder, 569 F.3d 250, 257
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No. 09-5399
United States of America v. Douglas Whisnant
(6th Cir. 2009) (internal quotation marks omitted); see also id. (“It is not sufficient for a party to
mention a possible argument in [a] skeletal way, leaving the court to put flesh on its bones.”)
(alteration in original) (internal quotation marks omitted). Thus, Whisnant has waived his
sentencing challenge.
Moreover, even if Whisnant’s argument is deemed not waived, other hurdles stymie his
success. First, he argues that the district court should have departed from the Guidelines range, but
we do “not review district court decisions not to depart downward” unless the court did not
understand its discretion to do so, United States v. Puckett, 422 F.3d 340, 345 (6th Cir. 2005)—an
argument that Whisnant has not made. Second, his claim still falls short even if we interpret his
argument as a challenge to the district court’s decision not to vary. The district court properly
calculated the advisory Guideline range, to which Whisnant did not object, and considered the 18
U.S.C. § 3553(a) factors before handing down the within-Guidelines sentence. Whisnant has failed
to rebut the presumption of reasonableness that applies to such a sentence, see United States v.
Vonner, 516 F.3d 382, 389 (6th Cir. 2008) (en banc), and we easily reject his claim.
III. CONCLUSION
For all of these reasons, we AFFIRM the judgment of the district court.
- 11 -
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Salomon v Citigroup Inc. (2014 NY Slip Op 08742)
Salomon v Citigroup Inc.
2014 NY Slip Op 08742
Decided on December 11, 2014
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 December 11, 2014
Sweeny, J.P., Renwick, DeGrasse, Clark, Kapnick, JJ.
13767 651683/13
[*1] William R. Salomon, Plaintiff-Appellant,
vCitigroup Inc., Defendant-Respondent.
Berger & Webb, LLP, New York (Steven A. Berger of counsel), for appellant.
Proskauer Rose LLP, New York (Joseph Baumgarten of counsel), for respondent.
Judgment, Supreme Court, New York County (Eileen Bransten, J.), entered March 12, 2014, dismissing the complaint, and bringing up for review an order, same court and Justice, entered February 18, 2014, which granted defendant's motion to dismiss the complaint, unanimously affirmed, with costs.
In 1981, plaintiff investment banker agreed to retire from his management position at Salomon Brothers, Inc. (SBI) and entered into a Consulting Agreement with SBI whereby, inter alia, SBI, or its successor(s) would provide plaintiff with full-time secretarial services in exchange for plaintiff's consulting work and client generation. SBI was ultimately acquired by defendant Citigroup. In 2011, it was discovered that a secretary assigned to plaintiff by Citigroup had stolen approximately $3 million from plaintiff while assisting plaintiff with his personal expenses over the years. Plaintiff commenced this action against Citigroup after the secretary was convicted and sentenced for her theft.
Plaintiff's breach of contract claim against Citigroup, predicated upon an alleged implied warranty by Citigroup to indemnify plaintiff for any personal financial loss incurred due to theft by a Citigroup secretary assigned to him, has no support in the language of the Consulting Agreement (see generally Rodolitz v Neptune Paper Prods., 22 NY2d 383 [1968]). Plaintiff may not read terms into the Consulting Agreement which, when fairly construed in the context of the whole of its provisions, offers no basis to support that such a warranty had been impliedly incorporated by the parties into the agreement (see generally Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]; Reiss v Financial Performance Corp., 97 NY2d 195, 199 [2001]). The Consulting Agreement was drafted by sophisticated, commercially savvy parties, and their intent as to their rights and liabilities thereunder should be gleaned from the language used in the Agreement (see generally W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]; Ashwood Capital, Inc. v OTG Mgt., Inc., 99 AD3d 1 [1st Dept 2012]). The fact that the phrase "full-time services" to be provided by a secretary is not specifically defined in the Consulting Agreement does not afford any basis to infer, as plaintiff suggests, that the parties intended that Citigroup indemnify plaintiff for any theft committed against him by an assigned secretary it employed. Even assuming, arguendo, the "full-time services" phrase was ambiguous, the claimed unspoken warranty to indemnify would constitute an obligation wholly distinct from the contract language that required SBI, or its successor, to simply supply plaintiff with full time secretarial services during the consulting arrangement. Indeed, an implied contractual obligation to indemnify cannot be maintained in the absence of explicit language or facts that clearly and unmistakably identify such a duty (see Blank Rome, LLP v Parrish, 92 AD3d 444 [1st Dept 2012]). There is no such language here. Moreover, the Consulting Agreement contained a merger clause that asserted that the parties' "entire agreement" had been set forth within its provisions, and that it could not be amended except in writing (see Ashwood Capital, 99 AD3d at 9). The parties did not amend their agreement.
Plaintiff's claim for breach of covenant of good faith and fair dealing, predicated upon [*2]Citigroup's alleged failure to abide by its purported obligation to indemnify plaintiff against any theft committed against him by his assigned Citigroup secretary, is essentially duplicative of the allegations in his breach of contract claim, and should be dismissed, particularly as it seeks the same damages as the breach of contract claim (see Mill Fin., LLC v Gillett, __ AD3d __, 2014 Slip Op 06039 [1st Dept 2014]; Amcan v Holdings, Inc. v Canadian Imperial Bank of Commerce, 70 AD3d 423, 426 [1st Dept 2010], lv denied 15 NY3d 704 [2010]).
Plaintiff's cause of action for conversion, predicated upon a vicarious liability theory, was properly dismissed where the factual allegations indicated that the theft was in furtherance of the secretary's own personal gain, not in furtherance of Citigroup's business (see N.X. v Cabrini Med. Ctr., 97 NY2d 247, 251 [2002]; Naegle v Archdiocese of N. Y., 39 AD3d 270 [1st Dept 2007], lv denied 9 NY3d 803 [2007]). The secretary's conduct constituted such a gross departure from the normal performance of her secretarial duties that the charged conduct could not be considered as being within the scope of her employment (see Roberts v 112 Duane Assoc. LLC, 32 AD3d 366, 369 [1st Dept 2006], lv denied 8 NY3d 815 [2007]) or in furtherance of Citigroup's business (see Cabrini Med. Ctr., 97 NY2d at 251).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: DECEMBER 11, 2014
CLERK
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669 So.2d 170 (1995)
DIRECTOR, STATE DEPARTMENT OF INDUSTRIAL RELATIONS
v.
Sam JONES, et al.
AV93000817.
Court of Civil Appeals of Alabama.
May 5, 1995.
Rehearing Denied June 9, 1995.
George Cocoris, Gen. Counsel, V. Wayne Causey and Frank D. Marsh, Asst. Gen. Counsel, Montgomery, for Appellant.
Gary J. Bone and Carla M. Handy, Gadsden, for Appellees.
L. CHARLES WRIGHT, Retired Appellate Judge.
This is an unemployment compensation case.
During the latter part of 1992 and the early part of 1993, Gulf States Steel, Inc., sent newsletters to its employees, reporting substantial losses. As a cost-cutting measure, Gulf States proposed, and the union accepted, a plan to reduce the work force by 224 employees and to make other changes in working conditions. The changes included the elimination of some jobs, alterations in the size of some crews, changes in the number of people in certain job categories, and reassignment of certain duties. Gulf States was in a bad financial condition. It determined that it must reduce its work force in some manner or close its plant.
In an effort to lessen the impact of the job reductions, the union and Gulf States negotiated a "reduction inducement agreement," *171 giving employees the opportunity to consent to termination in other than seniority order in exchange for a lump sum or periodic benefit payment.
Certain employees accepted the agreement and voluntarily terminated their employment with Gulf States. They applied for unemployment compensation, which was denied. Forty-nine employees appealed the denial to an unemployment compensation appeals referee. The referee affirmed the denial. The employees appealed the referee's decision to the Board of Appeals for the Department of Industrial Relations. Following a hearing, the Board held that voluntary resignation in anticipation of a pending reduction-in-force did not provide good cause for quitting work, where the effects of the reduction in force on each claimant was speculative. The Board disqualified the employees from receiving benefits under the provisions of § 25-4-78(2), Code 1975.
The employees appealed the Board's decision to the Etowah County Circuit Court. Following a trial de novo, the trial court ruled in favor of the employees, granting them unemployment compensation benefits.
The Department of Industrial Relations appeals and asserts that the employees terminated their employment voluntarily and, therefore, were not entitled to unemployment benefits.
There was little or no dispute in the evidence presented. While the ore tenus rule usually applies in unemployment compensation cases, that rule has minimal application in this case because the material facts are substantially undisputed. The trial court's finding, therefore, is not entitled to any presumption of correctness. Allen v. Stewart, 560 So.2d 1067 (Ala.Civ.App.1990).
Section 25-4-78(2) provides that an individual will be disqualified from receiving benefits "[i]f he has left his most recent bona fide work voluntarily without good cause connected with such work."
It is undisputed that the employees voluntarily terminated their employment. They, therefore, carried the burden of proving that the termination was for good cause connected with their work. Davis v. Hoggle, 392 So.2d 1190 (Ala.Civ.App.1980).
The test of good cause is whether the voluntary separation "is reasonable when measured by what the average or normal worker would have done under similar situations." Andala Co. v. Ganus, 269 Ala. 571, 115 So.2d 123 (1959).
Four employees representing the class testified at trial. Sharon Green, who had been employed by Gulf States for 17 years, decided to voluntarily separate from her employment because the changes in her job responsibilities made her fearful for her safety, along with the fact that she would no longer have relief personnel which had been available in the past.
Mike Foster, a skilled carpenter, had been employed by Gulf States for 14 years. He learned that his position as a carpenter would be eliminated and that he would be placed in the general unskilled labor pool. As a result, his earnings would decrease by $645 per month.
Jasper Harrel testified that he was employed at the coke plant as a mixer. He was responsible for preparing coal to be made into coke. He learned that when the operational changes went into effect, his work duties would increase; he would no longer have a laborer to assist him; and he would be required to assist in electrical work, for which he had no training. He testified that when the changes went into effect, he was afraid that he would be electrocuted or otherwise lose his life.
Jeff Bryant testified that he was the fifth youngest employee in seniority at Gulf States. He considered that his job would be one of the first to be eliminated as a result of the layoff. He determined that voluntary separation was in his and Gulf States's best interests.
Gulf States is not contesting the award of benefits to the employees. Over the years, many layoffs in the work force have occurred at Gulf States. For the last 20 years, there has been a sign-out procedure in effect, whereby when layoffs occurred in the plant, Gulf States allowed employees to volunteer for layoffs prior to resorting to involuntary reductions in force. This procedure allowed employees to choose to come out of the plant and to draw unemployment benefits without objection from Gulf States. The Department *172 has had a long-standing policy of allowing the employees of Gulf States to draw unemployment compensation benefits upon a voluntary separation. The Department even assisted this policy by going to the plant and to the union halls to enroll employees for the benefits. The policy has been in effect and has been continued by the Department for over 20 years.
The pertinent consideration is whether the employees acted reasonably as normal, average employees in voluntarily separating from their employment. Considering the testimony of the four witnesses, we conclude that the employees' actions were reasonable and that a normal, average employee would have done the same under similar situations. Our case law concerning "good cause" supports this conclusion. See Alabama Mills, Inc. v. Brand, 251 Ala. 643, 38 So.2d 574 (1948) (leaving employment because the employer failed to provide the employee with a helper constitutes good cause for voluntary separation); Davis v. Prestwood, 381 So.2d 85 (Ala. Civ.App.1980) (substantial reduction in wages constitutes good cause for voluntary separation); Dwight Manufacturing Co. v. Long, 36 Ala.App. 387, 56 So.2d 685 (1952) (an employee's reasonable fear for personal safety constitutes good cause for voluntary separation).
There was an agreement that all the claimants would be considered at trial and on appeal as one. Only four claimants testified at trial. Although their testimony varied as to the reasons for voluntarily leaving their employment, the Department has presented on appeal only a general issue as to whether there was good cause for voluntarily leaving their employment. Therefore, we make no distinction and affirm as to all claimants.
The judgment of the trial court is affirmed.
The foregoing opinion was prepared by Retired Appellate Judge L. CHARLES WRIGHT while serving on active duty status as a judge of this court under the provisions of § 12-18-10(e), Code 1975.
AFFIRMED.
All the judges concur.
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356 Mass. 612 (1970)
254 N.E.2d 891
NEW ENGLAND MERCHANTS NATIONAL BANK OF BOSTON, administrator,
vs.
OLD COLONY TRUST COMPANY & others.
Supreme Judicial Court of Massachusetts, Suffolk.
October 7, 1969.
January 21, 1970.
Present: SPALDING, CUTTER, KIRK, SPIEGEL, REARDON, & QUIRICO, JJ.
Virginia Aldrich for the plaintiff.
Allan van Gestel for the defendants.
SPIEGEL, J.
This is an action of contract or tort to recover the amount represented by certificates of preferred and common stock of the defendant, Associated Textile Companies (Associated). The defendants filed a demurrer to the declaration which was sustained. Subsequently, the plaintiff filed two substitute declarations, to each of which demurrers were sustained. The case is here on the plaintiff's exception to the sustaining of the demurrer[1] to the second substitute declaration.
The material allegations in the declaration are as follows. On July 22, 1960, and August 16, 1960, the trustees of Associated, the defendants Sanderson, Selby and Crane, *614 called for the redemption of Associated's common and preferred stock, respectively, and declared partial liquidating dividends. On December 24, 1931, the plaintiff's intestate, James F. Bacon, purchased Associated stock, and received certificates therefor indorsed in blank, from one Francis A. Gallop. The plaintiff, on April 7, 1967, as administrator of Bacon's estate, presented the stock certificates to the defendant Old Colony Trust Company (Old Colony), Associated's transfer agent. Upon presentment, Old Colony refused payment of the certificates. "At no time did [the] plaintiff's intestate or the plaintiff register the transfer of the ownership of the Associated Stock with the defendant Associated ... and, accordingly, the books and records of ... Associated ... never reflected the transfer to [the] plaintiff's intestate and the true and lawful ownership of the ... Stock."
The defendants contend that the judge sustained the demurrer because the "second substitute declaration did not cure the defects in the prior declarations and ... the assumptions of law made by the prior Court in sustaining the earlier demurrers had become the law of the case." We do not agree. In Saxon Theatre Corp. of Boston v. Sage, 347 Mass. 662, 665, we noted with approval the rule holding "that after a demurrer to a declaration has been sustained *615 and a superseding amendment has been allowed the demurrer to the original declaration will not be dealt with." The judge is free to make his own determinations based on the allegations set forth in the amended declaration and he is not required to accept "the rulings of two prior judges on the same legal issues."
The defendants also argue that a transferee "cannot ... maintain an action for a dividend against the issuer of stock or its agents unless and until that transferee has applied for a transfer of the registration of the ownership" on the books and records of the corporation. However, the defendants, by relying on this line of argument, overlook the overriding objective of the "Investment Securities" Article of the Uniform Commercial Code (code), G.L.c. 106, Article 8 (effective October 1, 1958), which confers negotiability upon "securities governed by this Article."[2] Article 8 does not require that before a "holder" of securities can enforce rights under the securities he must be the "record owner" of those securities. A purchaser acquires the rights of his transferor.[3] Article 8 is first concerned with whether the instruments involved are "securities" within the definition expressed in § 8-102 (1) (a).[4] In the instant case, the stock certificates are clearly "securities" and therefore fall within the ambit of § 8-105 (1).
In the case before us the pleadings do not contain a *616 denial of the validity of the signatures, and "unless specifically denied in the pleadings, each signature on the security or in a necessary indorsement is admitted."[5] With the signatures admitted, § 8-105 (2) (c) becomes effective and the "production of the ... [security] entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security." An indorsement in blank is sufficient to transfer legal title under § 8-308 (2).
The defendants further contend that under § 3 of the Uniform Stock Transfer Act, St. 1910, c. 171, predecessor of G.L.c. 155, § 29 (repealed by St. 1957, c. 765, § 2), and its code counterpart, § 8-207, "a corporation and its agents are free from liability when payment of a dividend is made to the record holder of the shares in the absence of notice of a conflicting claim." We need not now interpret § 8 - 207 or its predecessor for, in any event, the judge's ruling sustaining their demurrer cannot be upheld. Payment, even if averred in the demurrer, is a matter of defence, not a ground for the sustaining of a demurrer. Fay v. Boston & Worcester St. Ry. 196 Mass. 329, 336. Murray v. Grossman, 289 Mass. 217, 221. See G.L.c. 231, § 28.
We do not agree with the additional contention of the defendants that the case of Palmer v. O'Bannon Corp. 253 Mass. 8, is controlling. In that case we held that unless the pledgee of stock certificates completed the blank certificates by filling in his name, he had no right to have new certificates issued or to have title to the certificates registered in his name. However, the requirements set forth in the O'Bannon case were decided prior to the adoption of the code. In so far as these requirements are inconsistent with the concepts of negotiability enunciated in Article 8, they are no longer of any effect.[6]
The plaintiff's allegations are sufficient to state a cause of action.
Exceptions sustained.
NOTES
[1] The defendants "demur generally and specifically to each of the six (6) counts of the plaintiff's second substitute declaration and say that the said declaration and each count thereof and the matters therein contained in manner and form as the same are stated and set forth are not sufficient in law for the plaintiff to have its action against the said defendants, and assign specifically to the said second substitute declaration as a whole, and to each of said six (6) counts thereof as though set forth separately, their reasons therefor:
"1. The said second substitute declaration and each count thereof does not state a cause of action recognized by the laws of this Commonwealth;
"2. The said second substitute declaration and each count thereof does not state concisely and with substantial certainty the substantive facts necessary to constitute a cause of action;
"3. The said second substitute declaration and each count thereof fails to set forth or allege a material fact necessary to state a cause of action, to wit: that either the plaintiff or its intestate was a shareholder of record of Associated Textile Companies at any time; and in fact it affirmatively alleges the contrary;
"4. The said second substitute declaration and each count thereof fails to set forth or allege a material fact necessary to establish the plaintiff's cause of action, to wit: that either the plaintiff or its intestate ever presented a completed instrument to any one of the defendants and requested a transfer on the books of the Associated Textile Companies; and in fact it affirmatively alleges the contrary;
"5. The declaration and each count thereof reveals in its face that the causes alleged are barred by laches and the Statute of Limitations.
"6. Counts II, IV and VI of said second substitute declaration state as a conclusion of law that the various defendants `owe it' certain sums but fail to plead any facts upon which said debt is predicated."
The judge sustained the demurrer "on all grounds except No. 5." The defendants took no exception to this ruling. In any event, at law, the matter involved in this ground is an affirmative defence which cannot be raised by demurrer. See Gallo v. Foley, 299 Mass. 1, 3.
[2] G.L.c. 106, § 8-105 (1).
[3] General Laws c. 106, § 8 - 301 (1), reads: "Upon delivery of a security the purchaser acquires the rights in the security which his transferor had or had actual authority to convey except that a purchaser who has himself been a party to any fraud or illegality affecting the security or who as a prior holder had notice of an adverse claim cannot improve his position by taking from a later bona fide purchaser." Section 8-302 reads: "A `bona fide purchaser' is a purchaser for value in good faith and without notice of any adverse claim who takes delivery of a security in bearer form or of one in registered form issued to him or indorsed to him or in blank."
[4] General Laws c. 106, § 8-102 (1) (a) reads as follows: "(1) In this Article unless the context otherwise requires (a) A `security' is an instrument which (i) is issued in bearer or registered form; and (ii) is of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; and (iii) is either one of a class or series or by its terms is divisible into a class or series of instruments: and (iv) evidences a share, participation or other interest in properly or in an enterprise or evidences an obligation of the issuer."
[5] G.L.c. 106, § 8-105 (2) (1) (a).
[6] G.L.c. 106, § 8 - 308 (2), and § 8-401 (1) (a).
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195 P.3d 957 (2008)
STATE
v.
HEATH.
No. 81376-1.
Supreme Court of Washington, Department I.
October 1, 2008.
Disposition of petition for review. Denied.
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Case: 15-30086 Document: 00513323809 Page: 1 Date Filed: 12/29/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-30086 United States Court of Appeals
Fifth Circuit
FILED
YAROSLAV LOZOVYY, December 29, 2015
Lyle W. Cayce
Plaintiff - Appellant Clerk
v.
RICHARD L. KURTZ; THOMAS R. KLEI,
Defendants - Appellees
Appeal from the United States District Court
for the Middle District of Louisiana
Before BENAVIDES, DENNIS, and COSTA, Circuit Judges.
FORTUNATO P. BENAVIDES, Circuit Judge:
This appeal involves the application of Louisiana Code of Civil Procedure
Article 971, the state’s “anti-SLAPP” statute, which provides a procedural
mechanism for dismissing certain defamation claims early in litigation unless
the plaintiff can establish a “probability of success.” Plaintiff-Appellant
Yaroslav Lozovyy sued Richard Kurtz and Thomas Klei for allegedly stating
during a conference call that he destroyed and/or stole research data, and the
district court granted Kurtz and Klei’s special motion to strike the claim under
Article 971. Lozovyy now appeals, arguing that the court erred in granting the
motion despite the existence of a genuine dispute of material fact. We agree;
Case: 15-30086 Document: 00513323809 Page: 2 Date Filed: 12/29/2015
No. 15-30086
accordingly, we REVERSE the judgment of the district court and REMAND for
further proceedings.
I. BACKGROUND
From 2001 to 2012, Plaintiff-Appellant Yaroslav Lozovyy (“Lozovyy”)
was employed by Louisiana State University at the J. Bennett Johnston Sr.
Center for Advanced Microstructures & Devices (“CAMD”) on an annual
renewable-contract basis. Lozovyy worked as a research assistant,
contributing to CAMD’s study and development of potential alternative energy
sources. During the course of Lozovyy’s employment at CAMD, he had
considerable contact with Peter Dowben (“Dowben”), a physics and astronomy
professor at the University of Nebraska-Lincoln. Dowben and Lozovyy
frequently collaborated on academic papers, publishing over two dozen
together, and they often corresponded via email to share strategies for
navigating inter-office politics. Dowben also wrote to CAMD representatives
on Lozovyy’s behalf several times; for instance, in 2010 Dowben wrote a long
email to CAMD’s interim director Richard L. Kurtz (“Kurtz”) about the
apparent “poor quality” of recent CAMD research, arguing that it was “not a
problem that [could] be laid at the feet of Yaroslav Lozovyy specifically.”
Another time, Dowben wrote to an LSU professor and CAMD collaborator
about Lozovyy’s various contributions to CAMD’s work, noting that Lozovyy
had been going above and beyond his job description “as a good citizen” without
“any appreciable benefits.”
In April of 2012, a decision was made not to renew Lozovyy’s contract
with CAMD, effectively terminating his employment at LSU. Lozovyy sent an
email on June 28, 2012 suggesting that he had heard a “rumor . . . at LSU”
that he “stole” CAMD data and “Dr. Kurtz was forced to fire” him as a result.
Dowben subsequently contacted Kurtz and demanded an explanation for
Lozovyy’s termination, insisting that Lozovyy be allowed to return. In July of
2
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No. 15-30086
2012, a conference call was held at Dowben’s request to discuss Lozovyy’s
termination, among other things. The participants in the call were Dowben,
Kurtz, LSU Vice Chancellor for Research and Economic Development Thomas
R. Klei (“Klei”), Associate Vice Chancellor Kalliat T. Valsaraj (“Valsaraj”),
CAMD Scientific Director John Scott (“Scott”), and Prem Paul and Greg Snow
of the University of Nebraska-Lincoln. Lozovyy alleges that during the
conference call, Kurtz and Klei falsely stated that Lozovyy had been
terminated for stealing and/or destroying CAMD data.
Based on the statements allegedly made during the conference call,
Lozovyy sued Kurtz and Klei (collectively, “Defendants”) for defamation on
July 1, 2013. After conducting discovery for over a year and twice having joint
motions to extend discovery deadlines denied by a magistrate judge,
Defendants filed a special motion to strike under Louisiana Code of Civil
Procedure Article 971 on July 18, 2014. In support of their motion, Defendants
submitted their own affidavits and affidavits from Valsaraj and Scott averring
that none of the participants in the conference call had stated that Lozovyy
stole or destroyed CAMD data. In response to Defendants’ motion, Lozovyy
submitted an affidavit from Dowben asserting in relevant part that “Kurtz and
Klei specifically stated that Dr. Lozovyy had stolen and destroyed data.” 1
Defendants countered with numerous affidavits and exhibits attacking
Dowben’s credibility, including the aforementioned emails and statements
regarding actions taken by Dowben on Lozovyy’s behalf.
1Kurtz and Klei also argued forcefully in the district court that, apart from the issue
of whether defamatory statements were made, Lozovyy had failed to produce any evidence
on the necessary element of damages. In response, Lozovyy submitted affidavits from
colleagues regarding harm to his reputation as relevant to the issue of damages. The district
court ultimately resolved Kurtz and Klei’s motion on the question of whether the alleged
statements were made, and neither party has raised or argued the damages issue on appeal.
3
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No. 15-30086
On July 24, 2014, the district court issued a notice to the parties that the
special motion to strike would be converted to a motion for summary judgment,
and Defendants would have 14 days to supplement their motion as appropriate
for one for summary judgment. Defendants supplemented their motion on
August 7, 2014, maintaining in the alternative that a special motion to strike
was available to them under Louisiana law. On December 17, 2014, the district
court issued another notice to counsel indicating that, upon reconsideration,
Defendants’ motion would be treated as a special motion to strike under
Louisiana Code of Civil Procedure Article 971. The court asked for additional
briefing and held a hearing on January 15, 2015, ultimately granting
Defendants’ motion on January 26, 2015.
In the court’s written order, it first noted that Article 971 could properly
be applied in federal court, although “neither party ha[d] raised the issue.” The
court then based its decision to grant the motion on its view that “the burden
imposed by Article 971 is greater than . . . the burden of the non-movant on a
motion for summary judgment,” and it indicated in a footnote that “if the
ordinary summary judgment standard applied, . . . Peter Dowben’s declaration
would be enough, by itself, to defeat [the] motion . . . and create an issue of fact
for trial.” On the affidavits presented, the court concluded that Defendants’
evidence “cast[] doubt on the credibility of . . . Mr. Dowben,” and thus “[i]f any
weighing of evidence is required by Article 971, and the Fifth Circuit appears
to require this, then Plaintiff loses.” The district court accordingly entered
judgment dismissing Lozovyy’s claim with prejudice on February 9, 2015.
Lozovyy now appeals, arguing that (1) the motion and hearing were untimely,
and (2) the district court misapplied Article 971’s dismissal standard.
II. APPLICABLE LAW
Louisiana Code of Civil Procedure Article 971 provides that
4
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No. 15-30086
[a] cause of action against a person arising from any act of that
person in furtherance of the person's right of petition or free speech
under the United States or Louisiana Constitution in connection
with a public issue shall be subject to a special motion to strike,
unless the court determines that the plaintiff has established a
probability of success on the claim.
LA. CODE CIV. PROC. art. 971(A)(1). Article 971 also sets forth specific timing
provisions for special motions to strike: such motions “may be filed within
ninety days of service of the petition, or in the court’s discretion, at any later
time upon terms the court deems proper,” and properly filed motions “shall be
noticed for hearing not more than thirty days after service unless the docket
conditions of the court require a later hearing.” Id. arts. 971(C)(1) & (3). In the
act creating Article 971, the Louisiana legislature indicated that in light of the
“disturbing increase in lawsuits brought primarily to chill the valid exercise of
. . . constitutional rights,” the provisions of Article 971 “shall be construed
broadly.” Thomas v. City of Monroe, 833 So. 2d 1282, 1286 (La. App. 2d Cir.
2002) (quoting 1999 La. Acts 734).
This Court reviews a district court’s determinations of state law de novo.
Am. Reliable Ins. Co. v. Navratil, 445 F.3d 402, 404 (5th Cir. 2006). In
reviewing determinations of state law, we look to the final decisions of the
state’s highest court, making an “‘Erie guess’” as to how the highest court
would resolve an issue if it has not been fully addressed. Chaney v. Dreyfus
Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (quoting Travelers Cas. & Sur.
Co. of Am. v. Ernst & Young LLP, 542 F.3d 475, 483 (5th Cir. 2008)).
Intermediate state appellate decisions are generally given deference in making
an Erie guess unless “‘other persuasive data’” indicates “‘that the highest court
of the state would decide otherwise.’” Id. “To the extent that a prior panel of
this Circuit has ruled on [a state law] issue and has not been superceded [sic]
by either [state] case law or a change in statutory authority,” we are also
5
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No. 15-30086
“bound by the prior decisions of this Circuit as to the meaning of [state] law.”
Welborn v. State Farm Mut. Auto. Ins. Co., 480 F.3d 685, 687 (5th Cir. 2007).
III. DISCUSSION
Lozovyy challenges the district court’s grant of Defendants’ special
motion to strike on two primary bases: first, Lozovyy argues that the motion
and hearing did not comply with the timing provisions of Article 971, and
second, Lozovyy insists that the court misapplied Article 971’s “probability of
success” standard when it apparently weighed conflicting affidavits and
granted the motion despite the existence of a genuine dispute of material fact. 2
We address Lozovyy’s timeliness arguments first, and we then discuss the
meaning of Article 971’s dismissal provision. 3
A. Timeliness of the Special Motion to Strike and Hearing
As noted above, Article 971 provides that special motions to strike under
its auspices “may be filed within ninety days of service of the petition, or in the
court’s discretion, at any later time upon terms the court deems proper.” LA.
CODE CIV. PROC. art. 971(C)(1). Additionally, properly filed motions “shall be
2 Lozovyy puts forth two additional arguments that we need not address. First, in his
reply brief, Lozovyy argues that Defendants never met their initial burden under Article 971
by making a prima facie showing that the act sued upon was taken “in furtherance of the . .
. right of petition or free speech under the United States or Louisiana Constitution in
connection with a public issue.” Starr v. Boudreaux, 978 So. 2d 384, 388–89 (La. App. 1st Cir.
2007). However, because this argument was not raised in Lozovyy’s initial brief, it is waived.
See Lockett v. EPA, 319 F.3d 678, 684 n.16 (5th Cir. 2003) (“To the extent that appellants
attempt to raise the issue . . . in their reply brief, we view the issue waived.”); Peavy v. WFAA-
TV, Inc., 221 F.3d 158, 179 (5th Cir. 2000) (“We do not consider any of [the arguments],
because they were not raised in the parties’ opening briefs.”). Second, Lozovyy argues that
the district court’s application of Article 971 violated his Seventh Amendment right to a jury
trial. Because we reverse on statutory grounds, we do not reach the constitutional issue.
3 While we ultimately reverse on the district court’s application of Article 971’s
dismissal provision, it seems that the question of whether dismissal is appropriate on an
Article 971 motion is only relevant if that motion was timely filed under the statute’s timing
provisions. Significantly, we note that neither party has argued that we should not reach the
timing issue, and we accordingly address the timeliness of Defendants’ motion as a threshold
matter.
6
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noticed for hearing not more than thirty days after service unless the docket
conditions of the court require a later hearing.” Id. art. 971(C)(3). It is not
disputed that Defendants’ special motion to strike in the present case was filed
beyond the ninety day window provided in Article 971, and the motion was
noticed for hearing more than thirty days after service. Thus, Lozovyy argues
that both the motion and the hearing on the motion were untimely. 4 While he
acknowledges that Article 971(C)(1) gives the trial court discretion to hear
special motions filed after ninety days, he argues that Defendants should have
sought leave of court to file their motion beyond the deadline, which they failed
to do. Furthermore, Lozovyy contends that the statutory exception to the thirty
day hearing deadline in cases where “docket conditions of the court require a
later hearing” was neither discussed nor relied upon by the district court,
making the late docketing impermissible. We reject both arguments.
With respect to filing, Lozovyy cites no state-law authority for the
proposition that Defendants were required to seek leave of court in order to file
their motion beyond ninety days. Rather, Lozovyy simply cites to cases where
trial courts refused to consider Article 971 motions brought after the ninety
day deadline. But these citations miss the point, which is that the decision
whether to allow late motions is discretionary under 971(C)(1). Cases do exist
where litigants have waited too long and trial courts have declined to exercise
their 971(C)(1) discretion; but cases also exist where courts have allowed such
motions to proceed. See, e.g., BCCL Enter., Inc. v. Rizzo, No. 2013 CA 1624,
2014 WL 4102467, at *2 (La. Ct. App. 1st Cir. Aug. 20, 2014). Ultimately, the
4 In his briefing, Lozovyy also argues that Federal Rule of Civil Procedure 6(b) governs
deadline extensions in federal court and requires several formalities that were not complied
with here. However, Lozovyy apparently abandoned this contention at oral argument,
conceding that Rule 6(b) is inapposite, and he regardless waived the argument by failing to
raise it before the district court. See NCDR, L.L.C. v. Mauze & Bagby, P.L.L.C., 745 F.3d 742,
752 (5th Cir. 2014).
7
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broad, discretionary language of the statute “plainly allows a district judge to
determine when a motion is timely filed.” Hampton-Stein v. Aviation Fin. Grp.,
LLC, 472 F. App’x 455, 457 (9th Cir. 2012) (upholding a district court’s decision
to allow a late-filed motion under California’s almost-identical anti-SLAPP
statute).
With respect to the timeliness of the hearing on the motion, Louisiana
appellate court precedent conclusively forecloses Lozovyy’s argument. In
Aymond v. Dupree, a special motion to strike was filed in April of 2005, and the
trial court scheduled the hearing on the motion, as well as two other motions,
for July 12, 2005. 928 So. 2d 721, 731 (La. Ct. App. 3d Cir. 2006). The Louisiana
Third Circuit Court of Appeals held that this scheduling was permissible
despite the thirty day language of Article 971, because the judge had been
appointed ad hoc to hear the case and it was therefore “in the interest of
judicial economy” for all motions to be heard “on the same date.” Id. The court
also rejected the argument that the trial court should have listed specific
“docket conditions” warranting the late hearing; the appellate court reasoned
that had the legislature intended to require “oral or written reasons from the
court explaining the court’s deviation from the thirty-day scheduling provision,
the legislature would have included a mandate for same. There is no such
mandate.” Rather, “the article itself allows deviation from the” thirty day
provision, and this provision “is broadly stated.” Id. As such, the court
concluded that appellant’s argument was “without merit.” Id.
While Lozovyy dismisses the discussion in Aymond as “dicta” because
the issue was raised for the first time on appeal and thus was not properly
before the court, Lozovyy presents no argument or authority to suggest that
Aymond’s reasoning is flawed or should otherwise be discounted. Additionally,
the district court’s delay in this case appears to have stemmed from its
uncertainty about whether an Article 971 motion could be properly considered
8
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No. 15-30086
in federal court; this prompted the court to initially convert the motion into a
motion for summary judgment and later, after a new judge had been assigned
to the case, convert it back to a special motion to strike. We think that under
Aymond, the hesitation and judge-shuffling in the district court were enough
to have justified the late hearing on the motion. Accordingly, we conclude that
neither the motion nor the hearing were barred by the timing provisions of
Article 971.
B. Application of Article 971’s Dismissal Provision
Lozovyy’s primary contention on appeal is that the district court applied
Article 971’s “probability of success” dismissal standard incorrectly. Ruling on
a special motion to strike under Article 971 involves a “burden-shifting
analysis for weeding out frivolous claims.” Henry v. Lake Charles Am. Press,
566 F.3d 164, 170 (5th Cir. 2009). The defendant-movant must first make a
prima facie showing that Article 971 covers the speech or activity at issue—i.e.
that the act sued upon was taken “in furtherance of the . . . right of petition or
free speech under the United States or Louisiana Constitution in connection
with a public issue.” Starr, 978 So. 2d at 388–89. Once a prima facie showing
is made, the burden shifts to the plaintiff to demonstrate a “probability of
success” on his claim. Id. at 389. If the plaintiff demonstrates a “probability of
success,” “the trial court denies the [special] motion and the suit proceeds as it
normally would”; if the plaintiff fails to demonstrate a “probability of success,”
the trial court dismisses the claim. Henry, 566 F.3d at 170.
Lozovyy argues that the district court in this case, in ruling that Lozovyy
had failed to demonstrate a “probability of success” on his defamation claim,
applied Article 971 in a manner that directly conflicts with Federal Rule of
Civil Procedure 56. As Lozovyy correctly identifies, other circuits have refused
to apply anti-SLAPP dismissal provisions similar to Article 971 in federal court
under the Erie doctrine, reasoning that they create distinct mechanisms for
9
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pretrial dismissal of claims that are incompatible with the Rule 56 standard
for summary judgment. See, e.g., Abbas v. Foreign Policy Grp., LLC, 783 F.3d
1328, 1333–34 (D.C. Cir. 2015). In Henry v. Lake Charles American Press,
however, this court appeared to recognize that application of Article 971 does
not create an Erie problem when we held that “Louisiana law, including the
nominally-procedural Article 971, governs this diversity case.” 566 F.3d at
168–69. Nevertheless, Lozovyy asserts that Henry merely assumed the issue
without deciding it and failed to address the potential conflict with Rule 56; in
support of this assertion, Lozovyy points to later, unpublished cases where this
court has expressly declined to “decide whether Louisiana’s anti-SLAPP law is
appropriately asserted in a federal diversity case.” Mitchell v. Hood, No. 14-
30537, 2015 WL 3505481, at *2 n.1 (5th Cir. June 4, 2015) (per curiam).
Lozovyy accordingly argues that Article 971’s dismissal provision cannot apply
in federal court unless the “probability of success” standard is read as
functionally equivalent to the federal standard for summary judgment under
Rule 56 (thereby avoiding a “direct collision” between the two). Thus, Lozovyy
claims that the district court erred in granting Defendants’ motion, because it
explicitly premised its ruling on the view that Article 971 imposes a higher
burden on the non-movant than at summary judgment. In the district court,
however, Lozovyy never argued that Article 971 must comport with Rule 56 as
a matter of the Erie doctrine, nor did the district court address the issue in its
order. Rather, the court merely cited Henry in support of its authority to rule
on the motion after noting that “neither party [had] raised the issue.” We
accordingly decline to revisit Henry’s pronouncement on this point or address
its implications with respect to Article 971’s applicability in federal court under
the Erie doctrine, because Lozovyy failed to “raise the issue to such a degree
that the trial court [could] rule on it.” Mauze & Bagby, 745 F.3d at 752–53. We
10
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instead “proceed assuming” the statute does not conflict with the Federal
Rules. Id.
Assuming Article 971 properly applies in federal court, however, we are
faced with the question of whether the district court applied the “probability of
success” standard correctly as a matter of Louisiana law. Lozovyy forcefully
and repeatedly argued to the court below that Louisiana courts treat Article
971 motions in the same manner as motions for summary judgment, foregoing
credibility determinations and evidence-weighing and asking simply whether
a genuine dispute of material fact exists. Nevertheless, the district court
ultimately determined that Article 971 permits courts to weigh evidence and
make credibility assessments in order to essentially resolve disputed issues of
material fact before trial. Because we believe that Louisiana law would not
sanction such a result, we must reverse the district court’s judgment.
In his briefing, Lozovyy relies heavily on a federal district court opinion
from the Eastern District of Louisiana in which the court undertook “a
thorough review of the Louisiana cases interpreting [A]rticle 971” and
concluded that in almost every instance “when Louisiana courts have found
disputed issues of material fact, they have found that a special motion to strike
should not be granted.” Louisiana Crisis Assistance Ctr. v. Marzano-Lesnevich,
827 F. Supp. 2d 668, 679 (E.D. La. 2011), vacated on other grounds, 878 F.
Supp. 2d 662 (E.D. La. 2012). Our own review of Louisiana caselaw leads us to
a similar conclusion.
As a starting point, the Louisiana First, Second, and Third Circuit
Courts of Appeal have all referred to Article 971 motions as “akin to [] motion[s]
for summary judgment.” Hakim v. O’Donnell, 144 So. 3d 1179, 1190 n.5 (La.
Ct. App. 2d Cir. 2014); Hebert v. La. Licensed Prof’l Vocational Rehab.
Counselors, 4 So. 3d 1002, 1010 (La. App. 3d Cir. 2009); Lamz v. Wells, 938 So.
2d 792, 796 (La. Ct. App. 1st Cir. 2006). Most tellingly, Louisiana’s Second
11
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Circuit has treated the Article 971 “probability of success” dismissal standard
as effectively interchangeable with the standard for summary judgment under
Louisiana law and has rejected the notion that either standard allows judges
to weigh credibility. See Bradford v. Judson, 12 So. 3d 974, 983 (La. Ct. App.
2d Cir. 2009). In Bradford, the plaintiff sued the defendant over an email
stating that the plaintiff had taken certain proceeds illegally. Id. at 981. The
trial court granted defendant’s motions for summary judgment and special
motions to strike, and the appellate court reversed after conducting a thorough
analysis of Louisiana’s summary judgment standard and defamation law. See
id. at 977, 982. The court explained that the determination of whether to grant
summary judgment requires an assessment of whether there is a “genuine” or
“triable” issue of “material fact,” with “material fact” denoting a fact “the
existence or nonexistence of which may be essential to plaintiff’s cause of action
under the applicable theory of recovery.” Id. at 981 (citing Kennedy v. Sheriff
of East Baton Rouge, 935 So. 2d 669, 686 (La. 2006)). On the facts of the case,
the court recognized that a dispute existed as to whether the email constituted
abuse of a conditional privilege under state defamation law, and “[b]oth sides
[were] telling the ‘truth’ as they kn[e]w it.” Id. at 982–83. As such, the court
concluded that the plaintiff “should be permitted to present his version and
[defendant] hers,” because “[w]eighing credibility has no place in a motion for
summary judgment.” Id. at 983. The court thus reversed the grants of both
summary judgment and the special motions to strike, conducting no separate
analysis on the question of Article 971’s “probability of success” standard. Id.
This approach to Article 971 is consistent with the approach that
California courts have taken in applying their “virtually identical” anti-SLAPP
statute. Baxter v. Scott, 847 So. 2d 225, 231–32 (La. Ct. App. 2d Cir. 2003),
vacated on other grounds, 860 So. 2d 535 (La. 2003). Courts of appeal in
California have repeatedly held that the state’s anti-SLAPP dismissal
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provision, which requires a non-movant to demonstrate a “probability of
prevailing,” entails only a determination “that the complaint is both legally
sufficient and supported by a sufficient prima facie showing of facts to sustain
a favorable judgment.” D’Arrigo Bros. of Cali. v. United Farmworkers, 169 Cal.
Rptr. 3d 171, 178 (Cal. Ct. App. 6th Dist. 2014). Notably, a court is not
permitted to “weigh credibility [or] compare the weight of the evidence” in
making this determination. Id. Moreover, California courts have consistently
concluded that motions to dismiss under the state’s anti-SLAPP provision
should not be granted when material fact issues exist. See, e.g., GetFugu, Inc.
v. Patton Boggs LLP, 162 Cal. Rptr. 3d 831, 841 (Cal. Ct. App. 2d Dist. 2013)
(holding that “opposing declarations, by disputing” the falsity of the relevant
statements, precluded dismissal). Because Louisiana courts have recognized
the similarity between Article 971 and California’s anti-SLAPP statute and
have looked to California precedent in interpreting Louisiana’s provisions, this
caselaw is persuasive in predicting how the Louisiana Supreme Court would
construe Article 971’s “probability of success” standard. 5 See, e.g., Baxter, 847
So. 2d at 231–32. In short, a review of Louisiana caselaw—coupled with the
recognition that Louisiana courts have relied on California’s interpretation of
its nearly identical anti-SLAPP provision in the past—leads us to believe that
the Louisiana Supreme Court would decline to read Article 971’s “probability
of success” standard as permitting courts to assess credibility or weigh
evidence in order to resolve disputed issues of material fact before trial. 6
5 While we recognize that our task is to determine Louisiana law, and we are wary of
cherry-picking out-of-state precedent in service of this task, we think that California
precedent is useful in this instance precisely because Louisiana courts have acknowledged
the similarity between the California and Louisiana anti-SLAPP statutes in opinions
interpreting Article 971. See Yount v. Handshoe, 171 So. 3d 381, 387 n.4 (La. Ct. App. 5th
Cir. 2015).
6 We do recognize that there are a few cases in which Louisiana appellate courts have
appeared to weigh conflicting evidence in resolving Article 971 motions (without stating that
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This court’s discussion of Article 971 in Henry is also not to the contrary.
While Henry is not a paragon of clarity, and it admittedly does refer to Article
971 as establishing a “difficult burden,” the opinion also notes that a special
motion to strike “resolves a question separate from the merits in that it merely
finds that such merits may exist, without evaluating whether the plaintiff’s
claim will succeed.” 566 F.3d at 175, 182 (quoting Batzel v. Smith, 333 F.3d
1018, 1025 (9th Cir. 2003)). Ultimately, Henry frames the “probability of
success” standard as “akin to a court determining only that a plaintiff has
presented a threshold showing that allows her claim to proceed” by making a
“prima facie showing of facts sufficient to sustain a favorable judgment.” Id. at
176, 181. At no point does Henry intimate that Article 971 requires or permits
courts to make credibility determinations and dismiss claims despite the
presence of genuine disputes of material fact.
Nevertheless, Defendants argue that Article 971’s “probability of
success” standard was meant to codify a special, more stringent summary
judgment burden that formerly applied to non-movants in Louisiana
defamation cases, and they cite the Louisiana Supreme Court’s opinion in
Sassone v. Elder for this proposition. 626 So. 2d 345, 351 (La. 1993). Sassone,
they are doing so). See, e.g., Brandner v. Molonguet, No. 2014 CA 0712, 2014 WL 7332206, at
*12–*13 (La. Ct. App. 2d Cir. Dec. 23, 2014); Lozovyy v. Kurtz, No. 3:13-CV-00424, 2015 WL
331804, at *9 (M.D. La. Jan. 26, 2015) (reading Brandner as involving consideration of
“conflicting affidavits”). However, we think that these cases are not necessarily inconsistent
with our holding today. In Brandner, for instance, the court’s conclusion rested largely on the
fact that Plaintiff’s affidavit conflicted with his own handwritten records that he attached to
the affidavit. 2014 WL 7332206, at *12. Furthermore, to the extent that Brandner or a select
few other cases can be read as permitting courts to resolve material factual disputes by
weighing conflicting evidence, we are nevertheless persuaded that the weight of Louisiana
authority supports our conclusion (and would lead the Louisiana Supreme Court to reach a
consistent result). See Rogers v. Ash Grove Cement Co., 799 So. 2d 841, 849 (La. Ct. App. 2d
Cir. 2001) (Brown, J., dissenting) (lamenting the majority’s failure to address Article 971 and
noting that because “Article 971’s intent and purpose [are] the same as a summary judgment
motion,” denial of an Article 971 motion “obviously” means that “there [are] material issues
of fact”).
14
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No. 15-30086
however, did not hold that defamation claims should be subject to a summary
judgment standard that permits courts to weigh evidence and resolve disputed
fact issues. Rather, the court in Sassone simply determined that defamation
claims would not be subject to the unique standard for summary judgment in
non-defamation cases that applied under Louisiana law at the time. 7 See id. at
351–52. Put another way, Sassone was, if anything, merely a recognition that
Louisiana’s special summary judgment standard, which reflected a “strong
preference for full trial on the merits,” did not apply to defamation claims
“because of the constitutional considerations in such cases.” Id. at 352.
This reading of Sassone is supported by the fact that Louisiana’s distinct
summary judgment standard for non-defamation claims was “legislatively
overruled” by Louisiana Code of Civil Procedure Article 966. JCM Const. Co.,
Inc. v. Orleans Parish Sch. Bd., 860 So.2d 610, 634 (La. Ct. App. 4th Cir. 2003).
As the Court of Appeal for the Fourth Circuit later recognized, the statutory
amendment brought “Louisiana’s standard for summary judgment closely in
line with the federal standard under Fed. Rule Civ. Proc. 56(c),” id., and the
Louisiana Supreme Court subsequently acknowledged that the new statute
had eliminated the need to recognize a different standard for defamation and
non-defamation claims. Kennedy v. Sheriff of East Baton Rouge, 935 So. 2d 669,
686 n.17 (La. 2006). In other words, the court’s opinion in Kennedy reflected
that because the statute had brought Louisiana summary judgment “closely in
line” with the federal standard, the rejection of Louisiana’s special, cautious
treatment of summary judgment was no longer necessary in defamation cases.
All of this is to say that Article 971, assuming it was meant to codify the
“special” defamation standard for summary judgment that existed in 1993,
7 Prior to 1996, summary judgment was generally disfavored in Louisiana, and thus
a “heavy burden” rested on the movant to show that a motion for summary judgment should
be granted. Id. at 352.
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codified only a standard that Louisiana courts have since suggested is akin to
the federal standard. 8 And no court, to our knowledge, has concluded that on
a motion for summary judgment in a defamation case, the trial court is
permitted to weigh evidence and assess credibility in order to resolve material
factual disputes.
In sum, we believe the Louisiana Supreme Court would recognize that
Article 971’s “probability of success” standard does not permit courts to weigh
evidence, assess credibility, or resolve disputed issues of material fact. Thus,
when the district court in this case granted dismissal based on its assessment
of the credibility of the parties’ affidavits and despite its acknowledgment that
a triable fact issue existed, the court applied Article 971 in a manner that is
contrary to Louisiana law.
IV. CONCLUSION
For the foregoing reasons, we REVERSE the judgment of the district
court and REMAND for further proceedings.
8 Compare Sassone, 626 So. 2d at 356 (Dennis, J., concurring) (recognizing that the
burden on the non-movant defamation plaintiff was to “show[] that a judge or jury reasonably
could find by clear and convincing evidence” that he had proved his case), with Anderson v.
Liberty Lobby, 477 U.S. 242, 248 (1986) (setting forth essentially the same standard).
16
| {
"pile_set_name": "FreeLaw"
} |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
DANIEL CHARLES DeFRAIA,
Plaintiff,
v.
Case No. 1:16-cv-01862 (TNM)
CENTRAL INTELLIGENCE
AGENCY,
Defendant.
MEMORANDUM OPINION
The Plaintiff in this case, Daniel DeFraia, seeks specific records under the Freedom of
Information Act related to the Central Intelligence Agency’s former detention and interrogation
program. The requested records have been separated into two categories, and both parties have
moved for partial summary judgment on the first category, as the CIA continues to process and
produce records from the second. I conclude that the CIA is entitled to partial summary
judgment, because the parties have agreed to narrow the FOIA requests at issue to specified
contracts and the records “cited in” a specified Senate committee report, and the CIA has
produced all of the required records in those agreed-upon sets.
I. BACKGROUND
In December 2014, Mr. DeFraia sent the CIA a FOIA request seeking “a) all CIA
contracts with Bruce Jessen, b) all CIA contracts with James Mitchell, c) contract information
between Jessen and Mitchell, d) contracts between the CIA and Mitchell, Jessen[,] and AMP
Associates, and e) [] all information related to [] Jessen and [] Mitchell and their interaction with
detainees including interrogation.” Compl. 4; Decl. of Antoinette Shiner, Def.’s Mot. Summ. J.
Ex. 1, Exhibit A at 25, ECF No. 16-1 (the 2014 Request). “Dr. James Mitchell and Dr. Bruce
Jessen were contractors employed by the CIA to assist in interrogating CIA detainees under the
CIA’s former detention and interrogation program.” Shiner Decl. ¶ 26. In May 2015, Mr.
DeFraia sent another request asking for five categories of records that had been “cited in” or
“stated in” the declassified portion of the report of the Senate Select Committee on Intelligence
on that program. Shiner Decl. Ex. H, ECF No. 16-1 at 40 (the 2015 Request); see also Report of
the Senate Select Committee on Intelligence Study of the CIA’s Detention and Interrogation
Program (Senate Report), available at https://www.intelligence.senate.gov/sites/default/files/
documents/CRPT-113srpt288.pdf (last visited April 26, 2018). Having received no documents
in response to either request, Mr. DeFraia filed suit in September 2016.
In a Joint Status Report submitted in December 2016, the parties informed the Court that
“[w]ith respect to the first category of records sought [in the 2014 Request], the parties have
agreed to refine the scope of the request as seeking contracts between (1) the CIA and (2) Bruce
Jessen and/or James Mitchell and/or Mitchell Jessen & Associates from 2001-2009 that relate to
the CIA’s rendition, detention, and interrogation program.” ECF No. 7 at 2 (Joint Status Report).
Both sides agreed to exclude a laundry list of sensitive information “from Defendant’s initial
production of records responsive to this category,” such as the names and contact information of
CIA personnel. Id. at 2-3. The CIA had already produced these exact documents for another
litigation,1 and so anticipated providing responsive records within two weeks, after which the
Plaintiff “reserve[d] the right to request that CIA produce certain redacted material.” Joint Status
Report at 3. As for the 2015 Request, “the parties [] agreed that the request will be processed as
written.” Id.
1
Shiner Decl. ¶¶ 20-21 (“In short, the plaintiff agreed to waive processing under the FOIA in
exchange for the CIA’s agreement to produce a copy of what had been produced in the Salim
case.”).
2
After productions from the CIA, both parties filed motions for summary judgment on the
first portion of the 2014 Request and the full 2015 request. Mem. In Support of Def.’s Mot.
Summ. J. (Def.’s Mot. Summ. J.) at 1-2, ECF No. 15; Mem. In Support of Pl.’s Mot. Summ. J.
(Pl.’s Mot. Summ. J.), ECF No. 19. Production on the second portion of the 2014 Request is
ongoing. See Order, ECF No. 28 at 1-2 (setting a production schedule that ends on June 29,
2018).
II. LEGAL STANDARDS
To prevail on a motion for summary judgment, a movant must show that “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986);
Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986). The FOIA requires federal agencies to
“disclose information to the public upon reasonable request unless the records at issue fall within
specifically delineated exemptions.” Judicial Watch, Inc. v. FBI, 522 F.3d 364, 365-66 (D.C.
Cir. 2008); see also 5 U.S.C. § 552(a)(3)(A) (records sought must be “reasonably describe[d]”).
Thus, a FOIA defendant is entitled to summary judgment if it demonstrates that there is no
genuine dispute as to whether “each document that falls within the class requested either has
been produced, is unidentifiable or is wholly exempt from the Act’s inspection requirements.”
See Weisberg v. Dep’t of Justice, 627 F.2d 365, 368 (D.C. Cir. 1980). The “vast majority” of
FOIA cases are decided on motions for summary judgment. See Brayton v. Office of U.S. Trade
Rep., 641 F.3d 521, 527 (D.C. Cir. 2011).
Searching for records requires “both systemic and case-specific exercises of discretion
and administrative judgment and expertise,” and is “hardly an area in which the courts should
attempt to micro-manage the executive branch.” Schrecker v. Dep’t of Justice, 349 F.3d 657,
662 (D.C. Cir. 2003). To demonstrate the reasonableness of its search, an agency can submit a
3
“reasonably detailed affidavit, setting forth the search terms and the type of search performed,
and averring that all files likely to contain responsive materials (if such records exist) were
searched.” Oglesby, 920 F.2d at 68. Agency declarations are given “a presumption of good
faith, which cannot be rebutted by ‘purely speculative claims about the existence and
discoverability of other documents.’” SafeCard Servs. Inc. v. SEC, 926 F.2d 1197, 1201 (D.C.
Cir. 1991). “[S]ummary judgment . . . is warranted if the affidavits describe the documents and
the justifications for nondisclosure with reasonably specific detail, demonstrate that the
information withheld logically falls within the claimed exemption, and are not controverted by
either contrary evidence in the record nor by evidence of agency bad faith.” Military Audit
Project v. Casey, 656 F.2d 724, 738 (D.C. Cir. 1981).
III. ANALYSIS
The CIA contends that it has fully complied with its pertinent FOIA obligations,
supported by a declaration from Ms. Antoinette Shiner, the Information Review Officer for the
CIA’s Litigation Information Review Office. Def.’s Mot. Summ. J. Ex. 1 (Shiner Decl.). But
Mr. DeFraia argues that the CIA’s description of its search methodology is legally inadequate,
and that the CIA has failed “to follow-up on clear leads indicating the existence of additional
[responsive] agency records.” Pl.’s Mot. Summ. J. at 9; Supp. Decl. of Daniel DeFraia, Pl.’s
Mot. Summ. J. (Supp. DeFraia Decl).2 He also asks for in camera review to verify that the CIA
has properly invoked two FOIA exemptions. Pl.’s Mot. Summ. J. at 13-15. Based on the
governing language of Mr. DeFraia’s requests, I conclude that the CIA has provided every
legally required record, and that no basis exists for in camera review of the CIA’s work.
2
Mr. DeFraia’s first declaration was filed in support of his opposition to the CIA gaining an
extension of time to move for summary judgment. Decl. of Daniel DeFraia, Mem. In Opposition
to the CIA’s Motion for Extension of Time (DeFraia Decl), ECF No. 10-1 (March 6, 2017).
4
A. The CIA Has Produced the “Contracts” Listed in the 2014 Request
The parties have expressly agreed, in a document signed by attorneys for both sides, that
the scope of the first portion of Mr. DeFraia’s 2014 Request is limited to “contracts between (1)
the CIA and (2) Bruce Jessen and/or James Mitchell and/or Mitchell Jessen & Associates from
2001-2009 that relate to the CIA’s rendition, detention, and interrogation program,” with
specific, agreed-upon redactions. Joint Status Report at 2. Immediately after the parties agreed
to this narrowed scope, the CIA produced all of the CIA contracts at issue. Shiner Decl. ¶ 22.
The contracts were redacted as specified in the Joint Status Report, and the CIA invoked no
additional exemptions. Id.
Mr. DeFraia still wants to enforce the scope of his original 2014 Request, which was
somewhat broader, and he therefore demands “additional documents” to which the contracts
“directly refer.” Pl.’s Mot. Summ. J. at 10 (“[t]he portion of the . . . 2014 Request at issue herein
sought “all contract information”). But it is the Joint Status Report, not Mr. DeFraia’s original
request, that controls. 5 U.S.C. § 552(4)(A)(viii)(II)(bb), (6)(B)(ii) (both referring to a FOIA
requestor’s ability to later “limit the scope of the request”); Gilman v. U.S. Dep’t of Homeland
Sec., 32 F. Supp. 3d 1, 22 (D.D.C. 2014) (enforcing “[t]he plain meaning of the joint status
report” to conclude that certain documents “are not responsive to the plaintiff’s amended FOIA
request”).3
When confronted with this objection, Def.’s Opp. at 8-9, Mr. DeFraia does not squarely
challenge the binding nature of this agreement, but argues that a contracts-only interpretation of
the Joint Status Report “ignores DeFraia’s retained right to challenge [the CIA’s] withholdings
3
Even Mr. DeFraia’s original motion seems to acknowledge the binding nature of his
agreement, saying that “pursuant to the provisions of the [Joint Status Report], Plaintiff
challenges the adequacy of [the] CIA’s production of records.” Pl.’s Mot. Summ. J. 10.
5
as inadequate within the context of these proceedings.” Pl.’s Reply at 5. Under the plain
language of the agreement, that right does not extend beyond the specified contracts. The Joint
Status Report defines the “scope of the [2014] Request” as specific “contracts,” and immediately
explains that certain information will be redacted from those “records . . . with the understanding
that Plaintiff does not waive the right to seek copies of these records that may include some of
the redacted information in the agency’s subsequent record releases or in this action.” Joint
Status Report at 2. The agreement goes on to say that the CIA will produce “records responsive
to this category,” and “[a]fter reviewing those records in their redacted form, Plaintiff reserves
the right to request that CIA produce certain redacted material.” Id. at 3 (emphases added). The
only reasonable interpretation of this language is that Mr. DeFraia has retained a right to ask the
CIA to produce materials redacted from the listed contracts—the “records” to which the
agreement repeatedly refers—and nothing further. In other words, we are only dealing with
specified “contracts.” Id. at 2-3.
Because Mr. DeFraia has already narrowed the scope of his FOIA request, his assertion
that the CIA failed “to follow-up on clear leads indicating the existence of additional agency
records” must fail. See Pl.’s Mot. Summ. J. at 9. Mr. DeFraia points to five sets of documents
referenced in the CIA contracts, which he says are illustrative of “obvious indications that [the]
CIA omitted responsive records.” Id. at 11. But none of those documents constitute a contract—
or part of a contract—that the CIA has failed to produce.
A contract, in simple terms, consists of mutually agreed-upon words that create
obligations. See Contract, Black’s Law Dictionary (10th ed. 2014) (“An agreement between two
or more parties creating obligations that are enforceable or otherwise recognizable at law . . .
[or] [t]he writing that sets forth such an agreement.”). In Mr. DeFraia’s first example, he points
6
to 11 “applicable documents” listed in a 2005 “Statement of Work,” which he claims “were to be
integral outlines and guides of contract performance.” Pl.’s Mot. Summ. J. at 11; Id. Ex. 2 at 6.
But the “Applicable Documents” that the contract lists amount to independent rules and
guidebooks for working for the CIA, not part of the obligation-creating contract language itself.
Pl.’s Mot. Summ. J. Ex. 2 at 6 (listing, among other things, a “Contractor Classification Guide,”
a “National Industrial Security Program Operating Manual,” and a CIA “Directive” on
“Protecting Sensitive Compartmented Information with Information Systems.”). The 2005
Statement of Work also listed various deliverables that the contractors would provide, including
“six reports or categories of reports,” a “Management Plan,” a “Concept of Operations,”
“quarterly technical reports,” and “monthly financial reports.” Pl.’s Mot. Summ. J. at 11-12.
Mr. DeFraia also thinks these deliverables should have been produced. But deliverables are the
fruit of an obligation, not obligation creators themselves, and are therefore distinct from the
contract as such.
Mr. DeFraia’s second example does include actual contract language, but the CIA has
already produced it. He points to “a Statement of Work from the CIA Contracting Officer to Dr.
James Mitchell, dated 8 August 2001,” Pl.’s Mot. Summ. J. at 12, which states that the CIA in
“Appendix A” will “provide a list of specific variables to be included” in completing Project
Objective Task I (an assessment of “methods and strategies” for conducting psychological
assessments in difficult situations). Supp. DeFraia Decl. Ex. 4 at 2; see also Pl.’s Reply at 5
(claiming that “at least” this document counts as part of a contract, under a contracts-only
reading of the Joint Status Report). On April 3, 2018, I issued an order requiring the CIA to
produce Appendix A or explain why release was not required. Order, ECF No. 33. On April 18,
2018, the CIA filed a Notice of Compliance with this Order, explaining that Appendix A had
7
already been produced, and providing a copy to the Court. ECF No. 35. Thus, Mr. DeFraia’s
objections regarding the 2001 Statement of Work have been satisfied.4
Mr. DeFraia’s third, fourth, and fifth examples all point to “deliverables” that these
contracts required. Pl.’s Mot. Summ. J. at 12-13. But a party can produce a contract for apples,
in full, without handing over a single apple, because the deliverables are not part of the contract
itself. Accordingly, the CIA has produced all the records that Mr. DeFraia requested under the
first part of his 2014 Request, fully complying with its obligations under FOIA.
B. The CIA Has Produced the Required Records From the 2015 Request
The result in the 2015 Request is similarly controlled by the language of Mr. DeFraia’s
request. That request sought five categories of records that had been “cited in” or “stated in” a
certain Senate Report. Shiner Decl. Ex. H at 40. The CIA has identified 13 documents in those
five categories, withholding one document in full and producing the remaining 12 with
redactions under several claimed FOIA exemptions. Shiner Decl. ¶ 23.
Mr. DeFraia argues that the CIA ignored “clear leads that additional documents exist,”
pointing to specific language in the fourth sub-heading of his 2015 Request. Pl.’s Mot. Summ. J.
at 10. But the language does not back up his claim. In that request, Mr. DeFraia sought “[a]ll
emails, letters, and reports, and other sources of information cited in footnote 1029, 1030, and
1031 of the Senate . . . [R]eport[,] especially information related to the July 25, 2006
‘Justification For Other Than Full and Open Competition, Contractor.’” Shiner Decl. Ex. H.
Mr. DeFraia emphasizes that he sought “all . . . sources of information cited” in the three
footnotes, “especially information related” to the 2006 “Justification” document. Pl.’s Mot.
4
Mr. DeFraia also points to other deliverables listed in the 2001 Statement of Work, but those
documents are not part of the contract itself, for the reasons explained above. See Pl.’s Mot.
Summ. J. at 12.
8
Summ. J. at 10. On this basis, Mr. DeFraia would have the CIA produce information that was
not specifically cited in the footnotes, undertaking “follow-up search actions to locate the
relevant records and files associated with [the] Justification.” Id. But to look for information not
cited would go beyond the request, which sought “[a]ll emails, letters, and reports, and other
sources of information cited in” three specific footnotes. Shiner Decl. Ex. H. It is true that Mr.
DeFraia “especially” requested information related to the Justification, but “especially” modified
his “request” for “sources of information . . . cited.” Id. (emphasis added). By giving him
documents “cited in” the footnotes, the CIA gave Mr. DeFraia exactly what he requested.5
C. In Camera Review is Not Warranted
Mr. DeFraia only challenges the CIA’s invocation of four FOIA exemptions for the 2015
Request by asking for in camera review. Pl.’s Mot. Summ. J. at 13-14. In fact, he does not
challenge the CIA’s invocation of Exemption 1, for information that has been “properly
classified,” Morley, 508 F.3d at 1123 (citing 5 U.S.C. § 552(b)(1)), or Exemption 3, for material
“specifically exempted from disclosure by statute,” 5 U.S.C. § 552(b)(3).6 Pl.’s Mot. Summ. J.
at 13. Instead, Mr. DeFraia asks me to review seven specific documents, challenging the CIA’s
withholdings on the basis of FOIA Exemptions 5 and 6. Id. at 14. He explains that in camera
5
Mr. DeFraia also raises a global objection to the CIA’s motion for summary judgment, arguing
that the CIA never described its pre-litigation search processes, and did not adequately explain
how it went about finding the documents it has produced in response to either request. Pl.’s Mot.
Summ. J. at 6-9. But search requirements do not exist in a vacuum. Instead, “[t]o prevail on
summary judgment . . . the defending agency must show beyond material doubt . . . that it has
conducted a search reasonably calculated to uncover all relevant documents.” Morley v. CIA,
508 F.3d 1108, 1114 (D.C. Cir. 2007) (internal quotation marks and citation omitted). Because
the universe of “relevant documents” is relatively narrow in this case, and the CIA has shown
beyond material doubt that it has in fact uncovered them all, no further specificity is required.
6
For Exemption 3, the CIA invokes the National Security Act of 1947, and the Central
Intelligence Agency Act of 1949. Def.’s Mot. Summ. J. at 16-17.
9
review will help me to “quickly determine whether [the] CIA has accurately and adequately
identified the redacted information in [its] Vaughn index,” and adequately segregated non-
exempt information. Id. at 14-15. He argues that such review is “particularly appropriate” here,
where “the agency’s declarations are insufficiently detailed . . . the number of documents to
review is quite small, and . . . the dispute turns on the contents of the documents themselves.”
Id. at 15 (citations omitted).
But the mere possibility of error does not warrant in camera review. Ctr. for Auto Safety
v. EPA, 731 F.2d 16, 22 (D.C. Cir. 1984). As part of its required de novo review, a court “may
examine the contents of . . . agency records in camera to determine whether such records or any
part thereof shall be withheld under any of the exemptions.” 5 U.S.C. § 552(a)(4)(B) (emphasis
added). “[D]istrict courts have substantial discretion” in deciding whether to review documents
in camera, Ctr. for Auto Safety, 731 F.2d at 21, and “[t]he ultimate criterion is simply . . .
[w]hether the district judge believes that in camera inspection is needed in order to make a
responsible de novo determination on the claims of exemption.” Ray v. Turner, 587 F.2d 1187,
1195 (D.C. Cir. 1978). Here, reviewing the claimed exemptions de novo, I conclude that the
CIA’s affidavit contains enough detail to satisfy the legal standard. Shiner Decl. ¶¶ 24-42;
Military Audit Project, 656 F.2d at 738 (“summary judgment . . . is warranted if the affidavits
describe the documents and the justifications for nondisclosure with reasonably specific detail,
demonstrate that the information withheld logically falls within the claimed exemption, and are
not controverted by either contrary evidence in the record nor by evidence of agency bad faith.”).
Mr. DeFraia raises two arguments that this standard remains unmet, to no avail. With
respect to the CIA’s invocation of Exemption 5 for pre-decisional, deliberative material, see 5
U.S.C. § 552(b)(5), Mr. DeFraia points out that the CIA has invoked this exemption for four
10
documents without “pinpoint[ing] an agency decision . . . to which the document contributed,”
Senate of the Com. of Puerto Rico on Behalf of Judiciary Comm. v. U.S. Dep’t of Justice, 823
F.2d 574, 585 (D.C. Cir. 1987), and without much description of those documents. Pl.’s Reply at
7; see Shiner Decl. ¶¶ 38-40. But the CIA has identified these documents with some specificity,
as “MJA Monthly Report February 2006,” “MJA Monthly Report March 2006,” an “email
between Agency employees, Subject: Next Contractual Steps with Mitchell & Jessen,” and a
second “Email between Agency employees.” Def.’s Mot. Summ. J. Ex. 2 at Entry Nos. 7, 10,
12, and 13 (Vaughn Index); Shiner Decl. ¶¶ 39-40 (referring to the same items as Documents
C06673769, C06673772, C06674722, and C06674723). The last email, which was withheld in
full under Exemptions 1, 3, and 5, “includes comments and recommendations, and as well as
discussions about proposals, potential resource allocation, and other deliberative ancillary
matters.” Shiner Decl. ¶ 40. In this context—“the CIA’s former detention and interrogation
program,” where “[t]he focus of the program was to collect intelligence from high value
detainees, such as senior al-Qaida members and other terrorists thought to have knowledge of
active terrorist plots to murder American citizens,” id. at 26—Ms. Shiner’s bland description is
reasonably specific, and indeed seems wise. This program obviously “implicat[ed] national
security, a uniquely executive purview,” where “both the Supreme Court and this Court have
expressly recognized the propriety of deference to the executive in the context of FOIA claims.”
Ctr. for Nat. Sec. Studies v. U.S. Dep’t of Justice, 331 F.3d 918, 926–27 (D.C. Cir. 2003). Any
additional specificity about the specific “proposals” or “resource allocation” decisions under
consideration might well be unreasonable in this context, and Mr. DeFraia points to no “contrary
11
evidence in the record nor . . . evidence of agency bad faith.” Military Audit Project, 656 F.2d at
738.
Mr. DeFraia also suggests that the CIA may have invoked Exemption 6 to shield “non-
CIA personnel,” Pl.’s Mot. Summ J. 13-14, and that Ms. Shiner’s declaration on this point is
“boilerplate language parroting the standard of FOIA Exemption 6.” Pl.’s Reply 8 (quoting
Pinson v. U.S. Dep’t of Justice, 160 F. Supp. 3d 285, 300 (D.D.C. 2016) (“other than providing
boilerplate language . . . [the Government] does not identify how revealing this individual’s
identity . . . would result in a clearly unwarranted invasion of this person’s personal privacy).
But the CIA affidavit does all that can be expected here. Ms. Shiner invokes Exemption 6 only
to “withhold CIA officer’s names,” Shiner Decl. ¶ 41, and does so after explaining in detail why
“the CIA does not ordinarily disclose the identity and Agency affiliation of its employees,
regardless of whether or not they are under cover.” Id. ¶ 28.7 I find that no justification exists
for reviewing any documents in camera for compliance with Exemption 6.
In sum, I conclude that the CIA has complied with its obligations under FOIA, leaving no
genuine dispute on a question of material fact, and that in camera review of even a small number
of documents is not necessary to accomplish a responsible de novo review.
7
“Such employees may have served in sensitive positions or been involved in sensitive
operations, may be doing so now, or may do so in the future. The CIA undertakes substantial
efforts to protect its officers from exposure that could compromise their safety and the CIA’s
intelligence gathering mission. Revealing the names of those individuals who were involved in
the program would likely jeopardize the safety of these officers and their families, and
potentially the human intelligence sources who have met with these officers over the course of
their careers. Additionally, future officers may be less willing to accept dangerous job
assignments if the CIA is unable or unwilling to protect their identities, significantly impairing
the CIA’s ability to conduct its clandestine intelligence mission.” Id.
12
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 98-31213
JAMES COUTEE, et. al.,
Plaintiffs,
JAMES COUTEE,
Plaintiffs-Appellees-Cross-Appellant,
versus
WAL-MART STORES, INC. et al.,
Defendants,
WAL-MART STORES, INC.,
Defendant-Appellant-Cross-Appellee.
Appeal from the United States District Court
for the Western District of Louisiana
(96-CV-1640)
June 29, 2000
Before BARKSDALE, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
This case involves a personal injury suit for injuries sustained by James Coutee (“Coutee”)
during a slip and fall incident at a Wal-Mart store. The defendant appeals the district court’s denial
of its motion for a new trial on liability. Coutee claims that the jury awarded insufficient damages.
For reasons assigned below, we affirm the district court’s denial of the defendant’s motion for new
trial on liability, and deny Coutee’s request for a new trial on damages.
*
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.
FACTUAL AND PROCEDURAL HISTORY
This case involves a slip and fall incident at a Wal-Mart store. Coutee was shopping in a Wal-
Mart Super Center in Natchitoches, Louisiana when he slipped and fell. The parties do not dispute
that Coutee slipped on at least one grape that was on the floor. However, the parties dispute how
many grapes were present on the floor and the condition of the grapes when Coutee fell. Coutee
contends that several grapes on a stem caused his fall and that the grapes were brown and rotten
looking. Wal-Mart contends that only one grape was on the floor when Coutee fell and that the grape
was green, and thus not rotten. Coutee also claims that when he placed his hands on the floor to get
up, dirt and grit was on his hands, thus indicating that it had been some time since that area of the
floor was swept. While Coutee was on the floor, a store manager approached Coutee and assisted
him. The manager instructed Coutee to follow him to the front of the store to obtain information
regarding the incident. Wal-Mart personnel took pictures of the accident scene approximately fifteen
minutes after the incident.
Coutee filed a personal injury action in Louisiana state district court against Wal-Mart. Wal-
Mart removed the action to federal district court based on diversity jurisdiction. Wal-Mart filed a
third party action against Bingham Enterprises of Louisiana (“Bingham”) and Wausau Insurance
Company (“Wausau”). Bingham was contracted by Wal-Mart to perform floor maintenance
activities, and Wausau was Bingham’s insurer. Coutee amended his complaint to include Wausau.
Wausau and Bingham filed a motion for summary judgment which was granted. Wal-Mart and
Coutee timely filed notices to appeal the grant of summary judgment. Subsequently, the third party
action was severed, and the main action proceeded to jury trial. At the close of Coutee’s case, Wal-
Mart moved for a judgment as a matter of law (“JMOL”), which the court denied. Wal-Mart called
witnesses and presented evidence. The jury found that Wal-Mart was liable and did not find that
Coutee was contributorily liable. The jury also found that the accident did not cause Linda Coutee
loss of consortium. The jury awarded the following:
Past and present medical expenses $23,795.66
2
Past lost wages and/or lost $28,900.00
earning potential
Past physical and mental pain, $0
suffering and/or disability
Future medical expenses $15,000.00
Future lost wages and/or loss $75,000.00
of earning capacity
Future physical and mental pain, $0
suffering and/or disability
Wal-Mart renewed its motion for a JMOL and moved for a new trial on liability. Regarding
the JMOL, the district court found that Wal-Mart failed to renew its motion timely at the close of all
evidence. As such, the district court ruled that Wal-Mart’s failure to move timely for a JMOL
constituted a waiver. The district court also ruled that Coutee presented sufficient evidence to prove
that Wal-Mart had constructive notice of the grapes. Thus, the district court denied Wal-Mart’s joint
motion for JMOL and a new trial. Coutee did not move for a new trial on damages.
DISCUSSION
I. New Trial on Liability
Wal-Mart claims that the district court abused its discretion when it denied its motion for a
new trial. Specifically, Wal-Mart argues that Coutee presented insufficient evidence to prove that
it had “constructive notice” of the grapes on the floor that caused Coutee’s slip and fall. Wal-Mart
also argues that the jury rendered a compromise verdict because the jury awarded special damages,
but failed to award damages for pain and suffering.
Coutee, on the other hand, contends that he presented sufficient evidence to prove that Wal-
Mart had constructive notice of the grapes. Specifically, he asserts that because the grapes had a
rotten and brownish appearance and that sand and grit were present on the floor when he fell, a
3
reasonable jury could have inferred that the floor had not been swept or attended to for some period
of time before the fall. Additionally, Coutee maintains that the jury did not render a compromise
verdict.
A. Standard of Review
The standard for a district court to grant a new trial is whether the verdict is against the great
weight of the evidence. Whitehead v. Food Max of Mississippi, 163 F.3d 265, 270, n.2 (5th Cir.
1998). We review a district court’s denial of a motion for a new trial for abuse of discretion. See
Esposito v. Davis, 47 F.3d 164, 167 (5th Cir. 1995). There is no abuse o f discretion in denying a
motion for a new trial unless there is complete absence of evidence to support the verdict. Id.
(citation omitted).
B. Constructive Knowledge
In the present case, the parties do not dispute the cause of Coutee’s accident, i.e., grapes.
Coutee does not argue, nor does Wal-Mart concede on appeal that Wal-Mart had actual notice of the
grapes on the floor prior to Coutee’s slip and fall. Thus, the issue before us is whether Coutee
presented sufficient evidence to prove that Wal-Mart had constructive notice of the grapes.
Because this case comes to us under our diversity jurisdiction, we are bound to apply
Louisiana substantive law regarding the core elements of the cause of action, but the sufficiency or
insufficiency of the evidence in relation to the verdict is “indisputably governed by a federal standard.”
See Jones v. Wal-Mart Stores, Inc., 870 F.2d 982, 986 (5th Cir. 1989). Under LA. REV. STAT. ANN.§
9:2800.6, when a plaintiff claims negligence due to a fall caused by a condition on a merchant’s
premises, the plaintiff must show that:
(1) the condition presented an unreasonable risk of harm to the claimants and that risk
of harm was reasonably foreseeable;
(2) the merchant either created or had actual or constructive notice of the condition
that caused the damage, prior to the occurrence; and
(3) the merchant failed to exercise reasonable care.
4
(emphasis added). Constructive notice is defined as “the condition [that] existed for such a period
of time for it would have been discovered if the merchant had exercised reasonable care.” LA.REV.
STAT. ANN. § 9:2800.6(C). Under this definition, the plaintiff must establish that the condition
existed for a period of time prior to the accident. Whether the condition existed for some period of
time sufficiently lengthy for a reasonable merchant to discover the condition is a fact question. White
v. Wal-Mart Stores, 699 So.2d 1081, 1084 (La. 1997). The time period need not be in “specific
minutes or hours.” Id.
Wal-Mart contends that Coutee did not show constructive notice at trial because he failed to
present direct evidence as to how long the grapes were present on the floor before the incident.
However under Louisiana law, a plaintiff is not required to produce direct evidence in order to meet
the temporal requirement of constructive notice. A plaintiff may show constructive notice by
circumstantial evidence. See Broussard v. Wal-Mart Stores, Inc., 741 So.2d 65, 70 (La. App. 3 Cir.
1999)(spill pattern of liquid on the floor was circumstantial evidence of temporal element of
constructive notice); Lacy v. ABC Insurance Co., 712 So.2d 189, 191 (La. App. 4 Cir. 1998) (dirty
condition of floor and discoloration of banana peel permitted a reasonable inference that the banana
peel was on the floor for a sufficiently lengthy period of time before the accident); see also Crawford
v. Ryan’s Family Steak Houses, Inc., 741 So.2d 96, 102 (La. App. 2 Cir. 1999) (White’s requirement
that the plaintiff put forth “positive evidence” to show constructive notice does not supersede the
general rule of evidence allowing for circumstantial evidence to prove a material fact).
In the instant case, Coutee testified that there were several grapes on the floor when he fell,
and that the grapes had a brownish and rotten appearance. Coutee also testified that there was dirt
and grit on the floor when he fell. Furthermore, Coutee poi nts to testimony from a Wal-Mart
manager which indicates that there were skid marks on the floor when he approached Coutee.
Coutee maintains that the skid marks show that the grapes were walked through by other persons
before Coutee’s fall, thus supporting an inference that the grapes were on the floor for a sufficient
period of time before the fall to constitute constructive notice. Under our limited review of a trial
5
court’s denial of a motion for a new trial, we find that Wal-Mart fails to show that the trial record is
devoid of any evidence to permit the jury to reasonably infer that a dangerous condition existed on
the floor for period of time “sufficiently lengthy that a merchant should have discovered the
condition.” See Lacy, 712 So.2d at 191.
Although Wal-Mart contends that it adduced evidence at trial that contradicted Coutee’s
claims regarding the number and condition of the grapes on the floor, and the skid marks on the floor,
the fact that conflicting testimony was presented is not enough to warrant the grant of a new trial.
See Dawson v. Wal-Mart Stores, 978 F.2d 205, 209 (5th Cir. 1993). Issues of credibility are left
within the sound discretion of t he fact finder. Thus, a trial court does not abuse its discretion in
accepting a jury’s evaluations regarding credibility. See Polanco v. City of Austin, Texas., 76 F.3d
968, 980-981 (5th Cir. 1996). It is apparent from the verdict that the jury chose to believe Coutee’s
version of events, and not Wal-Mart’s. As such, Wal-Mart fails to show that the jury’s finding of
constructive notice is devoid of evidentiary support.
C. Compromise Verdict
Wal-Mart additionally claims that a new trial is warranted on liability because the jury
rendered a compromise verdict. A compromise verdict occurs when a jury which is unable to agree
on liability, compromises that disagreement and awards inadequate damages. Pagan v. Shoney’s, 931
F.2d 334, 339 (5th Cir. 1991) (citations omitted). Nominal or inadequate damages alone do not
automatically warrant a conclusion that a compromise verdict was rendered. See id., (citing Hadra
v. Herman Blum Consulting Engineers, 632 F.2d 1242, 1246 (5th Cir. 1980), cert. denied, 451 U.S.
912, 101 S.Ct. 1983, 68 L.Ed.2d 301 (1981)). “If the record indicates that a liability verdict stemmed
from a compromise on damages, the complaining party is entitled to a new trial, for considerations
of damages should not taint the initial question of the defendant’s fault.” Yarbrough v. Sturm, Ruger
& Co.,964 F.2d 376, 378 (5th Cir. 1992). In Pagan, we provided the following factors to address
whether a jury rendered a compromised verdict:
(1) whether the issues of liability were strongly contested;
(2) whether the jury was confused on contributory negligence;
6
(3) whether the trial court urged the jury to accept the verdict finally tendered; and
(4) how long the jury deliberated.
See Pagan, 931 F.2d at 339. Pagan noted that several circuits look also to whether the jury requested
instructions and whether the jury had attempted to qualify its award in anyway. See id. (discussing
National R.R. Passenger Corp. v. Koch Indus., Inc;, 701 F.2d 108, 110 (10th Cir. 1983) and National
Fire Ins. Co. v. Great Lakes Warehouse Corp., 261 F.2d 35, 37 (7th Cir. 1958)). No compromise
exists however when another basis for the improper award is present. See Pagan, 931 F.2d at 339.
Application of these factors do not fit into a mathematical formula. Thus, the facts of each case will
dictate the impact and the weight of each factor. Furthermore, the presence or absence of a factor
is not dispositive.
First, a review of the trial transcript reveals that both parties aggressively contested liability.
While the parties agreed that a grape or grapes were the cause of the accident, nonetheless, the
transcript reveals that both parties vigorously contested the issue of whether constructive notice of
the grapes could be attributed to Wal-Mart. “Although not determinative, such a fact indicates that
the jury’s ostensible difficulty in finding a satisfactory damage award was compromised by continuing
disputes over liability.” See Yarbrough, 964 F.2d at 379.
Second, however, Wal-Mart does not show that the jury was confused on contributory
negligence. Although Wal-Mart points out that on the verdict form the jury initially attributed a
percentage of fault to Bingham but voided it out, the jury form unequivocally shows that the jury
answered “Yes” to whether Wal-Mart had constructive knowledge and had failed to exercise
reasonable care, and “No” to whether it believed that Coutee caused or contributed to his own
accident. Furthermore, Wal-Mart’s argument that the jury was confused on liability based on
Coutee’s alleged failure to present evidence to show constructive notice is of no moment because,
as established above, there was sufficient evidence to support the jury’s finding of constructive
notice.
Third, Wal-Mart contends that the length of the deliberations (three and a half hours) in
conjunction with the jury’s question to the court regarding Coutee’s private insurance demonstrates
7
that the jury rendered a compromise verdict. However, the jury’s question regarding whether a
collateral source was available to compensate Coutee for his injuries does not indicate that the jury
compromised on liability. Furthermore, three and a half hours of deliberations for a two-day trial
does not raise a red flag. The t rial transcript does not show that the issue of liability involved a
“battle of experts” or was driven by complex and voluminous documentary evidence, which would
have arguably warranted longer deliberations.
Finally, although the trial transcript does not conclusively establish the absence or existence
of other factors that Pagan and its progeny have identified, nevertheless, we find that based on the
factors examined above, Wal-Mart does not demonstrate that the district court abused its discretion
when it ruled that the jury did not render a compromise verdict and denied Wal-Mart’s motion for
a new trial.
II. Inconsistent damages
Coutee raises an issue regarding the jury’s failure to award general damages. Specifically,
Coutee contends that the jury erred when it awarded special damages fo r past and future medical
expenses and lost wages, but failed to award general damages for past and future pain and suffering.
Coutee did not move for a new trial on damages below.
Generally, a party’s failure to raise the issue of inadequate damages in a motion for new trial
below constitutes a waiver, and thus is not reviewable on appeal. See Bueno v. City of Donna, 714
F.2d 484, 493 (5th Cir. 1983) (citing Baker v. Dillon, 389 F.2d 57 (5th Cir. 1968)); Carlton v. H.C.
Price Company, 640 F.2d 573, 576 (5th Cir.1981)(same). The purpose for presenting a motion for
new trial on the excessiveness or inadequacy of damages is to initially give the trial court the
8
opportunity to correct errors made at trial. Furthermore, the trial court’s ruling on the motion creates
a full record for review on appeal.
Although a party may overcome this presumption against review by demonstrating that
exceptional circumstances, i.e., plain error, exist, see Bueno, 714 F.2d at 493 (citing D.H. Overmyer
Co. v. Loflin, 440 F.2d 1213, 1215 (5th Cir.), cert. denied, 404 U.S. 851, 92 S.Ct. 87, 30 L.Ed.2d 90
(1971)), Coutee does not make this showing.
CONCLUSION
We AFFIRM the district court’s denial of the defendant’s motion for a new trial on liability.
Coutee’s request for a new trial on damages is DENIED.
9
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-10300 ELEVENTH CIRCUIT
Non-Argument Calendar AUGUST 31, 2010
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:08-cr-00171-RWS-RGV-1
UNITED STATES OF AMERICA,
lllllllllllllllllllllPlaintiff-Appellee,
versus
MESSIAH GREEN,
lllllllllllllllllllllDefendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 31, 2010)
Before EDMONDSON, BARKETT and MARTIN, Circuit Judges.
PER CURIAM:
Messiah Green appeals his convictions, and 241-month total sentence, for
armed bank robbery, in violation of 18 U.S.C. § 2113(a), (d) (Count 1), and
possession of a firearm during a crime of violence, in violation of 18 U.S.C.
§ 924(c)(1)(A)(iii) (Count 2).
Green raises two issues on appeal. First, he appeals his convictions, arguing
that the district court violated his Sixth Amendment right to confront witnesses
against him when it admitted the cell phone records and cell tower location
information from Green’s cell phone on the day of the robbery, which it had
subpoenaed from Metro PCS into evidence. He contends that, because the records
were testimonial for purposes of the Sixth Amendment’s Confrontation Clause, he
was entitled to cross-examine a Metro PCS employee at trial. 1 Second, Green
argues that his sentence for Count 1 was procedurally unreasonable because the
district court erroneously found that he organized the robbery, and thus, was
subject to a two-level enhancement pursuant to U.S.S.G. § 3B1.1(c).
I. Admission of Cell Phone Records
We review a district court’s evidentiary rulings for abuse of discretion, and
questions of whether a hearsay statement is “testimonial” for purposes of the Sixth
Amendment de novo. United States v. Caraballo, 595 F.3d 1214, 1226 (11th Cir.
2010).
1
Although a Metro PCS employee was not available to testify at trial, the records were
certified as accurate, and an expert witness testified, and was available for cross-examination, as
to the meaning of the documents.
2
The Confrontation Clause of the Sixth Amendment provides that, “[i]n all
criminal prosecutions, the accused shall enjoy the right . . . to be confronted with
witnesses against him.” U.S. Const. amend. VI. The Confrontation Clause bars
the admission of hearsay evidence that is “testimonial” unless the witness is
unavailable and the defendant had a prior opportunity for cross-examination.
Crawford v. Washington, 541 U.S. 36, 68, 124 S.Ct. 1354, 1374, 158 L.Ed.2d 177
(2004). “Testimonial” statements are typically “solemn declaration[s] or
affirmation[s] made for the purpose of establishing or proving some fact,” and
may include “material such as affidavits, custodial examinations, prior testimony
that the defendant was unable to cross-examine, or similar pretrial statements that
declarants would reasonably expect to be used prosecutorially.” Id. at 541 U.S. at
51-52, 124 S.Ct. at 1364. Generally, business records are “by their nature [] not
testimonial.” Id. at 541 U.S. at 56, 124 S.Ct. at 1367.
The Supreme Court recently expanded its definition of “testimonial”
statements to include affidavits containing the results of forensic analysis of seized
substances. Melendez-Diaz v. Massachusetts, __ U.S. __, __, 129 S.Ct. 2527,
2532, 174 L.Ed.2d 314 (2009). It did so because such affidavits were “made
under circumstances which would lead an objective witness reasonably to believe
that the statements would be available for use at a later trial,” and their sole
3
purpose “was to provide prima facie evidence of the composition, quality, and the
net weight of the analyzed substance.” Id. (citation and quotations omitted). The
Court rejected the argument that the affidavits were admissible as business
records, stating that:
Business and public records are generally admissible absent
confrontation not because they qualify under an exception to the
hearsay rules, but because–having been created for the administration
of an entity’s affairs and not for the purpose of establishing or
proving some fact at trial–they are not testimonial. Whether or not
they qualify as business or official records, the analysts’ statements
here–prepared specifically for use at petitioner’s trial–were testimony
against petitioner, and the analysts were subject to confrontation
under the Sixth Amendment.
Id. at __ U.S. at __, 129 S.Ct. at 2539-40.
Consistent with the Supreme Court’s decision in Melendez-Diaz, we have
held that documents which are routinely recorded for a purpose other than
preparation for a criminal trial are non-testimonial for purposes of the Sixth
Amendment. See Caraballo, 595 F.3d at 1226-29 (holding that an immigration
form, used for “routine, objective cataloging of unambiguous biographical
matters,” was not testimonial because it was primarily used to track the entry of
aliens into the United States, and it was “of little moment that an incidental or
secondary use of the interviews underlying the [] forms actually furthered a
prosecution.”). We have also held that the documents at issue in this case, cell
4
phone records and cell tower locations, are business records within the meaning of
Fed.R.Evid. 803(6), and thus, satisfy an exception to the hearsay rule. See United
States v. Sanchez, 586 F.3d 918, 929-30 (11th Cir. 2009), cert. denied, 130 S.Ct.
1926 (2010).
We conclude that Green’s cell phone records and cell tower location
information qualified as business records under Fed.R.Evid. 803(6) which, by their
nature, are non-testimonial for purposes of the Sixth Amendment. See Crawford,
541 U.S. at 56, 124 S.Ct. at 1367; Sanchez, 586 F.3d at 929-30. Further, because
the records were generated for the administration of Metro PCS’s business, and
not for the purpose of proving a fact at a criminal trial, they were non-testimonial,
and the district court did not violate Green’s constitutional right by admitting them
into evidence.
II. Sentencing
“A district court’s upward adjustment of a defendant’s Guidelines offense
level due to his status as a leader or organizer under U.S.S.G. § 3B1.1 is a finding
of fact reviewed only for clear error.” United States v. Phillips, 287 F.3d 1053,
1055 (11th Cir. 2002).
5
In determining whether a defendant was an organizer or leader, pursuant to
U.S.S.G. § 3B1.1(c), the district court should consider the following factors:
the exercise of discretion making authority, the nature of participation
in the commission of the offense, the recruitment of accomplices, the
claimed right to a larger share of the fruits of the crime, the degree of
participation in planning or organizing the offense, the nature and
scope of the illegal activity, and the degree of control and authority
exercised over others.
U.S.S.G. § 3B1.1, comment. (n.4). “The assertion of control or influence over
only one individual is enough to support a § 3B1.1(c) enhancement.” Phillips,
287 F.3d at 1058. In Phillips, we concluded that there was “abundant evidence”
supporting the district court’s finding that the defendant was an organizer of a
bank robbery when two codefendants testified that he did most of the planning and
preparation for the robbery, including suggesting the idea of the bank robbery,
selecting the bank to be robbed, providing the guns, and purchasing the supplies,
and then waited in a get-away car monitoring a police scanner during the
commission of the robbery. Id.
In this case, the trial judge heard evidence that Green suggested the bank
robbery, selected the bank, recruited two accomplices, developed the plan for the
robbery, and played the primary role during the actual commission of the robbery.
6
Based thereupon, it was not clear error for the district court to find that Green was
subject to a two-level enhancement pursuant to U.S.S.G. § 3B1.1(c).
For the foregoing reasons, Green’s conviction and sentence are
AFFIRMED.
7
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-2105
BELTRAN NYAMENJO NJOFANG,
Petitioner,
versus
ALBERTO R. GONZALES, Attorney General,
Respondent.
On Petition for Review of an Order of the Board of Immigration
Appeals. (A95-224-694)
Submitted: May 6, 2005 Decided: June 15, 2005
Before LUTTIG, TRAXLER, and KING, Circuit Judges.
Petition denied by unpublished per curiam opinion.
Ignatius Udeani, UDEANI & ASSOCIATES, Ltd., Bloomington, Minnesota,
for Petitioner. Peter D. Keisler, Assistant Attorney General,
James Hunolt, Senior Litigation Counsel, Uttam Dhillon, Associate
Deputy Attorney General, Office of Immigration Litigation, UNITED
STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Beltran Nyamenjo Njofang, a native and citizen of
Cameroon, petitions for review of the Board of Immigration Appeals’
(Board) order denying him asylum, withholding of removal, and
protection under the Convention Against Torture.*
We will reverse the Board only if the evidence “‘was so
compelling that no reasonable fact finder could fail to find the
requisite fear of persecution.’” Rusu v. INS, 296 F.3d 316, 325
n.14 (4th Cir. 2002) (quoting INS v. Elias-Zacarias, 502 U.S. 478,
483-84 (1992)). We have reviewed the evidence of record, the
immigration judge’s decision, and the Board’s order and find
substantial evidence supports the conclusion that Njofang failed to
establish the past persecution or well-founded fear of future
persecution necessary to establish eligibility for asylum. See 8
C.F.R. § 1208.13(a) (2004) (stating that the burden of proof is on
the alien to establish eligibility for asylum); Elias-Zacarias, 502
U.S. at 483 (same).
Nor can Njofang show that he was entitled to withholding
of removal under 8 U.S.C. § 1231(b)(3) (2000). “Because the burden
of proof for withholding of removal is higher than for asylum--even
though the facts that must be proved are the same--an applicant who
is ineligible for asylum is necessarily ineligible for withholding
*
Njofang does not petition for review from that part of the
order that denied protection under the Convention Against Torture.
- 2 -
of removal under [8 U.S.C.] § 1231(b)(3).” Camara v. Ashcroft, 378
F.3d 361, 367 (4th Cir. 2004).
Accordingly, we deny Njofang’s petition for review. 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.
PETITION DENIED
- 3 -
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Fourth Court of Appeals
San Antonio, Texas
JUDGMENT
No. 04-14-00498-CR
Benjamin ELIAS,
Appellant
v.
The STATE of Texas,
Appellee
From the County Court at Law No. 12, Bexar County, Texas
Trial Court No. 427052
Honorable Scott Roberts, Judge Presiding
BEFORE CHIEF JUSTICE MARION, JUSTICE MARTINEZ, AND JUSTICE ALVAREZ
In accordance with this court’s opinion of this date, the trial court’s judgment is
AFFIRMED.
SIGNED June 3, 2015.
_____________________________
Patricia O. Alvarez, Justice
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Case: 13-30181 Document: 00512405697 Page: 1 Date Filed: 10/14/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 14, 2013
No. 13-30181 Lyle W. Cayce
Summary Calendar Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
BEATRICE NWUGO ANYANWU,
Defendant-Appellant
Appeal from the United States District Court
for the Middle District of Louisiana
USDC No. 3:10-CR-101-2
Before DAVIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
PER CURIAM:*
The attorney appointed to represent Beatrice Nwugo Anyanwu on appeal
has moved for leave to withdraw and has filed a brief in accordance with Anders
v. California, 386 U.S. 738 (1967). Anyanwu has not filed a response. Counsel
contends Anyanwu can raise no nonfrivolous issues on appeal because she
agreed to waive her rights, including those conferred by 18 U.S.C. § 3742, to
appeal from her conviction and sentence. Further, counsel has certified, as
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 13-30181 Document: 00512405697 Page: 2 Date Filed: 10/14/2013
No. 13-30181
required by United States v. Acquaye, 452 F.3d 380, 382 (5th Cir. 2006), that the
Government intends to rely on the appellate waiver in this case.
Our independent review of the record and counsel’s brief discloses no
nonfrivolous issue for appeal. Accordingly, counsel’s motion for leave to
withdraw is GRANTED, counsel is excused from further responsibilities herein,
and the APPEAL IS DISMISSED. See 5TH CIR. R. 42.2.
2
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348 N.W.2d 409 (1984)
Steve S. BRUNELLO, Respondent,
v.
MILL CITY AUTO BODY, Relator, and
Commissioner of Economic Security, Respondent.
No. C1-83-1771.
Court of Appeals of Minnesota.
May 29, 1984.
Stephen R. O'Brien, Minneapolis, for relator.
Hubert H. Humphrey, III, Atty. Gen., Peter C. Andrews, Asst. Atty. Gen., St. Paul, for respondent Com'r of Economic Sec.
Steve C. Brunello, respondent, pro se.
Considered and decided by LANSING, P.J., and FOLEY and LESLIE, JJ., with oral argument waived.
OPINION
LESLIE, Judge.
Relator Mill City Auto Body appeals the Commissioner's representative's decision affirming the referee's decision awarding unemployment compensation benefits to claimant. We affirm.
*410 FACTS
On June 1, 1983, Brunello was separated from employment as a bodyman and painter for appellant Mill City Auto Body (Mill City). He had been employed at Mill City since March 1981. On June 3, 1983, he filed a claim for unemployment benefits alleging involuntary termination by Mill City. He explained the reasons for his separation as follows:
The owner (Bill Dozal) (sic) and myself were constantly argueing (sic) over personal matters, rarely related to work. On 6/1 Bill said he didn't feel we could work together any more due to this personality conflict. I always did my job to the best of my ability.
The department received the following statement from Mill City:
The claimant was not layed of (sic) because of lack of work he was fired. He was not trustworthy or reliable when I was not around. He also could not handle or accept his own mistakes. There was always an excuse to be heard.
The claims deputy determined that the separation was involuntary and awarded Brunello unemployment benefits. Mill City's attorney then gave notice of appeal to the Department of Economic Security.
At a hearing before a referee, Brunello testified that he made a mistake in his original statement. He then testified that he had voluntarily quit because he could not work with the owner. The owner also testified that Brunello voluntarily quit. He explained, against the advice of his attorney, that he was mistaken when he wrote his original statement.
The referee affirmed the claims deputy's determination that Brunello was entitled to benefits. The referee disregarded the testimony at the hearing and relied upon the original written statements made by the parties. Those statements were introduced into evidence at the hearing over Mill City's objection.
Mill City appealed to the Commissioner whose representative affirmed the referee's decision. Mill City appeals that determination.
ISSUE
Was evidence properly admitted to support the Commissioner's conclusion that respondent was involuntarily separated from his employment for reasons other than misconduct?
ANALYSIS
Mill City argues there is insufficient evidence to support the decision because Brunello no longer alleges that he is entitled to benefits. The Commissioner argues both that the original written statements provide sufficient evidence and that a claimant cannot withdraw a claim after the claims deputy has ruled.
Under Minn.Stat. § 268.09, subd. 1 (1982) persons claiming unemployment compensation are disqualified if they voluntarily terminated their jobs or were terminated for misconduct. The employer has the burden of showing that the employee voluntarily quit the job. Marz v. Department of Employment Services, 256 N.W.2d 287, 289 (Minn.1977).
The scope of review in economic security cases is limited. The evidence should be viewed in the light most favorable to the Commissioner's decision. If there is evidence reasonably tending to sustain the Commissioner's findings, the decision should not be disturbed. Group Health Plan, Inc. v. Lopez, 341 N.W.2d 294, 296 (Minn.App.1983); Ramirez v. Metro Waste Control Commission, 340 N.W.2d 355, 357 (Minn.App.1983).
The referee relied upon the original written statements. The Commissioner's representative indicated that the testimony of the two parties was disregarded as false and possibly the product of an agreement between the parties in violation of Minn. Stat. § 268.17, subd. 1:
Waiver of rights void. Any agreement by an individual to waive, release, or commute his rights to benefits or any other rights under sections 268.03 to *411 268.24 shall be void. . . . No employer shall directly or indirectly make or require or accept any deduction from wages to finance the employer's contributions required from him, require or accept any waiver of any right hereunder by any individual in his employ or in any manner obstruct or impede the filing of claims for benefits. Any employer or officer or agent of any employer who violates any provision of this subdivision shall, for each offense, be guilty of a misdemeanor.
Mill City argues the written statements should not have been admitted into evidence during the hearing. The attorney objected to introduction of the statements on the basis of the best evidence rule. Without those statements Mill City argues there is no evidence to support the representative's finding.
The Commissioner argues the admission of the statements was proper regardless of the operation of formal evidentiary rules. The Commissioner cites Pichler v. Alter Co., 307 Minn. 522, 240 N.W.2d 328 (1976) which held that hearings conducted by the commissioner are not subject to strict requirements of the rules of evidence. In Pichler the commissioner relied upon hearsay evidence to support his decision. The court found that hearsay evidence both admissible and sufficient to support the commissioner's determination. Id. at 523, 240 N.W.2d at 329.
The statements here appear no less reliable than the hearsay statements allowed in Pichler and were made on department forms which the parties should have known would be used in deciding the claim. Both statements unequivocally support the representative's conclusion that Brunello was involuntarily terminated.
DECISION
There is sufficient evidence reasonably supporting the Commissioner's representative's determination that respondent was involuntarily separated from his employment for reasons other than misconduct.
Affirmed.
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433 B.R. 52 (2010)
SOUTH POINT INC., Appellant,
v.
Warren AGIN, as Trustee of the Bankruptcy Estate of Debra Kurak, Appellee.
Civil Action No. 09-cv-11441-DPW.
United States District Court, D. Massachusetts.
May 11, 2010.
*53 Ingrid S. Martin, Dwyer & Collora, LLP, Boston, MA, for Appellant.
Zachary A. Cunha, United States Attorney's Office, Boston, MA, for Appellee.
MEMORANDUM AND ORDER
DOUGLAS P. WOODLOCK, District Judge.
This appeal arises out of an adversary proceeding filed by the Chapter 7 Trustee of a bankruptcy estate, Warren E. Agin (the "Trustee"), seeking a determination that South Point, Inc., the assignee of the original mortgage lender, does not have a valid mortgage lien against the Debtor's property. The United States Bankruptcy Court for the District of Massachusetts found the mortgage was not valid against the Debtor's interest in the real property and granted the Trustee's motion for summary judgment. South Point now appeals.
I. BACKGROUND
A. Factual Background[1]
On May 21, 2008, Debra A. Kurak (the "Debtor") filed a voluntary Chapter 7 petition, on which she listed her address as 37-39 Falmouth Street, Attleboro, Massachusetts (the "Property"). While she listed an ownership interest in the Property on "Schedule AReal Property," she noted that it was "subject to a lien in the amount of $361,250.00 [for] which the Debtor has no contractual liability."
On May 30, 2008, before the first meeting of creditors, South Point, as serviced by Wilshire Credit Corporation, sought to enforce its rights under a note and mortgage encumbering the Property by filing a Motion for Relief from the Automatic Stay. In that motion, South Point claimed that, on September 22, 2006, Manuel Lopes executed a $361,250 note in favor of First Franklin, a Division of National City Bank ("First Franklin"), and that the Debtor and Lopes simultaneously executed and delivered a mortgage to Mortgage Electronic Registration Systems, Inc., as nominee of First Franklin. South Point maintained that First Franklin recorded the mortgage in the Bristol County Registry of Deeds, and that South Point, as the assignee of the note and mortgage, was owed $389,719.72.
The closing for the Property was conducted on September 22, 2006 by J. Daniel Lindley, Esq., the attorney representing First Franklin, at the residence co-owned by Lopes and the Debtor. Lopes executed the note to First Franklin, and both Lopes and the Debtor signed the last page of the *54 mortgage, which Lindley notarized. Lindley testified that he took the mortgage to his office and made, or caused to be made, three copies for distribution: one for Lopes, one for Lindley's file, and one for First Franklin.
Four versions of the mortgage were produced to the Bankruptcy Court by the Trustee, in support of his summary judgment motion, as Exhibits C through F. On the first page of each version, Manuel Lopes is identified as the "Borrower," which is defined as "the mortgagor under this Security Instrument." Exhibit D, a copy of the mortgage produced by Lopes' counsel and given to the Trustee, included only the first page identifying Lopes as the sole Borrower and had no signature page.
The other versions, however, include the twelfth page of the mortgage which contains both Lopes' and the Debtor's signatures above the word "Borrower" and beneath the following language: "BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in pages 1 through 12 of this Security Instrument and in any Rider executed by Borrower and recorded with it." That is precisely how the last page of Exhibit E appears.[2] However, on the signature page of Exhibit C,[3] the word "Borrower" below the Debtor's signature is crossed out with five typed x's and replaced with the word "witness." The recorded mortgage, Exhibit F, unlike the other versions, has the phrase "& Debra Kurak" added to the "Borrower" term on the first page, thereby identifying both Lopes and the Debtor as Borrowers, and contains both of their signatures as Borrowers on the last page.
Based on its review of the several versions of the mortgage, the Bankruptcy Court concluded that "[t]here is no question that the Debtor signed a mortgage and that Lindley notarized her signature. Additionally, she and Lopes initialed each page of the mortgage, and Lindley's notarization appears" on the last page. That notarization is both handwritten and typed as follows:[4]
On this 22nd day of September, 2006, before me personally appeared MANUEL LOPES and Debra Kurak to me known to be the person (or persons) described in and who executed the foregoing instrument, and acknowledged that he/she/they executed the same as his/her/their free act and deed.
/s/ J. Daniel Lindley Notary Public My commission expires: 06/14/13
As noted by the Bankruptcy Court, in his deposition, Lindley explained why multiple versions of the mortgage exist:
ApparentlyI spoke to Lindsay [MacPhee, Lindley's assistant], who has no memory of this closing at all, but apparently when we faxed the executed mortgage to the lender, the lender called back and asked that Debra Kurak's name be included on the front page of the mortgage. And I believeAnd Lindsay thinks she may have done that. *55 And that's where that "and Debra Kurak" came from on the front page.
. . . .
. . . I noticed on page 12 someone had X'd out the word "borrower" and typed in the word "witness." That doesn't appear on my documents or the Registry of Deeds' documents, so I can only figure that someone at the lender's office did that.
Now this exhibit [Exhibit E] doesn't show the ampersand Debra Kurak on the first page that the others do, so I'mit's my opinion that this is a copy of the mortgage as my paralegal faxed it to the lender. And, based on that, the lender instructed her to add the ampersand Debra Kurak.
Later, someone seeing that Debra Kurak's name was not on there struck out the word "borrower" and put in the word "witness," but she wasI know from having done closings that even though only one owner may be the borrower, all owners have to sign the mortgage. Otherwise, nobody can foreclose on it.
And that's why I had Debra sign and initial all of the documents having to do with the mortgage. She was signing in the capacity as aas a mortgagor, not as a borrower, because she wasn't on the loan but as a mortgagor.
Relying upon the fact that "Debtor initialed every page of the mortgage and signed it as Borrower," the Bankruptcy Court "accept[ed] Lindley's testimony that he or someone in his law office subsequently added the Debtor's name [as a Borrower] to the first page of the mortgage (`& Debra Kurak') after he or his employees had sent copies to both Lopes and First Franklin." The Bankruptcy Court concluded that it had "insufficient information to determine when or why the word `Borrower' was crossed out and replaced [on the last page] with the word `Witness' on the copy [of the mortgage] with the notation `Certified True Copy.'"
B. Procedural History and the Bankruptcy Court Decision
In December 2008, the Trustee filed this adversary proceeding to determine the validity and extent of South Point's lien against the Debtor's interest in the Property. The Trustee subsequently filed a motion for summary judgment seeking a determination that South Point does not have a mortgage against the Debtor's interest in the Property because First Franklin's attorney purportedly altered the mortgage by adding the Debtor's name as a Borrower after the mortgage was executed.
In its July 15, 2009 decision, the Bankruptcy Court granted the Trustee's motion and determined that the mortgage did not extend to the Debtor's interest in the Property. In re Kurak, 409 B.R. 259, 268 (Bankr.D.Mass.2009). After finding that "there is no evidence or even allegation that the Debtor authorized her name to be added to the first page of the mortgage, identifying her as a Borrower," the Bankruptcy Court concluded that "Lindley, or someone in his office, added [the Debtor's] name to the mortgage without her authority and did not obtain and notarize her signature on the mortgage after it was amended." Id. at 266.[5] As a result, the Bankruptcy Court concluded that "the alteration of the mortgage by Lindley or one of his employees, was material and voids the mortgage as to [the Debtor's] interest in the property." Id. at 266-67. The Bankruptcy Court found further support *56 for this conclusion in the public policy consideration that "titles to real estate should not be held hostage to disputes over the parties' intention," as well as the general contract principle that unauthorized material alterations to a written instrument void that instrument. Id. at 267.
South Point has appealed raising as issues whether the Bankruptcy Court erred by (1) granting summary judgment based upon its factual finding that Lindley or one of his employees altered the mortgage, and (2) concluding that the alternation invalidated the mortgage with respect to the estate's interest in the property.
II. STANDARD OF REVIEW
Rule 8013 of the Federal Rules of Bankruptcy Procedure provides that "[o]n an appeal the district court . . . may affirm, modify, or reverse a bankruptcy judge's judgment, order, or decree or remand with instructions for further proceedings." The bankruptcy court's findings of fact are reviewed for clear error and its conclusions of law are reviewed de novo. Richmond v. N.H. Supreme Court Committee on Prof'l Conduct, 542 F.3d 913, 917 (1st Cir.2008). "The bankruptcy court findings will be considered clearly erroneous if, after a review of the entire record, [the court is] left with the definite and firm conviction that a mistake has been committed." In re R & R Assocs. of Hampton, 402 F.3d 257, 264 (1st Cir.2005) (internal quotation, marks and citation omitted).
III. DISCUSSION
A. Whether The Bankruptcy Court Committed Factual Error
South Point argues that the Bankruptcy Court committed clear error by finding that Lindley or one of his employees added the Debtor's name to the first page of the mortgage after its execution. First, South Point claims that the Bankruptcy Court rested "its finding that the Mortgage was altered after execution solely based on" Lindley's testimony, which was "a regurgitation of a conversation" between Lindley and his assistant Lindsay MacPhee. (Emphasis added). South Point objects to Lindley's statements that MacPhee told him that (1) she "has no memory of this closing at all," and (2) she thought she might have changed the executed mortgage to include the Debtor's name on the first page. Second, South Point contends that the Bankruptcy Court was obligated to resolve this factual issue in favor of South Point, the non-moving party to a summary judgment motion. See Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990) (evaluating a summary judgment motion by viewing "the entire record in the light most hospitable to the party opposing summary judgment, indulging all reasonable inferences in that party's favor").
There is no dispute that Lindley's testimony regarding what MacPhee said is hearsay. See FED.R.EVID. 801(c) ("`Hearsay' is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted."). However, contrary to South Point's contention, the Bankruptcy Court did not rely on Lindley's testimony regarding Mac-Phee's statements, but rather "accept[ed] Lindley's testimony that he or someone in his law office subsequently added the Debtor's name to the first page of the mortgage . . . after he or his employees had sent copies to both Lopes and First Franklin." In re Kurak, 409 B.R. at 263 (emphasis added).
Even if Lindley's testimony is disregarded entirely, the only reasonable inference is that the mortgage was altered after the *57 Debtor signed, but before Lindley, the lender's agent, arranged for recording. It is clear, as the Bankruptcy Court indicated, that the Debtor initialed each page of the mortgage and signed it on the last page above the word "Borrower." However, in Exhibits D and E, the versions of the mortgage mailed to Lopes on September 26, 2006 (four days after the mortgage was signed), only Lopes' name appears as a defined Borrower on the first page. The only version in which the Debtor is identified as a defined Borrower is the recorded version of the mortgage, Exhibit F, which Lindley's office recorded with the Registry of Deeds on October 3, 2006. Therefore, between September 22 (when the mortgage was signed) and October 3 (when the mortgage was recorded), someone altered the signed mortgage by adding the Debtor's name to the first page as an identified Borrower. Even when I view the facts in the light most favorable to South Point, the only reasonable conclusion is that someone in Lindley's office changed the mortgage after the Debtor signed it and before Lindley recorded it. That conclusion is also consistent with Lindley's testimony, even when shorn of the hearsay reference to MacPhee's statements.[6] The Bankruptcy Court's fact finding on this point was not clearly erroneous.
I also find that the Bankruptcy Court did not commit clear error but rather was scrupulously comprehensive when it concluded there was "insufficient information to determine when or why the word `Borrower' was crossed out and replaced with the word `Witness' on the copy with the notation `Certified True Copy'" as shown on Exhibit C. There is no evidence that at the time the Debtor signed the mortgage, she signed above the word "witness." In fact, even South Point recognizes that the mortgage was altered after the Debtor signed, admitting that "[t]he only possible explanation is the obvious one: Ms. Kurak signed the mortgage when the signature line listed her as `Borrower' and someone later altered copies of that document." (Emphasis added.) On all other versions of the mortgagewhich Lindley testified were copies of the signed originalthe Debtor signed above the word "Borrower." Regardless of who altered the mortgage to identify the Debtor specifically as a witness and not a Borrower, the fact remains that copies of the mortgage were altered both as to designated Borrower(s) and as to witness after it was signed, notarized, and executed.
B. Whether The Bankruptcy Court Committed Legal Error
South Point also argues that the Bankruptcy Court committed legal error by holding that the mortgage is void as to the Debtor's interest in the Property on the basis of fact finding I have found in Section III.A., supra, was not clearly erroneous. I review the Bankruptcy Court's conclusions of law de novo. See Richmond, 542 F.3d at 917.
*58 It is black letter law that "[t]he commencement of a bankruptcy case creates a debtor's estate, which is comprised of `all legal or equitable interests of the debtor in property as of the commencement of the case.'" In re NTA, LLC, 380 F.3d 523, 527-28 (1st Cir.2004) (quoting 11 U.S.C. § 541(a)(1)). In this connection, "[t]he extent of a debtor's interest in property is generally governed by state law." In re Guido, 344 B.R. 193, 196-97 (Bankr. D.Mass.2006). Under Massachusetts law, "[e]very deed presented for record shall contain or have endorsed upon it the full name, residence and post office address of the grantee. . . ." MASS. GEN. LAWS ch. 183 § 6. In Massachusetts, a "title theory" state, "a mortgagee holds legal title to the mortgaged property, subject to the mortgagor's equity of redemption." Hanna v. Town of Framingham, 60 Mass.App.Ct. 420, 802 N.E.2d 1061, 1066 n. 9 (2004).
Relying on this undisputed legal foundation, the Bankruptcy Court addressed whether the insertion of the Debtor's name in the definition of Borrower after the execution of the mortgage constituted a "material alteration." In re Kurak, 409 B.R. at 265. For that alteration to be "material," "the change must be such as to change the legal effect of the instrument." Mindell v. Goldman, 309 Mass. 472, 35 N.E.2d 669, 670 (1941). "Under the common law, the unauthorized material alteration of a written instrument by a party thereto, or the holder of it, voids the instrument and the person responsible for the alteration may not recover upon it as altered, nor may anyone claiming through the altering party. . . ." 4 AM.JUR.2D Alteration of Instruments § 24. The rationale for voiding the instrument is that "any material alteration destroys the identity of the contract, and therefore, if a party to the contract who has not consented to its alteration were to be held bound by it, it would in effect impose a new contract to whose terms the party has never agreed." Id.
With respect to instruments transferring title to property, "[i]f a deed is materially altered after the attestation but before it is recorded, it may not be recorded until it is reattested." Id. at § 27; see also 4 TIFFANY REAL PROP. § 989 ("An alteration made after the delivery of the conveyance is absolutely nugatory to divest property rights vested in the grantee by the conveyance.").
While the Bankruptcy Court was "unable to find any modern cases that directly address whether the insertion of the Debtor's name after the execution of the mortgage constitutes a material alteration," In re Kurak, 409 B.R. at 265, I am satisfied that long-settled Massachusetts case law accords with the doctrinal view that post-execution alterations have a voiding effect in this setting. See Lima v. Lima, 30 Mass.App.Ct. 479, 570 N.E.2d 158, 162-63 (1991) ("[T]he unauthorized alterations of the deeds prior to recording, being material in that they purported to change the deeds' legal effect, invalidated the deeds, but they did not invalidate the conveyances that had been effected by those deeds.") (internal citations omitted); Smigliani v. Smigliani, 358 Mass. 84, 260 N.E.2d 917, 921 (1970) (concluding that "no valid transfer of the property occurred" when the names of the grantees were erased and substituted with a different name before the instrument was recorded and there was "no evidence that the substitution of the grantee was made in the presence or with the authority of the grantors.").
Here, to be sure, the Debtor signed the mortgage above the word "Borrower" and beneath the language that "Borrower accepts and agrees to the terms and covenants contained in pages 1 through 12 of this Security Instrument and in any Rider *59 executed by Borrower and recorded with it." However, at the time the Debtor signed the mortgage and Lindley notarized her signature, she was not a defined Borrower in the granting language on the first page of the mortgage, and therefore the mortgage cannot be interpreted to bind her as such. See Ethridge v. Tierone Bank, 226 S.W.3d 127, 131-32 (Mo.2007) (en banc) (holding that a deed of trust defining the "Borrower" as the husband but not the wife "cannot reasonably be construed to mean that [the wife] also is a borrower under the deed of trust" even though she initialed each page of the document and signed on the final page). The mortgage grant definitively described Lopes as the sole Borrower of the Property. Adding the Debtor's name to the definition of Borrower after she executed the mortgage materially altered the mortgage by purporting to secure an interest in the Property that she did not grant when her signature was notarized. I therefore conclude that the Bankruptcy Court correctly found that the mortgage was void as to the Debtor's interest in the Property.
IV. CONCLUSION
For the reasons set forth more fully above, I AFFIRM the Bankruptcy Court's Order granting the Trustee's Motion for Summary Judgment.
NOTES
[1] The following facts were found by the Bankruptcy Court in its July 15, 2009 Memorandum. See generally In re Kurak, 409 B.R. 259 (Bankr.D.Mass.2009).
[2] Both Exhibits D and E are copies of the mortgage sent by Lindley to Lopes. Exhibit D only contains the first page, while Exhibit Ewhich came from Lindley's recordshas the first and last pages as well as a copy of the transmittal letter, dated September 26, 2006, from Lindley's office to Lopes.
[3] Unlike the other versions, Exhibit C is stamped with the notation "Certified True Copy." The Bankruptcy Court noted that, "[d]espite the characterization as a `Certified True Copy,' this version that was ultimately recorded." In re Kurak, 409 B.R. at 261 n. 1.
[4] The handwritten insertions in the notarization are italicized above. The strikeouts were handwritten.
[5] Lindley was not the Debtor's agent, rather he represented First Franklin at the closing, and therefore he could not act on the Debtor's behalf. In re Kurak, 409 B.R. at 268.
[6] South Point contends in a footnote that, "on the Trustee's summary judgment motion, the opposite must be assumed, that the "& Debra Kurak" was deleted from the front page of the altered and non-confirming [sic] versions of the mortgage." South Point misunderstands the applicable standard that, "[a]t the summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party only if there is a `genuine' dispute as to those facts." See Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Here, there is evidence of record from which it can reasonably be inferred that the original version stated "& Debra Kurak" on the first page and that someone deleted that language after the Debtor signed the mortgage; any such inference is belied by Lindley's testimony that he made three copies of the signed mortgage and by the fact that the other copies do not name the Debtor on the first page.
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350 F.3d 716
John Christopher SHAVER, Appellant,v.INDEPENDENT STAVE COMPANY, doing business as Salem Wood Products Co., Inc.; Salem Wood Products Co., Appellees.Equal Employment Opportunity Commission; Epilepsy Foundation of Kansas and Western Missouri; Epilepsy Foundation of Minnesota, Amici on Behalf of Appellant.
No. 03-1878.
United States Court of Appeals, Eighth Circuit.
Submitted: September 12, 2003.
Filed: December 1, 2003.
COPYRIGHT MATERIAL OMITTED Marie L. Gockel, argued, Kansas City, MO (Lynne Jaben Bratcher, on the brief), for appellant.
Joseph A. Seiner, argued, Washington, DC, for amicus.
Thomas M. Hanna, argued, St. Louis, MO, for appellee.
Before MORRIS SHEPPARD ARNOLD, BOWMAN, and MELLOY, Circuit Judges.
MORRIS SHEPPARD ARNOLD, Circuit Judge.
1
This is a harassment and retaliation case brought under the Americans with Disabilities Act (ADA), see 42 U.S.C. §§ 12101-12213, and the Missouri Human Rights Act (MHRA), see Mo.Rev.Stat. §§ 213.010-213.137, that comes to us on appeal from an order dismissing the plaintiff's claims on summary judgment. We affirm the judgment of the district court in part and reverse it in part.
2
Christopher Shaver has suffered from nocturnal epilepsy since he was a teenager. After an operation in which part of his brain was removed and replaced by a metal plate, he was able to get a job working at the timber mill of Salem Wood Products Company. After being fired, allegedly for insubordination, Mr. Shaver sued Salem under various theories. By the time that Salem moved for summary judgment, Mr. Shaver had abandoned most of his claims, but he continued to maintain that he had been unlawfully harassed as a result of his epilepsy and his cranial operation, that Salem had violated the anti-retaliation provisions of the ADA and the MHRA, and that Salem was liable to him under Missouri workers' compensation law. The district court ruled against Mr. Shaver on his ADA and MHRA claims and declined to exercise supplemental jurisdiction over the workers' compensation claim.
3
We review a district court's summary judgment order de novo. See Darby v. Bratch, 287 F.3d 673, 678 (8th Cir.2002). We resolve Mr. Shaver's MHRA claims on the same basis as his federal claims. See id. at 682.
I.
4
We have suggested in dicta that it might be possible to bring a claim for a hostile work environment under the ADA, see, e.g., Jeseritz v. Potter, 282 F.3d 542, 547 (8th Cir.2002), but we have never ruled directly on the matter. Today, for the reasons that follow, we join the other circuits that have decided the issue by holding that such claims are in fact actionable. Cf. Flowers v. Southern Reg'l Physician Servs., Inc., 247 F.3d 229, 232-35 (5th Cir.2001), Fox v. General Motors Corp., 247 F.3d 169, 175-77 (4th Cir.2001).
5
Even broad, remedial statutes such as the ADA do not give federal courts a license to create causes of action after the manner of the common law. See Alexander v. Sandoval, 532 U.S. 275, 286-87, 121 S.Ct. 1511, 149 L.Ed.2d 517 (2001). Rather, our rulings must be disciplined by the text of the statute itself. The ADA states that "[n]o covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to ... terms, conditions, and privileges of employment." 42 U.S.C. § 12112(a). While the statute does not specifically mention hostile work environment, in construing a statute we must look at how its text was understood at the time that it was passed.
6
The drafters of the ADA borrowed the phrase "terms, conditions, and privileges of employment" directly from Title VII of the Civil Rights Act of 1964. Compare 42 U.S.C. § 12112(a) with 42 U.S.C. § 2000e-2(a)(1). As early as 1971, courts had construed the phrase in Title VII to create an action based on a hostile work environment, see, e.g., Rogers v. EEOC, 454 F.2d 234, 238-39 (5th Cir.1971), cert. denied, 406 U.S. 957, 92 S.Ct. 2058, 32 L.Ed.2d 343 (1972), and by the time that the ADA was passed in 1991, this interpretation was clearly established as the controlling federal law on the subject. See Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 65-66, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). Thus, when Congress included the phrase "terms, conditions, and privileges of employment" in the ADA, it was using a legal term of art that prohibited a broad range of employment practices, including workplace harassment. Cf. Cannon v. University of Chicago, 441 U.S. 677, 696-98, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979).
7
In determining whether a hostile work environment claim has been made out under the ADA, we think it proper to turn to standards developed elsewhere in our anti-discrimination law, adapting them to the unique requirements of the ADA. To be entitled to relief, it seems to us that Mr. Shaver must show that he is a member of the class of people protected by the statute, that he was subject to unwelcome harassment, that the harassment resulted from his membership in the protected class, and that the harassment was severe enough to affect the terms, conditions, or privileges of his employment. Cf. Reedy v. Quebecor Printing Eagle, Inc., 333 F.3d 906, 907-08 (8th Cir.2003).
8
The ADA's employment provisions protect people who are "qualified individual[s] with a disability." 42 U.S.C. §§ 12111(8), 12112(a). In this case, neither party disputes that Mr. Shaver was qualified for his job at Salem's lumber mill. Salem does argue, however, that Mr. Shaver is not "disabled" within the meaning of the statute. A disability is an "impairment that substantially limits one or more ... major life activities." See 42 U.S.C. § 12102(2)(A). Furthermore, one can be within the statute if one is regarded (accurately or inaccurately) as having such an impairment or if one has a record of such an impairment in the past. See 42 U.S.C. § 12102(2)(B)-(C).
9
Before his operation, it is undisputed that Mr. Shaver's epilepsy caused severe seizures of the kind and frequency that this court has held impair "major life activities" such as speaking, walking, or seeing. See Otting v. J.C. Penney Co., 223 F.3d 704, 710-11 (8th Cir.2000). He thus has a record of impairment. Our review of the record also persuades us that at least some of his co-workers regarded Mr. Shaver as "stupid" and "not playing with a full deck" because of his epilepsy and resulting operation. And, since thinking is a major life activity, see Brown v. Lester E. Cox Med. Ctrs., 286 F.3d 1040, 1044-45 (8th Cir.2002), we conclude as well that a jury could find that Mr. Shaver qualifies as disabled because he was regarded as disabled.
10
Our review of the record indicates that there is no real factual dispute about whether Mr. Shaver was harassed. (The severity and legal consequence of that harassment are separate questions that we deal with below.) There is ample evidence, for instance, that he was routinely referred to as "platehead." Salem argues that the harassment was not the result of his disability, claiming that the name "platehead" was linked to the physical fact that Mr. Shaver has a plate in his skull, rather than with any impairment as such. We think that this distinction may be too fine for us, but in any case the meaning of the statements (that is, what inference to draw from the words used) is properly a matter for the jury. There is certainly nothing in the record to suggest that those who called Mr. Shaver "platehead" made the distinction suggested by Salem. The distinction itself, moreover, may well be meaningless: Even if one calls a person "pegleg" because he has a peg leg rather than because he has trouble walking, it is nevertheless the case that the nickname was chosen because the person was disabled.
11
With the question of the effect of the harassment on the "terms, conditions, and privileges" of Mr. Shaver's employment we come to the heart of this case. In order to be actionable, harassment must be both subjectively hostile or abusive to the victim and "severe and pervasive enough to create an objectively hostile or abusive work environment — an environment that a reasonable person would find hostile or abusive." Harris v. Forklift Sys., Inc., 510 U.S. 17, 21-22, 114 S.Ct. 367, 126 L.Ed.2d 295 (1993). On the other hand, we have repeatedly emphasized that anti-discrimination laws do not create a general civility code. See, e.g., Mems v. City of St. Paul, Dep't of Fire & Safety Servs., 327 F.3d 771, 782 (8th Cir.2003). Conduct that is merely rude, abrasive, unkind, or insensitive does not come within the scope of the law.
12
Taking the evidence in the light most favorable to Mr. Shaver, we have little difficulty concluding that a jury could find that he found the harassment by his co-workers hostile or abusive. The more difficult question is whether the behavior fell within the elusive category of "objectively... offensive," see Faragher v. City of Boca Raton, 524 U.S. 775, 787, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998). Mr. Shaver's co-workers referred to him as "platehead" over a period of about two years. Some of the co-workers were supervisors, and some were not. Some of the co-workers stopped using the name when Mr. Shaver asked them to, and others did not. Use of nicknames is widespread at the mill, and while this fact does not render the name applied to Mr. Shaver inoffensive, it might reduce its offensiveness. Several co-workers suggested that Mr. Shaver was stupid. On one occasion, a co-worker said that Mr. Shaver "pissed in his pants when the microwave was on," but this uglier statement seems to have occurred outside of Mr. Shaver's presence, a fact that lessens but does not undo its offensiveness.
13
Taken as a whole, we conclude that the verbal harassment here does not rise to the same level as that in cases where we have granted relief. For example, in Smith v. St. Louis Univ., 109 F.3d 1261, 1264-65 (8th Cir.1997), we allowed a suit to continue where the plaintiff had been subject to verbal abuse, but in that case there was evidence that a supervisor had repeatedly singled the plaintiff out and that she had been hospitalized twice as a result of the psychological trauma that she suffered. Showing some tangible psychological condition is not necessary to make out a hostile work environment claim, but it may be taken into account. Harris, 510 U.S. at 22-23, 114 S.Ct. 367. While Mr. Shaver was upset about the harassment at work, it was not so severe as to result in any psychological treatment. In Reedy, 333 F.3d at 909-10, we upheld a hostile work environment claim based on harassing words, but the words at issue were death threats directed specifically at the plaintiff over a sustained period of time. In contrast, there is no allegation or evidence in this case to suggest that any of the harassment of Mr. Shaver was explicitly or implicitly threatening. Nor does this case involve harassing conduct of a physical nature as was found actionable in many of the cases that Mr. Shaver cites. See, e.g., Breeding v. Arthur J. Gallagher & Co., 164 F.3d 1151, 1159 (8th Cir.1999); Rorie v. United Parcel Serv., Inc., 151 F.3d 757, 761-62 (8th Cir.1998).
14
Mr. Shaver advances two other arguments in an effort to transform the verbal harassment to which he was subjected into an actionable hostile work environment. First, he asserts that the harassment resulted from the unauthorized disclosure of his medical condition by his supervisor. Viewing the evidence in the light most favorable to Mr. Shaver, we conclude that it would support a finding that the supervisor did disclose Mr. Shaver's medical condition without his authorization. Shortly before the name "platehead" came into use, Mr. Shaver was injured on the job and taken to the hospital by his supervisor, who there learned for the first time about Mr. Shaver's epilepsy and the plate in his skull. Before then, no one at the mill seems to have been aware of Mr. Shaver's condition. Immediately thereafter, co-workers learned of the plate from the supervisor and began calling Mr. Shaver "platehead." We are uncertain as to whether this disclosure of Mr. Shaver's medical records was actionable under the ADA. See 42 U.S.C. § 12112(d); Cossette v. Minnesota Power & Light, 188 F.3d 964, 969-70 (8th Cir.1999). But Mr. Shaver does not in any case raise this as an independent claim for recovery on appeal (he is procedurally barred from doing so), and so we do not consider whether the facts here would support such a claim. Instead Mr. Shaver argues that because the harassment we have described resulted from the disclosure, it somehow makes the harassment more severe.
15
Even if the disclosure violated 42 U.S.C. § 12112(d), we note that workplace harassment and the unauthorized disclosure of medical records are different wrongs, involving different interests. Workplace harassment is forbidden in order to ensure that the "terms, conditions, and privileges of employment" are not altered for a legally impermissible reason. See 42 U.S.C. § 12112(a). Thus, it is a claim that can be raised under the ADA only by a "qualified individual with a disability." See id. In contrast, the prohibition on disclosing medical information protects a person's privacy, and one need not even be disabled in order to raise that matter. See Cossette, 188 F.3d at 969-70. Harassment resulting from such a disclosure would be relevant to the measure of damages on a claim for such disclosure, but because the wrong is the disclosure itself harassment need not even rise to the level of affecting the "terms, conditions, and privileges of employment" before it can furnish the basis for an award of damages.
16
Mr. Shaver in effect asks us to stand this last principle on its head and hold that harassment that by itself is not actionable can rise to the level of illegality by being the result of an unauthorized disclosure. We decline to do so. Medical privacy is not a "term, condition, or privilege" of Mr. Shaver's employment. In the absence of a statute, there is nothing to forbid an at-will employer from conditioning employment on the ability to disclose otherwise private information. This is precisely the reason that a separate section of the ADA deals with this issue. If Mr. Shaver's right to medical privacy under the ADA was violated, he was free to pursue a claim under that section. But he cannot do an end-run around his own procedural default by using such a claim to transform unactionable harassment into something actionable.
17
Mr. Shaver also asserts that the fact that he was denied promotions and opportunities because of his disability was part of the hostile work environment to which he was subjected. In support of his claim that he was denied promotions because of his disability, Mr. Shaver cites to speculations in his own deposition about the motives and actions of his supervisors, without any foundation suggesting that Mr. Shaver had personal knowledge of the matters that he was discussing. There are limits on what kinds of evidence a judge may consider in reviewing a motion for summary judgment, and inadmissible evidence obtained during discovery cannot be used to defeat such a motion. See Mays v. Rhodes, 255 F.3d 644, 648 (8th Cir.2001). Since Mr. Shaver's testimony would not be admissible, we ignore it. See Fed.R.Evid. 602. Mr. Shaver also points to depositions by co-workers who overheard unspecified managers saying that Mr. Shaver was too stupid to be promoted or to get another position at the mill. Such statements are admissible, but there is no indication of who the managers were, or whether they were discussing real or hypothetical job openings. We conclude that even coupled with the use of the name "platehead" this vague testimony is insufficient to get Mr. Shaver's harassment claim past summary judgment.
II.
18
Mr. Shaver also challenges the district court's dismissal of his retaliation claim. Salem fired Mr. Shaver after he had an argument with his supervisor, Charles Bacon. After he had commenced his suit for harassment, Mr. Shaver contacted several acquaintances for job interviews and gave them Mr. Bacon's name as a job reference. When contacted by Mr. Shaver's acquaintances, Mr. Bacon told them that he could not recommend Mr. Shaver because he had "a get rich quick scheme involving suing companies." None of the acquaintances with whom Mr. Shaver interviewed offered him a job, and he was subsequently able to find employment when he gave the name of a different former supervisor at Salem as a reference. On the basis of these facts, the district court concluded that Mr. Shaver was attempting to manufacture a retaliation claim against Salem by baiting Mr. Bacon into giving negative references because of Mr. Shaver's suit. In reaching this conclusion, the district court also relied on the fact that no one was hired by any of the acquaintances in lieu of Mr. Shaver and that Mr. Shaver intentionally gave the prospective employers the name of the supervisor with whom he had argued.
19
We are unable to agree with the district court's view that claims that are "manufactured" in the sense that the court used the word are not actionable. The ADA states that "[n]o person shall discriminate against any individual because... such individual made a charge ... under this chapter." 42 U.S.C. § 12203(a). A prima facie case under this provision consists of proof of protected activity by the employee, adverse action taken by the employer against the employee, and a causal connection between the protected activity and the adverse action. Cossette, 188 F.3d at 972. The district court seems to have added an additional requirement, namely, that the party asserting the claim did not purposefully seek the adverse action. Nothing in the words of the statute or in our cases, however, suggests that the conduct of the aggrieved party, other than the party's initial protected activity, is relevant. Rather, the law focuses exclusively on the conduct of the alleged retaliator in determining whether the aggrieved plaintiff has a claim.
20
In support of its conclusion, the district court cited McFadden v. State Univ. of N.Y., 195 F.Supp.2d 436 (W.D.N.Y.2002). Even if we were inclined to follow that case, nothing in it suggests that there is some "manufactured claim" exception to the retaliation provision of the ADA. In McFadden, the plaintiff, a university professor, learned that the tenure committee had recommended that she be denied tenure. Id. at 443-44. Her attorney then wrote to the university, asserting that gender discrimination had motivated the tenure decision and asking for an investigation, and the university deemed the request "premature." Id. at 444. Afterward, when the president of the university followed the committee's recommendation (and the recommendation of others) to deny the plaintiff tenure, the plaintiff responded by claiming that the president's decision was, in part, motivated by her attorney's letter. Id. at 454. While it used the term "manufacture," the McFadden court was making the straightforward point that it was quite impossible for the plaintiff's subsequent protected activity to have caused the committee to recommend denying her tenure. Id. at 455. Nor was there reason to think that the president's decision that was foreshadowed by that recommendation would have been different if no letter had been written. Id. Rather than announcing an exotic new "manufactured claim" defense, the court was making the pedestrian point that some claims fail because there is no demonstrable causal connection between the protected activity and the adverse action.
21
Our view of the matter finds support in the so-called "tester" cases, where minority applicants apply for jobs or housing that they have no intention of accepting for the sole purpose of determining whether the employer or landlord is unlawfully discriminating. See, e.g., Havens Realty Corp. v. Coleman, 455 U.S. 363, 102 S.Ct. 1114, 71 L.Ed.2d 214 (1982); Kyles v. J.K. Guardian Sec. Servs., Inc., 222 F.3d 289 (7th Cir.2000). In those cases, defendants have objected that there was no real substance to the plaintiffs' claims since those claims were created solely for the purpose of litigation. The courts, however, have advanced two different reasons for allowing such suits to proceed.
22
First, the mere fact of discrimination offends the dignitary interest that the statutes are designed to protect, regardless of whether the discrimination worked any direct economic harm to the plaintiffs. See Kyles, 222 F.3d at 297. In enacting the ADA, Congress found that "discrimination against individuals with disabilities continue[s] to be a serious and pervasive problem," 42 U.S.C. § 12101(a)(2), and that "individuals with disabilities ... have been... subjected to a history of purposeful unequal treatment, and relegated to a position of political powerlessness in our society, based on characteristics that are beyond the control of such individuals," 42 U.S.C. § 12101(a)(7). This language suggests that Congress was trying to protect a dignitary interest with the ADA. Second, tester cases have been allowed to proceed on a "private attorney general" theory. See Kyles, 222 F.3d at 299. By giving litigants an incentive to attack illegal activity by employers, Congress enlisted private self-interest in the enforcement of public policy.
23
In any case, there are many reasons why a person might seek a job interview even though he or she has no intention of taking the job. People may be "testing the waters" to find out what kind of reference they would get, practicing their interviewing skills, investigating a new line of work, or they may have any one of a whole host of other benign reasons for "manufacturing" a job application. See Kyles, 222 F.3d at 298 n. 5. For these reasons, we disagree with the district court's holding that a "manufactured" claim that meets the statutory requirements cannot proceed. The issue of whether Mr. Shaver actually failed to get a job remains relevant on the question of the extent of his damages, but even if the whole situation was "manufactured," he would still have a claim for nominal damages, and in the proper circumstances, for attorneys' fees, exemplary damages, and injunctive relief.
24
Having dealt with the district court's legal holding, the question remains whether the evidence here, taken in the light most favorable to Mr. Shaver, presents a triable issue for a jury. We conclude that it does. Contrary to Salem's arguments, negative job references can constitute adverse, retaliatory action as a matter of law. See Smith, 109 F.3d at 1266. In his deposition, Mr. Bacon denied that his words constituted a negative recommendation, and also denied that he was retaliating against Mr. Shaver. But it is for a jury to decide whether Mr. Bacon is to be believed, whether his interpretation of events is consistent with the rest of the evidence, and whether his recommendations caused prospective employers to reject Mr. Shaver's applications. Furthermore, the district court's conclusion that Mr. Shaver had no real intention of seeking a job with his acquaintances rests on contestable inferences from circumstantial evidence. The same is true of the district court's suggestion that the acquaintances were somehow involved in this alleged scheme. Both of these issues are relevant to the extent of the damages that Mr. Shaver suffered and on the present record are matters for the jury to decide.
III.
25
There are a few remaining issues that we must resolve. First, we agree with the district court's holding that Mr. Bacon was an agent of Salem and that Salem can be properly charged with any action that he took regarding recommendations of Mr. Shaver. Second, Independent Stave Company, Inc., asks that we rule that it is an independent company and that it therefore is not liable for any of Salem's actions. This issue was not reached by the court below, and on remand the district court will be obligated to deal with it if Independent pursues the matter. We decide that Salem's remaining arguments are without merit.
IV.
26
For the reasons set forth above, the district court's judgment is affirmed in part and reversed in part. We remand the case for further proceedings consistent with this opinion.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-7494
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
KENNETH FUQUAN ARTIS,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern District of North Carolina, at
Greenville. Malcolm J. Howard, Senior District Judge. (4:11-cr-00050-H-1; 4:16-cv-
00170-H)
Submitted: April 23, 2020 Decided: April 29, 2020
Before WYNN, FLOYD, and HARRIS, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Kenneth Fuquan Artis, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Kenneth Fuquan Artis seeks to appeal the district court’s order denying relief on his
28 U.S.C. § 2255 (2018) motion. The order is not appealable unless a circuit justice or
judge issues a certificate of appealability. See 28 U.S.C. § 2253(c)(1)(B) (2018). A
certificate of appealability will not issue absent “a substantial showing of the denial of a
constitutional right.” 28 U.S.C. § 2253(c)(2) (2018). When the district court denies relief
on the merits, a prisoner satisfies this standard by demonstrating that reasonable jurists
could find the district court’s assessment of the constitutional claims debatable or wrong.
See Buck v. Davis, 137 S. Ct. 759, 773-74 (2017). When the district court denies relief on
procedural grounds, the prisoner must demonstrate both that the dispositive procedural
ruling is debatable and that the motion states a debatable claim of the denial of a
constitutional right. Gonzalez v. Thaler, 565 U.S. 134, 140-41 (2012) (citing Slack v.
McDaniel, 529 U.S. 473, 484 (2000)).
We have independently reviewed the record and conclude that Artis has not made
the requisite showing. Accordingly, we deny a certificate of appealability and dismiss the
appeal. We dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before this court and argument would not aid the
decisional process.
DISMISSED
2
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IN THE
TENTH COURT OF APPEALS
No. 10-17-00405-CR
JAMES RAY SONNTAG,
Appellant
v.
THE STATE OF TEXAS,
Appellee
From the 220th District Court
Bosque County, Texas
Trial Court No. CR15124
ORDER ON REHEARING
Appellant’s motion for rehearing is granted. The Court’s memorandum opinion
and judgment, dated December 13, 2017, are withdrawn, and this appeal is reinstated.
PER CURIAM
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Order issued and filed February 21, 2018
Do not publish
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS December 14, 2006
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 06-40086
Summary Calendar
JALIL RAJAII FLOYD,
Plaintiff-Appellant,
versus
CHIEF MEDICAL DIRECTOR OF UTMB;
M.D. DARYL LAU; FRANCIS CHARIAN;
M.D. BEN RAIMER,
Defendants-Appellees.
--------------------------------------------------------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 3:03-CV-716
--------------------------------------------------------------------
Before DeMOSS, STEWART and PRADO, Circuit Judges.
PER CURIAM:*
Jalil Rajaii Floyd, Texas prisoner # 572644, appeals the district court’s order granting
summary judgment in favor of the defendants and dismissing his 42 U.S.C. § 1983 civil rights
complaint.
Floyd has contended that the defendants were deliberately indifferent to his serious medical
needs in treating, or failing to treat adequately, his hepatitis C virus (HCV). Although in his original
action, filed in September 2003, Floyd complained primarily about the delays in placing him in
standard Interferon therapy, he subsequently shifted the focus of his allegations to complaints about
the defendants’ failure to treat him with a newer medication, pegylated Interferon, or Pegasys. He
*
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.
has maintained that Pegasys has been more effective in treating black HCV patients, like him, than
the standard Interferon therapy. In his complaint, Floyd also asserted that the treatment of black
inmates with HCV violated their equal protection rights.
In this appeal, Floyd focuses on the defendants’ failure to place him in pegylated Interferon
therapy. The defendants’ summary-judgment evidence reflects that HCV is a disease that developed
as recently as the early 1990s, that the standard Interferon treatment was not developed until the late
1990s, and that the pegylated Interferon therapy became available only in the past few years.
Although the Texas Department of Criminal Justice (TDCJ) developed a standard treatment protocol
for HCV in 2000–-a protocol under which Floyd was unsuccessfully treated for several months in
2003–-the protocol was amended to include the availability of pegylated Interferon therapy only in
2004, after the date Floyd filed his original complaint. The evidence establishes that Pegasys is only
marginally more effective than the standard therapy and is unlikely to help a patient like Floyd, for
whom the standard therapy was unsuccessful.
The defendants’ summary-judgment evidence reflected that there was no genuine issue of
material fact as to Floyd’s deliberate-indifference claims, and Floyd failed to rebut that evidence.
See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); FED. R. CIV. P. 56(c), (e). Floyd relies on
treatment notes from a Dr. Robert Roe, who felt that Floyd should have been treated with the “new
antiviral meds” once they became available. However, neither the notes from Dr. Roe nor any other
evidence in the record supports Floyd’s assertions that he faced a “substantial risk of serious harm”
that would have been alleviated by pegylated Interferon therapy. See Estelle v. Gamble, 429 U.S.
97, 106 (1976); Farmer v. Brennan, 511 U.S. 825, 847 (1994).
In his appellate brief, Floyd had explicitly waived his claims against Dr. Francis Cherian. By
failing to brief any claims regarding the equal-protection allegations and his claims regarding the delay
in placing him standard Interferon treatment, Floyd has effectively abandoned those claims.
See Yohey v. Collins, 985 F.2d 222, 224-25 (5th Cir. 1993); FED. R. APP. P. 28(a)(9).
The judgment of the district court is AFFIRMED.
-2-
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Filed 2/21/14
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THE PEOPLE, D064350
Petitioner, (San Diego County
Super. Ct. No. CR110487)
v.
THE SUPERIOR COURT OF
SAN DIEGO COUNTY,
Respondent;
MANUEL FLORES,
Real Party in Interest.
Petition for writ of mandate/prohibition from an order of the Superior Court of
San Diego County. Charles G. Rogers, Judge. Petition granted.
Bonnie M. Dumanis, District Attorney, Laura E. Tanney, James E. Atkins and
Linh Lam, Deputy District Attorneys for Petitioner.
No appearances for Respondent.
Laura R. Sheppard for Real Party in Interest.
In this case, we consider whether Penal Code section 1170, subdivision (d)(2)
(section 1170(d)(2)), regarding a juvenile offender's ability to petition for recall of his or
her sentence, applies to a juvenile offender serving a long-term sentence that is not
technically life without parole (LWOP). We conclude that it does not. We further reject
real party in interest's contention that, so interpreted, section 1170(d)(2) violates his right
to equal protection. (Undesignated statutory references are to the Penal Code.)
BACKGROUND
To provide background, we summarize the facts that led to Manuel Flores's
convictions from our prior opinion (People v. Flores (Mar. 24, 1993, D014326) [nonpub.
opn.]).
In 1989, Flores and Christopher Box killed April Gilhousen, her three-year-old
son, Bryan, and Kevin Chandler during a robbery. They also attempted to kill Rodney
Almond who arrived at Gilhousen's home when the other crimes were taking place.
Flores admitted that he cut Chandler's throat with a box cutter and stabbed Gilhousen
with a knife.
Flores was approximately 17 and one-half years old when he committed the
crimes. He was convicted of three counts of first degree murder, premeditated attempted
murder, robbery, burglary and conspiracy to commit robbery. Flores was sentenced to
three consecutive terms of 25 years to life in prison for the first degree murder
convictions plus one year for a knife allegation. He was also sentenced to a term of life
in prison for the attempted murder. The court stayed all other determinate term sentences
2
pursuant to section 654. Box, an adult when the crimes were committed, was sentenced
to death.
After serving approximately 22 years in prison, Flores petitioned the trial court to
recall his sentence under section 1170(d)(2). The People opposed Flores's petition,
contending section 1170(d)(2) was inapplicable because he was not sentenced to LWOP.
Flores argued the statute was applicable to him because his sentence of 76 years to life
was the functional equivalent of LWOP.
The trial court granted Flores's petition and thereby recalled his sentence. The
court also set the matter for a resentencing hearing.
The People filed a petition for writ of mandate/prohibition in this court, arguing
that the trial court acted in excess of its jurisdiction because section 1170(d)(2) does not
apply to Flores. We stayed the trial court's resentencing hearing and subsequently issued
an order to show cause why the relief the People requested should not be granted.
DISCUSSION
I. Section 1170(d)(2)
A. Issue Presented and Standard of Review
The People's petition presents the legal question of whether section 1170(d)(2)
applies to long-term sentences that are not technically LWOP. The question presented
involves statutory interpretation, which presents a question of law subject to de novo
review. (Bialo v. Western Mutual Ins. Co. (2002) 95 Cal.App.4th 68, 76-77.) Our goal is
to ascertain and carry out the Legislature's intent (Code Civ. Proc., § 1859), looking first
to the words of the statute, giving them their usual and ordinary meaning. (People v.
3
Garcia (2002) 28 Cal.4th 1166, 1172.) If the language of the statute is susceptible to
more than one reasonable construction, we can look to the legislative history to aid in
ascertaining the legislative intent. (Diamond Multimedia Systems, Inc. v. Superior Court
(1999) 19 Cal.4th 1036, 1055.) "We are guided by the fundamental rule 'that the
objective sought to be achieved by a statute as well as the evil to be prevented is of prime
consideration in its interpretation.' " (People v. United Nat'l Life Ins. Co. (1967) 66
Cal.2d 577, 596, quoting Rock Creek Water Dist. v. County of Calaveras (1946) 29
Cal.2d 7, 9.)
B. Analysis
In September 2012, California enacted Senate Bill No. 9 (SB 9), which amended
section 1170 by adding subdivision (d)(2). (Stats. 2012, ch. 828, § 1.) That subdivision
provides: "When a defendant who was under 18 years of age at the time of the
commission of the offense for which the defendant was sentenced to imprisonment for
life without the possibility of parole has served at least 15 years of that sentence, the
defendant may submit to the sentencing court a petition for recall and resentencing."
(§ 1170, subd. (d)(2)(A)(i), italics added.)
One year later, California enacted Senate Bill No. 260 (SB 260), which added
section 3051, providing that "any prisoner who was under 18 years of age at the time of
his or her controlling offense" shall be afforded a "youth offender parole hearing." (Stats.
2013, ch. 312 (S.B. 260); § 3051, subds. (a)(1), (d).) Under the new law, a juvenile
offender with a determinate sentence of any length shall be eligible for release on parole
at a hearing during his or her 15th year of incarceration; a juvenile sentenced to an
4
indeterminate term of less than 25 years to life would be eligible for release on parole at a
hearing during his or her 20th year of incarceration; and a juvenile sentenced to an
indeterminate term of 25 years to life would be eligible for release on parole at a hearing
during his or her 25th year of incarceration. (§ 3051, subd. (b).) Section 3051 does not
apply to individuals sentenced to life in prison without the possibility of parole. (§ 3051,
subd. (h).)
SB 260 was a direct response to People v. Caballero (2012) 55 Cal.4th 262
(Caballero). (Stats. 2013, ch. 312 (S.B. 260), § 1.) In that case, our high court concluded
"that sentencing a juvenile offender for a nonhomicide offense to a term of years with a
parole eligibility date that falls outside the juvenile offender's natural life expectancy
constitutes cruel and unusual punishment in violation of the Eighth Amendment."
(Caballero, at p. 268.) The court "urge[d] the Legislature to enact legislation establishing
a parole eligibility mechanism that provides a defendant serving a de facto life sentence
without the possibility of parole for nonhomicide crimes that he or she committed as a
juvenile with the opportunity to obtain release on a showing of rehabilitation and
maturity." (Id. at fn. 5.)
In enacting SB 260, "[t]he Legislature recognize[d] that youthfulness both lessens
a juvenile's moral culpability and enhances the prospect that, as a youth matures into an
adult and neurological development occurs, these individuals can become contributing
members of society." (Stats. 2013, ch. 312 (S.B. 260), § 1.) The Legislature expressly
stated that the purpose of the law "is to establish a parole eligibility mechanism that
provides a person serving a sentence for crimes that he or she committed as a juvenile the
5
opportunity to obtain release when he or she has shown that he or she has been
rehabilitated and gained maturity, in accordance with the decision of the California
Supreme Court in People v. Caballero[, supra,] 55 Cal.4th 262 and the decisions of the
United States Supreme Court in Graham v. Florida (2010) 560 U.S. 48, and Miller v.
Alabama (2012) 183 L.Ed.2d 407." (Stats. 2013, ch. 312 (S.B. 260), § 1.) Thus, "[t]he
youth offender parole hearing to consider release shall provide a meaningful opportunity
to obtain release" and any psychological assessments utilized by the board in making its
parole determination must "take into consideration the diminished culpability of juveniles
as compared to that of adults, the hallmark features of youth, and any subsequent growth
and increased maturity of the individual." (§ 3051, subds. (e), (f)(1).)
Despite the enactment of SB 260, Flores argues that the Legislature responded to
Caballero, supra, 55 Cal.4th 262 through SB 9 and intended to treat de facto LWOP
sentences the same as technical LWOP sentences. The language and legislative history
of section 1170(d)(2) do not support Flores's contention.
The plain language of section 1170(d)(2) provides that it applies to juvenile
offenders "sentenced to imprisonment for life without the possibility of parole." (§ 1170,
subd. (d)(2)(A)(i), italics added.) There is nothing in the language that indicates the
Legislature intended for the statute to also apply to sentences that may be the functional
equivalent of life without the possibility of parole. Had the Legislature intended that
effect, we presume it would have expressly stated so. It is not "the province of this court
to rewrite the statute to imply an intent left unexpressed by the Legislature. . . . The
courts may not speculate that the legislature meant something other than what it said.
6
Nor may they rewrite a statute to make it express an intention not expressed therein."
(People v. Burgio (1993) 16 Cal.App.4th 769, 778.)
Even if we conclude that the language of the statute is susceptible to more than
one reasonable construction, its legislative history does not support Flores's argument that
the legislature responded to our high court's decision in Caballero with SB 9. SB 9 was
introduced in December 2010, which was nearly two years before the Caballero decision.
The bill went through multiple revisions with the last amendment on July 2, 2012, which
was more than a month before Caballero. The Senate passed SB 9 four days after the
decision in Caballero; however, there is no indication that they or the governor
responded to the Caballero decision.
Further, the history of SB 9 shows the Legislature knew that in certain instances,
courts found long-term sentences for juvenile offenders constituted de facto LWOP
sentences. For example, in the analysis by the Assembly Committee on Public Safety,
the author referenced a case in which the court found a juvenile's sentence was cruel and
unusual punishment because it was a "de facto LWOP" sentence in that it did not provide
a meaningful opportunity for release during the offender's lifetime. (Assem. Com. on
Public Safety, Analysis of Sen. Bill No. 9 (2011-2012 Reg. Sess.) as amended May 27,
2011, p. 10.) Despite its recognition of "de facto LWOP" sentences, the Legislature did
not include such language in SB 9.
The legislative history of recently enacted SB 260 further supports the conclusion
that the Legislature did not intend for section 1170(d)(2) (the subject of SB 9) to apply to
long term sentences that are not technically LWOP. As stated in the analysis by the
7
Assembly Committee on Appropriations, "[c]urrent law [(section 1170(d)(2))] allows an
inmate who was under 18 at the time of an offense that resulted in a term of life-without-
the-possibility-of parole (LWOP) (first-degree murder) to petition the court for
resentencing after 15 years. [SB 260] addresses the situation, the subject of People v[.]
Caballero, in which a youth is sentenced to life-with-the-possibility of parole, which may
serve as a de facto life sentence." (Assem. Com. on Appropriations, Analysis of Sen. Bill
No. 260 (2012-2013 Reg. Sess.) as amended Aug. 12, 2013, p. 2.) Accordingly, SB 260
filled the gap left after SB 9 and addressed Caballero.
Based on the foregoing, we conclude section 1170(d)(2) does not apply to
offenders sentenced to long-term indeterminate sentences that are not technically LWOP.
Rather, section 3051 applies to those offenders, including Flores. Thus, the trial court
erred in granting Flores's petition under section 1170(d)(2).
II. Equal Protection
Flores argues that interpreting section 1170(d)(2) to apply only to offenders with
technical LWOP sentences violates his right to equal protection because with a de facto
LWOP sentence, he is similarly situated. We reject this argument.
The Fourteenth Amendment to the United States Constitution provides that no
state shall "deny to any person within its jurisdiction the equal protection of the laws." A
similar requirement appears in the California Constitution, article I, section 7.
8
" ' " 'The first prerequisite to a meritorious claim under the equal protection clause
is a showing that the state has adopted a classification that affects two or more similarly
situated groups in an unequal manner.' [Citations.] This initial inquiry is not whether
persons are similarly situated for all purposes, but 'whether they are similarly situated for
purposes of the law challenged.' " ' " (People v. Jeha (2010) 187 Cal.App.4th 1063,
1073, quoting People v. McKee (2010) 47 Cal.4th 1172, 1218-1219.)
Here, Flores cannot show that he is similarly situated to offenders sentenced to
LWOP because his sentence is not the functional equivalent of LWOP. As previously
noted, after the enactment of section 3051 (SB 260), Flores has " 'some meaningful
opportunity to obtain release based on maturity and rehabilitation.' " (People v. Martin
(2013) 222 Cal.App.4th 98, 105 [finding that a sentence of 45 years plus two consecutive
life terms was not the functional equivalent of LWOP because newly enacted section
3051 provided him a meaningful opportunity for parole]; In re Alatriste (2013) 220
Cal.App.4th 1232, 1240 [finding that sentences of 77 years to life and 55 years to life did
not constitute cruel and unusual punishment because the sentences were not the
functional equivalent of LWOP where the Legislature subsequently enacted section 3051,
providing defendants a meaningful opportunity to obtain release on parole].) Thus,
Flores is not similarly situated to offenders with LWOP sentences and his equal
protection argument fails.
9
DISPOSITION
Let a writ issue directing the superior court to vacate its order recalling Flores's
sentence under section 1170(d)(2) and setting a resentencing hearing. The trial court is
directed to enter a new order dismissing Flores's petition for recall and resentencing. The
stay issued by this court on August 8, 2013 is vacated.
McINTYRE, J.
WE CONCUR:
HUFFMAN, J.
BENKE, Acting P. J.
10
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FILE COPY
BRIAN QUINN
Chief Justice
Court of Appeals VIVIAN LONG
Clerk
JAMES T. CAMPBELL
Justice
Seventh District of Texas MAILING ADDRESS:
MACKEY K. HANCOCK
Justice
Potter County Courts Building P. O. Box 9540
79105-9540
501 S. Fillmore, Suite 2-A
PATRICK A. PIRTLE
Justice Amarillo, Texas 79101-2449 (806) 342-2650
www.txcourts.gov/7thcoa.aspx
March 27, 2015
Matthew W. Sherwood Michael Hodge
UNDERWOOD LAW FIRM TWOMEY MAY, PLLC
P.O. Box 9158 2 Riverway, 15th Floor
Amarillo, TX 79105 Houston, TX 77056
* DELIVERED VIA E-MAIL * * DELIVERED VIA E-MAIL *
George F. May Larry A. Vick
TWOMEY MAY, PLLC Attorney at Law
2 Riverway, 15th Floor 908 Town and Country Blvd., Suite 120
Houston, TX 77056 Houston, TX 77024-2208
* DELIVERED VIA E-MAIL * * DELIVERED VIA E-MAIL *
RE: Case Number: 07-14-00398-CV
Trial Court Case Number: A9678-1311
Style: Expelled Grain Products, LLC and Scott Theiring v. Corn Mill Enterprises, LLC
Dear Counsel:
By Order of the Court, the motion for an extension of time to file Appellant’s brief
for Expelled Grain Products LLC is this day granted and the brief was filed on Thursday,
March 26, 2015.
Very truly yours,
Vivian Long
VIVIAN LONG, CLERK
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In the
United States Court of Appeals
For the Seventh Circuit
No. 01-2509
Shirley L. Johnson,
Petitioner,
v.
Commissioner of Internal Revenue,
Respondent-Appellee.
Appeal of Joe Alfred Izen, Jr.
Appeal from the United States Tax Court.
Nos. 6452-99, 6453-99--Mary Ann Cohen, Judge.
Argued March 6, 2002--Decided May 3, 2002
Before Posner, Evans, and Williams, Circuit
Judges.
Posner, Circuit Judge. Attorney Joe
Alfred Izen, Jr., has appeared in the
United States Tax Court in many cases
since the early 1980s. A number of them,
including the recently decided Muhich v.
Commissioner, 238 F.3d 860 (7th Cir.
2001), involve the same script: the IRS
determines a deficiency arising from the
use of sham trusts established for the
taxpayer by a promoter; the taxpayer
petitions for redetermination of the
deficiency; Izen appears for the
taxpayer; the case drags on, with the
taxpayer sometimes resisting discovery;
the court usually finds the taxpayer’s
arguments frivolous and either threatens
or imposes sanctions. Oelze v.
Commissioner, 723 F.2d 1162 (5th Cir.
1983) (per curiam); Watson v.
Commissioner, 690 F.2d 429 (5th Cir.
1982) (per curiam); Muhich v.
Commissioner, 77 T.C.M (CCH) 2143 (1999),
aff’d, 238 F.3d 860 (7th Cir. 2001);
Ripley v. Commissioner, 53 T.C.M. (CCH)
262 (1987); Dixon v. Commissioner, 79
T.C.M. (CCH) 1803, 1810 (2000).
The present case follows this pattern
except that instead of sanctioning the
taxpayer the court sanctioned Izen under
26 U.S.C. sec. 6673(a)(2) by ordering him
to pay the attorneys’ fees that the IRS
had incurred as a consequence of his
discovery abuses. Izen appeals, arguing
that section 6673(a)(2) is a denial of
equal protection; that the Tax Court’s
sanction was impermissible because really
the court disciplined him not for
discovery abuses as it said but for
representing "disfavored" litigants who
promote or utilize sham trusts to avoid
taxes, and for allowing his client to
invoke the Fifth Amendment in response to
the IRS’s discovery demands; and that the
Tax Court overstated the amount of
attorneys’ fees that the IRS had incurred
as a consequence of his discovery abuses.
In April 1999, Shirley Johnson, an
Indiana resident whose severe diabetes
hinders her ability to travel, filed in
the Tax Court two pro se petitions
challenging a notice of deficiency. Then,
hiring Izen, a Texas lawyer, to represent
her, she--realistically, Izen--took
advantage of the Tax Court’s liberal rule
on venue, Tax Ct. R. 140, to designate
Houston as the place for trial. And then
the stonewalling began. At first Johnson
simply ignored discovery demands. In Sep
tember 1999 the Tax Court ordered her to
respond to those demands and threatened
her with sanctions if she did not. Her
response was to answer 27 of 34
interrogatories and 37 of 51 document
requests with the words "Fifth
Amendment." The IRS requested sanctions,
and though declining that relief the
court conducted a hearing and ruled that
the Fifth Amendment defense was baseless.
The court ordered Johnson to cooperate
fully in discovery, and scheduled trial
for May 3, 2000.
In December 1999 the IRS issued a second
set of interrogatories and document
requests, but again had to resort to
filing a motion to compel. The Tax Court
granted the motion and ordered, under an
express threat of sanctions, that Johnson
comply fully by April 7, 2000. Johnson
did not. Instead she gave notice that she
would be physically unable to participate
in a May trial. The court continued the
trial to December 2000 but maintained the
May 3 date for hearing the IRS’s renewed
motion for sanctions.
Izen did not appear on May 3 but instead
sent his associate and sister, Jane Afton
Izen. The IRS explained to the court what
interrogatories remained unanswered and
also noted Johnson’s failure to comply
with a demand for copies of checks from
1996 and 1997. Expressing skepticism that
Johnson had made "a good faith effort to
comply with the court’s orders," the
court again threatened sanctions unless
she answered the interrogatories by May
17 and the document requests by July 5.
The court also expressed annoyance that
Joe Izen had failed to appear. Jane Izen
promised to provide the delinquent
discovery by the court’s deadlines.
May 17 came and went with no response
from Johnson. Instead, on May 22 the
court received a motion dated May 15
seeking postponement of the now-expired
deadline. As grounds Izen offered his
busy schedule and Johnson’s poor health.
The court responded that his workload did
not excuse his disobeying the court’s
orders and this time it promised
sanctions if the interrogatories were not
answered by June 1. On that day the IRS
received partial responses. Later, after
missing the July 5 deadline to produce
checks from 1996 and 1997, Izen tendered
checks from the wrong bank and for the
wrong years. These were the same checks
Izen had produced twice before; the IRS
had repeatedly told him the checks were
noncomplying.
On August 21, 2000, the court’s patience
ran out. After listening to Izen’s
explanations that he had "inadvertently"
failed to answer one of the
interrogatories and that Johnson’s poor
health hampered compliance with discovery
orders, the court ruled that Izen had
unreasonably and vexatiously multiplied
the proceedings within the meaning of 26
U.S.C. sec. 6673(a)(2) and in a
subsequent order it sanctioned him in the
amount of $9,394 to cover the attorneys’
fees incurred by the IRS in trying to
obtain compliance with its second set of
discovery requests. The court also
dismissed Johnson’s case for failure to
prosecute, a ruling she has not appealed.
Izen contends that section 6673(a)(2)
denies equal protection of the laws
(actionable under the due process clause
of the Fifth Amendment by virtue of the
Supreme Court’s decision in Bolling v.
Sharpe, 347 U.S. 497 (1954)), because it
exempts government attorneys, and only
government attorneys, from personal
liability for unreasonably and
vexatiously multiplying Tax Court
proceedings. Izen waived the argument by
first including it in a motion under Tax
Court Rule 162, the analog to Fed. R.
Civ. P. 60(b). Drobny v. Commissioner,
113 F.3d 670, 676-77 (7th Cir. 1996);
Heim v. Commissioner, 872 F.2d 245, 246-
47 (8th Cir. 1989); see Provident Savings
Bank v. Popovich, 71 F.3d 696, 698 (7th
Cir 1995); Seatrax, Inc. v. Sonbeck
Int’l, Inc., 200 F.3d 358, 364-65 (5th
Cir. 2000).
Anyway the argument is frivolous.
Section 6673(a)(2) states:
Counsel’s liability for excessive costs.-
-Whenever it appears to the Tax Court
that any attorney or other person
admitted to practice before the Tax Court
has multiplied the proceedings
unreasonably and vexatiously, the Tax
Court may require--
(A) that such attorney or other person
pay personally the excess costs,
expenses, and attorneys’ fees reasonably
incurred because of such conduct, or
(B) if such attorney is appearing on
behalf of the Commissioner of Internal
Revenue, that the United States pay such
excess costs, expenses, and attorneys’
fees in the same manner as such an award
by a district court.
This language authorizes the Tax Court to
sanction government attorneys personally
or to require the United States to pay
for their misconduct. Izen’s contrary
argument rests on a misreading. The equal
protection claim would be frivolous in
any event, as it is easy to imagine a
rational basis for treating public
lawyers in this respect different from
private ones. See Schwarz v. Kogan, 132
F.3d 1387, 1393-94 (11th Cir. 1998);
Weisbrod v. Sullivan, 875 F.2d 526, 529
n. 4 (5th Cir. 1989); State v. See, 387
N.W.2d 583, 586-87 (Iowa 1986).
The next issue is Izen’s bad faith. We
hold (it is a question of first
impression at the appellate level) that a
finding of "bad faith" is indeed required
before an attorney may be sanctioned
under section 6673(a)(2). The language of
that statute is materially identical to
that of 28 U.S.C. sec. 1927, which has
been held to require a finding of bad
faith, IDS Life Ins. Co. v. Royal
Alliance Associates Inc., 266 F.3d 645,
654 (7th Cir. 2001); Fox Valley
Construction Workers Fringe Benefit Funds
v. Pride of the Fox Masonry & Expert
Restorations, 140 F.3d 661, 666 (7th Cir.
1998); In re Prudential Ins. Co. America
Sales Practice Litigation Actions, 278
F.3d 175, 188 (3d Cir. 2002), and the two
statutes serve the same purpose, just in
different but similar forums, and should
therefore be interpreted similarly. See
Harper v. Commissioner, 99 T.C. 533, 545
(1992).
Bad faith under section 1927 of the
Judicial Code (and hence, we hold, under
section 6673(a)(2) of the Internal
Revenue Code) is not a subjective
concept, as the words "who so multiplies
the proceedings in any case unreasonably
and vexatiously" (emphasis added) might
be thought to imply; "reckless" or
"extremely negligent" conduct will
satisfy it. IDS Life Ins. Co. v. Royal
Alliance Associates Inc., supra, 266 F.3d
at 654; Kotsilieris v. Chalmers, 966 F.2d
1181, 1184-85 (7th Cir. 1992); In re TCI
Ltd., 769 F.2d 441, 445-46 (7th Cir.
1985); McLane, Graf, Raulerson &
Middleton, P.A. v. Rechberger, 280 F.3d
26, 44-45 (1st Cir. 2002); Proctor &
Gamble Co. v. Amway Corp., 280 F.3d 519,
525-26 (5th Cir. 2002); B.K.B. v. Maui
Police Dept., 276 F.3d 1091, 1108 (9th
Cir. 2002). And appellate review of the
decision to impose sanctions is for abuse
of discretion, Ragan v. Commissioner, 135
F.3d 329, 337 (5th Cir. 1998); Fox v.
Commissioner, 969 F.2d 951, 953 (10th
Cir. 1992), as is normally the case with
respect to decisions imposing sanctions,
e.g., IDS Life Ins. Co. v. Royal Alliance
Associates, Inc., supra, 266 F.3d at 654,
and is therefore consistent with the
general principle that the standards for
appellate review of Tax Court decisions
are identical to those for appellate
review of district court decisions. E.g.,
Freytag v. Commissioner, 501 U.S. 868,
891 (1991); Estate of Kunze v.
Commissioner, 233 F.3d 948, 950 (7th Cir.
2000); 26 U.S.C. sec. 7482(a)(1).
Izen’s complaint that the Tax Court
based its finding of bad faith on his
conduct in other cases is off the mark in
two respects. The court placed primary
reliance on his conduct in the present
case; our recital of the facts showing
that Izen recklessly, and in all
likelihood intentionally, obstructed
discovery was drawn from the Tax Court’s
opinion. The court further noted that
Johnson’s trial memorandum, due on
November 17, 2000, was postmarked
November 27 yet certified by Izen as
having been served on November 22, and
that Izen had deposed Johnson without
adequate notice to the IRS yet persisted
in offering her deposition as evidence
despite the court’s denying him
permission to do so. Izen’s repeated
flouting of discovery orders even after
being threatened with sanctions and
promising to comply established his bad
faith all by itself. See Castillo v. St.
Paul Fire & Marine Ins. Co., 938 F.2d
776, 778-79 (7th Cir. 1991); Godlove v.
Bamberger, Foreman, Oswald, & Hahn, 903
F.2d 1145, 1146-48 (7th Cir. 1990);
Malautea v. Suzuki Motor Co., 987 F.2d
1536, 1545-46 (11th Cir. 1993).
The Tax Court was not required to ignore
Izen’s bad conduct in other cases; indeed
it would have been remiss not to consider
it. S Industries, Inc. v. Centra 2000,
Inc., 249 F.3d 625, 628-29 (7th Cir.
2001); In re Joint Eastern & Southern
Districts Asbestos Litigation, 22 F.3d
755, 759 n. 8 (7th Cir. 1994); Fink v.
Gomez, 239 F.3d 989, 992 (9th Cir. 2001);
Doering v. Union County Bd. of Chosen
Freeholders, 857 F.2d 191, 197 n. 6 (3d
Cir. 1988). (Such consideration might, of
course, redound to a lawyer’s benefit--if
his prior record were good, rather than,
as in Izen’s case, very, very bad.) In
prior litigation, Izen’s clients were
sometimes sanctioned because he employed
tactics like those in this case; and
dogged good-faith persistence in bad
conduct becomes sanctionable once an
attorney learns or should have learned
that it is sanctionable. Christiansburg
Garment Co. v. EEOC, 434 U.S. 412, 422
(1978); In re TCI Ltd., supra, 769 F.2d
at 445.
Izen argues that the court penalized him
for Johnson’s frivolous assertion of her
right against self-incrimination. It did
not, as a matter of fact; but in any
event "if a competent attorney would find
no basis for a legal argument, then it
does not interfere with zealous advocacy
to penalize the repetitious assertion of
that argument." Id. at 447. Johnson had
the burden of proving that the IRS should
have allowed deductions for certain
business expenses. Competent counsel
would have recognized that burden as
incompatible with asserting a Fifth
Amendment privilege covering the entirety
of Johnson’s business affairs, and so
would have declined to make such a claim.
As for Izen’s challenge to the amount of
the sanction, it is waived because he
delayed presenting it to the tax court
until his Rule 162 motion.
If anything, the Tax Court treated Izen
too gently. But his travails are not
over. As his appeal is frivolous, we are
issuing an order to show cause why he
should not be sanctioned for his antics
in this court.
Affirmed.
| {
"pile_set_name": "FreeLaw"
} |
IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
CHARLES HERMAN. )
)
Plaintiff, )
)
v. )
) C.A. No. N13C-11-105 CLS
BRP, INC., BRP US, INC., )
TELEFLEX CANADA LIMITED )
PARTNERSHIP, TELEFLEX )
CANADA, INC., KONGSBERG, )
INC. (F/K/A TELEFLEX )
MEGATECH, INC.), and )
KONGSBERG AUTOMOTIVE )
HOLDING ASA. )
)
Defendants. )
Date Decided: April 13, 2015
On Defendant Kongsberg Automotive Holding ASA’s Motion to Dismiss for Lack
of Jurisdiction. GRANTED.
OPINION
Kevin J. Connors, Esquire, 1220 North Market Street, Wilmington, Delaware,
19899. Attorney for Defendant Kongsberg Automotive Holding ASA.
Timothy E. Lengkeek, Esquire, 1000 North King Street, Wilmington, Delaware,
19801. Attorney for Plaintiff.
Scott, J.
Defendant Kongsberg Automotive Holding ASA (“Kongsberg Holding”)
has moved to dismiss Plaintiff Charles Herman’s (“Plaintiff”) First Amended
Complaint for lack of personal jurisdiction pursuant to Del. Super. Ct. R. 12(b)(2)
and based on Delaware’s long-arm statute, 10 Del. C. § 3104(c). For the following
reasons, Defendant Kongsberg Holding’s Motion to Dismiss is GRANTED.
Background
I. The Present Action
Plaintiff has alleged claims of strict products liability1 and negligence
against Defendants BRP, Inc. (“BRP”), BRP US, Inc. (“BRP US”), Teleflex
Canada Limited Partnership (“Teleflex Canada”), Teleflex Canada, Inc.
(“Teleflex”), Kongsberg, Inc. (f/k/a Teleflex Megatech, Inc.) (“Kongsberg”), and
Kongsberg Holding. Plaintiff’s Complaint is based upon personal injuries Plaintiff
allegedly sustained as a result of a motor vehicle accident that occurred on August
8, 2012 in Sturgis, South Dakota. Plaintiff alleges that while participating in a test
drive of a 2012 Can-Am Spyder Roadster, which was then owned by Defendant
BRP US, the vehicle and/or its steering mechanism malfunctioned or failed to turn,
causing it to run off the road and crash. Defendants Kongsberg Holding and
Kongsberg each filed a motion to dismiss Plaintiff’s Complaint for lack of personal
jurisdiction on April 10, 2014.
1
The Court does not address the issue in this opinion, but notes that Delaware law does not
provide for claims sounding in strict products liability.
2
On July 10, 2014, Plaintiff filed his First Amended Complaint, which brings
the same causes of action as the original Complaint. To address the jurisdiction
issue, Plaintiff’s First Amended Complaint alleges that Kongsberg Holding and
Kongsberg have consented to jurisdiction or waived any jurisdictional challenge,
or alternatively, have sufficient minimum contacts with Delaware to comport with
10 Del. C. § 3104 and Constitutional Due Process. On September 12, 2014,
Defendants Kongsberg Holding and Kongsberg each filed a Motion to Dismiss
Plaintiff’s First Amended Complaint pursuant to Superior Court Rule 12(b)(2) for
lack of personal jurisdiction.2
Plaintiff is a resident of North Carolina. Defendant Kongsberg Holding is a
non-operational Norwegian holding company, and the parent corporation of
Defendant Kongsberg. Plaintiff and Defendant Kongsberg Holding are the
relevant parties to this motion to dismiss. Defendant Kongsberg, a Canadian
corporation and subsidiary of Defendant Kongsberg Holding, is a relevant
nonparty to this motion to dismiss. Defendant Teleflex, a Delaware corporation
with its principal place of business in Limerick, Pennsylvania, is also a relevant
nonparty to this motion to dismiss.
2
Pursuant to an Order dated March 24, 2015, Plaintiff’s First Amended Complaint was
dismissed against Defendant Kongsberg on the basis that this Court lacks personal jurisdiction
over Defendant Kongsberg. For that reason, the remainder of this opinion addresses only
Defendant Kongsberg Holding’s motion to dismiss.
3
II. The Earlier Delaware Action 3
On June 5, 2009, Kongsberg Holding filed its Complaint against Teleflex in
the United States District Court for the District of Delaware (“the Earlier Delaware
Action”). 4 The Complaint alleged three counts of breach of contract by Teleflex.
The bases for these breaches were the Purchase Agreement, entered into by
Kongsberg Holding and Teleflex on October 14, 2007, and a Supply Agreement
for Marine and Power Products (“Supply Agreement”), which was entered into by
Kongsberg Holding and Teleflex on December 7, 2007. 5 The Supply Agreement
was one of a series of subsequent agreements entered into pursuant to, and as
exhibits to, the Purchase Agreement. 6 In its Complaint, Kongsberg Holding
generally alleged that, in the Purchase Agreement, Teleflex agreed to indemnify
Kongsberg Holding for losses arising or resulting from any breach of any covenant
3
See Kongsberg Automotive Holding ASA v. Teleflex, Inc., C.A. No. 09-414-GMS (D. Del.). On
the record before the Court, the original Complaint filed by Kongsberg Holding against Teleflex
in the Earlier Delaware Action is the only document from which the Court can identify the legal
claims, and their bases, involved in that action. (D.I. 74, Exhibit A). Plaintiff also submitted a
Kongsberg Holding motion and appendix to which contained a supplemental final pre-trial order
(together “the Exhibits”) from the Earlier Delaware Action to suggest that Kongsberg Holding’s
suit there concerned the defective Can-Am Spyder involved in the Present Action. (D.I. 74,
Exhibits C & D). However, the Exhibits merely reference additional claims and counterclaim in
the Earlier Delaware Action, which were apparently brought in one or more amended
complaints. Moreover, both documents as submitted here are incomplete, as multiple pages are,
inexplicably, missing from throughout each. For these reasons, the Court will not rely on any
partial information contained in the Exhibits, and discusses only the original Complaint filed by
Kongsberg Holding against Teleflex in the Earlier Delaware Action.
4
Kongsberg Automotive Holding ASA’s Complaint, C.A. No. 09-414-GMS (D. Del. Jun. 5,
2009); D.I. 74, Exhibit A.
5
Id. at ¶¶ 8-11.
6
Id. at ¶¶ 10-11.
4
or obligation set forth in the agreement, which consisted of the Purchase
Agreement and its appendices, exhibits, and disclosure letters.7
More specifically, Count I of the Complaint alleged that, pursuant to the
Supply Agreement, Teleflex agreed to be Kongsberg Holding’s exclusive
distributor of specified products for sale in Australia and New Zealand. 8 The
Supply Agreement also contained a provision setting forth when and how Teleflex
was permitted to cancel any orders.9 Kongsberg Holding alleged that Teleflex
violated the Supply Agreement in 2008 by the way in which it cancelled a
particular order. 10
Count II of the Complaint alleged that, when entering into the Supply
Agreement, Teleflex knowingly provided Kongsberg Holding with inaccurate
financial information, including product prices, which Kongsberg Holding later
discovered and demanded Teleflex remedy. 11 Kongsberg Holding alleged that
Teleflex’s refusal to remedy those alleged misrepresentations constituted a breach
of the Supply Agreement. 12
Finally, Count III of the Complaint alleged that Teleflex breached its
contractual obligation under the Purchase Agreement to file certain tax returns in
7
Id. ¶¶ 8-9.
8
Id. ¶¶ 18-20.
9
Id. ¶¶ 21-25.
10
Id. at ¶¶ 26-32.
11
Id. at ¶¶ 34-39.
12
Id. at ¶¶ 40-41.
5
the State of Texas and to pay all applicable taxes for the filing periods April 2001
through December 2004, and that this breach caused damages to Kongsberg
Holding. 13
The relief Kongsberg Holding sought in the Complaint was, (1) an order for
Teleflex to indemnify Kongsberg Holding from all losses, damages, cost, and
expenses arising out of Teleflex’s breach of its covenants and obligations regarding
the cancelled product order, improper product pricing, and the Texas sales and use
tax audit; (2) an award of all damages arising from Teleflex’s breaches of the
Purchase Agreement and Supply Agreement; and (3) an award of costs and
attorneys fees for that action. 14
From the record before the Court, it appears that resolution of the Earlier
Delaware Action is still pending in Delaware District Court.
Parties’ Contentions
Defendant Kongsberg Holding asserts that Plaintiff’s First Amended
Complaint must be dismissed because this Court cannot properly exercise specific
or general personal jurisdiction over it. Kongsberg Holding argues that it lacks
both sufficient contacts with Delaware and connection to the present action to
13
Id. at ¶¶ 42-51.
14
Id. at 7.
6
satisfy Delaware’s long arm statute, 10 Del. C. § 3104(c). 15 Additionally,
Kongsberg Holding argues that its responses to Plaintiff’s discovery requests on
this jurisdictional issue further support that Kongsberg Holding lacks sufficient
contacts with Delaware to be subject to general personal jurisdiction in this Court.
Furthermore, Kongsberg Holding argues that it has not consented or waived its
challenge to jurisdiction in this State as a result of the Earlier Delaware Action
between Kongsberg Holding and Teleflex because both the parties and legal claims
involved in the Earlier Delaware Action and Present Action are substantially
unrelated. Therefore, Kongsberg Holding asserts that this Court cannot properly
exercise personal jurisdiction over it in this case.
Plaintiff asserts that this Court may properly exercise personal jurisdiction
over Defendant Kongsberg Holding because Kongsberg Holding’s voluntary
efforts to litigate in the forum state constitutes consent to jurisdiction in this State.
Plaintiff argues that Kongsberg Holding contracted to litigate in the Delaware
forum for disputes arising from contracts relating to the Can-Am Spyder and then
initiated that litigation in Delaware District Court regarding those contracts.
Moreover, Plaintiff argues that Kongsberg Holding has insisted that the lawsuit
take place in Delaware by rejecting opportunities to stay the Earlier Delaware
Action and resolve that dispute in other forums where related litigation was
15
Defendant cites the Declaration of its Chief Financial Officer, Trond Stabekk, as support for
this argument.
7
pending. Plaintiff asserts that, for those reasons, Kongsberg Holding has availed
itself of the privileges of the judicial forum in Delaware.
Standard of Review
On a motion to dismiss for lack of in personam jurisdiction the plaintiff
bears the burden of showing a basis for the trial court's exercise of jurisdiction over
a nonresident defendant.16 In determining whether a plaintiff satisfies this burden,
Delaware courts will apply a two-prong analysis to the issue of personal
jurisdiction over a nonresident.17 The court must first consider whether Delaware's
long arm statute, 10 Del. C. § 3104(c), is applicable.18 Second, the court must
evaluate whether subjecting the nonresident to jurisdiction in Delaware violates the
Due Process Clause of the Fourteenth Amendment. 19 Due process requires the
court to determine whether the defendant has minimum contacts with the forum
state, and whether asserting personal jurisdiction comports with “traditional
notions of fair play and substantial justice.” 20 In other words, it must be “fair and
reasonable” for the court to exercise jurisdiction over the nonresident party. 21
16
AeroGlobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 437 (Del. 2005).
17
Id., at 438; LaNuova D & B, S.P.A. v. Bowe Co., Inc., 513 A.2d 764, 769 (Del. 1986). See 10
Del. C. § 3104(c).
18
Id.
19
Id. (citations omitted).
20
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
21
Aeroglobal Capital Mgmt., LLC v. Cirrus Indus., Inc., 2003 WL 77007, at *4 (Del. Super. Jan.
6, 2003).
8
When reviewing a motion to dismiss, 22 the Court must view the record in a
light most favorable to the nonmoving party. 23 The allegations of the complaint
are assumed to be true, and all reasonable inferences must be construed most
strongly in favor of the plaintiff.24 Additionally, the Court is not limited to the
pleadings and may consider affidavits, briefs, and the results of discovery. 25
When, as here, such discovery is complete, “the plaintiff must allege specific facts
supporting its position” that the nonresident defendant is subject to the court's
personal jurisdiction. 26 If the plaintiff cannot demonstrate that the court has
jurisdiction over the defendant based on the two-prong analysis, the court will
dismiss the action against the moving nonresident party for lack of personal
jurisdiction. 27
Discussion
I. Personal Jurisdiction
Personal jurisdiction under the Delaware’s long arm statute, 10 Del. C. §
3104(c), is either specific or general. 28 Specific jurisdiction turns on the nexus
22
See Del. Super. Ct. R. 12(b)(2).
23
Aeroglobal Capital Mgmt., 2003 WL 77007, at *3.
24
Id.
25
Hartsel v. Vanguard Group, Inc., 2011 WL 2421003, *7 (Del. Ch. Jun. 15. 2011) aff'd, 38
A.3d 1254 (Del. 2012) cert. denied, 133 S. Ct. 32 (2012).
26
See e.g., Sprint Nextel Corp. v. iPCS, Inc., 2008 WL 2737409 (Del. Ch. Jul. 14, 2008).
27
Fischer v. Hilton, 549 F.Supp. 389, 392 (D. Del. 1982).
28
Aeroglobal Capital Mgmt., 2003 WL 77007, at *4.
9
between the nonresident defendant's Delaware contact and the cause of action, 29
and may be found where the plaintiff's claims arise out of the defendant's acts or
omissions within the State. 30 General jurisdiction, on the other hand, provides the
court with jurisdiction over a nonresident defendant regardless of whether there is
a nexus between the claim and the defendant's Delaware contacts with the forum
state.31 Instead, general jurisdiction is based on a persistent course of conduct
through which the nonresident defendant creates a general presence in Delaware. 32
In this case, the Court cannot properly exercise specific personal jurisdiction
over Kongsberg Holding. 33 Kongsberg Holding entered into a Purchase
Agreement and two Supply Agreements with Teleflex in August of 2007. 34 It is
well settled law that “a contract between a Delaware corporation and a nonresident
to ... transact business outside Delaware, which has been negotiated without any
contacts with this State, cannot alone serve as a basis for personal jurisdiction over
the nonresident for actions arising out of that contract.”35 It is also well established
29
See LaNuova, 513 A.2d 764.
30
Aeroglobal Capital Mgmt., 2003 WL 77007, at *4. See 10 Del. C. §§ 3104(c)(1)-(3).
31
LaNuova, 513 A.2d 764. See 10 Del. C. § 3104(c)(4).
32
Id.
33
See 10 Del. C. §§ 3104(c)(1)-(3).
34
See Kongsberg Automotive Holding, ASA’s Answers to Plaintiff’s Second Set of
Interrogatories, at 3. Importantly, neither party to this motion asserts otherwise. Also in August
of 2007, Kongsberg Holding entered an agreement with E.I. Nemours & Co., which contained a
Delaware choice of law provision. Again, neither party here asserts that the business
transactions subject to this agreement took place within the State.
35
Newspan, Inc. v. Hearthstone Funding Corp., 1994 WL 198721, *6 (Del. Ch. May 10,
1994); see Abajian v. Kennedy, 1992 WL 8794, *10 (Del. Ch. Jan. 17, 1992) (“It is well
established law that merely contracting with an entity that is incorporated within a forum state
10
that a choice of Delaware law provision in a contract is not, of itself, a sufficient
transaction of business in the State to confer jurisdiction under § 3104(c)(1).36
Though Teleflex is a Delaware corporation and all three agreements contained
Delaware choice of law and venue provisions, the business transactions contained
in the agreements took place outside of Delaware. Moreover, Plaintiff and
Kongsberg Holding are nonresidents, and Plaintiff’s alleged injury occurred
outside of this State. Thus, Kongsberg Holding merely entering three contracts
with a Delaware corporation, which contain Delaware choice of law provisions,
without more, is not sufficient to establish specific jurisdiction over Kongsberg
Holding.
Nor can the Court properly exercise general personal jurisdiction over
Kongsberg Holding. 37 “When a state exercises personal jurisdiction over a
defendant in a suit not arising out of or related to the defendant's contact with the
forum, the state has been said to be exercising ‘general jurisdiction’ over the
defendant.”38 In asserting such jurisdiction, the Sears court opined that “[i]n order
does not provide necessary connections between the contract and the forum to support a finding
of jurisdiction.”).
36
Intellimark, Inc. v. Rowe, 2005 WL 2739500, *2-3 (Del. Super. Oct. 24, 2005) (holding that
the nonresident defendants' signatures on a promissory note, which contained a Delaware choice
of law provision, were not a sufficient transaction of business in this State to confer
jurisdiction); see also Summit Investors II, L.P. v. Sechrist Indus., Inc., 2002 WL 31260989, *4
(Del. Ch. Sept. 20, 2002) (holding that a Delaware choice of law provision is insufficient to
satisfy the Constitutional minimum contacts test).
37
See 10 Del. C. § 3104(c)(4).
38
Sears Roebuck & Co. v. Sears plc, et al., 744 F.Supp. 1289, 1304 (D. Del. 1990).
11
to assert general jurisdiction, the defendant's activities in the forum must be
continuous and substantial.”39 Based on the additional discovery on this
jurisdictional issue and parties’ submissions, the Court finds an absence of any
contacts between Kongsberg Holding and Delaware that are regular, persistent, or
the source of substantial revenue. 40
Moreover, the Court does not find exercising general jurisdiction over
Kongsberg Holding appropriate based on its status as the parent corporation to
Defendant Kongsberg. Personal jurisdiction over a foreign holding company may
not be exercised merely because of that corporation’s relationship with an
allegedly at-fault subsidiary, even if the subsidiary is itself a Delaware
corporation.41 In this case, Defendant Kongsberg Holding is a non-operational
Norwegian holding company. Defendant Kongsberg is Kongsberg Holding’s
subsidiary that Plaintiff has alleged is at fault in this case. 42 However, Defendant
39
Id. See Plumb v. Cottle, 492 F.Supp. 1330, 1334 (D. Del. 1980) (The court, in applying
subsection (c)(4) to the nonresident manufacturer of an allegedly defective lighting protection
system, stated because the corporation sold no lighting systems in Delaware, maintained no
branch offices in Delaware and did not have a license to do business in Delaware, it could not be
subject to suit in Delaware).
40
See McElhaney v. Kelly-Moore Paint Co., 2013 WL 4829283, *4 (Del. Super. Aug. 14, 2013).
See Declaration of Kongsberg Holding’s Chief Financial Officer, Trond Stabekk.
41
See Freres v. SPI Pharma, Inc., 629 F.Supp.2d 374, 385 (D. Del. 2009) (finding court lacked
personal jurisdiction over foreign parent of allegedly infringing subsidiary in patent case);
Monsanto Co. v. Syngenta Seeds, Inc., 443 F.Supp.2d 644-45 (D. Del. 2006) (finding court
lacked personal jurisdiction over foreign parent in antitrust case).
42
As a non-operational holding corporation, Kongsberg Holding is merely the parent corporation
of Defendant Kongsberg, which Plaintiff alleges designed, manufactured and sold component
parts of the model motorcycle that allegedly injured Plaintiff. See Declaration of Kongsberg
Holding’s Chief Financial Officer, Trond Stabekk, at ¶¶ 18-20.
12
Kongsberg is not a Delaware corporation, but rather a Canadian corporation
without personal jurisdiction contacts of its own that would support the exercise of
general personal jurisdiction over Kongsberg Holding. More importantly, this
Court has already granted Defendant Kongsberg’s motion to dismiss for lack of
personal jurisdiction.43
Therefore, Plaintiff has failed to meet the standards of Delaware’s long-arm
statute to establish that this Court may exercise general personal jurisdiction over
Defendant Kongsberg Holding. Furthermore, the Court finds no evidence that
would satisfy the Constitutional minimum contacts requirement because
Kongsberg Holding does not have “continuous and systematic” contacts with
Delaware so as to render Kongsberg Holding “at home” in this State. 44
II. Consent to Personal Jurisdiction
The Court has found that it cannot properly exercise personal jurisdiction
over Kongsberg Holding. As such, the only remaining issue for the Court to
decide is whether Kongsberg Holding has consented or waived its challenge to
Delaware jurisdiction as a result of the Earlier Delaware Action with Defendant
Teleflex in the District Court of Delaware. To resolve this issue, the Court must
43
See Order dated March 24, 2015.
44
Daimler AG v. Bauman, 134 S.Ct. 746, 761 (2014). See Declaration of Kongsberg Holding’s
Chief Financial Officer, Trond Stabekk.
13
determine whether the Present Action and Earlier Delaware Action are sufficiently
related to constitute Kongsberg Holding’s consent to jurisdiction in this State.
Personal jurisdiction over a party in one action does not automatically confer
personal jurisdiction over that party in all future actions. However, “[b]ecause the
defense of lack of personal jurisdiction is a personal right, ‘it may be obviated by
consent or otherwise waived.’” 45 Whether a party has consented or waived its
challenge to personal jurisdiction is decided on a case-by-case basis.46 “[C]onsent
has been recognized as a basis for the exercise of general personal jurisdiction. In
fact, a variety of legal arrangements have been taken to represent express or
implied consent to the personal jurisdiction of the Court.” 47 For example, parties
45
Sprint Nextel Corp., 2008 WL 2737409, at *6
As the court noted in General Contracting, it is possible to attempt fine
distinctions between “waiver” and “consent” in terms of personal jurisdiction. It
has been argued, for example, that waiver arises from actions taken within a suit
and consent stems from conduct extrinsic to the suit proper. 940 F.2d at 22-23
(extensive internal citations omitted). The court also noted that another view on
the distinction between consent and waiver, “turns on whether the manifesting
conduct took place prior or subsequent to the suit's institution. Such a view
recognizes that consent ordinarily consists of ex ante conduct while waiver
ordinarily occurs in the form of actions taken ex post.” Id. at 23 n. 3. Here, the
issue is whether Horizon and Bright effectively consented to this Court's personal
jurisdiction over them in this case based on their conduct in connection with the
Earlier Delaware Action.
As in Sprint Nextel, the issue here is whether Kongsberg Holding effectively consented to this
Court’s personal jurisdiction over it in this case, based on its filing the Earlier Delaware Action.
46
See Wyrough & Loser, Inc. v. Pelmor Labs., Inc., 376 F.2d 543, 547 (3d Cir. 1967).
47
Sternberg v. O'Neil, 550 A.2d 1105, 1109 (Del. 1988) (quoting Ins. Corp. of Ir. v. Compagnie
des Bauxites de Guinee, 456 U.S. 694, 703 (1982)); see also Gen. Contracting & Trading Co. v.
Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991).
14
may explicitly “submit to a given court’s jurisdiction by contractual consent,” 48 or
“stipulate to personal jurisdiction.” 49
Alternatively, “a court may assert personal jurisdiction over a party on the
ground that the party consented to jurisdiction by submitting itself to a court's
jurisdiction by instituting another, related suit.” 50 To find this implicit consent to
jurisdiction, the court must look for a “logical relationship” between the previous
and current suits. 51 To do this, the court should consider whether the previous and
current actions involve common issues of fact and law, which are supported or
refuted by some overlapping evidence. 52 For example, similarity of the parties to
the previous and current actions is one factor in determining whether the two
actions are sufficiently related. However, a similarity of parties between separate
actions brought in Delaware is not, by itself, sufficient to establish that a party to
the first action has consented to personal jurisdiction in the present action.53
In this case, the Court must determine whether the Present Action and the
Earlier Delaware Action are sufficiently related to show that Defendant Kongsberg
48
Sternberg, 550 A.2d at 1109 n. 4 (citing Nat'l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311
(1964)).
49
Id. (citing Petrowski v. Hawkeye-Sec. Ins. Co., 350 U.S. 495 (1956)).
50
Foster Wheeler Energy Co. v. Metallgesellschaft AG, 1993 WL 669447 (D. Del. Jan. 4,
1993) (citing Gen. Contracting, 940 F.2d at 22).
51
Foster Wheeler Energy Corp., 1993 WL 669447, at *4.
52
Id.
53
Sprint Nextel Corp., 2008 WL 2737409, a*7 (where the fact that both actions in question
involved several of the same parties was not sufficient for the Chancery Court to find that the
previous present actions were sufficiently related).
15
Holding has consented to the Court’s jurisdiction over it in this case. The legal
claim involved in the Present Action is a products liability personal injury lawsuit,
based on strict liability and negligence. The legal claim involved in the Earlier
Delaware Action is multiple counts of breach of contract. 54 Defendant Kongsberg
Holding filed the Earlier Delaware Action in 2009 against Defendant Teleflex.55
Neither Plaintiff nor any of the other defendants in this case was a party to the
Earlier Delaware Action.
As emphasized by the relevant case law, whether the previous and current
actions arise from the same underlying transaction or transactions is the primary
consideration for determining if the separate legal actions are sufficiently related
for the court to confer jurisdiction over the nonresident defendant. In Foster
Wheeler Energy Co. v. Metallgesellschaft AG, the court found that it had personal
54
The original Complaint filed by Kongsberg Holding against Teleflex in the Earlier Delaware
Action is the only document in the record before the Court upon which the Court can use to
assess the relationship between the two actions. See supra, n.3. Plaintiff also submitted other
Exhibits, the Kongsberg Holding filings from the Earlier Delaware Action, to support his
argument that Kongsberg Holding filing “its related lawsuit concerning the defective Can-Am
Spyder in Delaware” “operate[s] as consent to...Delaware’s jurisdiction over matters concerning
the Spyder’s DPS.” (D.I. 74 at 4, Exhibits C & D). However, neither document adequately
articulates a specific claim brought by Kongsberg Holding against Teleflex, concerning the Can-
Am Spyder involved here. Moreover, Plaintiff had the opportunity to provide the Court with a
Kongsberg Holding amended complaint from the Earlier Delaware Action that identified a legal
claim arising from a defective Can-Am Spyder, as Plaintiff asserts here, because the parties were
given additional time to conduct the necessary discovery on this jurisdictional issue. For these
reasons, and those discussed supra, the Court will only consider Kongsberg Holding’s original
Complaint from the Earlier Delaware Action in its analysis of the relationship between the two
actions, as the original Complaint is the only document from the Earlier Delaware Action before
the Court that identifies the legal claims brought by Kongsberg Holding against Teleflex, and the
underlying transaction(s) from which those claims arose.
55
See Kongsberg Automotive Holding ASA’s Complaint, C.A. No. 09-414-GMS (D. Del. Jun.
5, 2009).
16
jurisdiction over the defendant as to the plaintiff’s claim against it for patent
infringement, when the defendant had procured the dismissal of that exact claim as
a counterclaim in a parallel suit by the defendant against the plaintiff. 56 In General
Contracting & Trading Co. v. Interpole, Inc., the court found that a party had
consented to personal jurisdiction in an action involving the same underlying
transaction as an earlier action in which it had sued the plaintiff.57 In Attorneys
Liab. Prot. Soc'y, Inc. v. Eisenhofer, 58 the court found that the defendant implicitly
consented to the court's personal jurisdiction when he filed a federal class action in
Delaware because the second suit was “spawned by” and “closely related to” the
federal class action.59 Although the plaintiff in Attorneys Liab. Prot. Soc'y, Inc.
was not named in the defendant’s previous federal class action, both suits were, in
part, based on the same underlying transaction. 60 While the Court finds the case
law instructive on the focus of the Court’s analysis, it finds these cases factually
distinguishable because, here, there is no logical relationship between the
underlying transactions giving rise to the Earlier Delaware Action and the Present
Action.
56
See Foster Wheeler, 1993 WL 669447, at *2-3, 11-12.
57
See Gen. Contracting, 940 F.2d at 10, 22-24.
58
2011 WL 2089718 (Del. Super. Apr. 29, 2011).
59
Id.
60
Id. (“When [the defendant] sued the law firm for legal malpractice, he could have anticipated
litigation in Delaware between the law firm and its carrier over coverage of his claim. Having
come to Delaware to sue the law firm, [the defendant] impliedly agreed to participate in litigation
here over insurance potentially covering his damages.”).
17
For this same reason, the Court also finds Furnari v. Wallpang, Inc., 61 the
case used by Plaintiff to support his consent argument, distinguishable. Plaintiff
uses Furnari in support of his argument that Kongsberg Holding has consented to
jurisdiction in this State because the Furnari court held that the litigant there had
waived his jurisdictional challenge against the plaintiff after he filed suit on a
related matter in Delaware Court of Chancery. 62 While the court in Furnari does
not discuss the factors it considered in reaching its conclusion that the suits were
related, the facts of that case establish that the various actions discussed by the
Furnari court arose out of the same underlying transaction between the parties.63
In other words, though the legal claims brought by each party to the transaction
may have varied, each suit was filed by a party to and resulted from the same
underlying transaction. 64
Instead, the Court finds Sprint Nextel Corp. v. iPCS, Inc. more factually
similar to this case. In Sprint Nextel, the court found that
[D]espite some significant overlap, the facts underlying the Earlier
Delaware Action differ from the facts underlying this litigation. The
Earlier Delaware Action involved the effects of the Sprint-Nextel
merger on the Sprint PCS affiliates as to Sprint's operation of Nextel's
iDEN network in purported violation of the exclusivity provisions in
the Management Agreements. Although this action involves many of
the same parties and similar, if not identical, contractual provisions,
61
2014 WL 1678419 (Del. Super. Apr. 16, 2014).
62
Id. at *10.
63
Id. at *1-3.
64
See Furnari, 2014 WL 1678419.
18
the underlying Clearwire Transaction is sufficiently different from and
independent of the Nextel transaction that I cannot find Horizon and
Bright's prior decision to bring the Earlier Delaware Action here also
reflects their consent to being sued in Delaware on the current dispute.
This is not, for example, a situation where Horizon and Bright had
some role in bringing about the Clearwire Transaction or taking some
action that precipitated the Current Delaware Action. Thus, I find that
neither Bright nor Horizon has implicitly or explicitly consented to
personal jurisdiction in this action regarding Sprint's Clearwire
Transaction.65
The underlying transaction for the Present Action is the alleged personal injury that
Plaintiff sustained while test driving a 2012 Can-Am Spyder in South Dakota.
Whereas the underlying transactions for the Earlier Delaware Action are the 2007
Purchase and Supply Agreements that Kongsberg Holding and Teleflex entered
into together, and the breaches of which are specifically described in Kongsberg
Holding’s Complaint against Teleflex. Generally, Kongsberg Holding alleged that,
under the Purchase Agreement, Teleflex agreed to indemnify Kongsberg Holding
for losses arising or resulting from any breach of any covenant or obligation set
forth in the agreement, which consists of the Purchase Agreement and its
appendices, exhibits, and disclose letters.66
More specifically, Count I of the Complaint alleged that Teleflex breached
its obligations under the cancellation provision of the Supply Agreement by the
65
Sprint Nextel, 2008 WL 2737409, at *7.
66
Kongsberg Automotive Holding ASA’s Complaint, C.A. No. 09-414-GMS, at ¶¶ 8-9.
19
way Teleflex cancelled a particular order. 67 Count II of the Complaint alleged that
Teleflex breached the Supply Agreement by refusing to remedy alleged
misrepresentations that Teleflex knowingly made to Kongsberg Holding regarding
financial information when the parties were entering the Supply Agreement. 68
Count III of the Complaint alleged that Teleflex breached its contractual obligation
to file certain tax returns in the State of Texas and to pay all applicable taxes for
the filing periods April 2001 through December 2004. 69
This comparison of the two actions shows that they are not sufficiently
related to demonstrate that Defendant Kongsberg Holding implicitly consented to
this Court’s jurisdiction over it in the Present Action when it filed the Earlier
Delaware Action in 2009. In Sprint Nextel, despite there being similar or identical
legal claims and contractual provisions at issue in both lawsuits, the court found
that the two lawsuits were not sufficiently related to enable the court to confer
jurisdiction over the moving defendant. 70 Here, the legal claims in each action –
breach of contract and personal injury – are entirely different. While the Earlier
Delaware Action does involve two of the defendants that are parties to the Present
Action, the remaining five parties – Plaintiff and the four other defendants – in the
Present Action were not involved there. Nor would this minor similarity between
67
Id. at ¶¶ 17-32.
68
Id. at ¶¶ 33-41.
69
Id. at ¶¶ 42-51.
70
Sprint Nextel, 2008 WL 2737409, at *7.
20
the parties of both actions be sufficient to find the Present Action and Earlier
Delaware Action related.71
Critically though, the underlying transactions from which the claims in both
actions arose are different. 72 Similarly, the dispositive factor in the Sprint Nextel
court’s analysis was that, despite the similarity of parties and contractual
provisions, the underlying facts of each action were sufficiently different from and
independent of the other because the previous lawsuit was based on the Clearwire
Transaction and the current lawsuit in that case was based on the Nextel
Transaction.73 The Court finds the differences underlying the two actions here
even greater than those between the two lawsuits in Sprint Nextel. The underlying
transactions from which the Earlier Delaware Action arose were the 2007 Purchase
and Supply Agreements between Kongsberg Holding and Teleflex, and Teleflex’s
alleged breaches of those agreements through an improper cancellation, improper
pricing, and failure to file and pay State of Texas taxes. There is no logical
relationship between these underlying facts and transactions, and the underlying
transaction from which the Present Action arose: Plaintiff’s alleged personal injury
sustained while test driving a 2012 Can-Am Spyder in South Dakota.
Furthermore, the Earlier Delaware Action does not involve the same model year
71
See Sprint Nextel, 2008 WL 2737409.
72
Id.
73
Id.
21
Can-Am Spyder involved in the Present Action. 74 Therefore, the Court finds that
the two actions are not sufficiently related for Defendant Kongsberg Holding’s
decision to bring suit against Teleflex in Delaware District Court to reflect its
consent to be sued by Plaintiff in Delaware on the Present Action. 75 Accordingly,
this Court cannot properly exercise personal jurisdiction over Defendant
Kongsberg Holding in this case.
Conclusion
For the foregoing reasons, Defendant Kongsberg Holding’s Motion to
Dismiss for lack of jurisdiction is GRANTED.
IT IS SO ORDERED.
/s/Calvin L. Scott
Judge Calvin L. Scott, Jr.
74
D.I. 75 at ¶ 2; Kongsberg Holding Reply Br. at ¶ 8. It does not appear, based on the parties’
submissions, that Plaintiff disputes that the model year Can-Am Spyder in the Earlier Delaware
Action is not the same as that involved in the Present Action.
75
See Sprint Nextel, 2008 WL 2737409, at *7.
22
| {
"pile_set_name": "FreeLaw"
} |
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1698
HUNTINGTON INGALLS INDUSTRIES, INC., f/k/a Northrup Grumman
Shipbuilding, Inc.,
Petitioner,
v.
RICKY N. EASON; DIRECTOR, OFFICE OF WORKERS’ COMPENSATION
PROGRAMS, UNITED STATES DEPARTMENT OF LABOR,
Respondents.
On Petition for Review of an Order of the Benefits Review Board.
(13−0573)
Argued: March 25, 2015 Decided: June 2, 2015
Before NIEMEYER and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Petition granted by published opinion. Senior Judge Hamilton
wrote the opinion, in which Judge Niemeyer and Judge Floyd
joined.
ARGUED: Jonathan Henry Walker, MASON, MASON, WALKER & HEDRICK,
PC, Newport News, Virginia, for Petitioner. Matthew W. Boyle,
UNITED STATES DEPARTMENT OF LABOR, Washington, D.C.; Gregory
Edward Camden, MONTAGNA, KLEIN, CAMDEN, LLP, Norfolk, Virginia,
for Respondents. ON BRIEF: M. Patricia Smith, Solicitor of
Labor, Rae Ellen James, Associate Solicitor, Mark Reinhalter,
Counsel for Longshore, Gary K. Stearman, Counsel for Appellate
Litigation, Office of the Solicitor, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C., for Federal Respondent.
- 2 -
HAMILTON, Senior Circuit Judge:
Huntington Ingalls Industries, Inc. (HI) petitions for
review of the May 16, 2014 decision of the Benefits Review Board
(BRB) upholding the August 16, 2013 decision of Administrative
Law Judge (ALJ) Daniel Sarno, Jr. (Judge Sarno) granting the
claim of Ricky Eason (Eason) for temporary partial disability
under the Longshore and Harbor Workers’ Compensation Act (LHWCA
or the Act), 33 U.S.C. §§ 901-950. 1 For the reasons that follow,
we grant the petition for review and remand the case to the BRB
to enter an order dismissing Eason’s claim for temporary partial
disability under the LHWCA.
I
A
The LHWCA establishes a federal worker’s compensation
system for employees injured, disabled, or killed in the course
of covered maritime employment. See generally id. § 907
(medical services and supplies to treat injury), id. § 908
(compensation for disability), id. § 909 (compensation for
1
Eason’s filing of his disability claim brought the
Director of the Office of Workers’ Compensation Programs (OWCP),
United States Department of Labor (the Director) into the case
as an interested party. Cf. Ingalls Shipbuilding, Inc. v. Dir.,
OWCP, 519 U.S. 248, 262–70 (1997) (holding that the Director may
appear as respondent in the courts of appeals when review is
sought of a BRB decision).
- 3 -
death). Like other worker’s “compensation regimes--limited
liability for employers; certain, prompt recovery for employees-
-the LHWCA requires that employers pay [disability] benefits
voluntarily, without formal administrative proceedings.”
Roberts v. Sea-Land Servs., Inc., 132 S. Ct. 1350, 1354 (2012);
see also 33 U.S.C. § 904 (“Every employer shall be liable for
and shall secure the payment to his employees of the
compensation payable under sections 907, 908, and 909 of this
title.”).
The LHWCA defines “[d]isability,” in pertinent part, as
“incapacity because of injury to earn the wages which the
employee was receiving at the time of injury in the same or any
other employment.” 33 U.S.C. § 902(10). Four different
categories of disabilities are set forth in the LHWCA: (1)
permanent total disability; (2) temporary total disability; (3)
permanent partial disability; and (4) temporary partial
disability. Id. § 908(a)–(c), (e).
No standard is set forth in the LHWCA to determine the
degree of a disability (total or partial) or the duration of a
disability (permanent or temporary). Because disability under
the LHWCA is an economic concept, see Metro. Stevedore Co. v.
Rambo, 515 U.S. 291, 297 (1995) (“Disability under the LHWCA,
defined in terms of wage-earning capacity . . . , is in essence
an economic, not a medical, concept.”), the degree of a
- 4 -
disability cannot be measured by medical condition alone,
Nardella v. Campbell Mach. Inc., 525 F.2d 46, 49 (9th Cir.
1975). Consideration must be given to the claimant’s age,
education, experience, mentality, ability to work as well as the
extent of the physical injury, and the availability of suitable
alternative employment. Fleetwood v. Newport News Shipbuilding
& Dry Dock Co., 776 F.2d 1225, 1227 n.2 (4th Cir. 1985). With
regard to duration, a claimant remains temporarily disabled
until he reaches “maximum medical improvement.” Stevens v.
Dir., OWCP, 909 F.2d 1256, 1259 (9th Cir. 1990). Maximum
medical improvement marks the time where “normal and natural
healing is no longer likely” to occur. Pac. Ship Repair &
Fabrication Inc. v. Dir., OWCP [Benge], 687 F.3d 1182, 1185 (9th
Cir. 2012) (citation and internal quotation marks omitted).
Thus, the “maximum medical improvement date ‘triggers a change
in the classification of a claimant’s disability from temporary
to permanent.’” Id. (quoting Haw. Stevedores, Inc. v. Ogawa,
608 F.3d 642, 653 (9th Cir. 2010)).
Which of the four categories of disability the claimant
falls in dictates the amount of compensation paid to him by his
employer. A permanently totally disabled employee is entitled
to weekly compensation amounting to two-thirds of his pre-injury
average weekly wage for as long as he remains permanently
totally disabled. 33 U.S.C. § 908(a); Roberts, 132 S. Ct. at
- 5 -
1354. The compensation payable for a temporary total disability
remains fixed at that two-thirds figure, while weekly
compensation for a permanent total disability is annually
adjusted to reflect increases to the national average weekly
wage. 33 U.S.C. § 910(f).
The LHWCA recognizes two types of permanent partial
disability. One, commonly referred to as “unscheduled” or “non-
scheduled” compensation, is based on the employee’s actual loss
of wage-earning capacity and, like total disability, is
compensated at two-thirds of the difference between the
employee’s average weekly wage at the time of injury and his
post-injury wage-earning capacity. Id. § 908(c)(21). The
other, commonly referred to as “scheduled” compensation, covers
specified body parts, and pays a fixed number of weeks of
compensation at two-thirds of the employee’s average weekly
wage. Id. § 908(c)(1)-(17), (20). These scheduled amounts
compensate for a presumed (not actual) loss of wage-earning
capacity. Korineck v. Gen. Dynamics Corp. Elec. Boat Div., 835
F.2d 42, 43-44 (2d Cir. 1987). For example, the loss of a leg
under the schedule entitles a claimant to 288 weeks of
compensation at two-thirds of his average weekly wage. 33
U.S.C. § 908(c)(2). For a partial loss of the use of a leg,
which includes knee injuries, the number of weeks is multiplied
by the percentage of loss. Id. § 908(c)(19). Thus, a claimant
- 6 -
with a 50% loss of the use of his leg would receive compensation
for 144 weeks. Notably, a claimant who is permanently partially
disabled due to a scheduled injury cannot choose to be
compensated for his actual loss of wage-earning capacity under
§ 908(c)(21), even though the compensation under § 908(c)(21)
potentially may be greater than the compensation paid under the
schedule. See Potomac Electric Power Co. [PEPCO] v. Dir., OWCP,
449 U.S. 268, 270-71 (1980) (holding that a claimant who was
permanently partially disabled due to a scheduled injury could
not choose to be compensated for his actual loss of wage-earning
capacity under § 908(c)(21) rather than being compensated for
his loss as provided by the schedule).
Compensation for temporary partial disability is “two-
thirds of the difference between the injured employee’s average
weekly wages before the injury and his wage-earning capacity
after the injury in the same or another employment.” 33 U.S.C.
§ 908(e). Under the LHWCA, temporary partial disability
compensation cannot be paid for a period longer than five years.
Id.
Once the claimant is classified in a particular disability
category, he need not necessarily remain in such category.
Benge, 687 F.3d at 1185. This is so because permanent/temporary
and total/partial are fluid concepts and not “cast in stone.”
Id. at 1186. Reclassification of a disability requires a
- 7 -
showing of a “change[] [in] circumstances.” Id. at 1185; see
also 33 U.S.C. § 922 (providing that, with certain time limits,
“on the ground of a change in conditions . . . , the deputy
commissioner may . . . , whether or not a compensation order has
been issued . . . , review a compensation case . . . [and] issue
a new compensation order which may terminate, continue,
reinstate, increase, or decrease such compensation, or award
compensation”). For example, a claimant with a permanent
partial disability may become permanently totally disabled or
temporarily totally disabled if his injury worsens and renders
him permanently or temporarily totally disabled. See Benge, 687
F.3d at 1185-87 (holding that permanent partial disability
claimant became temporarily totally disabled following surgery
to treat injury). Likewise, a claimant with a permanent total
disability may be reclassified to having a permanent partial
disability if suitable alternative employment becomes available.
See Stevens, 909 F.2d at 1259-60 (holding that a permanent total
disability changes to a permanent partial disability when
suitable alternative employment becomes available to claimant).
It is also possible that a disability deemed permanent and total
or permanent and partial may improve “due to a remarkable
recovery, advances in medical science, or other reasons” such
that the claimant may be recharacterized as temporarily totally
- 8 -
disabled or temporarily partially disabled. Benge, 687 F.3d at
1185.
B
On September 28, 2008, Eason injured his right knee while
employed as a pipe fitter at Newport News Shipbuilding and Dry
Dock Company (NNS) in Newport News, Virginia. 2 He went to the
medical clinic at NNS on October 1, 2008, complaining of pain in
his right knee. The injury, which was diagnosed on October 14,
2008 as a torn meniscus requiring surgery, kept Eason completely
out of work from October 2, 2008 through June 28, 2009. As a
result, HI paid Eason temporary total disability benefits for
this period.
On June 29, 2009, Eason returned to work at NNS full-time
as a pipe fitter. On September 23, 2009, Eason was evaluated at
Tidewater Physical Therapy and given a 14% lower extremity
permanent impairment rating. Sometime in October 2009, Dr.
David Hoang (Dr. Hoang), Eason’s treating orthopedic surgeon,
“signed off” on the 14% rating, and, thus, Eason reached maximum
medical improvement for purposes of determining his eligibility
for permanent partial disability compensation. (J.A. 180).
Based on the 14% lower-extremity permanent impairment rating, HI
2
At the time of Eason’s injury, NNS was owned by Northrop
Grumman Shipbuilding, Inc. (NGS). In 2011, HI purchased NNS
from NGS. For ease of reference, we will refer to NGS as HI.
- 9 -
paid Eason from October 16, 2009 through May 17, 2010, and from
May 19, 2010 through July 25, 2010, 40.28 weeks of scheduled
compensation for permanent partial disability at $992.29 (two-
thirds of his pre-injury average weekly wage of $1,488.43) per
week. See 33 U.S.C. § 908(c)(2) (loss of leg provides 288 weeks
of scheduled compensation); id. § (c)(19) (permanent partial
loss “may be for proportionate loss or loss of use of the
member”). 3 Thus, for approximately seven months, Eason received
scheduled permanent partial disability compensation in addition
to his regular weekly salary for performing his duties as a pipe
fitter at NNS.
Eason continued to work full-time as a pipe fitter through
May 17, 2010. On May 18, 2010, Eason met with Dr. Hoang and
reported that “his left knee was acting up on him and his right
knee was getting stiff intermittently, especially after sitting
for awhile.” (J.A. 180). Dr. Hoang noted “mild soreness” in
the right knee and “tenderness” in the left knee, (J.A. 83), and
he put Eason on light duty restrictions for both knees. These
3
HI paid 40.28 weeks of compensation for the scheduled
injury, rather than 40.32 weeks (288 weeks x .14 = 40.32 weeks).
Although the record under review is unclear as to why the
difference exists, it may well be because HI paid an intervening
day (May 18, 2010) of compensation for temporary total
disability. In any event, the .04 difference is not at issue in
this appeal.
- 10 -
light duty restrictions prevented Eason from performing his
duties as a pipe fitter.
On his June 3, 2010 visit with Dr. Hoang, Eason reported
that his left knee “still hurts” and that his right knee was
“improving.” (J.A. 83). Dr. Hoang advised Eason to “continue
with the same work restrictions.” (J.A. 84). On July, 16,
2010, Eason reported to Dr. Hoang that his right knee was “doing
well” but the left knee was “grinding.” (J.A. 84). Dr. Hoang
directed Eason to “continue with the light duty [restrictions].”
(J.A. 85). Over the next month, Eason’s condition improved, and
he returned to work full-time as a pipe fitter at NNS on August
10, 2010.
Between May 19, 2010 and August 9, 2010, NNS did not offer
Eason light-duty employment within his restrictions. In
addition, during this period, Eason did not seek suitable
alternative employment within the relevant labor market.
C
Eason brought a claim against HI for temporary total
disability or, alternatively, temporary partial disability for
the May 19, 2010 through August 9, 2010 time period. In support
of his claim, Eason argued that during this time period he “was
not at maximum medical improvement.” (J.A. 13). He posited
that he was “undergoing ongoing medical treatment” and “under
temporary [work] restrictions.” (J.A. 13). Because no suitable
- 11 -
alternative employment was available, he argued he was entitled
to temporary total disability compensation. Alternatively,
Eason argued that, even if HI’s alternative employment data were
entitled to “any weight,” he was entitled to temporary partial
disability compensation because his pre-injury salary exceeded
the salary of any alternative employment available. (J.A. 13).
Eason posited that, even though he received scheduled permanent
partial disability compensation for his knee injury, such
compensation did not prevent the recovery of additional
compensation for a temporary partial disability due to a flare
up of that injury. In response, HI argued that Eason reached
maximum medical improvement in October 2009. Because Eason
reached maximum medical improvement at that time and received
permanent partial disability compensation under the schedule, HI
posited that he was not entitled to any additional temporary
compensation--either total or partial--under the Supreme Court’s
decision in PEPCO. HI stressed that Eason’s scheduled
compensation for his knee injury presumed his actual loss of
wage-earning capacity for that injury, such that any temporary
compensation (total or partial) sought for a flare up of that
injury already was covered by the payments made under the
schedule.
A hearing was held before ALJ Richard Malamphy (Judge
Malamphy). In his decision, Judge Malamphy found that Eason
- 12 -
reached maximum medical improvement in October 2009. He also
found that the evidence did not support Eason’s claim of
temporary total disability. With regard to temporary partial
disability, relying on the Supreme Court’s decision in PEPCO,
Judge Malamphy ruled that Eason’s disability compensation for
his knee injury was limited to the amount required by the
schedule. He explained that “[t]he Act presumes that the
scheduled award fully compensates claimant for any loss in wage-
earning capacity” and, “[t]herefore, any temporary loss of wage
earning capacity Claimant suffered is not compensable in
addition to the scheduled award.” (J.A. 184). In other words,
Judge Malamphy held that the scheduled compensation award
compensated Eason for his knee injury and that Eason was not
entitled to additional compensation for any temporary partial
loss of wage-earning capacity for that same injury.
On appeal, the BRB vacated Judge Malamphy’s decision. The
BRB affirmed Judge Malamphy’s finding that Eason reached maximum
medical improvement in October 2009. The BRB ruled, however,
that this finding did not preclude the recovery of temporary
partial disability compensation for Eason’s knee injury.
Referring to language in PEPCO that states “that a scheduled
injury can give rise to an award for permanent total disability”
and that “once it is determined that an employee is totally
disabled the schedule becomes irrelevant,” 449 U.S. at 277 n.17,
- 13 -
the BRB found that “the fact that permanent partial disability
benefits were fully paid under the schedule is not determinative
of a claimant’s entitlement thereafter to permanent total,
temporary total, or temporary partial disability benefits.”
(J.A. 188-89). Consequently, the BRB remanded the case to the
ALJ to determine whether Eason’s work restrictions from May 19,
2010 through August 19, 2010 prevented him from performing his
usual work. If they did, the BRB stated, Eason would have
established a prima facie case of temporary total disability.
See Newport News Shipbuilding & Dry Dock Co. v. Dir., OWCP, 315
F.3d 286, 292 (4th Cir. 2002) (noting that an LHWCA “claimant
must first establish a prima facie case by demonstrating an
inability to return to prior employment due to a work-related
injury”). The burden would then shift to HI to establish the
availability of suitable alternative employment that Eason was
capable of performing. See id. (outlining burden shift).
According to the BRB, HI could meet its burden by showing that
suitable alternative employment was available to Eason in the
relevant labor market. See id. at 293 (noting that an employer
meets its burden by demonstrating, inter alia, that suitable
alternative employment was available in the relevant labor
market). Thus, on remand, the BRB required the ALJ to determine
if HI met its burden, such that its obligation to pay disability
benefits would be reduced or eliminated. See id. (“Under our
- 14 -
precedent, if the employer meets its burden, its obligation to
pay disability benefits is either reduced or eliminated, unless
the disabled employee shows that he diligently but
unsuccessfully sought appropriate employment.” (citation and
internal quotation marks omitted)).
On remand, the case was reassigned to Judge Sarno. Judge
Sarno found that Eason was not able to return to his usual work
from May 19, 2010 through August 9, 2010. However, Judge Sarno
found that HI had established the availability of suitable
alternative employment for 32 hours per week at $7.25 per hour.
Judge Sarno concluded that Eason was temporarily partially
disabled from May 19, 2010 through August 20, 2010 and entitled
to compensation of $845.82 per week (two-thirds of the
difference between $1,488.43 per week, Eason’s average weekly
wage at the time of the injury, and $219.70 per week, Eason’s
residual wage-earning capacity based on the national average
weekly wage in 2008, the year of Eason’s injury). 4
4
Judge Sarno noted that HI had established that Eason had a
wage-earning capacity under § 908(e) of $232.00 per week in
2010. This amount was adjusted downward to $219.70 per week in
order to account for inflation between 2008 and 2010. See
Walker v. Wash. Metro. Area Transit Auth., 793 F.2d 319, 321 n.2
(D.C. Cir. 1986) (“In order to make a fair comparison between
wages, the Board looks to the amount the post-injury job paid at
the time of the claimant’s injury. This allows the Board to
compare the wages without worrying about the effect of
inflation.”); Quan v. Marine Power & Equip. Co., 30 BRBS 124,
1996 WL 581786, at *4 (BRBS 1996) (“Sections 8(c)(21) and 8(h)
(Continued)
- 15 -
HI appealed Judge Sarno’s decision to the BRB, arguing once
again that Eason was precluded from receiving any additional
compensation in addition to that received under the schedule.
The BRB found that it had already rejected that argument in its
earlier decision. It also affirmed, as unchallenged on appeal,
Judge Sarno’s findings that Eason was unable to perform his
usual work from May 19, 2010 through August 20, 2010 and that HI
had established suitable available alternative employment.
Consequently, it affirmed Judge Sarno’s award of compensation
for temporary partial disability from May 19 through August 20,
2010. 5 It is from this BRB decision that HI filed its timely
petition for review.
II
We review the BRB’s decision for errors of law and to
ascertain whether the BRB adhered to its statutorily-mandated
standard for reviewing the ALJ’s factual findings. Gilchrist v.
Newport News Shipbuilding & Dry Dock Co., 135 F.3d 915, 918 (4th
require that a claimant’s post-injury wage earning capacity be
adjusted to account for inflation to represent the wages that
the post-injury job paid at the time of claimant’s injury.”).
5
Because he returned to work on August 10, 2010, Eason
concedes that Judge Sarno (and the BRB) erroneously awarded
temporary partial disability compensation from August 10, 2010
through August 20, 2010.
- 16 -
Cir. 1998). As to the BRB’s interpretation of the LHWCA, our
review is de novo because the BRB is not a policy-making agency
and, thus, its statutory interpretation is not entitled to any
special deference from us. Id. However, the Director’s
reasonable interpretation of the LHWCA is entitled to some
deference. See Norfolk Shipbuilding & Drydock Corp. v. Hord,
193 F.3d 797, 801 (4th Cir. 1999) (“We note that this is the
result advocated by the Director of the Office of Workers’
Compensation Programs, to whose reasonable interpretation of the
LHWCA we accord some deference.”).
In its petition for review, HI challenges Judge Sarno’s
award of temporary partial disability benefits from May 19, 2010
through August 20, 2010. HI argues that a claimant, like Eason,
who receives scheduled compensation for a permanent partial
disability cannot subsequently receive additional temporary
partial disability compensation because the receipt of scheduled
permanent partial disability compensation for an injury includes
any temporary partial disability compensation. Moreover, HI
reads the LHWCA and PEPCO as precluding a claimant, like Eason,
with a scheduled injury from receiving any additional temporary
disability compensation--either total or partial--for the same
injury. 6 Eason counters by arguing that receipt of scheduled
6
HI concedes that a claimant who receives scheduled
(Continued)
- 17 -
permanent partial disability compensation for an injury is not
determinative of entitlement to temporary partial disability
compensation for the same injury. According to Eason, PEPCO is
not particularly helpful to HI because it only dealt with a
permanent partial disability claim and not a claim, as here, for
temporary partial disability. He suggests that his claim for
temporary partial disability is viable because his knee injury
flared up, preventing him from working as a pipe fitter from May
19, 2010 through August 9, 2010, though he apparently concedes
that suitable alternative employment was available during that
time. He also posits that his argument is supported by PEPCO
because the Court there recognized the availability of total
disability compensation for a scheduled injury.
The Director, while agreeing with the result urged by HI,
takes a middle course. He agrees with HI that a scheduled
permanent partial disability claimant cannot receive additional
temporary partial disability compensation for the injury
underlying the permanent partial disability compensation because
such temporary compensation essentially is duplicative to the
permanent partial disability compensation is not precluded from
subsequently receiving permanent total disability compensation.
See Petitioner’s Reply Br. at 2-3 (noting that scheduled
compensation is “exclusive to all other forms of compensation,
except for permanent total disability under 33 U.S.C. § 908(a)
of the Act”).
- 18 -
scheduled compensation. He also agrees with HI that a claimant
who receives scheduled permanent partial disability compensation
is not precluded from subsequently receiving permanent total
disability compensation. However, the Director disagrees with
HI that a claimant who receives scheduled permanent partial
disability compensation for an injury is precluded from
receiving temporary total disability compensation for the same
injury. According to the Director, the LHWCA’s statutory
framework supports his construction of the Act and nothing in
PEPCO precludes reclassification of a scheduled permanent
partial disability to a temporary total disability. However,
because Eason’s injury has remained permanent and partial, the
Director posits that reclassification of his injury is not
warranted, and, thus, Eason is precluded from recovering any
additional disability compensation for his knee injury.
We agree with the position espoused by the Director, which
we accord some deference. Hord, 193 F.3d at 801. Eason
suffered a scheduled injury. Thus, his permanent partial
disability compensation is set by the schedule. PEPCO, 449 U.S.
at 270-71. Such scheduled compensation is presumed to cover
Eason’s actual partial loss of wage-earning capacity due to that
partial disability. See ITO Corp. of Balt. v. Green, 185 F.3d
239, 242 n.3 (4th Cir. 1999) (“The presumed effect of scheduled
disabilities on a claimant’s wage-earning capacity has been set
- 19 -
by Congress within a fairly narrow range. Benefits are payable
for a specific duration regardless of the actual impact of the
disability on the claimant’s prospects of returning to longshore
(or any other) work.”); Bethlehem Steel Co. v. Cardillo, 229
F.2d 735, 736 (2d Cir. 1956) (noting that, “as to any schedule
loss, there is a conclusive presumption of loss or reduction of
wage-earning capacity”). Once Eason’s permanent partial
disability compensation is set under the schedule, he is not
entitled to receive additional disability compensation for the
same scheduled injury unless the circumstances warrant a
reclassification of that disability to permanent total or
temporary total. See, e.g., Benge, 687 F.3d at 1185-87
(permitting claimant, who received unscheduled permanent partial
disability compensation, to receive temporary total disability
compensation because subsequent surgery rendered her temporarily
totally disabled); Hord, 193 F.3d at 801-02 (allowing claimant,
who was paid permanent partial disability compensation under the
schedule to recover temporary total disability compensation); DM
& IR Ry. Co. v. Dir., OWCP, 151 F.3d 1120, 1122-23 (8th Cir.
1998) (allowing a claimant who received permanent partial
disability compensation to subsequently recover disability
compensation for permanent total disability); cf. PEPCO, 449
U.S. at 277 n.17 (“Indeed, since the § 8(c) schedule applies
only in cases of permanent partial disability, once it is
- 20 -
determined that an employee is totally disabled the schedule
becomes irrelevant.”). This is so because, once a disability
becomes total, it makes no sense to apply a presumption designed
to approximate a claimant’s permanent partial disability
compensation. A permanent or temporary total disability
presumes the loss of all wage-earning capacity, while a
permanent partial disability involves only a partial loss. See
Benge, 687 F.3d at 1187 (noting that any total disability
presupposes the loss of all wage-earning capacity). Thus, an
increase in the disability compensation for the change from
permanent partial to either permanent total or temporary total
is warranted to account for the additional actual loss in wage-
earning capacity. Such a conclusion comports with the basic
purpose of the LHWCA, which is to provide compensation for the
actual loss of wage-earning capacity. See Korineck, 835 F.2d at
44 (noting that the purpose of the LHWCA is “to provide work
benefits for lost earning capacity”).
In contrast, in the case of a scheduled permanent partial
disability that allegedly changes to a temporary partial
disability because the claimant’s injury flared up, there is no
additional loss of wage-earning capacity. The claimant’s loss
of wage-earning capacity already is accounted for under the
schedule. In other words, the scheduled compensation accounts
for all the lost wages due the claimant under the LHWCA. To
- 21 -
hold otherwise would allow for an impermissible double recovery.
Cf. id. (“Denying additional [scheduled] benefits to one already
receiving benefits for total permanent disability serves to
avoid double recoveries.”). Like the claimant in Korineck,
whose scheduled compensation claim was subsumed by the
compensation he already was receiving for permanent total
disability, Eason’s temporary partial disability claim is
subsumed by the compensation he received under the schedule.
Id. at 43-44.
To be sure, in the case before us, there is no record
evidence supporting a reclassification of Eason’s disability to
a permanent total or temporary total disability. His disability
has remained permanent and partial since September 2008. His
scheduled compensation is presumed to cover his actual loss of
wage-earning capacity for any flare up of his knee injury that
did not prevent him from working in some type of suitable
alternative employment. Green, 185 F.3d at 242 n.3. Since
Eason does not allege that the flare up rendered him permanently
or temporarily totally disabled, he is not entitled to any
additional disability compensation for his knee injury.
Eason’s argument that the LHWCA permits the recovery of
additional temporary partial disability compensation under the
circumstances of this case is unpersuasive. First, his
argument, if accepted, permits an impermissible double recovery.
- 22 -
He was compensated for his actual loss of wage-earning capacity
due to his injury under the schedule and now he is seeking
additional compensation for the same injury. We see nothing in
LHWCA that permits such a double recovery. See Port of Portland
v. Dir., OWCP, 932 F.2d 836, 839 n.1 (9th Cir. 1991) (noting
that, under the LHWCA, “an employee may not obtain a double
recovery for a disability for which compensation has already
been paid”); cf. Strachan Shipping Co. v. Nash, 782 F.2d 513,
515 (5th Cir. 1986) (en banc) (noting that the “credit doctrine,
created by the BRB for the singular purpose of avoiding double
recoveries, provides that an employer is not liable for any
portion of an employee’s disability for which the employee has
actually received compensation under the LHWCA”). Second,
Eason’s construction of the LHWCA defeats the intent of the
schedule in the Act. The schedule is designed to provide quick
compensation for certain permanent partial disabilities and,
simultaneously, to fix the employer’s liability exposure. See
PEPCO, 449 U.S. at 282 (“The use of a schedule of fixed benefits
as an exclusive remedy in certain cases is consistent with the
employees’ interest in receiving a prompt and certain recovery
for their industrial injuries as well as with the employers’
interest in having their contingent liabilities identified as
precisely and as early as possible.”); see also Travelers Ins.
Co. v. Cardillo, 225 F.2d 137, 144 (2d Cir. 1955) (noting that
- 23 -
schedule “conclusively establishe[s]” the loss of wage-earning
capacity and “its extent”). Yet, under Eason’s construction of
the LHWCA, the employer’s liability exposure is anything but
fixed. Rather, the liability exposure is subject to increase
essentially any time a scheduled claimant is placed on temporary
work restrictions. Such a construction of the LHWCA makes
little sense. 7
We also note that the Director understandably rejects HI’s
interpretation of the LHWCA because it forecloses the receipt of
temporary total disability compensation following the receipt of
scheduled disability compensation. HI’s interpretation of the
LHWCA has two flaws. First, it is inconsistent with Benge and
Hord, where the permanent partial claimants were permitted to
receive temporary total disability compensation after proper
reclassification of their respective disabilities. Benge, 687
F.3d at 1185-87; Hord, 193 F.3d at 802. Second, HI’s
interpretation runs counter to the language of the LHWCA, which
says that permanent partial disability compensation (scheduled
or unscheduled) shall be paid “in addition to” the compensation
7
Of course, nothing prevents a claimant who is receiving
scheduled permanent partial disability compensation from seeking
additional compensation to reflect a higher percentage of
permanent loss of the relevant body part due to the aggravation
of the injury that gave rise to the scheduled compensation. See
New Haven Terminal Corp. v. Lake, 337 F.3d 261, 268-69 (2d Cir.
2003) (discussing the interplay of the aggravation rule and the
credit doctrine).
- 24 -
paid for a “temporary total disability.” 33 U.S.C. § 908(c).
This language contains no temporal limitation. Thus, such
additional temporary total disability compensation can be paid
before the permanent partial disability compensation (for
example, as in this case, Eason received temporary total
disability compensation for his injury before receiving
scheduled compensation for the same injury) or after (for
example, as in Benge, where the claimant received temporary
total disability compensation for her injury after receiving
unscheduled compensation for the same injury). The receipt of
such additional temporary total disability compensation ensures
that the claimant is compensated for his actual loss in wage-
earning capacity (including the loss not presumed by the
schedule) and, thus, fulfills the basic purpose of the LHWCA.
See Korineck, 835 F.2d at 44 (noting that the purpose of the
LHWCA is “to provide work benefits for lost earning capacity”).
Therefore, HI’s construction of the LHWCA is inconsistent with
the case law and thwarts the basic purpose of the LHWCA.
We realize that the schedule created by Congress allows for
overcompensation in some instances and undercompensation in
others. For example, a claimant with a scheduled injury may be
compensated even though he never misses a day of work and, thus,
incurs no actual wage loss whatsoever. At the same time, the
schedule may undercompensate a claimant whose loss of wage
- 25 -
earning capacity may be greater than that compensated under the
schedule. If a claimant who loses a hand only earns 50% of his
pre-injury salary after reaching maximum medical improvement,
the claimant would not, after 9.4 years, be compensated under
the schedule as much as he would have been for an unscheduled
injury. As recognized by the Supreme Court in PEPCO, such
inequities simply are a manifestation of the system created by
Congress which we are not at liberty to disturb. See 449 U.S.
at 282-83 (noting that “requiring resort to the schedule may
produce certain incongruous results” because, on the one hand,
“even though a scheduled injury may have no actual effect on an
employee’s capacity to perform a particular job or to maintain a
prior level of income, compensation in the schedule amount must
be paid,” while on the other hand, “the schedule may seriously
undercompensate some employees”); id. at 284 (noting that the
fact that the schedule “leads to seemingly unjust results in
particular cases does not give judges a license to disregard it”
where Congress employed “compelling statutory language”); see
also Green, 185 F.3d at 242 n.3 (“Depending on one’s point of
view, this approach could reasonably be seen as either tending
to overcompensate claimants with non-scheduled disabilities, or
as under compensating those receiving payments pursuant to the
schedule. Nonetheless, despite its inevitable inequities and
the unwieldiness of its application, this aspect of the system
- 26 -
apparently functions in the manner intended by Congress, as
evidenced by its being left essentially undisturbed since its
enactment in 1927.”). 8
Finally, we reject both Eason’s and HI’s interpretation of
PEPCO. 9 Eason interprets PEPCO as supporting his argument that a
claimant who is receiving scheduled compensation for a permanent
partial disability may receive additional compensation for
temporary partial disability due to the same injury. HI’s
interpretation of PEPCO is quite different. It interprets the
case as foreclosing a claimant who is receiving scheduled
compensation for an injury from ever receiving temporary (total
or partial) disability compensation for that injury.
In PEPCO, the Supreme Court addressed whether a claimant
who was permanently partially disabled due to a scheduled injury
could choose to be compensated for his actual loss of wage-
8
Of course, Eason is on the overcompensation end of the
equation. He was awarded actual partial wage loss for the May
19 through August 20, 2010 time period at a compensation rate of
$845.82 per week (two thirds of the difference between his
average weekly wage of $1,488.43 and his residual wage-earning
capacity of $219.70 per week). Thus, Eason would receive
$11,237.22 in actual partial wage loss compensation. By
contrast, Eason’s scheduled award entitled him to $40,009.13 in
compensation (40.32 weeks x $992.29 per week). Thus, his
scheduled award paid him $28,771.91 more for a presumed loss of
wage-earning capacity than he would have been entitled to for
his actual loss.
9
The BRB’s interpretation of PEPCO is in line with Eason’s
interpretation of that case.
- 27 -
earning capacity under § 908(c)(21), rather than being
compensated for his presumed loss as provided by the schedule.
449 U.S. at 270. 10 The Court held that the LHWCA did not
authorize such an election, and, therefore, a claimant’s
recovery for a scheduled injury “must be limited by the
statutory schedule.” Id. at 271. The Court focused on the
language of § 908(c)(21), which calls for the payment of actual
loss of wage-earning capacity “‘[i]n all other cases’” of
permanent partial disability. Id. at 274 (quoting 33 U.S.C.
§ 908(c)(21)). The Court interpreted this language to mean all
permanent partial disability cases not specifically enumerated
in the schedule, namely § 908(c)(1) to (20). Id. Thus, the
Court held that injuries or disabilities covered by the schedule
must be compensated according to the schedule, whereas permanent
partial disabilities not covered by the schedule are subject to
compensation based on the actual loss of wage-earning capacity.
Id. at 278-82.
The Supreme Court in PEPCO rejected the argument that its
construction of the LHWCA would not fulfill the remedial
10
As noted earlier, unscheduled permanent partial
disability awards are based on the actual loss of wage-earning
capacity. 33 U.S.C. § 908(c)(21). The claimant in PEPCO sought
wage-loss compensation under § 908(c)(21) because his loss of
wage-earning capacity was over 40% and § 908(c)(21) would have
provided far more compensation than the schedule otherwise
allowed. 449 U.S. at 271.
- 28 -
purposes of the Act and that it would produce anomalous results
that Congress probably did not intend. Id. at 280-84. The
Supreme Court pointed out that the LHWCA represents a compromise
between the interests of employers and employees. Id. at 282.
The Court stated that the use of fixed scheduled benefits as an
exclusive remedy “is consistent with the employees’ interest in
receiving a prompt and certain recovery for their industrial
injuries as well as with the employers’ interest in having their
contingent liabilities identified as precisely and as early as
possible.” Id. As noted above, the Court also recognized the
incongruous results which the schedule could produce by over or
undercompensating an employee for his actual loss in wage-
earning capacity. Id. at 282-84. The Court stated, however,
that this fact did not give it license to disregard the
“compelling statutory language” and that it was up to Congress
to reexamine the statute if anomalies were occurring frequently.
Id. at 284.
Eason’s interpretation of PEPCO is flawed. The Supreme
Court in PEPCO did not imply, as he posits, that a claimant who
is receiving scheduled compensation for a permanent partial
disability can receive additional compensation for temporary
partial disability due to the same injury. The Court merely
said that a scheduled injury does not preclude an award of total
disability. Id. at 277 n.17. This is not surprising since a
- 29 -
total disability increases the claimant’s actual loss in wage-
earning capacity. In any event, just because the Court cited
with approval the receipt of total disability compensation
following a scheduled injury, it does not follow that the Court
would countenance the duplicative recovery that occurs when a
claimant receives temporary partial disability compensation for
an injury that the claimant already has received (or is
receiving) scheduled compensation. As we noted above, the LHWCA
does not permit such duplicative recoveries. See Port of
Portland, 932 F.2d at 839 n.1 (noting that the LHWCA is designed
to avoid double recoveries for the same injuries).
HI’s interpretation of PEPCO also is flawed. The Court in
PEPCO did not hold, as HI posits, that a claimant who is
receiving scheduled compensation for an injury is foreclosed
from receiving temporary (total or partial) disability
compensation for that injury. Rather, as noted above, the Court
simply held that a permanent partial disability claimant could
not choose between the schedule and § 908(c)(21). 449 U.S. at
278-82. Thus, the Court did not address whether the receipt of
scheduled compensation forecloses the receipt of additional
temporary disability compensation, and we read nothing in PEPCO
lending support for HI’s interpretation of the case.
In sum, the PEPCO decision is not outcome determinative for
either Eason or HI. The case addressed a discrete issue, and
- 30 -
the reasons advanced by Eason and HI for an expansive reading of
the decision are not compelling. Cf. Korineck, 835 F.2d at 44
(noting the “narrow issue” decided by the PEPCO Court).
III
For the reasons stated herein, we grant the petition for
review and remand the case to the BRB to enter an order
dismissing Eason’s claim for temporary partial disability under
the LHWCA.
PETITION GRANTED
- 31 -
| {
"pile_set_name": "FreeLaw"
} |
ACCEPTED
05-17-01126-CV
FIFTH COURT OF APPEALS
DALLAS, TEXAS
5/21/2018 12:33 PM
LISA MATZ
CLERK
No. 05-17-01126-CV
_____________
FILED IN
5th COURT OF APPEALS
IN THE DALLAS, TEXAS
5/21/2018 12:33:19 PM
FIFTH DISTRICT COURT OF APPEALS LISA MATZ
Clerk
AT DALLAS, TEXAS
WWLC INVESTMENT, L.P.,
Appellant,
vs.
SORAB MIRAKI,
Appellee.
_____________
Appealed from the 416th Judicial District Court of Collin County, Texas
__________________________________________________________________
REPLY BRIEF OF APPELLANT WWLC INVESTMENT, L.P.
__________________________________________________________________
PALMER & MANUEL, PLLC
By: /s/ Jeffrey R. Sandberg
Jeffrey R. Sandberg
State Bar No. 00790051
[email protected]
8350 N. Central Expressway; Suite 1111
Dallas, Texas 75206
(214) 242-6444/Fax (214) 265-1950
COUNSEL FOR APPELLANT WWLC
INVESTMENT, L.P.,
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
TABLE OF CONTENTS .......................................................................................... ii
TABLE OF AUTHORITIES ..................................................................................... v
INTRODUCTION...................................................................................................... 1
REPLY ISSUES PRESENTED FOR REVIEW ........................................................ 2
REPLY - SUMMARY OF ARGUMENT ................................................................. 3
BRIEF OF ARGUMENT ........................................................................................... 3
REPLY ISSUE ONE (Restated) ................................................................................ 5
The Trial Court Erred When It Sua Sponte Entered the Final Judgment That
WWLC’s Petition for Bill of Review Was Denied Because There Was No
Consent by WWLC’s Counsel. (CR136; RR2 6-9)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE ONE ............................ 5
REPLY ISSUE TWO (Restated) ............................................................................... 6
Because the Order Authorizing Substituted Service and Return of Service Do
Not State the Nature of the Address for Substituted Service, the Substituted
Service is Defective. (CR131, 132)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE TWO ........................... 6
ISSUE THREE (Restated) ......................................................................................... 7
The Trial Court Erred When It Entered the Final Judgment Dismissing the
Petition for Bill of Review Because the Citation Did Not Comply with Texas
Law –Service Upon a Limited Partnership Is Not Properly Addressed to an
“Owner.” (CR 136)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE THREE ....................... 7
A. The Citation Is Addressed to Wendy Chen, Owner and Is Not Addressed
to Wendy Chen, President as Argued by Appellee. ......................................... 7
ii
B. Because the Corporate General Partner Was Not Defunct at the Time
of the Issuance of the Citation and Its Receipt by the Process Server,
the Citation to “Owner” Failed to Comply with Texas Law. ........................... 8
C. Because the Citation is Defective - The Citation is Improperly Addressed
to “Wendy Chen, Owner” - Service Is Defective. ........................................... 9
D. The Information Regarding the Corporate General Partner’s Charter
Being Revoked Was Not Filed in the Underlying Case and Was Not Filed
in the Petition for Review Proceeding Until 2017 – More Than a Year
After the Default Judgment Was Entered in 2016. .......................................... 9
REPLY ISSUE FOUR (Restated) ............................................................................ 10
The Trial Court Erred When It Entered the Final Judgment Dismissing the
Petition for Bill of Review Because the Attempted Service Before the
Substituted Service Did Not Comply with Texas Law – There Was No
Attempted Service Upon a Registered Agent or Partner Before the Substituted
Service. (CR 136; App.)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE FOUR........................ 10
A. No Service Was Attempted at the Address of the Registered Agent or
Another Person Authorized to Be Served by Texas Law. ............................. 10
B. The Information Regarding the Corporate General Partner’s Charter
Being Revoked Was Not Filed in the Underlying Case and Was Not Filed
in the Petition for Review Proceeding Until 2017 – More Than a Year
After the Default Judgment Was Entered in 2016. ....................................... .12
REPLY ISSUE FIVE (Restated) .............................................................................. 13
Service is Defective Because the Return of Service States the Petition, Not the First
Amended Petition, Was Attached to the Front Door. (CR131)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE FIVE ......................... 13
REPLY ISSUE SIX (Restated) ................................................................................ 14
WWLC Requests Rendition of Judgment on the Threshold Petition for Bill of
Review Issue – Defective Service – and a Remand on the Substantive Issues in
the Underlying Litigation. (CR136)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE SIX ............................ 14
iii
A. There Are No Presumptions in Favor of Compliance with Texas Law
Regarding Service When A Default Judgment is Directly Attacked. ............ 14
B. The Justice Court Eviction Petition Does Not Make Wendy Chen an
“Agent” for Service of Process. .................................................................... .14
C. The Justice Court Eviction Petition Was Not Filed in the Underlying
Case and Was Not Filed in the Petition for Review Proceeding
Until 2017 – More Than a Year After the Default Judgment Was
Entered in 2016. ............................................................................................. 15
PRAYER .................................................................................................................. 15
CERTIFICATE OF SERVICE ................................................................................ 16
CERTIFICATE OF COMPLIANCE – WORD COUNT ........................................ 17
iv
TABLE OF AUTHORITIES
CASES: PAGE
Bailey’s Furniture, Inc. v. Graham-Rutledge & Co.,
No. 05-11-0071 0-CV, 2012 WL 6554420
(Tex. App.—Dallas 2012, no pet.). ................................................ 9, 10, 12, 15
Brown v. Magnetic Media, Inc.,
795 S.W.2d 41(Tex. App.—Houston [1st Dist.] 1990, no writ). ..................... 7
Davis v. Martin,
No. 01-07-00831-CV, 2009 Tex. App. LEXIS 1040
(Tex. App.--Houston [1st Dist.] Feb. 12, 2009, no pet.).................................. 7
Hurd v. D.E. Goldsmith Chem. Metal Corp.,
600 S.W.2d 345 (Tex. Civ. App.—Houston [1st Dist.] 1980, no writ). .......... 7
Lytle v. Cunningham,
261 S.W.3d 83 (Tex. App.—Dallas 2008, no pet.). ......................................... 3
Marrot Commns., Inc. v. Town & Countrv P’ship,
227 S.W.3d 372 (Tex. App.—Houston [1st Dist.1 2007,
pet. denied). ........................................................................................ 10, 12, 15
McKanna v. Edgar,
388 S.W.2d 927 (Tex.1965)........................................................................... 14
Primate Constr., Inc. v. Silver,
884 S.W.2d 151 (Tex. 1994).......................................................................... 13
Shamrock Oil Co. v. Gulf Coast Nat. Gas, Inc.,
68 S.W.3d 737 (Tex. App.—Houston [14th Dist.] 2001, pet denied). .......... 13
Titus v. Southern Cnty. Mut. Ins. as Subrogee for T.W. Sales,
No. 03-05-00310-CV (Tex. App.—Austin 2009, no pet.). .............................. 7
Uvalde Country Club v. Martin Linen Supply Co.,
690 S.W.2d 884 (Tex.1985)........................................................................... 14
v
Wilson v. Dunn,
800 S.W.2d 833 (Tex.1990)....................................................................... 3, 14
STATUTES PAGE
TEX. BUS. ORGS. CODE § 5.201. ........................................................................... 9, 11
TEX. BUS. ORGS. CODE § 5.251. ........................................................................... 9, 11
TEX. BUS. ORGS. CODE § 5.255. ........................................................................... 9, 11
TEX. CIV. PRAC. & REM. CODE § 17.022. ............................................................. 9, 11
TEX. R. CIV. P. 106 ............................................................................................... 6, 11
vi
No. 05-17-01126-CV
_____________
IN THE
FIFTH DISTRICT COURT OF APPEALS
AT DALLAS, TEXAS
WWLC INVESTMENT, L.P.,
Appellant,
vs.
SORAB MIRAKI,
Appellee.
__________________________________________________________________
REPLY BRIEF OF APPELLANT WWLC INVESTMENT, L.P.
__________________________________________________________________
TO THE COURT OF APPEALS:
Appellant WWLC Investment, L.P., (“WWLC” or “Appellant”) submits this
Appellant’s Reply Brief. Appellee Sorab Miraki will be referred to as “Miraki” or
“Appellee.”
1
REPLY ISSUES PRESENTED FOR REVIEW
REPLY ISSUE ONE
The Trial Court Erred When It Sua Sponte Entered the Final Judgment That WWLC’s
Petition for Bill of Review Was Denied Because There Was No Consent by WWLC’s
Counsel. (CR136; RR2 6-9)
REPLY ISSUE TWO
Because the Order Authorizing Substituted Service and Return of Service Do Not State
the Nature of the Address for Substituted Service, the Substituted Service is Defective.
(CR131, 132)
REPLY ISSUE THREE
The Trial Court Erred When It Entered the Final Judgment Dismissing the Petition for
Bill of Review Because the Citation Did Not Comply with Texas Law –Service Upon a
Limited Partnership Is Not Properly Addressed to an “Owner.” (CR 136)
REPLY ISSUE FOUR
The Trial Court Erred When It Entered the Final Judgment Dismissing the Petition for
Bill of Review Because the Attempted Service Before the Substituted Service Did Not
Comply with Texas Law – There Was No Attempted Service Upon a Registered Agent
or Partner Before the Substituted Service. (CR 136; App.)
REPLY ISSUE FIVE
Service is Defective Because the Return of Service States the Petition, Not the First
Amended Petition, Was Attached to the Front Door. (CR131)
REPLY ISSUE SIX
WWLC Requests Rendition of Judgment on the Threshold Petition for Bill of Review
Issue – Defective Service – and a Remand on the Substantive Issues in the Underlying
Litigation. (CR136)
2
REPLY - SUMMARY OF ARGUMENT
If the record fails to affirmatively show strict compliance with the rules of civil
procedure governing issuance, service, and return of citation, there is error apparent on
the face of the record and attempted service of process is invalid and of no effect.
Lytle v. Cunningham, 261 S.W.3d 837, 840 (Tex. App.—Dallas 2008, no pet.).
In response to the service defects requiring a reversal that are described in
WWLC’s Brief, Appellee wholly fails to show that the attempted service upon
WWLC’s “owner” was somehow proper under Texas law. Without multiple attempts
at service in compliance with Texas law - upon the registered agent or some other
person authorized by Texas law to be served with process - there was no attempted
compliant service before substituted service was requested and authorized. Further,
Appellee wholly fails to explain why an attempted service at a business entity’s place
of business might somehow comply with Texas law before Appellee moved for
alternative service. Instead, on page 18 of Appellee’s Brief, Appellee argues that
WWLC had “actual notice” of the lawsuit no later than December 15, 2015. Actual
notice of a lawsuit is not a substitute for service that complies with the requirements
mandated by Texas law, and “actual notice” is also not a substitute for the return of
service information that is required by Texas law. Even if a defendant has received
actual notice of a pending lawsuit, a default judgment rendered upon defective service
will not stand. Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990).
3
On pages 15 and 19 of Appellee’s Brief, Appellee points this Court to the
forfeiture of the charter of WWLC’s general partner. Appellee summarily concludes
that this somehow authorizes service upon Wendy Chen as “owner” of WWLC, but
Appellee points to no Texas law in support of Appellee’s conclusion. If Appellee is
arguing that Wendy Chen could be served as a replacement general partner, then the
Citation would be required to expressly state that Wendy Chen was being served in her
capacity as a partner. Of course, the citation does not state that Wendy Chen is being
served in her capacity as a partner. (CR133)
4
BRIEF OF ARGUMENT
REPLY ISSUE ONE
(Restated)
The Trial Court Erred When It Sua Sponte Entered the Final Judgment That
WWLC’s Petition for Bill of Review Was Denied Because There Was No Consent
by WWLC’s Counsel. (CR136; RR2 6-9)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE ONE
On page 20 of Appellee’s Brief, Appellee points to the statement by the trial
court at the conclusion of the hearing that WWLC’s counsel consented to the June 14,
2017 trial on the petition for review. (CR256-57, RR2 67-68) To be clear, this is what
the trial court stated on the record at the conclusion of the hearing/trial. (RR2 67-68) It
is also clear that the Court was prepared to re-set the hearing on the temporary
injunction to mid-July, which would have resulted in a writ of execution being issued
and WWLC’s property sold. (RR2 68) WWLC had no real choice here, and this is not
“consent.” (RR2 68) Further, the trial court judge requested that the proceedings “go
off the record” following WWLC’s attorney repeated requests, and before WWLC
called its first witness. (RR2 6-9)
5
REPLY ISSUE TWO
(Restated)
Because the Order Authorizing Substituted Service and Return of Service Do Not
State the Nature of the Address for Substituted Service, the Substituted Service is
Defective. (CR131, 132)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE TWO
On page 20 of Appellee’s Brief, Appellee argues that Rule 106 permits an
affidavit seeking to support alternative service to identify any place where the
defendant can probably be found. See TEX. R. CIV. P. 106. Contrary to Appellee’s
argument, the order authorizing substituted service and the return of service also fail to
state that the address is one where the defendant can probably be found. (CR131, 132)
Appellee’s argument fails – the legal requirement relied upon by Appellee is not met
due to the omission of this language from the order authorizing substituted service and
return of service. Further, these are two different issues – language requirements for
the affidavit versus the order authorizing substituted service and return of service.
Rule 106’s requirements for the affidavit, on its face, do not mean that the omission of
the “nature of the address” from the order authorizing substituted service and return of
service is somehow excused.
Again, Texas law is clear - the order authorizing substituted service and return
of service must state the nature of the address being utilized for substituted service:
6
Furthermore, neither the trial court's order nor Smith's return of service
states that the address for substituted service was Titus's usual place of
abode or other place where she could probably be found. This, too, is an
error on the face of the record that requires reversal. See Brown v.
Magnetic Media, Inc., 795 S.W.2d 41, 43 (Tex. App.—Houston [1st
Dist.] 1990, no writ) (trial court's order and return of service must
specifically state that address for service was defendant's usual place of
business in order to comply with Rule 106); Hurd v. D.E. Goldsmith
Chem. Metal Corp., 600 S.W.2d 345, 346 (Tex. Civ. App.—Houston [1st
Dist.] 1980, no writ) (reversing default judgment where neither
constable's return nor trial court's order authorizing substitute service
under Rule 106(b) stated that address for substituted service was
defendant's usual place of business); see also Davis v. Martin, No. 01-07-
00831-CV, 2009 Tex. App. LEXIS 1040, at *17 n.7 (Tex. App.—
Houston [1st Dist.] Feb. 12, 2009, no pet.) (mem. op.).
Titus v. Southern Cnty. Mut. Ins. as Subrogee for T.W. Sales, No. 03-05-00310-CV,
n.4 (Tex. App.—Austin 2009, no pet.).
REPLY ISSUE THREE
(Restated)
The Trial Court Erred When It Entered the Final Judgment Dismissing the
Petition for Bill of Review Because the Citation Did Not Comply with Texas Law
–Service Upon a Limited Partnership Is Not Properly Addressed to an “Owner.”
(CR 136)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE THREE
A. The Citation Is Addressed to Wendy Chen, Owner and Is Not Addressed to
Wendy Chen, President as Argued by Appellee.
On page 21 of Appellee’s Brief, Appellee apparently is arguing that the Citation
is not defective because, according to Appellee, Wendy Chen was served in her
capacity as “President of Appellant’s defunct (at the time of attempted and completed
7
service of process) general partner.” This is false – the Citation states that Ms. Chen
was served as “Owner” and not in her capacity as “President.” (CR136)
B. Because the Corporate General Partner Was Not Defunct at the Time of
the Issuance of the Citation and Its Receipt by the Process Server, the
Citation to “Owner” Failed to Comply with Texas Law.
The Certificate of Amendment and the Assumed Name Certificate indicate that
WWLC’s registered agent is HPZ International, Inc., 100 N. Central Expressway, Suite
813, Richardson, Texas 75080. (RR5, pp. 36 &40/49; PX1)
The Citation was issued on January 13, 2016. (CR133) On page 15 of
Appellee’s Brief, Appellee asserts that “[o]n January 29, 2016, the corporate charter of
the entity Appellant alleges is its general partner was forfeited involuntarily by the
Texas Secretary of State. (CR189) Further, the Return of Service states that the
Citation was received by the process server on January 20, 2016 (CR131), and thus
before the forfeiture of the corporate charter on January 29, 2016. (CR189)
Clearly, the Citation was defective when it was issued by the clerk’s office and
received by the process server – the corporate general partner’s charter had not yet
been forfeited. As a result, and contrary to Appellee’s argument that the forfeiture of
the charter somehow permits service upon an “Owner,” the Citation is not addressed to
a person that Texas law provides may be properly served with process.
8
C. Because the Citation is Defective - The Citation is Improperly Addressed
to “Wendy Chen, Owner” - Service Is Defective.
“Owner” is not an appropriate person for service of citation upon a limited
partnership. TEX. BUS. ORGS. CODE §§ 5.201(b), 5.251, 5.255; TEX. CIV. PRAC. &
REM. CODE § 17.022. As a result, the Citation is defective and WWLC was never
properly served with process.
D. The Information Regarding the Corporate General Partner’s Charter
Being Revoked Was Not Filed in the Underlying Case and Was Not Filed in
the Petition for Review Proceeding Until 2017 – More Than a Year After
the Default Judgment Was Entered in 2016.
As shown above, the forfeiture of the corporate general partner’s charter
occurred after the Citation was issued by the clerk’s office and received by the process
server. Further, the documents regarding the corporate forfeiture were not filed in the
underlying litigation and were instead filed in the Petition for Bill of Review
proceeding on August 1, 2017 – when Appellee filed the document as supplemental
exhibits to Appellee’s Response to WWLC’s Motion for New Trial. (CR186, 189) As
a result, the corporate charter documents were not before the trial court at the time the
default judgment was entered on April 27, 2016. (CR15)
“Unless the record affirmatively shows, ‘at the time the default judgment is
entered,’ either an appearance by the defendant, proper service of citation, or a written
memorandum of waiver, the trial court does not have in personam jurisdiction to
render a default judgment against the defendant.” Bailey’s Furniture, Inc. v. Graham-
9
Rutledge & Co., No. 05-11-0071 0-CV, *4; 2012 WL 6554420 (Tex. App.—Dallas
2012, no pet.) (quoting Marrot Commns., Inc. v. Town & Countrv P’ship, 227 S.W.3d
372, 376 (Tex. App.—Houston [1st Dist.1 2007, pet. denied).
In conclusion, the forfeiture of the corporate charter is not relevant to this
Court’s analysis of whether the Citation complied with Texas law. See Bailey’s
Furniture, Inc., No. 05-11-0071 0-CV, *4.
REPLY ISSUE FOUR
(Restated)
The Trial Court Erred When It Entered the Final Judgment Dismissing the
Petition for Bill of Review Because the Attempted Service Before the Substituted
Service Did Not Comply with Texas Law – There Was No Attempted Service
Upon a Registered Agent or Partner Before the Substituted Service. (CR 136;
App.)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE FOUR
A. No Service Was Attempted at the Address of the Registered Agent or
Another Person Authorized to Be Served by Texas Law.
On page 21, Appellee argues that Texas law does not require that service be
attempted at multiple locations before substituted service may be authorized. While
this is a correct statement of law, Appellee fails to show that there were multiple
attempts to effect service before the substituted service was requested. The service
attempts by the process server upon “Wendy Chen, Owner” began on January 20, 2016
and concluded on January 29, 2016. (CR130) On page 15 of Appellee’s Brief,
10
Appellee asserts that “[o]n January 29, 2016, the corporate charter of the entity
Appellant alleges is its general partner was forfeited involuntarily by the Texas
Secretary of State. (CR189)
“Owner” is not an appropriate person for service of citation upon a limited
partnership. TEX. BUS. ORGS. CODE §§ 5.201(b), 5.251, 5.255; TEX. CIV. PRAC. & REM.
CODE § 17.022. As a result, the attempted service on and before January 29, 02016 is
defective, making the substituted service defective as well. Again, before a motion for
substituted service may be granted, service must be attempted under Rule 106(a). TEX.
R. CIV. P. 106(b). There must be a supporting affidavit establishing that service was
attempted more than once that complies with the personal service requirements of Rule
106(a)(1) or the mailing requirement of Rule 106(a)(2). TEX. R. CIV. P. 106(b).
The Certificate of Amendment and the Assumed Name Certificate indicate that
WWLC’s registered agent is HPZ International, Inc., 100 N. Central Expressway, Suite
813, Richardson, Texas 75080. (RR5, pp. 36 &40/49; PX1) The affidavit in support of
Miraki’s Motion for Substituted Service describes service attempts solely at the “above
mentioned address” – 5610 Eastside Ave., Dallas, Texas 75214. (CR129) With no
attempt to serve the registered agent or another person in compliance with Texas law,
Appellee’s substituted service was not proper, and the default judgment must be set
aside.
11
B. The Information Regarding the Corporate General Partner’s Charter
Being Revoked Was Not Filed in the Underlying Case and Was Not Filed in
the Petition for Review Proceeding Until 2017 – More Than a Year After
the Default Judgment Was Entered in 2016.
As shown above, the forfeiture of the corporate general partner’s charter
occurred after the Citation was issued by the clerk’s office and received by the process
server. Further, the documents regarding the corporate forfeiture were not filed in the
underlying litigation and were instead filed in the Petition for Bill of Review
proceeding on August 1, 2017 – when Appellee filed the document as supplemental
exhibits to Appellee’s Response to WWLC’s Motion for New Trial. (CR186, 189) As
a result, the corporate charter documents were not before the trial court at the time the
default judgment was entered on April 27, 2016. (CR15)
“Unless the record affirmatively shows, ‘at the time the default judgment is
entered,’ either an appearance by the defendant, proper service of citation, or a written
memorandum of waiver, the trial court does not have in personam jurisdiction to
render a default judgment against the defendant.” Bailey’s Furniture, Inc., No. 05-11-
0071 0-CV, *4 (quoting Marrot Commns., Inc., 227 S.W.3d at 376). In conclusion,
the forfeiture of the corporate charter is not relevant to this Court’s analysis of whether
the attempted service complied with Texas law. See Bailey’s Furniture, Inc., No. 05-
11-0071 0-CV, *4.
12
REPLY ISSUE FIVE
(Restated)
Service is Defective Because the Return of Service States the Petition, Not the
First Amended Petition, Was Attached to the Front Door. (CR131)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE FIVE
The return of service must correctly identify the petition served on the
defendant. Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994)
(recitation that petition, instead of second amended petition, was served, was error).
Shamrock Oil Co. v. Gulf Coast Nat. Gas, Inc., 68 S.W.3d 737, 738-39 (Tex. App.—
Houston [14th Dist.] 2001, pet denied) (recitation that petition was served, without
correctly stating which petition was served, was error).
On page 22 of Appellee’s Brief, Appellee argues that the Return of Service, by
describing the Amended Petition as being “delivered,” shows that it was the Amended
Petition, and not the Original Petition, that was served. (CR131) While the Return of
Service states the Amended Petition was “delivered,” it also states the facts describing
the process server’s action: “By attaching a true copy of the Citation to Defendant
WLC Investment, LP, with a copy of the Petition [not the Amended Petition]
attached.” (CR131) The failure to accurately state that the First Amended Petition was
attached to the door is error. See Primate Constr., Inc., 884 S.W.2d at152; Shamrock
Oil Co., 68 S.W.3d at 738-39.
13
REPLY ISSUE SIX
WWLC Requests Rendition of Judgment on the Threshold Petition for Bill of
Review Issue – Defective Service – and a Remand on the Substantive Issues in the
Underlying Litigation. (CR136)
ARGUMENT AND AUTHORITIES FOR REPLY ISSUE SIX
A. There Are No Presumptions in Favor of Compliance with Texas Law
Regarding Service When A Default Judgment is Directly Attacked.
Strict compliance with the rules for service of citation must affirmatively appear
on the record in order for a default judgment to withstand direct attack. Wilson v.
Dunn, 800 S.W.2d 833, 836 (Tex.1990); Uvalde Country Club v. Martin Linen Supply
Co., 690 S.W.2d 884, 886 (Tex.1985). There are no presumptions in favor of valid
issuance, service, and return of citation in the face of a direct attack on a default
judgment. Uvalde, 690 S.W.2d at 836; McKanna v. Edgar, 388 S.W.2d 927, 929
(Tex.1965). Contrary to Texas law, Appellee argues on pages 22 and 23 of Appellee’s
Brief that this Court should imply findings in support of the service of process and
apply a “factual sufficiency” standard of review. This is not the applicable standard of
review.
B. The Justice Court Eviction Petition Does Not Make Wendy Chen an
“Agent” for Service of Process.
On page 24 of Appellee’s Brief, Appellee argues that the Justice Court Eviction
Petition somehow makes Wendy Chen an appropriate agent for service because Wendy
Chen signed the Eviction Petition above the signature line for “Plaintiff
14
(Landlord/Property Owner) or Agent.” (CR122) Notably Appellee does not provide
any authorities or argument in support of Appellee’s conclusion, and the reason is
simple – there aren’t any.
C. The Justice Court Eviction Petition Was Not Filed in the Underlying Case
and Was Not Filed in the Petition for Review Proceeding Until 2017 –
More Than a Year After the Default Judgment Was Entered in 2016.
“Unless the record affirmatively shows, ‘at the time the default judgment is
entered,’ either an appearance by the defendant, proper service of citation, or a written
memorandum of waiver, the trial court does not have in personam jurisdiction to
render a default judgment against the defendant.” Bailey’s Furniture, Inc., No. 05-11-
0071 0-CV, *4 (quoting Marrot Commns., Inc., 227 S.W.3d at 376). On June 14, 2017
(CR60), Appellee filed a Brief in support of Appellee’s opposition to the injunctive
relief requested by WWLC and included the Justice Court Eviction Petition as an
exhibit. (CR122) The Eviction Petition is not relevant to this Court’s analysis, as it was
not timely before the trial court at the time of the default judgment. See Bailey’s
Furniture, Inc., No. 05-11-0071 0-CV, *4.
PRAYER
For all the reasons stated in Appellant’s Brief and this Reply Brief, Appellant
WWLC Investment, L.P. asks that this Court reverse the judgment of the trial court,
partially render judgment in favor of WWLC that the default judgment is void and
remand this cause for further proceedings.
15
Respectfully submitted,
PALMER & MANUEL, PLLC
By: /s/ Jeffrey R. Sandberg_
Jeffrey R. Sandberg
State Bar No. 00790051
[email protected]
8350 N. Central Expressway; Suite 1111
Dallas, Texas 75206
(214) 242-6444/ (214) 265-1950 – Fax
COUNSEL FOR APPELLANT
WWLC INVESTMENT, L.P.
CERTIFICATE OF SERVICE
The undersigned certifies that a true and correct copy of the foregoing
instrument was served upon opposing counsel, on the 21st day of May, 2018, upon:
Via E-Filing and Email ([email protected]):
Eric D. Walker, Esq.
MORALES |WALKER PLLC
6060 N. Central Expy., Suite 500
Dallas, Texas 75206
Telephone: 972.948.3646
Facsimile: 972.361.8005
Attorneys for Appellee Sorab Miraki
/s/ Jeffrey R. Sandberg
Jeffrey R. Sandberg
16
CERTIFICATE OF COMPLIANCE – WORD COUNT
Appellants file this Tex. R. App. P. 9.4 Certificate of Compliance regarding the
Appellant’s Reply Brief filed on this date. Counsel for Appellants certifies that
Appellant’s Reply Brief was generated by a computer using Microsoft Word 2007
which indicates that after excluding the caption, identity of parties and counsel,
statement regarding oral argument, table of contents, index of authorities, statement of
the case, statement of issues presented, statement of jurisdiction, statement of
procedural history, signature, proof of service, certification, certificate of compliance,
and appendix, as permitted under Rule 9.4(i)(1) of the Texas Rules of Civil Procedure,
the word count of this document is 2,950.
/s/ Jeffrey R. Sandberg_
Jeffrey R. Sandberg
17
| {
"pile_set_name": "FreeLaw"
} |
167 F.3d 1106
Kathleen EVANS, as Conservator of Jessica EVANS, a protectedperson, Plaintiff-Appellant,v.LEDERLE LABORATORIES, Link Clinic, and O. Sharma,Defendants-Appellees.
No. 98-1293.
United States Court of Appeals,Seventh Circuit.
Argued Sept. 25, 1998.Decided Feb. 3, 1999.
Joseph Phebus, Phebus & Winkelmann, Urbana, IL; Nancy J. Glidden (argued), Phebus & Winkelmann, West Chester, PA, for Kathleen Evans.
Michael A. Pollard (argued), Thomas F. Bridgman, Baker & McKenzie, Chicago, IL; Peter W. Brandt, Livingston, Barger, Brandt & Schroeder, Bloomington, IL, for Lederle Laboratories.
Richard C. Hayden (argued), Richard F. Record, Jr., Craig & Craig, Mattoon, IL, for Link Clinic and O. Sharma.
Before CUDAHY, COFFEY and KANNE, Circuit Judges.
CUDAHY, Circuit Judge.
1
During the first year of her life, Jessica Evans received three doses of a diphtheria, pertussis and tetanus (DPT) vaccine manufactured by Lederle and administered by Sharma, a physician, at the Link Clinic. Several years later, Jessica's mother, Kathleen Evans, filed suit on her behalf seeking to recover damages for injuries allegedly caused by the vaccine. A confusing chronology of litigation ensued culminating in this appeal.
2
On August 14, 1985, Evans sued the Link Clinic and Sharma in state court. That action was voluntarily dismissed without prejudice to make way for a diversity action filed in the district court on June 8, 1990, naming as defendants Lederle, the Link Clinic and Sharma. On October 1, 1990, Evans filed suit in the Court of Claims seeking an award under the National Childhood Vaccine Injury Act (the "Vaccine Act"), 42 U.S.C. § 300aa-1 et seq. That filing necessitated the voluntary dismissal of the pending diversity action. When the Court of Claims subsequently dismissed the Vaccine Act claim with prejudice, Evans went back to the district court and refiled the diversity action on February 28, 1995. The Link Clinic and Sharma moved to dismiss the claims against them pursuant to the Illinois saving statute which allows a plaintiff just one opportunity to refile an action that has been voluntarily dismissed. See 735 ILCS 5/13-217. The magistrate judge determined that the Illinois rule was preempted by the Vaccine Act and recommended that Evans be allowed to proceed with her action. But the district court rejected the magistrate judge's recommendation on the ground that the Illinois rule was not preempted. Applying the Illinois rule, the court dismissed the Link Clinic and Sharma from the case and subsequently granted Lederle's motion for judgment on the pleadings. We affirm.
I.
3
We review de novo the district court's decision to dismiss the Link Clinic and Sharma as defendants. A motion to dismiss is granted only if "it appears beyond doubt that the plaintiff can prove no facts sufficient to support [her] claim for relief, and the facts in the complaint are viewed in the light most favorable to the non-moving party." Flenner v. Sheahan, 107 F.3d 459, 461 (7th Cir.1997); see also City Nat. Bank of Florida v. Checkers, Simon & Rosner, 32 F.3d 277, 281 (7th Cir.1994). A motion for judgment on the pleadings is reviewed under the same standard as a motion to dismiss. See Flenner, 107 F.3d at 461; Frey v. Bank One, 91 F.3d 45, 46 (7th Cir.1996), cert. denied, 519 U.S. 1113, 117 S.Ct. 954, 136 L.Ed.2d 841 (1997). Thus, we also review the district court's decision to enter judgment on the pleadings in favor of Lederle de novo applying the same principles.
4
The Vaccine Act provides a no-fault compensation system for individuals harmed by childhood vaccines. The system involves a special procedure whereby a vaccine-injury plaintiff files a petition in the Court of Claims, naming the Secretary of Health and Human Services as respondent, seeking an award to be administered from a fund financed by a tax on vaccines. See 42 U.S.C. § 300aa-11 et seq. Recourse to the Court of Claims is mandatory as a general rule. See 42 U.S.C. § 300aa-11(a)(2)(A). However, a plaintiff, such as Evans, who was already in the throes of civil litigation when the Act came into effect was permitted but was not required to dismiss her civil action and bring a compensation claim under the Act.1 See Amendola v. Secretary, Dept. Health & Human Serv., 989 F.2d 1180, 1184 (Fed.Cir.1993) (explaining the effect of the Act on pending litigation).
5
A curious feature of the Act is that filing a petition in the Court of Claims--whether mandatory or optional--does not signal the abandonment of traditional tort rights. Once proceedings in the Court of Claims have run their course, the vaccine-injury plaintiff is allowed to jump ship and initiate or resume a civil action.2 Congress thus created a bias in favor of the federal compensation scheme by requiring vaccine-injury plaintiffs to exhaust the remedy under the Act before resorting to civil litigation. The result is "a new remedial system that interacts in a complicated way with traditional tort lawsuits." Schafer v. American Cyanamid Co., 20 F.3d 1, 3 (1st Cir.1994). It is in sync with this pas de deux between Vaccine Act claims and conventional lawsuits that we must hop in deciding this appeal.
6
Evans's original diversity action was pending in the district court when the Vaccine Act came into effect. She exercised her option to proceed under the Act and, having voluntarily dismissed the diversity action, filed a petition in the Court of Claims on October 1, 1990. The petition was dismissed with prejudice pursuant to a joint stipulation.3 Evans then elected to return to the district court and filed the present diversity action.4 She advances two principal arguments--essentially a reiteration of the magistrate judge's view--in support of her bid to maintain that action. First, Evans contends that the Illinois saving statute is preempted by the Vaccine Act and therefore cannot operate to bar her suit. Alternatively, Evans argues that the refiling of her diversity action does not offend the Illinois rule.
II.
7
In determining whether a federal statute preempts state law, "our ultimate task is to ascertain the intent of Congress." American Agric. Movement, Inc. v. Board of Trade, 977 F.2d 1147, 1154 (7th Cir.1992). We have noted that the Act restricts but does not eliminate the exercise of traditional tort rights. In fact, the Act not only recognizes the possibility of civil actions but goes a step further and declares that "[s]tate law shall apply to a civil action brought for damages for a vaccine-related injury or death." 42 U.S.C. § 300aa-22(a). Nevertheless, Evans contends that Congress expressly preempted the Illinois saving statute by virtue of the following provision:
8
No State may establish or enforce a law which prohibits an individual from bringing a civil action against a vaccine manufacturer for damages for a vaccine-related injury or death if such civil action is not barred by this part.
9
42 U.S.C. § 300aa-22(e). Evans advocates a broad construction of this provision that would preclude any state rule that operates to prohibit a civil action against a vaccine manufacturer. Since the Illinois saving statute has this effect, Evans asserts that the rule cannot be applied consistent with the Act. The district court rejected this argument and held that § 300aa-22(e) does not extend to state statutes of limitations including the Illinois saving statute. Thus, before addressing whether Congress intended to preempt state statutes of limitations, we must first clarify whether the saving statute's one-refiling rule is properly classified as a rule of limitation.
10
The Illinois statute of limitations does not expressly bar two or more refilings of a suit. Rather, the one-refiling rule has developed as a judicial gloss on the saving statute which provides in relevant part:
11
Reversal or Dismissal. In the actions specified in Article XIII of this Act or any other act or contract where the time for commencing an action is limited, if judgment is entered for the plaintiff but reversed on appeal, or if there is a verdict in favor of the plaintiff and, upon a motion in arrest of judgment, the judgment is entered against the plaintiff, or the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, or the action is dismissed by a United States District Court for lack of jurisdiction, then, whether or not the time limitation for bringing such action expires during the pendency of such action, the plaintiff, his or her heirs, executors or administrators may commence a new action within one year or within the remaining period of limitation, whichever is greater, after such judgment is reversed or entered against the plaintiff, or after the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, or the action is dismissed by a United States District Court for lack of jurisdiction.
12
735 ILCS 5/13-217.5 The section is a saving provision "which allows a plaintiff to refile a cause of action if its prior disposition was based on the reasons outlined in the statute." Timberlake v. Illini Hosp., 175 Ill.2d 159, 221 Ill.Dec. 831, 676 N.E.2d 634, 636 (1997). But while the one-year grace period is a boon for plaintiffs, Illinois courts have consistently held that the section permits no more than one refiling within that period. See id. ("[section 13-217] was not intended to permit multiple refilings of the same action"); Flesner v. Youngs Development Co., 145 Ill.2d 252, 164 Ill.Dec. 157, 582 N.E.2d 720, 720 (1991) ("We interpret the language of section 13-217 as providing for one and only one refiling regardless of whether the applicable statute of limitations has expired."); Gibellina v. Handley, 127 Ill.2d 122, 129 Ill.Dec. 93, 535 N.E.2d 858, 864 (1989) ("While a [voluntary dismissal] motion in conjunction with section 13-217 may protect the right of a plaintiff to have a decision in the particular case made on the merits of the claim by potentially permitting "two bites of the apple" when the first bite turns sour, the statutory scheme does not allow a third bite."); Gendek v. Jehangir, 119 Ill.2d 338, 116 Ill.Dec. 230, 518 N.E.2d 1051, 1053 (1988) (for the same proposition). The first filing is a reference point for statute of limitations purposes. Thus, the one-refiling rule operates as an integral part of the saving statute which courts have characterized as a rule of limitation. See Reyes v. Court of Claims of State of Illinois, 299 Ill.App.3d 1097, 234 Ill.Dec. 58, 702 N.E.2d 224, 230 (1998) ("This 'savings statute' enumerates the circumstances under which the statute of limitations for certain actions may be extended."); Andrews v. Heinold Commodities, Inc., 771 F.2d 184, 186 (7th Cir.1985) ("The borrowing of a state statute of limitations includes the state's tolling doctrines, which suspend the application of the statute of limitations in prescribed situations."); Cook v. Starling, 104 F.R.D. 468, 470 (N.D.Ill.1985) ("Section 13-217 ... is part of the chapter titled 'Limitations,' and is part and parcel of Illinois' total statute of limitations scheme ...."). And we endorse that characterization for the purposes of the present appeal.
13
The issue then is whether Congress intended to preempt state statutes of limitations including the Illinois one-refiling rule. Evans argues that the Vaccine Act preempts any state rule--whether substantive or procedural--that bars civil actions. The language of § 300aa-22(e) supports this construction insofar as it provides that "[n]o State may establish or enforce a law which prohibits an individual from bringing a civil action ...." However, defendants offer a less expansive reading of the same language that suggests a more modest preemptive effect. They assert that the term "law," as it appears in § 300aa-22(e), refers only to a state's substantive law and does not extend to procedural rules or statutes of limitation. From this perspective, Congress intended to preempt only direct state prohibitions on civil actions that would override the Act's interplay between the federal compensation scheme and traditional tort rights; thus, Congress was not concerned with incidental state rules regulating the time and manner for the bringing of civil actions--even though those rules might restrict or actually bar proceedings. Reasonable minds could differ as to which of the proffered interpretations is correct. Since the plain language of § 300aa-22(e) is susceptible to inconsistent interpretations as to whether the Act preempts state statutes of limitation, we look to other indicia of statutory intent. See United States v. Thomas, 77 F.3d 989, 991 (7th Cir.1996) ("A court may look beyond the plain meaning of a statute when the result it apparently decrees is difficult to fathom or where it seems inconsistent with Congress' intention.") (quoting Public Citizen v. United States Dept. of Justice, 491 U.S. 440, 454-55, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989)).
14
The view that state statutes of limitation are not preempted finds support within the legislative scheme. The Act contemplates the application of state statutes of limitation where a petitioner elects to institute civil proceedings after judgment in the Court of Claims. See 42 U.S.C. §§ 300aa-16(c) (Statutes of limitation are tolled during the pendency of a petition); and 300aa-21(c) (Once a petitioner has elected to file a civil action, any subsequent civil action "shall ... be brought within the period prescribed by limitations of actions under State law applicable to such civil action."). Indeed, common sense suggests that if state statutes of limitation were preempted--and not replaced by federally prescribed limitations--vaccine-injury plaintiffs would have extraordinary freedom to commence lawsuits at a time and in a manner of their own choosing. This result would be contrary to an important federal purpose underlying the Act, namely, "to free manufacturers from the specter of large, uncertain tort liability, and thereby keep vaccine prices fairly low and keep manufacturers in the market." Schafer, 20 F.3d at 4 (citing legislative history); see also Pennsylvania Dept. of Public Welfare v. Davenport, 495 U.S. 552, 565, 110 S.Ct. 2126, 109 L.Ed.2d 588 (1990) ("strict language ... does not control, even if the statutory language has a plain meaning, if the application of that language will produce a result demonstrably at odds with the intention of its drafters") (internal quotations and citation omitted).
15
The legislative history of a statute is significant "when the statute is not clear or when the application of its plain language produces absurd or unjust results." United States v. Shriver, 989 F.2d 898, 901 (7th Cir.1993) (internal quotations and citation omitted). In determining that the Illinois one-refiling rule is not preempted, the district court relied on the House Report which explains § 300aa-22(e) in the following terms:
16
State statutes that effectively foreclose individuals from bringing civil actions for vaccine-related injuries or deaths or [sic] preempted by this subsection. The Committee intends this preemption to apply even where a State has established a compensation system as an alternative to filing a civil action. It does not intend, however, to preempt statutes of limitations or other provisions of state law and practice that regulate the time or manner in which civil actions in general may be brought or maintained ....
17
H.R.REP. No. 99-908, at 27 (1986), U.S. Code Cong. & Admin. News 1986 at 6344, 6368. It is hard to imagine legislative history that speaks more directly to the issue and Evans offers no alternative history that would support her interpretation of the Act's preemptive effect.6 In light of the statutory language, legislative scheme and, in particular, this legislative history, we agree with the district court that the Illinois one-refiling rule is not preempted by the Vaccine Act.
III.
18
Next we turn to the issue whether the present action is barred by the Illinois one-refiling rule. Statutes of limitations are generally considered part of the forum state's substantive law which federal courts must apply when sitting in diversity. See Guaranty Trust Co. v. York, 326 U.S. 99, 109-10, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). Thus, we have applied the Illinois one-refiling rule in diversity cases. See, e.g., Locke v. Bonello, 965 F.2d 534 (7th Cir.1992).7 Moreover, we have previously recognized that the rule allows for a single refiling whether in state court or federal court. See Koffski v. Village of North Barrington, 988 F.2d 41, 43-44 (7th Cir.1993) (plaintiffs were barred from refiling in the district court where their suit had been voluntarily dismissed in state court and then dismissed for lack of subject matter jurisdiction in the district court). In other words, a plaintiff who has filed suit in state court and subsequently commenced diversity proceedings in the district court has exhausted the rule and cannot refile in either court for a second time. Regardless of the forum, Illinois permits a plaintiff just two bites at the apple.
19
Defendants contend that there has been a total of four filings with respect to Jessica's vaccine-related injuries: (1) the state court action against the Link Clinic and Sharma; (2) the initial diversity action in the district court naming all three defendants; (3) the petition with the Court of Claims; and (4) the present diversity action.8 With respect to the Link Clinic and Sharma, it is undisputed that there were two previous filings--in the state court and the district court, respectively--naming these defendants as parties. On the basis of Koffski, Evans exhausted the Illinois one-refiling rule when she voluntarily dismissed her state court action and commenced proceedings in the district court.
20
Evans seeks to escape from Koffski's grip by arguing that the Illinois rule is triggered only by a voluntary dismissal whereas she was compelled to seek relief in the Court of Claims. This suggestion is flatly contradicted by the Vaccine Act which expressly gave Evans the option to go to the Court of Claims or to proceed with her pending diversity action. For the purposes of the Illinois one-refiling rule, we see no principled reason to distinguish Evans's decision to forego her diversity action to petition the Court of Claims from her previous decision to abandon the state court in favor of a federal forum. In both instances, the policies underlying the Illinois rule are implicated insofar as Evans made a strategic choice regarding the most advantageous forum for the pursuit of her claims.
21
Evans also points out that in giving her the option to file a petition in the Court of Claims, the Act provided that her civil action be "dismissed without prejudice." 42 U.S.C. § 300aa-11(a)(5)(A). From this premise, she infers a Congressional intent to permit the resumption of civil litigation purely as an incentive to plaintiffs like herself to forego pending civil actions in favor of compensation claims under the Act. But Congress gave all vaccine-injury plaintiffs--and not merely those who had civil actions pending--the right to resort to civil litigation after exhausting their remedies in the Court of Claims. Evans's contention is untenable because it fails to take account of the statutory caveat that the commencement or resumption of civil proceedings--as well as their substantive determination--is a matter for state law. See 42 U.S.C. §§ 300aa-21(c) & 300aa-22(a). To put it another way, there is no reason to believe that in deciding not to preempt state statutes of limitations Congress intended to make an exception for plaintiffs who had civil actions pending when the Act came into effect.
22
In any event, as far as Illinois is concerned, the circumstances in which Evans departed from the district court for the Court of Claims are not material to the application of the one-refiling rule. The Illinois Supreme Court has held that where a cause of action has been dismissed on two occasions, the plaintiff cannot refile regardless of the reason for the second dismissal. See Timberlake, 221 Ill.Dec. 831, 676 N.E.2d at 637 ("Under the statute, the reason a cause of action was originally dismissed is important in determining whether a plaintiff can subsequently refile, but after the case has been filed a second time, the reason for the second dismissal is of no consequence at all. No matter why the second dismissal took place, the statute does not give plaintiff the right to refile again."). In the present case, it is sufficient that Evans voluntarily dismissed her state court action, that she refiled in the district court and that her case was dismissed for a second time. At least with respect to the Link Clinic and Sharma, the present action constitutes an additional filing that is barred by the Illinois saving statute.
23
The position with respect to Lederle is more problematic since Lederle was not named as a defendant in the state court action. Evans contends that because Lederle was technically a party only to the original diversity action, the present action constitutes the first refiling against Lederle and, as such, is permitted by the Illinois rule. Lederle counters that its absence from the initial proceeding is a mere technicality. It takes the position that the filings in state and federal court arose out of the same set of facts and therefore comprise the same proceedings for the purposes of the Illinois rule.
24
The Illinois rule does not differentiate on its face between actions brought against different defendants by the same plaintiff. Evans cites no instance in which a court in Illinois has ignored the rule on this basis. Illinois courts have held that, for the purposes of § 13-217, a complaint is deemed to be refiled where it contains the same cause of action as defined by res judicata principles. See D'Last Corp. v. Ugent, 288 Ill.App.3d 216, 224 Ill.Dec. 30, 681 N.E.2d 12, 16, app. denied, 174 Ill.2d 558, 227 Ill.Dec. 3, 686 N.E.2d 1159 (1997). Res judicata bars a further suit if "the same facts were essential to maintain both actions" or if "a single group of operative facts gives rise to the assertion of relief." Rodgers v. St. Mary's Hosp., 149 Ill.2d 302, 173 Ill.Dec. 642, 597 N.E.2d 616, 621 (1992) (internal quotations and citations omitted). Here, Evans's claims against all three defendants arise out of the same essential group of operative facts. Insofar as § 13-217 is designed to temper the litigious excesses of plaintiffs, it is reasonable to apply it to multiple refilings of the same action even against additional defendants. Otherwise, a plaintiff could prolong litigation indefinitely merely by failing to join necessary defendants. See Gendek, 116 Ill.Dec. 230, 518 N.E.2d at 1053 ("[Section 13-217] was intended to serve as an aid to the diligent, not a refuge for the negligent.").9 Thus, we believe that Evans should not be able to maintain this action simply because Lederle was not named as a party in the original state court action.10
25
We are mindful that for Evans the dismissal of this suit so far down the road to recovery may be a bitter pill to swallow. We also recognize that there may be a technical ring to some of the analysis. But to allow Evans to institute fresh proceedings more than 13 years after she first filed suit would invite the evils of uncertain and protracted litigation, which Illinois has chosen to contain. Having voluntarily sought relief before the Court of Claims and having failed in that endeavor, Evans must satisfy the Illinois statute of limitations in order to pursue her diversity action in the district court. Unfortunately for Evans, the Illinois Supreme Court has made clear that the saving statute allows for only one refiling. Evans's refiling of the present action was therefore barred.
AFFIRMED
1
The Act provides that such a plaintiff "may, at any time within 2 years after the effective date ... or before judgment, whichever occurs first, petition to have such action dismissed without prejudice or costs and file a petition [in the Court of Claims]." 42 U.S.C. § 300aa-11(a)(5)(A) (as amended in 1989)
2
Specifically, the Act provides that once the Court of Claims has entered judgment, the petitioner must elect either to accept the award and formally abandon his or her tort rights or to reject the award and proceed by way of civil action. See 42 U.S.C. §§ 300aa-11(a)(2)(A)(i) & 300aa-21(a)
3
The fate of the petition is something of a mystery. The stipulation itself calls merely for the dismissal of Evans's claim with prejudice "for reasons addressed during a conference" with a special master. See Appellant's Br. at A-24. Defendants maintain that Evans's petition was time-barred because it should have been filed within two years of the effective date of the Act, October 1, 1988. Evans filed her petition on October 1, 1990, and, according to defendants, missed the deadline by a day. Evans keenly disputes this contention and explains the dismissal as a strategic decision motivated by differences in the type of proof required to sustain her claim in the district court as opposed to the Court of Claims
4
Lederle questions whether Evans had a right of election in these circumstances. The Act allows a vaccine plaintiff to bring a civil action where the Court of Claims "has issued a judgment ... on [the] petition." 42 U.S.C. § 300aa-11(a)(2)(A)(i)(I). Lederle contends that the Court of Claims never issued a "judgment" in this case. On its face, this provision does not require a judgment on the merits. Rather, we read the term "judgment" to connote a final disposition of a petition by the Court of Claims. Thus, we take the view that the dismissal of Evans's petition with prejudice triggered her right of election
5
This statutory language was amended prospectively in 1995 by P.A. 89-7 § 15 (eff.Mar. 9, 1995) which the Illinois Supreme Court subsequently held to be unconstitutional in its entirety. See Best v. Taylor Machine Works, 179 Ill.2d 367, 228 Ill.Dec. 636, 689 N.E.2d 1057, 1104 (1997)
6
In her Brief, Evans did not address this legislative history. Eventually, when pressed on rebuttal at oral argument, Evans's attorney took the position that the meaning of § 300aa-22(e) is plain and that recourse to legislative history is not required. As noted, we disagree
7
In this regard, we reject Evans's argument that this case is governed by F ED.R.CIV.P. 41, which allows a second refiling
8
With respect to the third filing, it is an open question whether filing a petition in the Court of Claims under the Vaccine Act constitutes a filing for the purposes of the Illinois saving statute. But it is not necessary to resolve this question for present purposes
9
Another way of looking at the problem--which also casts it in a light favorable to Lederle--is to say that Lederle should not be penalized for Evans's oversight in failing to include it as a defendant in the original state court action
10
In light of this conclusion, it is not necessary to consider Lederle's alternative argument, namely that the petition before the Court of Claims constitutes a refiling for the purpose of the Illinois saving statute
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 97-6237
ROBERT DIAZ,
Petitioner - Appellant,
versus
WARDEN, NOTTOWAY CORRECTIONAL CENTER,
Respondent - Appellee.
Appeal from the United States District Court for the Western Dis-
trict of Virginia, at Roanoke. James C. Turk, District Judge.
(CA-96-658-R)
Submitted: May 15, 1997 Decided: May 29, 1997
Before RUSSELL, HALL, and HAMILTON, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Robert Diaz, Appellant Pro Se. Daniel John Munroe, OFFICE OF THE
ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Appellant seeks to appeal the district court's order denying
relief on his petition filed under 28 U.S.C.A. § 2254 (West 1994 &
Supp. 1997). We have reviewed the record and the district court's
opinion accepting the recommendation of the magistrate judge and
find no reversible error. Accordingly, we deny a certificate of ap-
pealability and dismiss the appeal on the reasoning of the district
court. Diaz v. Warden, Nottoway, Corr. Ctr., No. CA-96-658-R (W.D.
Va. Feb. 3, 1997). We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional process.
DISMISSED
2
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624 F.2d 192
Marine Terminals Corp.v.Director, Office of Workers' Compensation Programs
78-2350
UNITED STATES COURT OF APPEALS Ninth Circuit
5/2/80
1
Ben. Rev. Bd.
AFFIRMED AND REMANDED
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549 F.2d 859
5 O.S.H. Cas.(BNA) 1001, 1976-1977 O.S.H.D. ( 21,537
MOHAWK EXCAVATING, INC., Petitioner,v.OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and W. J.Usery, Jr., Secretary of Labor, Respondents.
No. 356, Docket 76-4068.
United States Court of Appeals,Second Circuit.
Argued Dec. 28, 1976.Decided Feb. 8, 1977.
Thomas C. Marshall, New Britain, Conn. (Weber & Marshall, Barry L. Thompson, Jr., New Britain, Conn., of counsel), for petitioner.
Nancy L. Southard, Atty., U.S. Dept. of Labor, Washington, D.C. (William J. Kilberg, Sol. of Labor, Benjamin W. Mintz, Associate Sol. for Occupational Safety and Health, Michael H. Levin, Counsel for App. Litigation, and Allen H. Feldman, Asst. Counsel for App. Litigation, U.S. Dept. of Labor, Washington, D.C., of counsel), for respondents.
Before SMITH, ANDERSON and TIMBERS, Circuit Judges.
J. JOSEPH SMITH, Circuit Judge:
1
Mohawk Excavating, Inc. ("Mohawk") petitions for review of a final order of the Occupational Safety and Health Review Commission ("the Commission"). The order finds that Mohawk violated the Occupational Safety and Health Act of 1970 ("the Act"), 29 U.S.C. § 651 et seq., and imposes a $75 penalty. Mohawk claims that the Commission's finding is not supported by substantial evidence on the record and that the Act is unconstitutional. We find no merit in Mohawk's claims and order the Commission's order enforced.
I.
2
On June 24, 1974 Harold Smith, the Commission's Area Director, inspected a sewer trench that Mohawk was digging in Enfield, Connecticut and then cited Mohawk for two "non-serious" violations of the Act;1 he proposed a civil penalty of $75 for each violation. Mohawk contested both violations, and on March 27, 1975 a hearing was held before an Administrative Law Judge ("ALJ"). On October 29, 1975 the ALJ affirmed one violation and its $75 civil penalty and vacated the other violation and its proposed penalty. On February 11, 1976 the Commission approved the ALJ's decision. Pursuant to § 660(a) of the Act, Mohawk petitions this court for review of the Commission's final order.
3
This appeal involves Mohawk's alleged failure to have an adequate exit from the trench, in violation of 29 C.F.R. § 1926.652(h).2 Section 660(a) of the Act says "the findings of the Commission with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive."
4
The government relies on several photographs and the testimony of Smith to support the ALJ's findings. The trench was approximately 35 feet long, 14 feet, 5 inches deep, 8 feet wide at the top, and 5 feet wide at the bottom. Inside the trench was a steel "trench box," which was 16 feet long, 10 feet high, and weighed 6 to 7 tons. Its sides were constructed of steel plates which were framed vertically and horizontally with steel girders, or "I" beams. The vertical distance between the "I" beam supports was from 2 to 3 feet. The vertical distance from the bottom of the trench to the lowest "I" beam was 4 to 5 feet. There was no ladder in the trench. Workers left the trench by using the "I" beams as steps to climb up the side of the trench box. Based on these undisputed facts, the ALJ found "the 'first step' of this means of exit less than desirable or adequate." (Appendix at 10). He suggested that Mohawk could weld a metal ladder to the inside of the trench box and observed that Mohawk had done this on some of its other trench boxes.
5
Noting that Mohawk's foreman had immediately put a ladder into the trench when Smith indicated the need for one on June 24 and that Mohawk had paid without protest penalties for a previous "serious" violation and a previous "non-serious" violation, the ALJ concluded that the $75 penalty for this violation was appropriate and reasonable.
6
To refute the ALJ's findings, Mohawk relies on the testimony of its President, two of its employees, and two engineers, all of whom said that climbing up the "I" beams was an adequate and safe way of leaving the trench. Mohawk says that Smith "did not go into the trench (or try to get out of it). . . . There is no evidence in the record that Mr. Smith bothered to have anyone try it or that the trial judge (ALJ) tried it. . . . " (Appellant's Reply Brief at 1).
7
There is no requirement that the trier of fact go to the scene of the alleged violation, especially when, as here, the condition of the trench at the time of the hearing was probably very different from its condition at the time of the alleged violation. The trier of fact whether a judge or a jury can weigh the photographs that are in evidence along with the testimony of Mohawk's witnesses. We have examined all the evidence on the record and conclude that there is substantial evidence on the record considered as a whole that Mohawk violated 29 C.F.R. § 1926.652(h). The photographs and testimony of the height of the "first step" taken in conjunction with the statements of the foreman and the use of ladders in other boxes are quite sufficient to overbalance the evidence of Mohawk in this regard.
II.
8
We turn now to Mohawk's claims that the Act is unconstitutional.3 Section 658(a) of the Act authorizes the Secretary of Labor ("the Secretary") to issue a citation before holding a hearing, and § 659 of the Act authorizes the Secretary to notify the employer, prior to a hearing, of the proposed penalty. Relying on Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971), and Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), Mohawk argues that this procedure violates the due process clause of the fifth amendment by not providing for a prior hearing.
9
Mohawk's argument ignores more recent cases which hold that in some situations due process requires only a prompt, not a prior hearing. Mathews v. Eldridge, 424 U.S. 319, 349, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 606, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975); Fusari v. Steinberg, 419 U.S. 379, 389, 95 S.Ct. 533, 42 L.Ed.2d 521 (1975); Arnett v. Kennedy, 416 U.S. 134, 157, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974).
10
Mathews, supra, 424 U.S. 335, 96 S.Ct. 903, sets out three factors a court should consider in deciding whether the fifth amendment requires a prior hearing: "first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail."
11
Mohawk is unclear as to what interest is affected by the procedure authorized by the Act. At any stage of the proceeding an employer accused of violating the Act can voluntarily pay the proposed penalty. If the employer refuses to pay voluntarily, § 666(k) of the Act authorizes the government to bring a civil action in the United States District Court to recover the penalty. Mohawk has not yet paid the $75 civil penalty. The litigation costs to Mohawk are presumably the same whether the citation and proposed penalty are assessed before or after a hearing, since in either case Mohawk would presumably wish to present its evidence and legal arguments. Perhaps Mohawk's interest in a prior hearing is in avoiding the stigma of being identified as an alleged violator of the Act.4
12
The ALJ affirmed one violation and vacated the other. There is, however, nothing in the record indicating what stigma, if any, has attached to Mohawk from the issuance of the citation which was vacated by the ALJ. On this record there is no indication of a risk of an erroneous deprivation of Mohawk's interest.
13
We have already pointed out that "the broad purpose of the Act (is) 'so far as possible' to assure 'every working man and woman in the Nation safe and healthful working conditions. . . .' " Brennan v. OSHRC, 513 F.2d 1032, 1038 (2d Cir. 1975). Considering this purpose along with the risk of an erroneous deprivation of Mohawk's interest, we hold that §§ 658 and 659 of the Act do not violate the fifth amendment's due process clause. Brennan v. Winters Battery Manufacturing Co., 531 F.2d 317, 324-325 (6th Cir. 1975), cert. denied sub nom. Winters Battery Manufacturing Co. v. Usery, Secretary of Labor, 425 U.S. 991, 96 S.Ct. 2202, 48 L.Ed.2d 815 (1976); Beall Construction Co. v. OSHRC, 507 F.2d 1041, 1045 (8th Cir. 1974); McLean Trucking Co. v. OSHRC, 503 F.2d 8, 11 (4th Cir. 1974).
III.
14
Section 666 of the Act enumerates both civil and criminal penalties. Under § 666(c) of the Act, Mohawk was assessed a civil penalty of $75. Relying on the seven criteria for determining whether a penalty is criminal, as set forth in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-169, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963), Mohawk argues that this is actually a criminal penalty and thus, under the sixth amendment, a jury trial is required.5
15
We recently rejected a similar claim: that civil penalties imposed under the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 41 et seq., were in fact criminal. We said, "(W)hen Congress has characterized the remedy as civil and the only consequence of a judgment for the Government is a money penalty, the courts have taken Congress at its word. . . . In the face of a long line of contrary authority, appellants have not directed our attention to any civil penalty provision that has been held sufficiently 'criminal' in nature to invoke the protections of the Sixth Amendment." United States v. J. B. Williams, Inc., 498 F.2d 414, 421 (2d Cir. 1974).
16
Mohawk has failed to meet the test set forth in J. B. Williams. We hold that the penalty authorized by § 666(c) of the Act is not a criminal penalty. Clarkson Construction Co. v. OSHRC, 531 F.2d 451, 455 (10th Cir. 1976); Brennan v. Winters Battery Manufacturing Co., supra, 531 F.2d 325; Frank Irey, Jr., Inc. v. OSHRC, 519 F.2d 1200, 1205 (3d Cir. 1975), cert. denied on this issue, 424 U.S. 964, 96 S.Ct. 1458, 47 L.Ed.2d 731 (1976); Atlas Roofing Co. v. OSHRC, 518 F.2d 990, 994-1011 (5th Cir. 1975), cert. denied on this issue, 424 U.S. 964, 96 S.Ct. 1458, 47 L.Ed.2d 731 (1976); Beall Construction Co. v. OSHRC, supra, 507 F.2d 1044.
IV.
17
Mohawk invites us to follow the dissenting opinion in the en banc decision in Frank Irey, Jr., Inc., supra, 519 F.2d 1219-1225, and to hold that the Act violates the seventh amendment because it does not provide for a jury trial. The government urges us to hold that the seventh amendment does not apply to any of the proceedings under the Act. The Supreme Court has granted certiorari on this question,6 424 U.S. 964, 96 S.Ct. 1458, 47 L.Ed.2d 731 (1976), and has heard oral argument on it, 45 U.S.L.W. 3412 (Nov. 29, 1976).
18
We have considered whether we may avoid the constitutional question by so interpreting the Act that a jury trial is available.7 While an argument might be made to this effect in the light of the provision for collection proceedings in the district court and the failure of the legislative history to mention the issue, we conclude that the more likely interpretation is that the Congress meant that the determination of violation and penalty be made in the administrative process and that the district court action be solely a collection procedure. The provision in § 660(a) that the judgment and decree of the court of appeals shall be final, and the remarks of Representative Steiger (Legislative History of the Occupational Safety and Health Act of 1970, S. 2193, P.L. 91-596 at 1220, 91st Cong., 2nd Sess., Subcommittee on Labor of the Senate Committee on Labor and Public Welfare (1971) (hereafter "Legislative History")), referred to later herein, accord with that interpretation.
19
The Act provides two routes for judicial enforcement of a final order by the Commission. Section 660 of the Act provides that either "any person adversely affected or aggrieved by an order" or the Secretary may petition a United States Court of Appeals for review of the Commission's order. If the court of appeals enters a decree upholding the order, then § 660 contemplates the possibility of a contempt proceeding if the decree is not obeyed, and as part of the contempt proceedings, the court of appeals is authorized to assess the proposed civil penalty. Section 666(k) of the Act also authorizes the government to bring a civil action in a United States District Court to recover any civil penalties that are owed.8
20
These two sections of the Act reflect a compromise between the Senate bill and the House of Representatives bill, and the legislative history on their meaning is limited and not entirely clear. Section 10 of the Senate bill (S. 2193) provided for judicial enforcement only via a court of appeals and contempt proceedings. See S.Rep. No. 91-1282, 91st Cong., 2d Sess. (1970), reprinted at 1970 U.S.Code Cong. & Ad.News, pp. 5177, 5191, 5210-11. Section 11 of the Committee bill in the House of Representatives (H.R. 16785) provided for judicial enforcement only via a district court "by restraining order, injunction, or otherwise." Both H.R. 16785 and the Committee's analysis of it, H.R.Rep. No. 91-1291, 91st Cong., 2d Sess. (1970), reprinted in Legislative History, are silent as to whether there shall be a jury trial in the district court (see H.R.Rep. No. 91-1291, 24-26, 40-41, Legislative History, 854-56, 870-71). The House of Representatives did not adopt H.R. 16785. Instead it adopted H.R. 19200, which was offered as an amendment by Representatives Steiger and Sikes. Section 13 of H.R. 19200 provided for both review of the Commission's order in a court of appeals and suits in a district court to collect civil penalties; it also gave the district court jurisdiction to provide "additional relief as the court deems appropriate" to carry out the Commission's order.9 Nothing in the debate in the House of Representatives explained this provision of H.R. 19200 and why it differed from H.R. 16785.
21
The Conference Report, No. 91-1765, 91st Cong., 2d Sess. (1970), reprinted at 1970 U.S.Code Cong. & Ad.News, pp. 5228, 5235, indicates that the House of Representatives agreed to contempt proceedings in a court of appeals and the Senate agreed to a suit in a district court to collect civil penalties. The provision in H.R. 19200 authorizing the district court to grant "additional relief" was deleted and the text changed. The only explanation of § 17(m) of the Conference bill, which is § 666(k) of the Act, during the Congressional debate on the Conference bill is Representative Steiger's brief explanation: "It should also be made clear that the provision for judicial review and enforcement of the Commission's orders contained in section 11 are exclusive. Section 17(m) authorizing actions in the name of the United States for the collection of penalties should be construed narrowly and is intended to be limited to any collection process which may be necessary in order to actually collect the penalty." Legislative History, 1220. There is no reference to this provision during the Senate debate on the Conference bill.10
The government argues:
22
It seems obvious that "jury trials would 'dismember' the statutory scheme" of OSHA (the Act) by inhibiting the development of safety and health expertise; dispersing enforcement determinations into hundreds of district courts creating manifold opportunities for delay and forum shopping; and injecting prohibitive costs into a streamlined procedure designed to afford cheap and easy adjudication to employers and employees alike.
23
(Appellee's brief at 19, footnotes omitted).
24
The government's fears of vast amounts of jury litigation and consequent crippling of safety enforcement may be overdrawn. However, the salutary health and safety purposes of the Act, the adaptability of the administrative process to their implementation and the relative meagerness of the penalties authorized11 lead us to adhere to the view we tentatively indicated in the Williams case12 and to join the Third Circuit in Frank Irey, Jr., Inc., supra, the Fifth Circuit in Atlas Roofing, supra, the Sixth Circuit in Winters Battery Manufacturing Co., supra, the Eighth Circuit in Beall Construction Co., supra, and the Tenth Circuit in Clarkson Construction Co., supra. We hold that a jury trial was not contemplated by the Act and that the seventh amendment is no bar to the imposition of civil penalties through the administrative process without jury trial in the enforcement of this Act as provided in § 660.13
25
We order the Commission's order enforced.
1
Section 666(j) of the Act says:
For purposes of this section, a serious violation shall be deemed to exist in a place of employment if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations, or processes which have been adopted or are in use, in such place of employment unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.
2
29 C.F.R. § 1926.652(h) says:
When employees are required to be in trenches 4 feet deep or more, an adequate means of exit, such as a ladder or steps, shall be provided and located so as to require no more than 25 feet of lateral travel.
3
We have jurisdiction to consider the constitutionality of the Act, when an appeal is taken pursuant to § 660(a) of the Act. Flemming v. Nestor, 363 U.S. 603, 607, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960); Anniston Mfg. Co. v. Davis, 301 U.S. 337, 345-346, 57 S.Ct. 816, 81 L.Ed. 1143 (1937)
4
Section 658(b) of the Act says "each citation . . . shall be prominently posted . . . at or near each place a violation referred to in the citation occurred."
5
Mohawk does not mention any of the other consequences such as double jeopardy and self-incrimination under the fifth amendment and speedy trial under the sixth amendment and the Speedy Trial Act, 18 U.S.C. § 3161 et seq. of our determining that this is a criminal penalty
6
Certiorari was granted on the question "assuming arguendo that such civil penalties and enforcement procedures are civil in nature and effect, whether such procedures deny the defendant employer his right to jury trial guaranteed by the Seventh Amendment to the Constitution." 424 U.S. 964, 96 S.Ct. 1458, 47 L.Ed.2d 731 (1976)
7
Cf. Brennan v. Gibson's Products, Inc. of Plano, 407 F.Supp. 154, 162 (E.D.Tex.1976) (absent clear statutory language and legislative history, court concludes Congress intended § 657(a) of the Act to require a search warrant). But cf. Barlow's Inc. v. Usery, 424 F.Supp. 437, 440 (D.Idaho, 1976) (absent clear statutory language and legislative history, court concludes Congress did not intend to require a search warrant under § 657(a) of the Act, and § 657(a) violates fourth amendment)
8
Section 666(k) of the Act says:
(k) Civil penalties owed under this chapter shall be paid to the Secretary for deposit into the Treasury of the United States and shall accrue to the United States and may be recovered in a civil action in the name of the United States brought in the United States district court for the district where the violation is alleged to have occurred or where the employer has its principal office.
9
Section 13 of H.R. 19200 says in pertinent part:
(c) Civil penalties owed under this Act shall be paid to the Secretary for deposit into the Treasury of the United States and shall accrue to the United States and may be recovered in a civil suit in the name of the United States brought in the Federal district court in the district where the violation is alleged to have occurred or where the employer has its principal office.
(d) The Federal district courts shall have jurisdiction of actions to collect penalties prescribed in this Act and may provide such additional relief as the court deems appropriate to carry out the order of the Occupational Safety and Health Appeals Commission.
10
Compare the Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. § 801 et seq., where § 819(a)(4) limits the district court, in a proceeding by the government to collect an unpaid civil penalty, to a de novo jury trial on "all relevant issues, except issues of fact which were or could have been litigated in review proceedings before a court of appeals under section 816 . . . ." National Independent Coal Operators' Ass'n v. Kleppe, 423 U.S. 388, 393, 96 S.Ct. 809, 46 L.Ed.2d 580 (1976)
11
See Olin Construction Co. v. OSHRC, 525 F.2d 464, 467 (2d Cir. 1975) (per curiam): "As for the penalties, we are amazed at their paucity, reflecting more of a license than a penalty."
12
United States v. J. B. Williams, Inc., 498 F.2d 414, 430 (2d Cir. (1974):
Perhaps it would be wiser for Congress to allow the FTC to impose penalties for violations of its orders, subject to limited judicial review, as it has done in some other cases, see, e. g., § 271 of the Immigration and Nationality Act, 8 U.S.C. § 1321, 18 predecessors of which were held valid in Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320 (29 S.Ct. 671, 53 L.Ed. 1013) . . . and Lloyd Sabaudo Societa v. Elting, 287 U.S. 329 . . . .
18
See also Marine Mammal Protection Act, 16 U.S.C. § 1375(a); Occupational Safety and Health Act, 29 U.S.C. § 666(i); Natural Gas Pipeline Safety Act, 49 U.S.C. § 1678
13
The Supreme Court will shortly pass on this seventh amendment question, as noted above. We think the matter properly one for administrative enforcement, not subject to the jury trial mandate of the seventh amendment. See Pernell v. Southall Realty, 416 U.S. 363, 383, 94 S.Ct. 1723, 40 L.Ed.2d 198 (1974), Curtis v. Loether, 415 U.S. 189, 194, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974), and NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 48-49, 57 S.Ct. 615, 81 L.Ed. 893 (1937)
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560 N.W.2d 735 (1997)
Michael Roy DUFF, Petitioner, Appellant,
v.
COMMISSIONER OF PUBLIC SAFETY, Respondent.
No. C3-96-1786.
Court of Appeals of Minnesota.
March 18, 1997.
*736 Jeffrey B. Ring, Jeffrey B. Ring & Associates, Minneapolis, for Appellant.
Hubert H. Humphrey, III, Attorney General, Joel A. Watne, Clarissa Marie Klug, Assistant Attorneys General, St. Paul, for Respondent.
Considered and decided by NORTON, P.J., and KALITOWSKI and DAVIES, JJ.
OPINION
NORTON, Judge.
Michael Roy Duff appeals from a district court order sustaining the revocation of his driving privileges under the implied consent statute. Duff's limited right to consult with counsel prior to deciding whether to submit to chemical testing for alcohol concentration was not vindicated because he was not allowed a reasonable time to meaningfully consult with his attorney. We reverse.
FACTS
On April 14, 1996, at approximately 2:45 a.m., Oak Park Heights Police Officer Kenneth Anderson arrested appellant Michael Roy Duff for driving under the influence of alcohol. After Officer Anderson transported Duff to the Washington County Sheriff's Office and read the implied consent advisory, Duff indicated that he wished to consult with *737 an attorney. At 3:06 a.m., Officer Anderson provided Duff with a telephone and telephone directories. Officer Anderson sat in an adjacent room and filled out paperwork while watching Duff through a window.
Duff called a number for an attorney and reached an answering service, which said an attorney would be contacted. Duff estimated that attorney Douglas Hazelton called him at the station approximately 25 minutes after he was provided with the telephone. Hazelton estimated that he received the page from his answering service at approximately 3:20 a.m. At 3:45 a.m., Duff had been talking to Hazelton for approximately four to five minutes when Officer Anderson entered the room and told him to conclude the conversation.
Officer Anderson did not know who Duff was speaking to or the length and the contents of Duff's conversation. Officer Anderson testified that he did not believe that Duff desired additional time to speak on the telephone. Duff testified that he believed that he indicated to Officer Anderson his need for more time by saying "[s]omething to the effect of `hold on a second.'" Hazelton stated that, while he heard someone tell Duff to conclude the conversation, he did not hear Duff ask for more time to speak on the telephone. Hazelton had advised Duff to submit to testing.
After Duff ended his conversation with Hazelton, Officer Anderson asked him if he would submit to testing. Duff agreed to take the breath test.
ISSUE
Was Duff's limited right to consult with counsel vindicated?
ANALYSIS
Whether a motorist has been allowed a reasonable time to consult with counsel is a mixed question of law and fact. Parsons v. Commissioner of Pub. Safety, 488 N.W.2d 500, 501 (Minn.App.1992). Establishing the chronology of events is a question of fact. Id. The significance of those facts becomes a question of law. Id. Our review is de novo because Duff challenges only the district court's application of the law to this case.
Duff argues that he was not afforded a reasonable time to have a meaningful consultation with Hazelton, and thus his right to consult with an attorney prior to chemical testing was not vindicated. We agree.
A driver has a limited right to consult with an attorney before deciding whether to submit to chemical testing for alcohol concentration. Friedman v. Commissioner of Pub. Safety, 473 N.W.2d 828, 835 (Minn.1991). This right is vindicated when the driver is provided with a telephone and given reasonable time to contact and talk with an attorney. Id. (quoting Prideaux v. State, Dep't of Pub. Safety, 310 Minn. 405, 421, 247 N.W.2d 385, 394 (1976)).
When determining whether the driver was given a reasonable time, relevant factors include, but are not limited to, the police officer's vindication of the right to counsel and the driver's diligent exercise of the right. Kuhn v. Commissioner of Pub. Safety, 488 N.W.2d 838, 842 (Minn.App.1992), review denied (Minn. Oct. 20, 1992). In determining whether the driver diligently exercised the right, the court should consider: whether the driver made a good faith and sincere effort to reach an attorney; the time of day when the driver tried to contact an attorney; and the length of time the driver had been under arrest. Kuhn, 488 N.W.2d at 842; see also McNaughton v. Commissioner of Pub. Safety, 536 N.W.2d 912, 915 (Minn.App.1995) (driver did not have a reasonable opportunity to have a meaningful consultation with an attorney because he did not have an opportunity to consult with an attorney of his own choosing and because the attorney he eventually contacted refused to represent him or give him any advice).
Duff's right to consult with an attorney was not vindicated because he was not given reasonable time to have a meaningful consultation with Hazelton. Officer Anderson terminated Duff's telephone conversation with Hazelton without knowing who Duff was speaking to or how long the conversation had lasted. It was unnecessary to terminate the conversation at that moment because Officer Anderson testified that he was not concerned that Duff would slip under *738 the legal limit for alcohol concentration if the test was not administered immediately. In support of its conclusion that Duff's right to counsel was vindicated, the district court found that Duff did not inform Officer Anderson that he needed more time to consult with Hazelton. A review of the record, however, indicates that Duff was not given an effective choice regarding whether to terminate the consultation. Officer Anderson's manner in concluding the conversation made it clear to Duff that he was to obey.[1]
Moreover, the record suggests that Duff was not given reasonable time to meaningfully consult with Hazelton because his conversation was terminated before he received any advice on additional testing. The Commissioner argues that Duff's failure to receive advice on additional testing is inconsequential because such advice could be "reasonably postponed" until after the officer completed initial testing, as an additional test is relevant only if the driver fails the initial test. This view is too simplistic; it is unreasonable to conclude that a driver would be aware of the right to an additional test absent advice by counsel. For example, the implied consent advisory form does not advise motorists of the right to an additional test. Minn.Stat. § 169.123, subd. 2(b) (1996). It is the duty of attorneys, not police officers, "to explain the extent and scope of the right to an additional test while the driver is in custody." Davis v. Commissioner of Pub. Safety, 509 N.W.2d 380, 387 (Minn.App.1993), aff'd, 517 N.W.2d 901 (Minn.1994).
These facts demonstrate that Officer Anderson terminated Duff's conversation with Hazelton before Duff had a reasonable time to meaningfully consult with him. Officer Anderson gave Duff no option but to terminate the consultation with Hazelton before Duff received advice on such matters as additional testing.
DECISION
Appellant's limited right to consult with an attorney prior to chemical testing was not vindicated because he was not given reasonable time to meaningfully consult with the attorney. Therefore, the district court's order sustaining the revocation of Duff's driving privileges is reversed.
Reversed.
KALITOWSKI, Judge (dissenting).
I respectfully dissent. The district court found: (1) the officer made a telephone and telephone books available to Duff at 3:06 a.m.; (2) Duff contacted an attorney; and (3) at 3:45 a.m. the officer indicated Duff would have to make a decision about testing. It is undisputed the officer was not in the room and did not know who Duff telephoned, or the length or content of the conversation. Further, the district court found that Duff did not inform the officer that he needed additional time to consult with an attorney and the attorney did not call back and indicate additional consultation time was needed.
The supreme court has stated:
The right to counsel will be considered vindicated if the person is provided with a telephone prior to testing and given a reasonable time to contact and talk with counsel. If counsel cannot be contacted within a reasonable time, the person may be required to make a decision regarding testing in the absence of counsel.
Friedman v. Comm. of Pub. Safety, 473 N.W.2d 828, 835 (Minn.1991) (citation omitted). Applying Friedman to these facts, the district court did not err in concluding the police officer vindicated Duff's limited right to counsel.
NOTES
[1] The following exchange took place on cross-examination of Officer Anderson:
Q Would it be fair for His Honor to Would it be fair for our record to reflect that when you told Mr. Duff this is done, or whatever words you used, it was put to him in a way that he was to obey?
A I believe so. Usually what I've stated in the past
Q I didn't ask what usually was said in the past.
A Okay.
Q Mr. Duff It was made clear to Mr. Duff that his time on that phone was done, wasn't it?
A That's correct.
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FILED
NOT FOR PUBLICATION DEC 21 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
GREGORY GALAZ, No. 08-55430
Petitioner - Appellant, D.C. No. 2:05-cv-05759-GPS-PLA
v.
MEMORANDUM *
TOM E. VAUGHN, Warden,
Respondent - Appellee.
Appeal from the United States District Court
for the Central District of California
George P. Schiavelli, District Judge, Presiding
Submitted December 19, 2011 **
Before: GOODWIN, WALLACE and McKEOWN, Circuit Judges.
California state prisoner Gregory Galaz appeals from the district court’s
judgment denying his 28 U.S.C. § 2254 habeas petition. We have jurisdiction
under 28 U.S.C. § 2253, and we affirm.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Galaz contends that the Board’s 2004 decision to deny him parole was not
supported by “some evidence” and therefore violated his due process rights. The
only federal right at issue in the parole context is procedural, and the only proper
inquiry is what process the inmate received, not whether the state court decided the
case correctly. Swarthout v. Cooke, 131 S. Ct. 859, 863 (2011); Roberts v. Hartley,
640 F.3d 1042, 1045-47 (9th Cir. 2011) (applying Cooke). Because Galaz raises
no procedural challenges, we affirm.
We decline to expand the certificate of appealability to include Galaz’s
uncertified claims of breach of the plea agreement and violation of the Ex Post
Facto Clause. See 28 U.S.C. § 2253(c)(2); 9th Cir. R. 22-1(e).
AFFIRMED.
2 08-55430
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12 N.Y.3d 928 (2009)
PEOPLE
v.
PRUDE.
Court of Appeals of New York.
July 15, 2009.
Application in criminal case for leave to appeal denied. (Smith, J.).
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349 F.2d 414
Carlotta Mozelle BREWER and Demetria Yvonne Brewer, infants,by Oner Brewer, their father and next friend, etal., Appellants,v.The SCHOOL BOARD OF the CITY OF NORFOLK, VIRGINIA, et al., Appellees.
No. 9898.
United States Court of Appeals Fourth Circuit.
Argued May 31, 1965.Decided July 30, 1965.
S. W. Tucker, Richmond, Va. (Henry L. Marsh, III, Richmond, Va., Victor J. Ashe, J. Hugo Madison, Norfolk, Va., Jack Greenberg and James M. Nabrit, III, New York City, on brief), for appellants.
Leonard H. Davis, City Atty., City of Norfolk (W.R.C. Cocke, Norfolk, Va., on brief), for appellees.
Before HAYNSWORTH, Chief Judge, and SOBELOFF, BRYAN and J. SPENCER BELL, Circuit Judges.
PER CURIAM:
1
This appeal from an order approving a new plan for the operation of the Norfolk, Virginia school system, initially placed in effect for the school year 1963-1964, comes to us soon after our announcement of a succession of decisions which may affect the problem.1 Not only did the District Court have no opportunity to consider those decisions, but the briefs in this Court were prepared and filed before they were available to the attorneys. The consequence is that there are a number of factual situations in the Norfolk school case which are very hazy to us and, in light of our very recent further enunciation of those principles which seem to us controlling, the answer here is uncertain.
2
The appropriate course seems to be a remand of the case to the District Court for its further consideration in light of the more recent decisions in this and other courts. In that connection, if the issue is presented after further definition of the factual situation, the Court is directed to consider the appropriateness and the legal propriety of a mixture of freedom of choice in certain zones where the plaintiffs claim the population is residentially mixed as to races and the denial of that same freedom of choice in other zones which the plaintiffs allege contain racially homogeneous populations. The Court should also consider the propriety of superimposing the 'at large' characteristics of the Booker T. Washington enrollment over the entire system while the other high schools serve separate geographical zones.
3
Vacated and remanded.
1
Bradley v. School Board of City of Richmond, Virginia, 4 Cir., 345 F.2d 310; Gilliam v. School Board of City of Hopewell, Virginia, 4 Cir., 345 F.2d 225; Bowditch v. Buncombe County Board of Education, 4 Cir., 345 F.2d 329; Nesbit v. Statesville City Board of Education, 4 Cir., 345 F.2d 333; Brown v. County School Board of Frederick County, 4 Cir., 346 F.2d 22; Wheeler v. Durham City Board of Education, etc., 4 Cir., 346 F.2d 768
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936 F.2d 575
UNPUBLISHED DISPOSITIONNOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.UNITED STATES of America, Plaintiff/Appellee,v.Garry W. NEWMAN, Defendant/Appellant.
No. 90-3826.
United States Court of Appeals, Seventh Circuit.
Submitted June 13, 1991.*Decided June 26, 1991.
Before BAUER, Chief Judge, and FLAUM and RIPPLE, Circuit Judges.
ORDER
1
Garry W. Newman pleaded guilty to one count of embezzlement of federal funds in violation of 18 U.S.C. Sec. 641 and was sentenced under the Sentencing Guidelines to a four month prison term followed by four months of supervised release. Mr. Newman was also ordered to pay $5,000 in restitution. Mr. Newman appeals that sentence, arguing that the district court improperly increased his sentence under Guidelines Sec. 2B1.1(b)(5) on the grounds that his embezzlement involved "more than minimal planning". For the reasons stated below, we find the district court properly applied a two-level enhancement and affirm the district court's decision.
FACTS
2
Mr. Newman and a partner obtained a contract with the U.S. Department of Housing and Urban Development (HUD) to act as a closing agent in Indiana for sales of homes owned by HUD. Mr. Newman and his partner conducted this business through a corporation, Closing Services. As part of their responsibility as HUD closing agents, Mr. Newman and his partner maintained an escrow account in the name of Closing Services in which they deposited funds obtained upon the sale of HUD property. These funds were to be wire-transferred to a HUD account in Washington, D.C. either the day of a closing or the following banking day.
3
In October, 1988 Mr. Newman undertook daily supervision of the activities of Closing Services. In June, 1990 Mr. Newman's partner revealed to the Federal Bureau of Investigations (FBI) that Mr. Newman had embezzled funds from the escrow account maintained by Closing Services. As a result, the FBI placed a wiretap on the partner's telephone and recorded a conversation between Mr. Newman and the partner. In that conversation, Mr. Newman admitted that he had drawn six checks from the escrow account, deposited them in an account under his sole control, and used the money, approximately $55,000, to pay for Closing Services business expenses, among other things.
4
Mr. Newman voluntarily appeared before FBI agents, at which time he admitted embezzling $54,425 from the HUD escrow account by writing six separate checks, on four separate occasions, to a corporation under his exclusive control. Mr. Newman wrote the first and second check on February 6, 1989, the third check on March 13, 1989, the fourth check on March 14, 1989, and the fifth and sixth checks on April 12, 1989. In each case, Mr. Newman signed the checks in the name of Cheryl Newman, the Closing Services office manager, although he was authorized to sign the checks in his own name.
ANALYSIS
5
Mr. Newman's sentence included a two-level enhancement for more than minimal planning as provided for by Guideline Sec. 2B1.1(d)(5). The Sentencing Guidelines general application notes explain that "more than minimal planning" exists in "any case involving repeated acts over a period of time unless it is clear that each instance was purely opportune." Furthermore, "significant affirmative steps [ ] to conceal the offense indicate more than minimal planning," as does "several instances of taking money, each accompanied by false entries". Sentencing Guideline 1B1.1, Application Note 1(f). In fact, the application notes observe that "more than minimal planning" will "apply especially frequently in property offenses." Id.
6
In reviewing district court's sentencing determinations under the Sentencing Guidelines, we afford due deference to the district court's application of the guidelines to the facts. United States v. Hassan, No. 89-2559, slip op. at 4 (7th Cir. March 6, 1991). We accept the district court's findings of fact unless they are clearly erroneous. Id.; United States v. White, 903 F.2d 457, 460 (7th Cir.1990). Contrary to the appellant's contention, we treat a decision to apply an enhancement factor as a factual determination and Mr. Newman must prove that the district court was clearly erroneous in determining that his activities warranted a two-level enhancement for more than minimal planning. United States v. Lennick, 917 F.2d 974, 979 (7th Cir.1990).
7
We have upheld "more than minimal planning" enhancements in cases where a relatively small amount of planning was involved. See Lennick, 917 F.2d at 979 (creating a two letter paper trial and collecting cases describing acts constituting more than minimal planning); United States v. Ojo, 916 F.2d 388, 392 (7th Cir.1990) (possession of multiple forms of false identification); see also United States v. Culver, 929 F.2d 389 (8th Cir.1991) (purchase of disguises alone constitutes more than minimal planning).
8
Mr. Newman's activities fall squarely within those described in the Application Note as examples constituting more than minimal planning. Mr. Newman transferred funds from the HUD account to an account he controlled on several instances. These transfers were not so close in time to constitute one act but were such so as to show a pattern of continuing behavior. Furthermore, Mr. Newman took affirmative steps to conceal the offense. Although he was authorized to draw checks with his signature, he signed another authorized individual's name to each of the six checks involved in this offense.
9
Therefore, it was not clearly erroneous for the district court to apply a two-level enhancement for "more than minimal planning". The district court's sentencing determination is AFFIRMED.
*
After preliminary examination of the briefs, the court notified the parties that it had tentatively concluded that oral argument would not be helpful to the court in this case. The notice provided that any party might file a "Statement as to Need of Oral Argument." See Fed.R.App.P. 34(a); Circuit Rule 34(f). Appellant has filed a statement requesting oral argument. Upon consideration of that statement, the briefs, and the record, the request for oral argument is denied and the appeal is submitted on the briefs and record
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT July 24, 2007
Charles R. Fulbruge III
Clerk
No. 06-40131
Summary Calendar
HAROLD V. DAVIS,
Plaintiff-Appellant,
versus
DOCTOR KEN KUYKENDALL; CURTIS LAWSON; DAVID DIXON,
Defendants-Appellees.
--------------------
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 6:04-CV-500
--------------------
Before JOLLY, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Harold V. Davis, Texas prisoner # 1068730, alleged under
42 U.S.C. § 1983 a denial of adequate medical treatment and the
use of excessive force. He appeals the dismissal as frivolous of
the medical claim and the summary judgment on the excessive force
claims. Davis appeals the denial of his motions for appointment
of counsel. Davis’s motion for reconsideration of the Clerk’s
notification that no action would be taken on an emergency motion
for injunctive relief is denied.
*
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. 06-40131
-2-
Davis argues that Kuykendall violated his Eighth Amendment
rights because Kuykendall did not provide Davis a wheelchair,
although Davis alleged that he could not walk, and did not order
wheelchair transportation, which Davis alleged was necessary for
him to be examined by a specialist. We review for abuse of
discretion the dismissal of a claim as frivolous under 28 U.S.C.
§ 1915(e). Ruiz v. United States, 160 F.3d 273, 275 (5th Cir.
1998). A claim is frivolous if it lacks an arguable basis in law
or fact. Harper v. Showers, 174 F.3d 716, 718 (5th Cir. 1999).
To establish an Eighth Amendment claim for the denial of
adequate medical treatment, a prisoner must show that prison
officials acted with deliberate indifference to the prisoner’s
serious medical needs, constituting an unnecessary and wanton
infliction of pain. Wilson v. Seiter, 501 U.S. 294, 297 (1991).
Unsuccessful medical treatment, acts of negligence, neglect, or
medical malpractice are insufficient to give rise to a § 1983
cause of action. Varnado v. Lynaugh, 920 F.2d 320, 321 (5th Cir.
1991). A delay in medical care constitutes an Eighth Amendment
violation only if there has been “deliberate indifference, which
results in substantial harm.” Mendoza v. Lynaugh, 989 F.2d 191,
195 (5th Cir. 1993).
Kuykendall examined Davis, determining that a wheelchair was
not medically necessary, Davis’s muscle tone was good, and that
Davis did not have muscle atrophy in his legs. After Kuykendall
examined Davis’s medical records, he referred Davis to a
No. 06-40131
-3-
specialist, provided Davis a wheelchair pass, and ordered the
transportation necessary to enable Davis to see a specialist.
Although Davis did not agree with Kuykendall’s evaluation of his
condition or the timeliness with which his concerns were
addressed, Davis’s allegations do not establish deliberate
indifference. See Mendoza, 989 F.2d at 195; Varnado, 920 F.2d
at 321. The dismissal of Davis’s claim against Kuykendall was
not an abuse of discretion. Ruiz, 160 F.3d at 275.
Davis’s excessive force claim against Sergeant David Dixon
involves an incident that occurred in December 2002. Davis
asserted that he was being escorted from his cell by guards,
including Dixon, with his hands cuffed behind his back. In
response to Davis refusing to continue walking, a guard jerked
Davis’s arm and when Davis jerked back, Dixon and another guard
brought Davis to his back on the floor. While holding Davis’s
head, the three guards hit Davis. When they ceased, the officers
dropped Davis’s head to the floor and Dixon kicked Davis in the
ear. A medical examination showed that Davis had contusions on
his left check and the bridge of his nose, pin-sized lacerations
to his right cheek and the right side of his neck, and that his
right ear was bruised, purple, and swollen.
The second alleged excessive force incident occurred in
April 2003. Davis had tied his cell door shut so that no one
could enter his cell due to his alleged inability to walk. When
Lawson managed to open the cell door, Davis, who was sitting on
No. 06-40131
-4-
the floor, squirted Lawson in the face and chest with an unknown
substance. According to Davis, Lawson closed the cell door after
being squirted, then opened the door and kicked Davis, sending
Davis across his cell. Davis asserts that Lawson stomped on
Davis’s upper back, neck, and head until Davis’s head began to
bleed. An examination of Davis showed that he suffered bruising
and lacerations to his forehead that required the application of
steristrip bandages and that he suffered bruising to his lower
back and the area between his shoulder blades.
The district court granted summary judgment in favor of
Dixon and Lawson, holding that the injuries Davis sustained were
de minimis and that Dixon and Lawson had used de minimis force.
We review de novo the district court’s grant of summary judgment.
Stewart v. Murphy, 174 F.3d 530, 533 (5th Cir. 1999). Summary
judgment is appropriate if the evidence shows that “there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” FED. R. CIV.
P. 56(c). We view the evidence in the light most favorable to
the nonmoving party. Jenkins v. Cleco Power LLC, F.3d , No.
05-30744, 2007 WL 1454363 at *3 (5th Cir. May 18, 2007).
In determining whether a claim of excessive force amounts to
an Eighth Amendment violation we examine the extent of the
injury; the need for the applied force; the relationship between
the need and the force used; the threat reasonably perceived by
officials; and efforts made to temper the severity of a forceful
No. 06-40131
-5-
response. Gomez v. Chandler, 163 F.3d 921, 923 (5th Cir. 1999).
The physical injury suffered must be more than de minimis but
need not be significant. Id. at 924. The core inquiry is
“whether force was applied in a good-faith effort to maintain or
restore discipline, or maliciously and sadistically to cause
harm.” Hudson v. McMillian, 503 U.S. 1, 6-7 (1992).
The evidence, construed in the light most favorable to
Davis, reveals material issues of fact concerning whether the
injuries suffered as a result of each incident were de minimis.
See Brown v. Lippard, 472 F.3d 384, 387 (5th Cir. 2006); Gomez,
163 F.3d at 924-25. Additionally, material issues of fact exist
regarding whether Dixon kicked Davis in the ear or otherwise
injured him and, if so, whether this was done maliciously or in a
good faith effort to restore discipline. Material issues of fact
also exist regarding whether Lawson, who admitted kicking Davis
in the face, did so in immediate response to being sprayed with
the unknown substance and whether the amount of force used was
reasonable in light of the threat he perceived, or whether,
Lawson exited the cell, then returned, and struck Davis. Given
the existence of material issues of fact, we vacate the district
court’s summary judgment in favor of Dixon and Lawson.
Davis challenges the district court’s determination that the
claims of imminent danger raised in a post judgment motion were
unrelated to this action. The district court did not abuse its
discretion in denying the motion for relief from judgment. See
No. 06-40131
-6-
Provident Life and Accident Ins. Co. v. Goel, 274 F.3d 984, 997
(5th Cir. 2001). We do not address Davis’s arguments regarding
the failure to protect him from harm and incidents that occurred
on December 19, 2002, and January 16, 2007. See Leverette v.
Louisville Ladder Co., 183 F.3d 339, 342 (5th Cir. 1999). The
district court did not abuse its discretion in denying Davis’s
motions for appointment of counsel. See Cupit v. Jones, 835 F.2d
82, 86 (5th Cir. 1987); Ulmer v. Chancellor, 691 F.2d 209, 212
(5th Cir. 1982).
JUDGMENT AFFIRMED IN PART; SUMMARY JUDGMENT ON EXCESSIVE
FORCE CLAIMS VACATED AND CASE REMANDED FOR FURTHER
PROCEEDINGS; MOTION FOR RECONSIDERATION DENIED.
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OPINION HEADING PER CUR
NO.
12-06-00373-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS
DISTRICT
TYLER, TEXAS
FRANK O. SEMBERA, § APPEAL
FROM THE 321ST
APPELLANT/CROSS-APPELLEE
V. § JUDICIAL DISTRICT COURT OF
PETROFAC
TYLER, INC. AND
PETROFAC LIMITED, § SMITH
COUNTY, TEXAS
APPELLEES/CROSS-APPELLANTS
OPINION
Frank O.
Sembera appeals the trial court’s judgment denying him the recovery of stock he
once owned in his former employer, Petrofac Tyler, Inc. (“PT”), and the
recovery of stock from a related company, Petrofac Limited (“PL”). Instead, the trial court awarded Sembera
$105,269.40 for five thousand shares of stock he owned in PT until December 31,
2001.
In four
issues, Sembera contends the trial court erred by not restoring his stock in
PT, that the evidence was not legally or factually sufficient to support the
trial court’s judgment, that he could not be forced to sell his shares of stock
when he was terminated, and, in the alternative, that he was entitled to
prejudgment and postjudgment interest on his award. In one cross issue, PL contends the judgment
in favor of Sembera was erroneously entered against it. PL also brings three conditional cross issues
relating to its status as a party to the action.
We affirm
Sembera’s judgment against PT. We
reverse Sembera’s judgment against PL and render a take nothing judgment in its
place.
Factual and
Procedural Background
On January
1, 2000, Sembera, a senior cost engineer, began purchasing shares in his
employer, PT, a worldwide energy exploration company. PT had been a Subchapter S corporation since
1986. By 2001, PT had fifty-one
shareholders who owned a total of 855,000 shares. Sembera owned 5,000 of these shares. Each of these shareholders and their spouses
had entered into a stock purchase agreement with PT. One of the major purposes of this agreement
was to protect the corporation’s 1986 Subchapter S election. Section 13(a)(ii) of the agreement stated
that “no shareholder shall take any action or inaction which will result in the
termination of the S Corporation election unless all of the other shareholders
and the corporation consents to such action or inaction.”1 In January of 2001, PT shareholders were
notified that there was a likelihood of a change in PT’s structure during that
calendar year. In October, details were
given in a shareholder meeting regarding PT’s plans to sell its assets to a
soon to be created foreign company, PL.
The current PT shareholders would have the option of becoming owners in
the new company. The new company’s
purpose was to obtain an equity investor or become a publicly traded company so
that more capital could be generated to fund business operations. On November 19, another PT shareholder
meeting was held and more than two-thirds of the shareholders voted to sell
substantially all of PT’s assets to the new company. During that meeting, the following “Notice Of
Shareholder Election” was given to each PT shareholder:
PETROFAC TYLER, INC.
NOTICE OF SHAREHOLDER
ELECTION
Shareholder’s
Name ______ (Shareholder) Date:
November 27, 2001
At a shareholder meeting of
Petrofac Tyler, Inc. held on November 19, 2001, more than two-thirds of the
shareholders of Petrofac Tyler, Inc. voted to accept the recommendation of the
Board of Directors to sell substantially all the assets of Petrofac Tyler,
Inc. As a result of this transaction, I
understand that as a Petrofac Tyler, Inc. shareholder, I can elect to receive
cash and further receive, separate from the cash, stock in a new holding
company to be formed outside the United States in exchange for the sale of the
assets or I can elect to redeem my shares of Petrofac Tyler, Inc. under the
terms of the Stock Purchase Agreement dated March 9, 2000.
This constitutes my notice to
Petrofac Tyler, Inc. of my irrevocable election.
I hereby irrevocably elect to
(Check only one box) -
___ Receive cash and, separate from the
cash, stock in a new holding company formed outside the United States following
the sale of substantially all assets of Petrofac Tyler, Inc. in accordance with
the terms negotiated by the Board of Directors of Petrofac Tyler, Inc.
Or
___ Redeem ________ of Shares . . . of
stock I own in Petrofac Tyler, Inc. at a per share value as of December 31,
2001, according to the formula set forth in Section 4 of the Stock Purchase
Agreement and, based on the remaining shares I own in Petrofac Tyler, Inc.,
receive cash and separate from the cash, stock in a new holding company formed
outside the United States following the sale of substantially all assets of
Petrofac Tyler, Inc. in accordance with the terms negotiated by the Board of
Directors of Petrofac Tyler, Inc.
Or
___ Redeem all of my shares in Petrofac
Tyler, Inc. at a per share value as of December 31, 2001, according to the
formula set forth in section 4 of the Stock Purchase Agreement.
_________________________________
Signature
_________________________________
Printed
Name
Shareholders were asked to make an election by November 26,
2001 so that the necessary documentation to effectuate their decision would be
in place by December 31, 2001. The
purpose of this election was to determine which PT shareholders wanted to
become shareholders in the new company being formed. By early December, fifty of the fifty-one PT
shareholders had made an election, with Sembera being the lone holdout.
Correspondence
and meetings between Sembera and Philip Norton, a consultant hired by PT to put
together and implement the transitional plan, occurred throughout December.2 On
December 22, Sembera sent the following email to Norton:
From: Frank Sembera
Sent: Saturday, December 22,
2001 4:04 PM
To: Philip Norton
Subject: Petrofac Tyler, Inc.
Restructure
Personal and Confidential
December 22, 2001
Philip
Norton
Petrofac
Re:
Petrofac Tyler, Inc. Restructure
My attorney advised me that
the actions taken and to be taken by Petrofac contemplate a merger pursuant to
the Texas Business Corporation Act. He
advised that additional documentation, information and notice were required to
be furnished to me in connection with the proposed merger. He also advised that Petrofac did not provide
requisite information for the proposed merger or sale of assets.
Since I have not been given
proper opportunity to dissent from the proposed merger or sale of assets, I
hereby formally register my dissent to
the proposed merger and sale of assets and in accordance with the Texas
Business Corporation Act request payment of fair value for my shares.
Should you have any
disagreement with this request, please let me know at your earliest
convenience.
Frank
Sembera
Based upon Sembera’s email, on December
31, PT included Sembera’s 5,000 PT shares with 40,300 shares of other PT
shareholders who did not want to become a part of the new corporation and sold
these shares to PT’s three largest shareholders, Ralph Martin, Louis Owen, and
Gregory Hendrickson. The new company,
PL, was formed on January 10, 2002.
Three days later, PT sold virtually all of its assets to PL in exchange
for shares of PL stock. These PL shares
were then distributed to the shareholders on PT’s books as of January 1,
2002. Following notification by PT of
the completion of the asset sale to PL, Sembera sent Norton and Hendrickson the
following email on February 8, 2002:
From: Frank Sembera
Sent: Friday, February 8, 2002 4:41 PM
To: Philip Norton
Cc: Greg Hendrickson
Subject: Petrofac Tyler, Inc. Stock 2/8/02
Personal
and Confidential
Phil,
Petrofac advised shareholders
and employees on January 30, 2002 that actions submitted for shareholder
approval at the November 19, 2001 special meeting of Petrofac Tyler, Inc.
shareholders had been effected.
Therefore, in accordance with the Texas Business Corporation Act and my
previous dissent(s), I submit this demand for payment of fair value for my
5,000 shares of Petrofac Tyler, Inc. stock.
The estimated fair value per
share of Petrofac Tyler, Inc. stock on November 18, 2001 is $504.02 per
share. This value is based on: 1.) market
valuations of comparable publicly traded companies, 2.) adjustments for
earnings and cash flow multiples to growth rates and 3.) Petrofac evaluations
and projections.
You previously recommended
that the most efficient way to resolve this was to have our attorneys
communicate. I provided my attorney’s
phone number on January 8. Since then, I
believe there have been two phone discussions between the attorneys. I understand that they have had difficulty in
contacting one another.
Please let me know if you
have any questions or if you would like to discuss.
Frank Sembera
On February 19, 2002, PT responded to
Sembera’s email with the following letter:
February
19, 2002
Via
hand delivery
Return
Receipt Requested
Mr.
Frank Sembera
[address]
Re: Your February 8, 2002 demand for fair value of shares in
Petrofac Tyler, Inc.
Dear
Frank:
Please accept this letter as
a formal response and notice to your recent communications concerning the fair
value of shares in Petrofac Tyler, Inc.
First, you are not entitled to any rights under article 5.12 of the
Texas Business Corporation Act because you failed to comply with the
requirements of 5.12. Second, your
demand for payment of $504.02 per share for 5,000 shares is absurd and,
therefore, rejected.
Without waiving Petrofac
Tyler, Inc.’s right to contest and challenge your rights under article 5.12,
Petrofac Tyler, Inc. estimates that the fair value, as of November 18, 2001, of
the 5,000 shares you owned is $54.00 per share, as documented under the Petrofac
Tyler, Inc. Stock Purchase Agreement.
Petrofac Tyler, Inc. agrees to pay this amount to you, less the amount
you owe to Petrofac Tyler, Inc., within ninety (90) days of January 13, 2002.
Petrofac
Tyler, Inc.
By:
_________________________________
Gregory
L. Hendrickson, Secretary
When the
parties failed to reach an agreement on the amount Sembera was to be paid for
his 5,000 shares of PT stock, Sembera filed suit against PT and PL. During a bench trial in early 2006, Sembera
sought restoration of his PT stock and also inclusion in the distribution of
shares of PL stock. The trial court
entered a judgment denying Sembera this relief but awarding him $105,269.40 as
the value of his PT shares under the stock purchase agreement. The trial court then entered findings of fact
and conclusions of law in support of its judgment. Sembera appeals the trial court’s judgment.
Restoration of
Stock
In his
first issue, Sembera contends that his status as a shareholder was
automatically restored because of the trial court’s determination that he was
not entitled to relief under Texas Business Corporation Act’s dissenting
shareholder provision. Therefore, he
argues, he was entitled to receive the PL shares distributed in return for his
5,000 shares of PT stock and all dividends paid while his dissent was
pending. The specific portion of the act
upon which Sembera relies states that
if after the hearing of a
petition filed pursuant to Article 5.12 or 5.16, the court shall determine that
such shareholder is not entitled to the relief provided by those articles,
then, in any such case, such shareholder and all persons claiming under him
shall be conclusively presumed to have approved and ratified the corporate
action from which he dissented and shall be bound thereby, the right of such
shareholder to be paid the fair value of his shares shall cease, and his status
as a shareholder shall be restored without prejudice to any corporate
proceedings which may have been taken during the interim, and such shareholder
shall be entitled to receive any dividends or other distributions made to
shareholders in the interim.
Tex. Bus. Corp. Act Ann. art. 5.13, § C
(Vernon 2003).
This issue
is a direct attack upon two of the trial court’s conclusions of law, which
state as follows:
10. Plaintiff cannot be restored as a
shareholder of Petrofac Tyler, Inc. because restoration would prejudice the
actions of Petrofac Tyler, Inc.
11. Petrofac Limited cannot be compelled
to issue shares to Plaintiff or his spouse because to do so would prejudice the
actions of Petrofac Limited.
These conclusions of law, which are supported by implicit
underlying findings of fact, are also supported by one explicit finding of
fact:
24. The corporate proceedings of Petrofac Tyler, Inc. would be
prejudiced if Plaintiff was restored to his 5,000 shares in Petrofac Tyler,
Inc.
Sembera argues that this finding of fact and the two conclusions of law are not supported
by legally and factually sufficient evidence.
Statutory
Interpretation and Standards of Review
In our
analysis, we must consider the applicable methodology of statutory
interpretation and the three applicable standards of review.
Statutory
Interpretation
The interpretation
of a statute is a question of law. In re Canales, 52 S.W.3d 698, 701
(Tex. 2001) (orig. proceeding).
Therefore, we review a trial court’s interpretation of a statute de
novo. Canal Ins. Co. v.
Hopkins,
238 S.W.3d 549, 561 (Tex. App.–Tyler 2007, pet. denied) (citing Smith v. Smith, 22 S.W.3d 140, 149
(Tex. App.–Houston [14th Dist.] 2000, no pet.)). When performing a de novo review, we exercise
our own judgment and redetermine each legal issue. Quick
v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1999). We will uphold conclusions
of law on appeal if the judgment can be sustained on any legal theory the
evidence supports. Canal, 238 S.W.3d at 561 (citing Waggoner v. Morrow, 932 S.W.2d 627, 631
(Tex. App.–Houston [14th Dist.] 1996, no writ)).
The Texas
Code Construction Act governs the interpretation of statutory codes enacted by
the 60th or a subsequent legislature as part of the state’s continuing
statutory revision program. See Tex.
Gov’t Code Ann. § 311.002 (Vernon 2005).
Chapter 312 of the Texas Government Code governs the interpretation of
civil statutes enacted by Texas legislatures prior to the 60th legislature. See
Tex. Gov’t Code Ann. §§
312.001-.016 (Vernon 2005). The Texas
Business Corporation Act was enacted by the 54th legislature and has not been
officially incorporated into the Texas system of subject matter codes. Instead, the act remains part of the
collection of revised civil statutes and continues to be titled as an “act” and
not a “code.” Tex. Bus. Corp. Act Ann. art.
1.01, § A (Vernon 2003). Therefore, we
should apply the methods of interpretation set forth in Government Code chapter
312 when interpreting the Business Corporation Act.3 See Tex. Gov’t
Code Ann. §§ 312.001-.016.
Under
chapter 312, “[i]n interpreting a statute, a court shall diligently attempt to
ascertain legislative intent and shall consider at all times the old
law, the evil, and the remedy.” Tex. Gov’t
Code Ann. § 312.005 (emphasis added). But see Sheppard v. Lone Star Gas Co., 195 S.W.2d 1013,
1016 (Tex. App.–Austin 1946, writ ref’d) (stating that legislative intent is to
be arrived at, if possible, from the language of the statute itself). Chapter 312 further provides as follows:
(a)
The Revised Statutes are the law of this state and shall be liberally
construed to achieve their purpose and to promote justice.
(b)
The common law rule requiring strict construction of statutes in derogation of
the common law does not apply to the Revised Statutes.
Tex.
Gov’t Code Ann. § 312.006 (emphasis added).
Chapter 312 instructs that “words shall be given their ordinary meaning.”
Tex. Gov’t Code Ann. §
312.002(a). However, “[i]f a word is
connected with and used with reference to a particular trade or subject matter
or is used as a word of art, the word shall have the meaning given by experts
in the particular trade, subject matter, or art.” Tex. Gov’t Code Ann. § 312.002(b).
Under chapter 312, “[a] grammatical
error does not vitiate a law. If the
sentence or clause is meaningless because of the grammatical error, words and
clauses may be transposed to give the law meaning.” Tex. Gov’t Code Ann. §
312.012(a). Likewise, the “[p]unctuation
of a law does not control or affect legislative intent in enacting the law.” Tex.
Gov’t Code Ann. § 312.012(b).
Finally, Texas has a well developed body of common law that provides
tools for statutory interpretation and
predates both chapter 312 and the Code Construction Act.4 Under the common
law, statutes should be read as a whole and construed to give meaning and purpose
to every part. Ex parte
Pruitt, 551 S.W.2d 706, 709 (Tex. 1977) (orig.
proceeding).
Evidentiary Sufficiency
Article 5.13, section C of the
Business Corporation Act provides a dissenting shareholder a right to
restoration “without prejudice to any corporate proceedings which may have been
taken during the interim.” Tex. Bus. Corp. Act Ann. art. 5.13, §
C. As such, the issue of prejudice,
where applicable, may be raised as a defense to a dissenting shareholder’s
restoration. Cf. Canal, 238 S.W.3d at 556 (construing a statute
negating liability for consensually incurred towing fees as a defense to towing
fee recovery actions brought against a third party insurance company); Brown & Root, Inc. v. Shelton, No. 12-01-00259-CV,
2003 WL 21771917, at *2 (Tex. App.–Tyler July 31, 2003, no pet.) (not
yet released for publication) (construing a statute of repose as a defense to a
personal injury action based on strict liability or negligence). Here, the existence of prejudice was a
question of fact. See Pepe Int’l Dev. Co. v. Pub Brewing Co., 915 S.W.2d 925,
931-32 (Tex. App.–Houston [1st Dist.] 1996, no writ) (treating the existence of
prejudice as a question of fact). A
trial court’s findings of fact are reviewable for legal and factual sufficiency
of the evidence by the same standards that are applied in reviewing evidence
supporting a jury’s verdict. Catalina v. Blasdel, 881 S.W.2d 295, 297
(Tex. 1994).
When reviewing a finding of fact for
legal sufficiency, we may set aside the finding only if the evidence at trial
would not enable a reasonable and fair minded finder of fact to make the
finding under review. Canal, 238 S.W.3d at 557 (citing City of Keller v. Wilson, 168 S.W.3d 802, 827
(Tex. 2005)). In making this
determination, we must credit favorable evidence if a reasonable finder of fact
could, and disregard contrary evidence unless a reasonable finder of fact could
not. Id. The finder of fact
is the sole judge of the credibility of the witnesses and the weight to be
assigned to their testimony. Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at
819). The finder of fact is free to
believe one witness and disbelieve another, and reviewing courts may not impose
their own opinions to the contrary. Id. Accordingly,
reviewing courts must assume that the finder of fact decided all credibility
questions in favor of the verdict if a reasonable person could do so. Id. If a reasonable
finder of fact could have done so, we must assume that the finder of fact chose
what testimony to disregard in a way that was in favor of the verdict. Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at
820). A finder of fact “may disregard
even uncontradicted and unimpeached testimony from disinterested witnesses”
where reasonable. Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at
819-20).
In addition, it is within the finder
of fact’s province to resolve conflicts in the evidence. Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at
820). Consequently, we must assume that,
where reasonable, the finder of fact resolved all conflicts in the evidence in
a manner consistent with the verdict. Id.
Where a reasonable finder of fact could resolve conflicting evidence
either way, we must presume the finder of fact did so in favor of the
verdict. Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at
821). Where conflicting inferences can
be drawn from the evidence, it is within the province of the finder of fact to
choose which inference to draw, so long as more than one inference can
reasonably be drawn. Id.
Therefore, we must assume the finder of fact made all inferences in
favor of the verdict if a reasonable person could do so. Id.
Regarding factual sufficiency
challenges, where a party who did not have the burden of proof on an issue
asserts that the trial court’s finding of fact is contrary to the evidence, we
must overrule the complaint unless, considering all the evidence, the finding
is clearly wrong and manifestly unjust. Santa Fe Petroleum, L.L.C. v. Star Canyon Corp., 156 S.W.3d 630, 637
(Tex. App.–Tyler 2004, no pet.) (citing Garza v. Alviar, 395 S.W.2d 821, 823, (Tex. 1965)). In conducting our review, we must consider,
weigh, and compare all of the evidence that supports and that which is contrary
to the finding. See Sosa v. City of Balch Springs, 772 S.W.2d 71, 72
(Tex. 1989). “Reversal [can] occur
because the finding [is] based on weak or insufficient evidence or because the
proponent’s proof, although adequate if taken alone, is overwhelmed by the
opponent’s contrary proof.” Santa Fe Petroleum, 156 S.W.3d at 637.
When reviewing factual sufficiency
issues arising from a bench trial, we must remember that the trial court, as
the trier of fact, is the sole judge of the credibility of the witnesses. Canal, 238 S.W.3d at 557
(citing Santa Fe
Petroleum, 156 S.W.3d at 638). The trial
court may take into consideration all of the facts and surrounding
circumstances in connection with the testimony of each witness and accept or
reject all or any part of that testimony.
Canal, 238 S.W.3d at 557-58
(citing Santa Fe
Petroleum, 156 S.W.3d at 638). Where
enough evidence is before the trial court so that reasonable minds could differ
on the meaning of the evidence, or the inferences and conclusions to be drawn
from the evidence, we may not substitute our judgment for that of the trial
court. Canal, 238 S.W.3d at 558 (citing Santa Fe Petroleum, 156 S.W.3d at 638).
Discussion
Before the 1955 enactment of the
Business Corporation Act, there was no statutory authorization for dissent by
shareholders and, as a general rule, dissenting shareholders had no legal right
to recover compensation for their shares of stock. See Tex.
Bus. Corp. Act Ann. art. 5.11, Comment of Bar Committee – 1955. In 1967, the legislature amended article
5.13, section C, explicitly setting forth a right of restoration.5 See Act of
June 17, 1967, 60th Leg., R.S., ch. 657, 1967 Tex. Gen. Laws 1723-24. In its current form, the statute plainly
states that a dissenting shareholder may have his status as a shareholder
restored “without prejudice to any corporate proceedings which may have been
taken during the interim.” Tex. Bus. Corp. Act Ann. art. 5.13, §
C. The 1967 comment to that article
states:
The new Section C makes it clear that the position of
the dissenting shareholder after demand for payment is not rigid. . . .
[Where appropriate, a shareholder may seek
restoration] except that he has no right to prejudice any corporate proceedings
which may have been taken in the interim.
Tex.
Bus. Corp. Act Ann. art. 5.13, Comment of Bar Committee – 1967.
As
we stated earlier, chapter 312 mandates that “[i]n interpreting a statute, a
court shall diligently attempt to ascertain legislative intent and shall
consider at all times the old law, the evil, and the remedy.” Tex.
Gov’t Code Ann. § 312.005 (emphasis added). Here, the “old law” is the 1955 Business
Corporation Act, which did not explicitly contain a right of restoration. See Act of April 15, 1955, 54th Leg.,
R.S., ch. 64, 1955 Tex. Gen. Laws 282 (the 1955 version of section 5.13). The “evil” is both the 1955 Business
Corporation Act, because it did not explicitly provide such a right, and the
common law at the time, which was considered by the legislature to include a “rigid”
interpretation of that act. See Tex. Bus. Corp. Act Ann. art. 5.13,
Comment of Bar Committee – 1967. Thus,
the “remedy” is the amended version of article 5.13, section C, which
explicitly contains a right of restoration.
However, the plain language of a
statute is often the best indicator of legislative intent. See, e.g., Canal, 238 S.W.3d at 563 (“This question is
better answered by unambiguous statutory language rather than legislative
history.”). The plain language of
article 5.13, section C indicates that it was the intent of the legislature to
impose as a condition precedent to a shareholder’s restoration that the
restoration not prejudice any corporate proceedings that have been taken in the
interim. See Tex. Bus. Corp. Act Ann. art. 5.13, §
C. Further, considering legislative
history, and specifically the old law, the evil, and the remedy, it is still
clear that the legislature intended such a condition precedent. See Tex.
Bus. Corp. Act Ann. art. 5.13, Comment of Bar Committee – 1967; see
also Tex. Bus. Corp. Act Ann.
art. 5.11, Comment of Bar Committee – 1955; Act of April 15, 1955, 54th Leg.,
R.S., ch. 64, 1955 Tex. Gen. Laws 282; Act of June 17, 1967, 60th Leg., R.S.,
ch. 657, 1967 Tex. Gen. Laws 1723-24. We
must now determine the meaning of the term “corporate proceedings.”
Corporate Proceedings
“Proceeding” has been defined to
include “[a]n act or step that is part of a larger action” or “[a] course of
action.” Black’s Law Dictionary 1221 (7th ed.
1999); American Heritage College
Dictionary 1090 (3d ed. 2000).
The definition of “proceeding” does not appear to have meaningfully
evolved or changed during the time pertinent to our analysis. See Webster’s
New World Dictionary (Modern Desk Edition 1979) (defining “proceeding”
to include a “course of action”); American
Heritage Dictionary 1043 (New College Edition 1978) (defining “proceeding”
to include a “course of action” or “procedure”); Webster’s Collegiate Dictionary 790 (5th ed. 1943) (“proceeding”
includes a “procedure,” a “transaction,” and an “act, measure or step in a
course of business or conduct”); Webster’s
Elementary-School Dictionary 451 (1914) (“proceeding” includes “an act
of one who proceeds,” “ a measure or step in a course of business,” and a “transaction”);
Webster’s Common School Dictionary 275
(1892) (“proceeding” is a noun meaning “transaction; course; conduct”); Johnson & Walker’s Dictionary of the
English Language 570 (2d ed. 1828) (defining proceeding as
including to “process from one thing to another,” a “series of conduct,” and a “transaction”). The word “proceeding,” therefore, is a
broadly defined term. However, Sembera
contends that “proceedings” should be construed narrowly, encompassing only a
corporate resolution approved at a meeting where a formal vote was taken and
recorded in the corporate books and records.
In support of his argument, Sembera
cites other Texas statutes – article 9.10 of the Texas Business Corporation Act
and articles 581-7, 1396-6.06, and 1396-9.10 of the Texas Revised Civil
Statutes – that refer to “proceedings.” See
Tex. Bus. Corp. Act Ann. art. 9.10 (Vernon Supp. 2007); Tex. Rev. Civ. Stat. Ann. art. 581-7
(Vernon Supp. 2007); Tex. Rev. Civ.
Stat. Ann. art. 1396-6.06 (Vernon 2003); Tex. Rev. Civ. Stat. Ann. art. 1396-9.10 (Vernon 2003). In three of these articles, the term “proceedings”
refers to the records of an official body. See Tex.
Bus. Corp. Act Ann. art. 9.10; Tex.
Rev. Civ. Stat. Ann. arts. 581-7, 1396-9.10. One article, article 1396-6.06, uses the term
“proceedings” in a more expansive way.
Still, none of these articles indicate that the legislature intended to
deviate from the “ordinary meaning” of the word “proceeding” when using it in
other statutory contexts. See Tex. Gov’t Code Ann. § 312.002(a) (“[W]ords
shall be given their ordinary meaning.”).
Likewise, we have discovered nothing in the wording of article 5.13, its
legislative history, other statutes, or the common law that indicates the term “proceedings”
has taken on a special meaning as a term of art. See Tex.
Gov’t Code Ann. § 312.002(b).
Further, adding the word “corporate” does not create a new term, but
instead, merely limits “proceedings” to those that involve a corporation’s
action. In our review, we have located
nothing to support a conclusion that “corporate proceedings” is always a term
of art with special meaning. Therefore,
the term “corporate proceedings” must be understood in the context in which it
appears.
Finally, although article 5.13
applies to the facts of this case before us, it will no longer apply after
January 1, 2010. See Tex. Bus. Orgs. Code Ann. § 402.005(a)
(Vernon Supp. 2007). Following January 1, 2010, section 10.367 of the Texas
Business Organizations Code will apply to cases formerly governed by the
provisions of article 5.13. See Tex. Bus. Orgs. Code Ann. § 10.367(b)
(Vernon Supp. 2007). That section reads,
in pertinent part:
§ 10.367. Rights of Owners Following
Termination of Right of Dissent
. . . .
(b)
On termination of the right of dissent under this section:
. . . .
(2)
the owner’s right to be paid the fair value of the owner’s ownership interests
ceases and the owner’s status as an owner of those ownership interests is
restored without prejudice to any interim proceeding if the owner’s ownership
interests were not canceled, converted, or exchanged as a result of the action
or a subsequent fundamental business transaction; . . . .
Tex.
Bus. Orgs. Code Ann. § 10.367(b)(2).
We have found no case interpreting
what “without prejudice to any corporate proceedings which may have been taken
during the interim” means. However, the
legislature, when it enacted section 10.367(b)(2), specifically stated that the
dissenting shareholder’s stock would be restored “if the owner’s ownership
interests were not cancelled, converted, or exchanged as a result of the action
or a subsequent fundamental business transaction.” One of the purposes of the legislature in
enacting the Business Organizations Code was to “make the law . . . more
accessible and understandable by . . . restating the law in modern American
English to the greatest extent possible.” Tex. Bus. Orgs. Code Ann. § 1.001
(Vernon Supp. 2007). During the process
of enacting the new code, it was eventually understood by the legislature that
the new code did not make any significant changes to prior law. See Robert W. Hamilton, Texas Practice:
Business Organizations § 2.10 (2d ed.).
As such, our interpretation of the term “corporate proceedings” is
buttressed by subsequent interpretive legislative history supporting a broad
meaning and applying the ordinary meaning of the two words.
For the foregoing reasons, we hold
that, when the legislature enacted the current version of article 5.13, it
intended that “corporate proceedings” be defined expansively and in a manner
consistent with the ordinary meaning of those two words.
Evidentiary Sufficiency
Having determined that, as used in
article 5.13, “corporate proceedings” is an expansive term, we now must
determine if the trial court’s findings of prejudice to corporate proceedings
were supported by legally and factually sufficient evidence. The evidence showed that Sembera’s ownership
interest was redeemed by PT in a business transaction on December 31,
2001. The evidence showed that to try to
reverse this transaction and restore Sembera’s PT shares would create
significant tax consequences for PT shareholders. Further, evidence was presented that the
shares of stock in PL, the new company, had already been distributed to those
who had completed the written election form and, on that form, elected to
receive PL stock. To provide Sembera
with PL stock would require PL to create additional shares of stock without
providing any compensation for that stock or would require divesting other
shareholders of their shares of stock.
Those shareholders were not parties to the lawsuit in question and,
thus, the trial court could not have ordered any such divestiture.
Together, this was evidence of
prejudice to interim corporate proceedings.
Although Sembera presented evidence contradicting some of PT’s evidence,
it was within the trial court’s province to resolve conflicts in the evidence. See
City of Keller, 168 S.W.3d at 820; Canal, 238 S.W.3d at 557-58; Santa Fe Petroleum, 156 S.W.3d at 638. Consequently, we must
assume that, where reasonable, the trial court resolved all conflicts in the
evidence in a manner consistent with its findings of prejudice. See id.
As such, the evidence was legally sufficient to support the trial court’s
findings because the evidence would have enabled a reasonable and fair minded
finder of fact to make them. See City of Keller, 168 S.W.3d at 827; Canal, 238 S.W.3d at 557.
Likewise, the evidence was factually sufficient to support the trial
court’s findings of prejudice because, considering all the evidence, the findings
were not clearly wrong or manifestly unjust. See Santa Fe Petroleum, 156 S.W.3d at
637. We overrule Sembera’s first issue.
PT Stock Election
We next consider Sembera’s third
issue in which he contends there was not legally and factually sufficient
evidence to support the trial court’s findings of fact and conclusions of law
that are contrary to his ownership of shares in both PT and PL.
Standard of Review
We have previously explained the
standards of review for legal sufficiency challenges as well as factual
sufficiency challenges raised by a party who did not have the burden of proof
on an issue. In addition, we must
consider the standard of review applicable to a party attacking the factual
sufficiency of the evidence supporting an adverse finding on which it bore the
burden of proof. When a party attacks
the factual sufficiency of an adverse finding on an issue for which the party
had the burden of proof, the party must demonstrate on appeal that the adverse
finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242
(Tex. 2001). The court of appeals must
consider and weigh all of the evidence, and can set aside a verdict only if the
evidence is so weak or if the finding is so against the great weight and
preponderance of the evidence that it is clearly wrong and unjust. Id.
In reviewing such a challenge, an
appellate court should be mindful that the finder of fact “was not convinced by
a preponderance of the evidence.” Herbert
v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988).
Again, we must remember that the trial court, as the trier of fact, is
the sole judge of the credibility of the witnesses. Canal, 238 S.W.3d at 557 (citing Santa Fe Petroleum, 156 S.W.3d at
638). The trial court may take into
consideration all of the facts and surrounding circumstances in connection with
the testimony of each witness and accept or reject all or any part of that
testimony. Canal, 238 S.W.3d at 557-58 (citing Santa Fe Petroleum, 156 S.W.3d at
638). Where enough evidence is before
the trial court so that reasonable minds could differ on the meaning of the
evidence, or the inferences and conclusions to be drawn from the evidence, we
may not substitute our judgment for that of the trial court. Canal, 238 S.W.3d at 558 (citing Santa Fe Petroleum, 156 S.W.3d at 638).
Discussion
Sembera challenges the sufficiency
of the evidence to support six findings of fact and five conclusions of law.
Sembera’s Decision
The first two findings of fact that
Sembera contends are not supported by legally and factually sufficient evidence
are as follows:
13. Pursuant to authority given by the
shareholders to determine the terms and conditions and to protect the
corporation’s status as an S corporation, the directors of Petrofac Tyler, Inc.
required each shareholder to complete a written election form as part of the
sale by Petrofac Tyler, Inc. of substantially all of its assets.
. . . .
15. Plaintiff did not complete an election
form as required by the Petrofac Tyler, Inc. Directors.
Hendrickson and Norton
testified that the PT directors had authorized the written election form
provided to each of the PT shareholders.
Sembera acknowledged he had been provided an election form by PT. He further testified that he knew he was
under a contractual obligation to assist PT and his fellow shareholders to
retain PT’s Subchapter S election.
Sembera, utilizing his MBA degree
from the University of Dallas, asked Norton twenty-nine sophisticated questions
concerning financial issues, management structure issues, and the tax
implications of the transaction. On
November 26, a week after Sembera and the other fifty PT shareholders received
the election form, Norton gave Sembera a seven page single spaced document
responding to each of his twenty-nine questions. Although the other fifty shareholders had
made an election by early December, Sembera continued to ask Norton for
extensions to make an election. His
December 3 email to Norton tracked much of the shareholder election form:
From: Frank Sembera
Sent: Monday, December 03, 2001 2:51 PM
To: Philip Norton
Cc: Mike Coyne
Subject: CONFIDENTIAL: Shareholder Election – Frank
Sembera
Philip,
Thanks
for the information provided on 11/26 and 11/30. My attorney had reviewed the information regarding
the proposed Petrofac Restructure and Shareholding. It is his advice that I should receive and
review the New Stock Purchase Agreement prior to executing the irrevocable
Election Form.
Therefore,
in accordance with Petrofac’s advice to Shareholders to seek professional
advice prior to execution of the individual Shareholder Election Form and my
attorney’s advice, I must withhold my election until after receipt and review
of the New Stock Purchase Agreement.
As a
note, it is currently my intention to elect to “receive cash and, separate from
the cash, stock in a new holding company formed outside the United States
following the sale of substantially all assets of Petrofac Tyler, Inc. in
accordance with the terms negotiated by the Board of Directors of Petrofac
Tyler, Inc.”
Thanks,
Frank
Communications continued between
Norton and Sembera. Norton pressed
Sembera to make an election but Sembera continued delaying his decision. On December 14, Norton sent Sembera the
following email:
From: Philip Norton
Sent: Friday, December 14, 2001 4:57 PM
To: Frank Sembera
Cc: Mike Coyne
Subject: Your Earlier Messages of December 12
Frank,
Regarding
the subject messages, I would recommend for the “Petrofac Tyler, Inc. Capital
Gains” message you request an individual session on December 19th (refer to my
Tyler Shareholder message of today).
These sessions are available from 1-3 on Wednesday.
For
the “Shareholder Election - Frank Sembera” message, as noted in my message to
you of December 5, 2001, your election was conditionally extended to December
7, 2001 based on fulfilling your request and providing additional time to
review the related document. There has
been no extension thereafter and therefrom we consider your election has been
made.
Regards,
Phil
After this email, Norton continued
responding to more questions and communications regarding the transaction. Sembera continued making numerous trips to
the PT data room where documents detailing the transaction were provided for
all shareholders. Sembera attended a
December 19 shareholder meeting. On that
day, the PT Board of Directors established an eight day period within which
shareholders who had previously elected not to be part of the new transaction
could change their election. Finally, on
December 22, Sembera sent the email registering his dissent to the
transaction. Hendrickson and Norton
testified that this December 22 email was considered by PT to be Sembera’s
election to sell his shares of stock.
This led to the redemption of his 5,000 shares on December 31, 2001 as
contemplated by the shareholder election form.
At oral argument, Sembera contended
that the December 22 email could not have been a sale of his shares because of
the following additional conclusion of law entered by the trial court:
7. The December 22, 2001[] email from
Sembera to Phil Norton[] was not a sale of Sembera’s shares in Petrofac Tyler,
Inc.[] because there was no joinder of his spouse.
Implicit within this
conclusion of law is a fact finding that, with “joinder of his spouse,” the
email would have constituted an election to sell. This is even more evident in the context of
the form in which the proposed conclusion of law was submitted. As originally submitted to the trial court,
the proposed conclusion of law did not include the text “because there was no
joinder of his spouse.” This text was
added to the proposed finding before the findings and conclusions were
signed. Therefore, we can discern that
the trial court considered the December 22 email to be “a sale of Sembera’s
shares” but concluded that the sale was ineffective “because there was no
joinder of his spouse.” The trial court
had the opportunity to make a broader ruling that would have encompassed other
reasons for the email’s ineffectiveness but chose not to, thereby limiting the
reasons for its ineffectiveness to one single reason, “no joinder of [Sembera’s]
spouse.”
Again, we review conclusions of law
de novo, and an erroneous conclusion of law is not binding on appeal. Canal, 238 S.W.3d at 561. The 5,000 shares of the stock had been issued
solely in the name of Sembera. Where
community property is held in one spouse’s name only, there is a presumption
that the property is sole management community property. Tex. Fam. Code Ann. § 3.104(a)
(Vernon 2006). Absent a showing of fraud
or notice on the part of persons dealing with the named spouse, the sole
management presumption protects third parties who rely on the spouse’s
authority to deal with the property. Tex.
Fam. Code Ann. § 3.104(b) (Vernon 2006); see Jean v. Tyson-Jean, 118 S.W.3d 1, 5
(Tex. App.–Houston [14th Dist.] 2003, pet. denied).
Not only were the shares of stock
issued in Sembera’s name, but he alone signed the promissory notes for the
purchase of the shares. The related
stock certificates and promissory notes were offered into evidence. There was no evidence presented at trial that
there was any fraud against Sembera’s wife or that PT had notice that Sembera
lacked authority to sell the shares without his spouse’s joinder.
The stock purchase agreement was
signed by both Sembera and his wife. It
specifically states that it is an agreement between PT and its shareholders and
their spouses. The agreement includes
sections relating to how the shares were to be dealt with in the event of the
death of the shareholder, the death of a spouse, and the termination of a
marriage between the shareholder and spouse.
Finally, the agreement provided that “such shareholders may sell all or
any portion of his shares and his spouse’s interests, if any.” This sentence demonstrates PT’s underlying
belief that a shareholder could sell his spouse’s interest. This same belief is apparent in the “Notice
of Shareholder Election” shown above, which only the shareholder was required
to sign.
Hendrickson’s and
Norton’s testimony showed that PT believed Sembera’s December 22 email
constituted Sembera’s election to sell his shares. Hendrickson described it as a “definitive
decision.” Sembera’s wife was not
required to sign the election form.
Sembera sent the December 22 email to PT, and it was unnecessary
for Sembera’s wife to participate in that transaction for the email to take on
the legal force of an election. The
evidence establishes that the trial court erred in entering additional
conclusion of law 7, and we will therefore disregard it.
Sembera contends that Norton’s email
of December 14 constituted PT’s making his shareholder election for him. The election form itself showed December 31,
2001 as the day the shares would be redeemed.
PT allowed shareholders the period from December 19 through 27 to change
their election form. The tax ramifications
for PT and each shareholder were a paramount consideration. Each shareholder had to make an election by
the end of PT’s and each shareholder’s taxable year, which was December
31. Norton testified that he sent the
December 14 email based on what Sembera had indicated in his December 3
email. The PT stock purchase agreement
required Sembera to make an election so that the Subchapter S status of PT
would be maintained. Sembera’s
subsequent emails of January 7 and February 8 showed he believed he had
tendered his shares for redemption by PT on December 31. The evidence was also legally and factually
sufficient to support the trial court’s findings of facts 13 and 15. When we disregard the erroneous conclusion of
law, we are left with an implicit finding of fact that Sembera’s December 22
email was an election to sell his shares.
Further, the evidence was legally and factually sufficient to support
that implied finding of fact.
Value of Tendered Shares
Sembera also attacks the legal and
factual sufficiency of the evidence supporting the following findings of fact
and conclusions of law:
Findings of Fact
. . . .
19. The books and records of Petrofac
Tyler, Inc. reflect that effective December 31, 2001, the principal balance
Plaintiff owed on the two promissory notes given for the purchase of his 5,000
shares in Petrofac Tyler, Inc. was $166,700.
. . . .
30. Petrofac Tyler, Inc. did not fail to
comply with any provision of the Stock Purchase Agreement regarding plaintiff
or his wife.
. . . .
34. The net value of the stock purchased
by [P]laintiff and his wife, was $105,269.40.
Conclusions
of Law
. . . .
2. Petrofac Tyler, Inc. did not breach
the Stock Purchase Agreement dated March 9, 2000 entered into by and among
Petrofac Tyler, Inc. and its shareholders, including Plaintiff.
. . . .
14. Plaintiff is entitled to receive from
Petrofac Tyler, Inc., in accordance with the Stock Purchase Agreement dated
March 9, 2000, the sum of $105,269.40 which is the net value of his shares of
stock in Petrofac Tyler, Inc.
The Stock Purchase
Agreement established the formula for determining the value of Sembera’s
shares. A letter from the public
accounting firm of Henry & Peters, P.C. of Tyler, Texas dated May 30, 2002
was entered into evidence and contained a detailed calculation, according to
the Stock Purchase Agreement, showing the value of the stock on December 31,
2001. The letter stated that the value
of each share was $54.39388 and the total value of Sembera’s 5,000 shares was
$271,969.40. Hendrickson testified from
documents in evidence that Sembera owed $166,700.00 on his notes to PT. Thus, PT owed Sembera $105,269.40 for his
shares on December 31, 2001.
Sembera did not produce any evidence
to rebut these figures. Rather, he
emphasized that he was a dissenting
shareholder under the Texas Business Corporation Act and therefore entitled to
restoration of his 5,000 PT shares. The
trial court made a specific finding that Sembera was not a dissenter under the
Texas Business Corporation Act, which has not been attacked on appeal by
Sembera.
The Stock Purchase Agreement is part
of the evidence before us. Sembera has
not attacked its validity. The trial
court made a finding of fact that Sembera and his wife executed the
agreement. That finding has not been
attacked on appeal. PT presented
evidence that it performed its obligations under the agreement. We hold that there was legally and factually
sufficient evidence to support findings of fact 19, 30, and 34 and conclusions
of law 2 and 14.
PL is not PT’s
Successor
Sembera attacks finding of fact 31
and conclusions of law 24 and 25, which state:
Findings
of Fact
. . . .
31. Petrofac Limited was not the successor
in interest to Petrofac Tyler, Inc.
. . . .
Conclusions
of Law
. . . .
24. Under the terms of the Sale and
Purchase Agreement dated January 13, 2002, Petrofac Limited was obligated to
issue shares to Petrofac Tyler, Inc. and not to any Petrofac Tyler, Inc.
shareholder; Petrofac Tyler, Inc. had the authority to determine how to
distribute the Petrofac Limited shares, and Petrofac Limited had no role or
involvement in the distribution process.
25. Petrofac Tyler, Inc. fulfilled its
obligations to its shareholders following the sale of assets to Petrofac
Limited on January 13, 2002.
PL in its cross issue
contends the trial court erred when it included PL in Sembera’s judgment for
$105,269.40. Because these issues
involve the same facts and legal issues, we will consider them together. Unobjected to evidence established that PL
was a company incorporated in the Isle of Jersey on January 10, 2002. On January 13, PT sold substantially all of
its assets to PL in exchange for cash and shares of PL stock. However, PT continued its existence as a
Subchapter S corporation and maintained that status at the time of trial. The evidence therefore supports the trial
court’s finding that PL was not a successor to PT. Because of this finding, there is no
connection between Sembera and PL that would support a judgment against PL. Findings of fact form the basis of a
judgment. Tex. R. Civ. P. 299.
As shown above, only the dealings between Sembera and PT are properly
before us. We overrule Sembera’s third
issue and sustain PL’s cross issue.
Because we have sustained PL’s cross issue, we need not consider PL’s
three conditional cross issues.
Termination of Employment
In his second issue, Sembera
contends that PL’s termination of his employment on June 10, 2002 could not
have forced him to sell his 5,000 shares in PT.
We have shown above that Sembera’s shares were tendered to PT on
December 31, 2001 and he ceased to own shares in PT on that date. Therefore, we overrule Sembera’s second
issue.
Prejudgment and Postjudgment Interest
In his fourth issue, Sembera
contends that he is entitled to prejudgment and postjudgment interest on the
judgment of $105,269.40. PT contends it
made an offer of this amount to settle the dispute in both February and May of
2002. It thus contends that Sembera was not
a prevailing party entitled to prejudgment interest because he refused this
amount.
A party must prevail before it is
entitled to prejudgment interest. Cf. Apache Corp. v. Dynergy Midstream Servs., L.P., 214 S.W.3d 554, 566
(Tex. App.–Houston [14th Dist.] 2006, no pet.).
If judgment for a claimant is equal to or less than the amount of a
settlement offer of the defendant, prejudgment interest does not accrue on the
amount of the judgment during the period
that the offer may be accepted. Tex. Fin. Code Ann. § 304.105(a)
(Vernon 2006). Here, Sembera has not
shown he is entitled to prejudgment interest because the judgment he was
awarded was not more than PT’s settlement offer and the amount offered was
continuously available.
With reference to postjudgment
interest, the $105,269.40 was unconditionally tendered into the registry of the
trial court prior to trial. Postjudgment
interest is not available when the judgment amount has been tendered with the
trial court prior to the entry of judgment. See St. Paul Mercury Ins. Co. v. Billiot, 342 S.W.2d 161, 164
(Tex. App.–Beaumont 1960, writ ref’d.).
Postjudgment interest is simply compensation for a judgment creditor’s
lost opportunity to invest the money awarded as damages at trial. Miga v. Jensen, 96 S.W.3d 207, 212
(Tex. 2002). When a judgment creditor
has received an unconditional tender of the money awarded, and may invest it as
he chooses, there is no need for the continuing accrual of postjudgment interest.
Id. We overrule Sembera’s fourth issue.
Conclusion
Because we have sustained PL’s cross
issue, we reverse Sembera’s judgment
against PL and render judgment that Sembera
take nothing against PL. Having
overruled Sembera’s four issues, we affirm
the
trial court’s judgment for $105,269.40 against PT.6
JAMES T. WORTHEN
Chief Justice
Opinion delivered March 26, 2008.
Panel consisted of Worthen,
C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
1 Taxation is one of the
most important economic considerations when choosing a business form. See Robert W. Hamilton, Texas
Practice: Business Organizations § 1.13 (2d ed.). A major factor among taxation issues is that
of federal income taxation. See id. §
4.7. Ordinarily, stockholders in a
corporation are effectively taxed twice, once when the corporation is taxed on
its earnings, and then a second time when dividends are paid to the
stockholders. See id. However, when a corporation meets certain
requirements, it can elect to be taxed as a Subchapter S corporation and
therefore avoid the initial federal tax on its earnings. See id. Significant requirements for Subchapter S
eligibility are that
(1) the corporation must not
have more than one hundred stockholders;
(2) all the stockholders must
be individuals, qualified estates or trusts, or certain tax exempt
organizations;
(3) no stockholder may be a
nonresident alien; and
(4) the corporation must not
have more than one class of stock.
See 26 U.S.C.A. § 1361(b)(1)
(West, Westlaw through May 2007 amendments).
2 Norton testified that
the election was necessary so that PT’s Subchapter S election would not be
revoked by the Internal Revenue Service (“IRS”). Gregory Hendrickson, chief financial officer,
corporate secretary, and a major shareholder in PT, testified that the failure
of any shareholder to make an election could have jeopardized PT’s Subchapter S
election. Regarding Sembera’s failure to
make a decision, Hendrickson testified that “if [Sembera] would continue to
have sat on the fence, that would have jeopardized our S [corporation] election
by the creation of a second class of stock.”
Hendrickson also stated that “we were a Subchapter S Corporation, we
could not have two classes of stock. Two
classes of stock would have created horrific tax consequences that . . . could
have prevented the reorganization plans.”
“We had to know [who from] our shareholder base was going into [the new
company] and who did not want to go into [the new company]. We didn’t have three options. We had two
options. You had to get in, or you had
to get out.”
3 Where the Code
Construction Act does not conflict with chapter 312, and when it is reasonable
to do so, it may also be appropriate to consider methods set forth within the
Code Construction Act, unless it appears that the legislature has chosen not to
apply those methods to uncodified civil statutes. See Tex.
Gov’t Code Ann. § 311.025 (Vernon 2005) (addressing situations of
irreconcilable statutes); cf. Tex.
Gov’t Code Ann. § 311.026 (Vernon 2005) (addressing the interplay
between specific and general statutory provisions).
4 As we have explained above, chapter 312,
and not the Code Construction Act, governs our review of article 5.13, section
C. Therefore, where chapter 312 does not
contradict these common law rules of statutory interpretation, and when the
common law rules would otherwise be appropriate for use, they should be
considered. Where these common law rules
contradict the Code Construction Act, we must disregard the suggestions
contained within the Code Construction Act and follow the common law if that
common law is binding precedent. Cf. In re Doe, 19
S.W.3d 249, 253 (Tex. 2000) (Texas Supreme Court had the power to set forth the
appropriate standard to be applied by lower courts when determining evidentiary
sufficiency).
5 The
1967 version of the statute is, with minor revisions not pertinent here, the
version before us for interpretation. Compare Tex.
Bus. Corp. Act Ann. art. 5.13, § C with Act of June 17, 1967,
60th Leg., R.S., ch. 657, 1967 Tex. Gen. Laws 1723-24.
6 To the extent any party has raised additional issues not
addressed in this opinion, we do not consider those issues necessary to the
final disposition of this appeal.
Therefore, we do not address them.
See Tex. R. App. P. 47.1.
| {
"pile_set_name": "FreeLaw"
} |
(2008)
RANCHERS CATTLEMEN ACTION LEGAL FUND; United Stockgrowers of America; Herman R. Schumacher; Robert P. Mack; Ernie J. Mertz; Wayne J. Nelson; South Dakota Stockgrowers Association; Center for Food Safety; Consumer Federation of America; Creutzfeldt-Jakob Disease Foundation, Inc.; Food & Water Watch; and Public Citizen, Plaintiffs,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE; Animal and Plant Health Inspection Service; Charles F. Conner, in his capacity as the Acting Secretary of Agriculture, Defendants.
No. CIV 07-1023.
United States District Court, D. South Dakota, Northern Division.
July 3, 2008.
MEMORANDUM OPINION AND ODER ON MOTION FOR PRELIMNARY INJUNCTION
LAWRENCE L. PIERSOL, District Judge.
This matter is before the Court for a decision on the plaintiffs' Motion for Preliminary Injunction. The plaintiffs ("Plaintiffs") filed a Verified Complaint for Declaratory and Injunctive Relief against the United States Department of Agriculture ("USDA"), Animal and Plant Health Inspection Service ("APHIS"), and the Acting Secretary of Agriculture, to prevent implementation of a final rule published on September 18, 2007: "Bovine Spongiform Encephalopathy; Minimal-Risk Regions; Importation of Live Bovines and Products Derived From Bovines; Final Rule" 72 Fed. Reg. 53,314 (the "OTM [over thirty months] Rule"). In the OTM Rule, APHIS relaxed restrictions on imports of live cattle and edible bovine products from "minimal risk" regions (Canada), allowing for the first time since May 2003 the importation of cattle for any purpose, provided they were born on or after March 1, 1999, and allowing imports of most edible products from Canadian cattle of any age. Plaintiffs seek to enjoin the OTM Rule, which went into effect on November 19, 2007. Shortly after the Complaint was filed, Plaintiffs filed the pending Motion for Preliminary Injunction.
The Court has considered the relevant portions of the administrative record, the parties' briefs, the amici briefs, oral arguments presented on Tuesday, February 19, 2008, and post-hearing briefs filed by the parties and amici.[1] For the following reasons, the Motion for Prehminary Injunction will be granted in part.
I. JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction of this proceeding under 28 U.S.C. § 1331 and 5 U.S.C. § 702. Under the Administrative Procedure Act ("APA"), the Court must not set aside agency regulations unless they are found to be arbitrary, capricious, an abuse of discretion, or otherwise contrary to law. National Pork Producers Council v. Bergland, 631 F.2d 1353, 1359 (8th Cir.1980). An arbitrary and capricious agency rule exists if the agency "relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). This is a highly deferential standard of review. Northwest Airlines, Inc. v. Goldschmidt, 645 F.2d 1309, 1317 (8th Cir.1981). The court cannot substitute its judgment for that of the agency, and affirmance is required if a rational basis exists for the agency's decision. Id.
When considering whether to grant a preliminary injunction, the Court must consider four factors: (1) the threat of irreparable harm to plaintiffs; (2) the state of the balance between this harm and the injury that granting the preliminary injunction will inflict on the defendants; (3) the probability of plaintiffs' success on the merits; and (4) the public interest. See Dataphase Systems, Inc. v. C.L. Systems, Inc., 640 F.2d 109, 113 (8th Cir.1981) (en banc). The Eighth Circuit rejected a construction of the "probability of success" factor requiring that the movant prove a greater than fifty per cent likelihood that he will prevail on the merits, reasoning that:
At base, the question [of whether preliminary relief should be granted] is whether the balance of equities so favors the movant that justice requires the court to intervene to preserve the status quo until the merits are determined. The equitable nature of the proceeding mandates that the court's approach be flexible enough to encompass the particular circumstances of each case. Thus, an effort to apply the probability language to all cases with mathematical precision is misplaced.
Id. at 113. Rather, the Eighth Circuit explained that "[i]n balancing the equities no single factor is determinative." Id. The likelihood that the movant will prevail on the merits "must be examined in the context of the relative injuries to the parties and the public." Id. The Eighth Circuit provided examples of the balancing and relative importance of various factors depending upon the circumstances of the case:
If the chance of irreparable injury to the movant should relief be denied is outweighed by the likely injury to other parties litigant should the injunction be granted, the moving party faces a heavy burden of demonstrating that he is likely to prevail on the merits. Conversely, where the movant has raised a substantial question and the equities are otherwise strongly in his favor, the showing of success on the merits can be less.
Id.
II. BACKGROUND
The Animal Health Protection Act ("AHPA") gives the Secretary of the USDA broad discretion to regulate the importation of animals and animal products. It states that the Secretary "may" prohibit or restrict such importation "if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction into or dissemination within the United States of any pest or disease of livestock." 7 U.S.C. § 8303(a)(1). APHIS is the agency within the USDA that regulates the importation of animals and animal products to guard against the introduction of various animal diseases in the United States. APHIS collaborates with other federal agencies to implement a coordinated response to Bovine Spongiform Encephalopathy ("BSE"), commonly referred to as "mad cow disease." Protection from the risks of BSE is carried out primarily by APHIS with respect to animal health, and by the USDA's Food Safety and Inspection Service ("FSIS") with respect to the food safety of meat.
BSE is a progressive and fatal neurological disorder of cattle. Although the agent that causes BSE has yet to be fully characterized, the theory that is most accepted in the international scientific community is that the agent is an abnormal form of a protein called a cellular prion protein. Scientists believe that the primary route of transmission between cattle requires that cattle ingest feed that has been contaminated with a sufficient amount of infected tissue from another animal. It is believed that cattle can develop BSE from exposure to as little as one milligram of infected tissue. (Doc. 19-2 at p. 11.) The USDA believes that this route of transmission can be prevented by excluding potentially contaminated materials, including tissues designated as "specified risk materials" ("SRMs"), from ruminant feed.
The background of regulations developed by the USDA to prevent the spread of BSE to the United States have been set forth by the Ninth Circuit in Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. United States Dep't of Agric, 499 F.3d 1108 (9th Cir. 2007) ("R-Calf II"), and it need not be repeated at length here. In 1996, the British government discovered that consumption of BSE-contaminated meat could cause variant Creutzfeldt-Jakob Disease (vCJD) in humans. See id. at 1112. This is a chronic and fatal neurodegenerative disease. Approximately 200 cases of vCJD have been identified worldwide since 1996. As stated by the Ninth Circuit, "[c]hief among the USDA's measures to prevent BSE in the United States was a ban on imports of all cattle products from countries where BSE was known to exist." Id. Canada was added to this list in May 2003 when a cow in Alberta was diagnosed with BSE. See id.
In August 2003, the USDA "partially changed course and announced that certain `low-risk' cattle products could be imported from Canada, including meat from cows under 30 months of age." Id. APHIS completed a risk analysis regarding the possibility of resuming Canadian cattle and beef imports. In November 2003, it announced a proposed rule creating a new category of "minimal risk" regions those that would present a minimal risk of introducing BSE into the United States via ruminants and ruminant products.[2] Canada was on the list based on its fulfillment of the three requirements for such regions. First, Canada maintained risk mitigation measures to prevent spread of BSE, including import restrictions on animals, animal products and feed, conducted surveillance for BSE at levels recommended by the Office International des Epizooties ("OIE"), also referred to as the World Organisation for Animal Health; and enforced an effective ban on feeding ruminant protein to ruminants. Second, it conducted an epidemiological investigation to confirm the adequacy of measures to prevent the further introduction or spread of BSE. Third, it took additional risk mitigation measures, as necessary, based on risk analysis of the outbreak.
The November 2003 proposed MMR Rule also proposed to permit imports from Canada of (1) cattle less than 30 months of age, and (2) meat from such cattle, subject to prescribed conditions. The rationale for this proposal was that because of the nature, incubation period, and progression of BSE infectivity, young cattle exposed to low levels of BSE will accumulate very little BSE infectivity during the first few years of life. Therefore, the USDA believed that the risk to United States livestock presented by the importation of such bovines was very low.
In December 2003, BSE was detected in a Canadian-origin cow in Washington State, likely caused by feed ingested before the Canadian feed ban went into effect. R-Calfll, 499 F.3d at 1112-13. In response to this discovery, on January 12, 2004, FSIS issued three interim final rules to minimize human exposure to SRMs believed to have the potential to harbor the BSE agent in infected cattle. One rule designated certain materials from cattle as SRMs, declared that SRMs were inedible, and prohibited the use of SRMs for human food. 69 Fed. Reg. 1862. It required establishments that process and slaughter cattle to develop, implement, and maintain written procedures for the removal, segregation, and disposition of SRMs. Id. This rule also prohibited the slaughter of nonambulatory disabled cattle for human consumption and prescribed the proper disposition of such cattle. Id. the other rules dealt with requirements for meat produced by advanced meat recovery systems (69 Fed. Reg. 1874), and a prohibition on the use of air injection stunning methods at slaughter because they may force pieces of the brain into the circulatory system of cattle (69 Fed. Reg. 1885). On July 13, 2007, FSIS finalized the SRM interim final rule with amendments, and affirmed without amendment the air injection stunning interim final rule. 72 Fed. Reg. 38,700 and 38,701.
In support of FSIS's July 13, 2007 final rule regarding SRMs, the agency conducted a risk assessment to develop baseline and mitigation estimates of the potential human exposure to the BSE agent. 72 Fed. Reg. at 38,703. This was an updated version of the 2001 and 2003 risk assessment models used in a previous human health risk assessment conducted by the Harvard Center for Risk Analysis of the Harvard School of Public Health and the Center for Computational Epidemiology at Tuskegee University. A peer review of the updated model ("the 2005 model") and the resulting assessment was completed in September 2005. In July 2006, FSIS published a notice in the Federal Register announcing the availability of the updated risk assessment and requesting public comment. 71 Fed. Reg. 39,282. The notice also announced a public meeting to discuss the updated risk assessment. Id. Plaintiff R-Calf participated in this process and filed comments with the FSIS. A discussion of the updated risk assessment is found in FSIS's July 2007 SRM final rule. 72 Fed. Reg. at 38,724-26. FSIS concluded that the results of the 2005 model demonstrated that removal of SRMs almost completely eliminates potential human exposure to the BSE agent and that the regulatory requirements for SRM removal are prudent and appropriate for preventing potential human exposure to the BSE agent. 72 Fed. Reg. at 38,726.
While FSIS was working on the SRM regulations, on March 8, 2004, APHIS reopened the comment period on the November 2003 proposed MMR rule, and also proposed to allow the import of beef from Canadian cattle thirty months of age and older, provided SRMs are removed at slaughter. AR 3837. APHIS stated:
The measures taken by FSIS do not restrict the slaughter of cattle in the United States based on the age of the animals i.e. meat from cattle 30 months of age or older will continue to be allowed into the human food supply. However, measures are in place to ensure that SRMs from such cattle do not enter the food supply. We now believe it would not be necessary to require that beef imported from BSE minimal riskregions [Canada] be derived only from cattle less than 30 months of age, provided equivalent measures are in place to ensure that SRMs are removed when the animals are slaughtered, and that such other measures as are necessary are in place. We believe such measures are already being taken in Canada. We invite comment from the public regarding this change to the provisions we proposed in November 2003 regarding the importation of beef.
AR 3839. The original proposal would have required beef to come from cattle that were less than 30 months of age at the time of slaughter. Plaintiff R-Calf, and 3,378 others, submitted written comments on this possible change to the proposed MMR Rule. R-Calf II, 499 F.3d at 1113; 70 Fed. Reg. 465. R-Calf also sought and received, on April 26, 2004, a temporary restraining order ("TRO") against the USDA from the United States District Court in Montana. See Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. United States Dep't of Agric, 359 F.Supp.2d 1058, 1062 (D.Mont.2005). The TRO prohibited the USDA from allowing importation from Canada of beef products beyond those authorized by the USDA's action in 2003 from cattle under the age of 30 months. See id. On May 5, 2004 the TRO was converted into a preliminary injunction that was set to expire five days after notice of final agency action on the MMR rulemaking proposed on November 4, 2003 and reopened on March 8, 2004. See'id.
The final MMR Rule was published by the USDA on January 4, 2005, with an effective date of March 7, 2005. See Calf II, 499 F.3d at 1113; 70 Fed. Reg. 460. It allowed imports of live Canadian cattle under 30 months of age and also allowed in Canadian beef products from cattle of all ages. See R-Calf II, 499 F.3d at 1113; 70 Fed. Reg. at 494. After the final rule was published, more cows in Alberta were diagnosed with BSE and, again, the USDA attributed the disease to contaminated feed manufactured before the Canadian feed ban. See R-Calf II, 499 F.3d at 1113. Subsequently, the USDA decided to continue the ban on beef derived from older Canadian cattle because ongoing investigations into those cases were not complete. See 72 Fed. Reg. at 53,316; R-Calf, 359 F.Supp.2d at 1068. On March 11, 2005, the USDA published a Federal Register notice suspending the section of the MMR Rule that would relax the ban on meat from cattle over 30 months old. See R-Calf II, 499 F.3d at 1113; 70 Fed. Reg. 12,112. The final MMR Rule was to go into effect on March 7, 2005, but on March 2, 2005, the Montana District Court issued a preliminary injunction prohibiting its implementation. See R-Calf, 359 F.Supp.2d 1058. On August 17, 2005, the Ninth Circuit reversed the preliminary injunction ruling, finding that the USDA "had a firm basis for determining that the resumption of ruminant imports from Canada would not significantly increase the risk of BSE to the American population," and that the district court had not adequately deferred to the USDA's determinations. See Ranchers Cattlemen Action Legal Fund United Stockgrowers of Am. v. United States Dep't of Agric., 415 F.3d 1078 (9th Cir.2005) ("R-Calf I"). On remand, the district court granted summary judgment in favor of the USDA and, on August 28, 2007, the Ninth Circuit affirmed this decision on appeal. See R-Calf II, 499 F.3d at 1114. The Ninth Circuit stated that the additional cases of BSE-infected cows in Canada (five of the nine cases having been diagnosed "in just the past year") were cause for concern, and that they cast doubt on the effectiveness of Canada's feed ban. But those cases were not before the USDA during its rulemaking in 2004, and the Ninth Circuit held that the agency was entitled to rely on the opinions of its experts and other evidence that was before it at that time. See id. at 1117-18. The Ninth Circuit said that the "proper remedy is to petition to reopen rulemaking under 5 U.S.C. § 553(e), not to challenge the existing rule as arbitrary and capricious." Id. at 1118.
This brings the Court to the OTM Rule being challenged in this case. Published on January 9, 2007, the proposed rule stated its purpose was to amend the regulations to allow importation into the United States from Canada "[l]ive bovines for any use born on or after a date determined by APHIS to be the date of effective enforcement of a ruminant-to-ruminant feed ban in the region of export; blood and blood products derived from bovines; and casings and part of the small intestine derived from bovines." 72 Fed. Reg. at 1102. The January 9, 2007 proposed OTM Rule referred to the March 11, 2005 Federal Register notice that suspended the provision of the MMR Rule which had relaxed the ban on meat from cattle over 30 months old, stating, "[I]n March 2005, APHIS gave notice in the Federal Register that the applicability of certain provisions of the rule pertaining to bovine meat, meat byproducts, whole and half carcasses, and certain other bovine products was being delayed until further notice." Id. at 1123. The proposed OTM Rule also stated, "Removal of the delay of applicability, thereby allowing importation of Canadian beef from cattle slaughtered at 30 months or older, is a decision that will be taken at the discretion of the Secretary of the U.S. Department of Agriculture." Id. at 1125. The proposed OTM Rule discussed the economic effects of lifting the delay simultaneously with the publication of the final OTM Rule, but it did not discuss the safety of beef and other products from Canadian cattle over 30 months old.
The final OTM Rule was published on September 18, 2007. 72 Fed. Reg. 53,314. It was stated that, as part of the rulemaking, APHIS conducted an assessment that evaluated the animal health risk to the United States of BSE as a result of importing the "bovine commodities" considered in the rule. See id. at 53,315. APHIS concluded that the BSE risk to the United States is "negligible." Id. The reasons given for this negligible risk were that Canada effectively enforces its feed ban, id. at 53,330; there is a very low level of BSE prevalence in Canada, id. at 53,329, and the additional, sequential barriers to the transmission of BSE (e.g., slaughter controls and dead animal disposal requirements) have a multiplicative risk-reduction effect, id. at 53,331.
In addition to making the risk assessment report available to the public for comments, APHIS made it available for peer review by experts in the field "to determine whether the risk assessment was scientifically sound, transparent, and consistent with international standards (e.g., those by the OIE); the application of external assessments or models was appropriate; and the assumptions were justified, supported and reasonable." Id. at 53,315. Comments submitted by the public on the proposed rule were also given to the peer reviewers for their consideration. The reviewers found that the methods used in the risk assessment were scientifically sound and agreed with the conclusion that the likelihood of establishment of BSE in the United States cattle population is negligible. See id. at 53,316.
In the final OTM Rule published on September 18, 2007, APHIS did, in fact, lift the delay on imports of meat from Canadian cattle over 30 months old. 72 Fed. Reg. at 53,316. In the discussion regarding this, APHIS stated that the risk assessment for the final OTM Rule demonstrating a negligible risk of BSE from importing live cattle, including those over 30 months of age, supports the conclusion of the risk analysis conducted for the January 2005 final MMR Rule regarding importation of meat and meat products derived from bovines of any age. Id. APHIS concluded that the BSE risk is "even lower" for the meat imports than for live bovines because the SRMs will be removed.[3]Id.
Before the OTM Rule went into effect on November 19, 2007, Plaintiffs in this case filed their Complaint in the Northern Division of the District of South Dakota on October 24, 2007, and their Motion for Preliminary Injunction was filed on November 1, 2007. The case was transferred to this Court in the Southern Division of the District of South Dakota on December 10, 2007. An Order issued on December 13, 2007 granted Plaintiffs' motion to extend the deadline to file their reply brief in support of the Motion for Preliminary Injunction until January 9, 2008, and directed the parties to advise the Court when they would be prepared for a hearing on the motion. The administrative record was filed on December 17, 2007. On January 10, 2008, the parties filed a "Joint Response to Order of December 13, 2007," indicating that all counsel would be available for a hearing on the Motion for Preliminary Injunction on February 19 or February 20, 2008. The Court scheduled the hearing for February 19, 2008. Amicus curiae briefs were filed prior to the hearing by three groups: the Canadian Cattlemen's Association, the Government of Canada and the National Meat Association, et. al. Arguments were heard from the parties at the hearing on February 19, 2008, and post-hearing briefs have been submitted by the parties and by amici. The Motion for Preliminary Injunction is now ready for ruling.
III. ISSUES PRESENTED
There are five counts in the Verified Complaint. In Count 1, Plaintiffs challenge the substantive content of the OTM Rule. Plaintiffs claim in Count 2 that Defendants acted in excess of their statutory authority in promulgating the OTM Rule. Count 3 contains allegations of procedural inadequacies in the rule-making process. Plaintiffs assert in Count 4 that Defendants failed to comply with their obligations under the National Environmental Policy Act ("NEPA"), and assert in Count 5 that Defendants failed to comply with the Regulatory Flexibility Act.
In the Motion for Preliminary Injunction, Plaintiffs address "a fraction of the arguments that Plaintiffs believe justify overturning the OTM Rule and that would be presented in a summary judgment motion." (Doc. 19, p. 2.) The arguments presented by Plaintiffs at this point are:
A. Plaintiffs first argue that the USDA violated the APA by failing to engage in notice and comment before lifting the ban on imports of beef from cattle over 30 months. In response, the USDA contends that the OTM beef provisions had already been subject to a thorough notice and comment opportunity before the January 2005 MMR Rule was promulgated. (As noted previously, the March 8, 2004 notice reopened the comment period on the MMR Rule and invited comment from the public specifically on imports of beef from cattle over 30 months old.) The USDA argues that further notice and comment was unnecessary in 2007 because the substance of the beef provisions did not change from the January 2005 final MMR Rule.
B. According to Plaintiffs, the USDA's actions in removing the restrictions on Canadian imports exceed its statutory authority because they violate Congress's mandate to "prevent the introduction into or dissemination within the United States" of BSE. 7 U.S.C. § 8303(a)(1). Defendants counter that the AHPA confers wide discretion on the Secretary to deal with imports and does not impose any requirement that all of the USDA's actions carry no risk of disease. Investigations reveal a "negligible" risk that the OTM Rule will lead to disease in U.S. cattle, and the USDA believes the OTM Rule meets statutory requirements.
C. Plaintiffs assert that the USDA failed to consider that the different requirements for SRM disposal in the United States and Canada creates an economic incentive to ship older Canadian cattle to the United States because SRMs are banned from use for animal feed or fertilizer in Canada and disposal costs are higher. In the United States, wastes from slaughterhouses, including SRMs, can be used in non-ruminant animal feed and fertilizer. Defendants counter that Canada's more stringent SRM requirements and its higher costs were considered in the rulemaking.
D. Next, Plaintiffs believe that the USDA has made inconsistent statements regarding BSE surveillance and testing in order to support the OTM Rule. Defendants deny that any of the statements referenced by Plaintiffs are inconsistent.
E. Plaintiffs argue that the USDA failed to respond in a meaningful way to commentators who asked the USDA to require testing of OTM Canadian cattle before slaughter. Defendants say they considered and responded to comments about testing cattle for BSE.
F. Plaintiffs contend that various provisions of the OTM Rule conflict with existing regulations. Defendants deny this allegation.
G. On November 20, 2007, Plaintiffs supplemented the record with information and argument regarding their claim in Count 4 of the Complaint that the USDA violated the National Environmental Policy Act ("NEPA") when it promulgated the OTM Rule. Defendants claim they complied with NEPA.
The Court finds that Plaintiffs are likely to prevail on the merits of their first claim that the USDA failed to comply with the APA in promulgating the beef provisions of the OTM Rule. This conclusion requires remand to the USDA for additional administrative proceedings and, therefore, the Court will not reach Plaintiffs' other challenges to OTM Rule at this time.
IV. LEGAL ANALYSIS
The Court's examination of the rulemaking process reveals that the USDA failed to provide Plaintiffs and the public in general with legally sufficient notice and an opportunity to comment on its decision in 2007 to relax the ban on imports of OTM beef from Canada. All four of the Dataphase factors relevant to the Court's determination whether to grant or deny a preliminary injunction weigh in favor of granting Plaintiffs' request on this issue.
A. Plaintiffs Have Shown a Substantial Likelihood of Success on the Merits
The issue for this Court's determination is whether the Plaintiffs are likely to prevail on the merits of their claim that the September 18, 2007 OTM beef provisions should have been subject to a fresh notice and comment procedure under the APA.[4] In their post-hearing brief, Defendants offer four reasons why they were not required to provide another round of notice and comment. First, they argue that the notice and comments regarding the January 2005 OTM beef provisions which occurred in November 2003 and March 2004 were enough because the January 2005 OTM beef provisions were never "repealed" after that. Second, Defendants assert that they simply "delayed" implementation of the January 2005 OTM beef provisions, and those provisions were not changed when they were implemented in the September 2007 OTM Rule. Third, they state that lifting the delay and announcing the new effective date for the January 2005 OTM beef provisions was a purely procedural matter exempt from APA notice and comment requirements. Finally, Defendants contend that R-Calf had actual notice of the January 2005 OTM beef provisions and the lifting of the delay.
The Court is not persuaded by Defendants' characterization of its actions. The effective date of a rule generally is more than procedural and its suspension or delay usually is subject to rulemaking. See, e.g., Natural Res. Def. Council, Inc. v. United. States EPA, 683 F.2d 752, 761-762 (3d Cir.1982) (holding "an effective date is `part of an agency statement of general or particular applicability and of future effect' " within the definition of "rule" under 5 U.S.C. § 551(4)); Cf. Envtl. Def. Fund, Inc. v. EPA, 716 F.2d 915, 920 (D.C.Cir. 1983) ("The suspension or delayed implementation of a final regulation normally constitutes substantive rulemaking under [the] APA. . . ."); Envtl. Def. Fund, Inc. v. Gorsuch, 713 F.2d 802, 816 (D.C.Cir.1983) (holding an agency decision effectively suspending duly promulgated regulations constitutes rulemaking subject to notice-and-comment requirements). In Public Citizen v. Steed, 733 F.2d 93 (D.C.Cir.1984), the court found an "indefinite suspension does not differ from a revocation simply because the agency chooses to label it a suspension. Although the agency's characterization may provide some guidance in determining the nature of the challenged action, it is the substance of what the [agency] has purported to do and has done which is decisive." Id. at 98 (internal quotations omitted).
The decisions relied on by Defendants for the proposition that a temporary postponement of an effective date is not rulemaking and that implementation can be virtually automatic once the delay is lifted, are distinguishable. See Am. Fed'n of Gov't Employees, AFL-CIO v. Office of Pers. Mgmt., 821 F.2d 761, 764 (D.C.Cir. 1987); State of La. v. Mosbacher, 1989 WL 87616, *6 (E.D.La. Aug. 1, 1989). In both cases, the delay and the lifting of the delay were the result of Congressional action not requiring further agency action. Those are not the circumstances in the present case. Here, the agency rather than Congress decided to delay implementation of the OTM beef provisions. The Defendants' own belief in the importance of a more thorough investigation prior to implementing the OTM beef provisions is reflected in the USDA's decision in March 2005 to delay implementation to "give Department officials the opportunity for further review and consideration of the specified provisions," 70 Fed. Reg. at 12,113, and to complete ongoing investigations into the recent finds of BSE in Canadian cattle, 72 Fed. Reg. at 53,316. Defendants' own record reveals that the decision to implement the OTM beef provisions after reconsideration was more than purely procedural, and that the OTM beef provisions merited further notice and comment. See, e.g., Gorsuch, 713 F.2d at 817 (EPA's postponement of effective date of final rules was a reversal of course constituting a "danger signal," requiring closer scrutiny of agency's compliance with APA).
Before implementing the OTM beef provisions in 2007, the USDA did not reveal the results of the investigations done after March 2005 which renewed the USDA's confidence in the regulations, or otherwise explain the bases for implementing the provisions 32 months after they were first proposed. There is no discussion about the effect the BSE cases found in Canadian cattle born after the effective date of the feed ban would have on the OTM beef provisions. The Court could not find an explanation why imports of live cattle are limited to those born after the effective date of the feed ban but meat from cattle born before that date can be imported. Plaintiffs accurately state that "[a] key assumption underlying USDA's justification for allowing any imports from Canada had consistently been that they would come from Canadian cattle with a low likelihood of BSE infection because those cattle were subject to a ban on ruminant protein in cattle feed." (Doc. 117, p. 5.) In regard to the OTM beef provisions, it appears that the USDA relied on the evidence that was in the record from the original notice and comment proceeding years earlier. In light of the new cases of BSE in Canada and the dire consequences that would result from a BSE outbreak in the United States, relying on an old record and simply lifting the delay on imports of OTM beef, without more, does not reflect reasoned decision-making. Cf. Action on Smoking and Health v. CAB, 713 F.2d 795, 800 (D.C.Cir.1983) ("Although the Administrative Procedure Act does not establish a `useful life' for a notice and comment record, clearly the life of such a record is not infinite.")
The USDA now says the results of the FSIS's risk assessment indicating that removal of SRMs almost completely eliminates potential human exposure to the BSE agent, published in July 2007 with its SRM final rule, would be applicable for all beef products whether derived from cattle under or over 30 months.[5] Even if this is true, it does not justify the USDA's decision because the FSIS risk assessment was not referred to as a basis for implementing the OTM beef provisions in 2007. See, e.g., City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1165 (D.C.Cir.1987) ("Post hoc rationalizations advanced to remedy inadequacies in the agency's record or its explanation are bootless."). If the USDA relied on research done in conjunction with the SRM rule in deciding to implement the OTM beef provisions, that fact should have been disclosed to the public. See, e.g., Solite Corp. v. United States EPA 952 F.2d 473, 484 (D.C.Cir.1991) ("An agency commits serious procedural error when it fails to reveal portions of the technical basis for a proposed rule in time to allow for meaningful commentary."); see also Air Transp. Ass'n of Am. v. FAA, 169 F.3d 1, 7 (D.C.Cir.1999) ("`[T]he most critical factual material that is used to support the agency's position on review must have been made public in the proceeding and exposed to refutation.'" (quoting Ass'n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of the Fed. Reserve Sys., 745 F.2d 677, 684 (D.C.Cir. 1984))).
The procedural safeguards of the APA help ensure that government agencies are accountable and their decisions are reasoned. See Am. Bus. Ass'n v. United States, 627 F.2d 525, 528 (D.C.Cir.1980); Rodway v. United States Dep't of Agriculture, 514 F.2d 809, 817 (D.C.Cir.1975) (APA's purpose is to cause agency to respond to comments in a reasoned manner and explain how agency resolved problems). The Third Circuit stated in New Jersey v. Dep't of Health and Human Servs., 670 F.2d 1262 (3d Cir.1981):
The APA notice and comment procedures exist for good reason: to ensure that unelected administrators, who are not directly accountable to the populace, are forced to justify their quasi-legislative rulemaking before an informed and skeptical public. When these procedures are not followed in situations where they are in fact applicable, a court promotes neither the agency's ultimate mission nor respect for the law by ignoring the agency's indiscretion or condoning the agency's shortcut.
Id. at 1281. In the present case, the fact that thousands of comments were made in response to the OTM beef provisions when APHIS reopened the comment period on March 8, 2004 illustrates that the notice and comment procedure was a vital part of the USDA's rulemaking. The USDA's failure to explain why the OTM beef provisions were implemented in 2007 after its decision not to implement them in 2005 prohibits this Court from concluding that a reasoned basis for the decision existed in 2007. See, e.g., Motor Vehicle Mfrs. Ass'n, 463 U.S. at 48, 103 S.Ct. 2856 ("[A]n agency must cogently explain why it has exercised its discretion in a given manner."). Because the USDA failed to initiate new rulemaking before allowing importation of beef from Canadian cattle of any age, the Court must remand to the USDA to provide notice and comment on the OTM beef provisions as required by the APA.
Notice
Defendants argue that R-Calf and other interested parties had actual notice of the OTM beef provisions and knew that lifting the delay on imports of Canadian beef from cows of any age was on the table during rulemaking for the OTM Rule. There is no dispute that the USDA provided notice and secured comments before the initial issuance of the OTM beef provisions in the January, 2005 MMR Rule. As noted previously, the January 9, 2007 proposed OTM Rule referred to the March 11, 2005 Federal Register notice that suspended the provision of the MMR Rule which had relaxed the ban on meat from cattle over 30 months old, stating, "[I]n March 2005, APHIS gave notice in the Federal Register that the applicability of certain provisions of the rule pertaining to bovine meat, meat byproducts, whole and half carcasses, and certain other bovine products was being delayed until further notice." The proposed OTM Rule also stated, "Removal of the delay of applicability, thereby allowing importation of Canadian beef from cattle slaughtered at 30 months or older, is a decision that will be taken at the discretion of the Secretary of the U.S. Department of Agriculture." The proposed OTM Rule discussed the economic effects of lifting the delay simultaneously with the publication of the final OTM Rule, but it did not discuss the safety of beef and other products from Canadian cattle over 30 months old.
The Court agrees that this placed Plaintiffs on notice that the USDA was contemplating reinstatement of the OTM beef provisions, but the USDA did not provide any information that would allow for useful criticism after a gap of nearly three years since the previous notice and comment on the OTM beef provisions. As stated above, the USDA had acknowledged that it needed to consider new information from its investigations in order to ensure the appropriateness of the OTM beef provisions. The public needed to be notified of the USDA's findings and the impact of those findings, as well as given an opportunity to comment on the new information or to provide additional information. Thus, the Court cannot say that notice was adequate. See, e.g., Arlington Oil Mills, Inc. v. Knebel, 543 F.2d 1092 (5th Cir.1976) (rejecting Secretary's contention that plaintiffs' actual notice that March differentials were being reconsidered constituted APA compliance; plaintiffs, had been prevented from participating in the decision making process).
B. Plaintiffs Have Demonstrated Irreparable Harm
Next the Court considers whether Plaintiffs have demonstrated they will suffer irreparable injury if the Court declines to issue a preliminary injunction. Financial harm without more cannot constitute irreparable injury unless it threatens the very existence of the movant's business. See, e.g., Packard Elevator v. I.C.C., 782 F.2d 112, 115 (8th Cir.1986).
Plaintiffs claim that United States cattle producers will suffer an economic loss from imports of cheap Canadian cattle and beef for which there is little market outside Canada. Plaintiffs further assert that the general public in the United States, consumers of beef, are being exposed to meat that has a higher risk of BSE, thus there is a higher risk of people contracting vCJD in the United States. The Court finds that the last assertion weighs in favor of injunctive relief. Defendants acknowledge that there is a risk, however slight, that BSE-infected tissue would reach the human food supply in the United States and lead to vCJD, a chronic and fatal neurodegenerative disease. Plaintiffs contend that, had they had the opportunity to comment on the OTM beef provisions, they could have shown that allowing imports of beef from cattle born before the effective date of the Canadian feed ban presents a very different risk profile than that considered by the USDA.
C. The Balance of Harms and Public Interest Favors Granting the Preliminary Injunction
The two remaining Dataphase considerations the balance of harms and the public interestfavor granting relief at this time. The balance of harms analysis examines the harm of granting or denying the injunction upon both of the parties to the dispute and upon other interested parties, including the public. See Pottgen v. Missouri State High Sch. Activities Ass'n, 40 F.3d 926, 929 (8th Cir.1994). Any harm to the USDA by requiring notice and comment on the OTM beef provisions is slight in light of the substantial impact that importation of BSE-infected meat could have in the United States. Leaving the regulations in place during the pendency of the rulemaking proceedings will alleviate most of the potential harm to Defendants, and the USDA's discretion to regulate the importation of animals and animal products will not be impeded. The public interest will be furthered by allowing public participation in the rulemaking process to ensure that the USDA carefully and fairly considers all aspects of the important decision to allow importation of beef from Canadian cattle of any age. Because the balance of all four Dataphase factors weighs in favor of issuing a preliminary injunction, Plaintiffs' request will be granted.
D. Bond Requirement
The Federal Rules of Civil Procedure require the movant to give security for the issuance of a preliminary injunction. See FED.R.CIV.P. 65(c). "Although [the Eighth Circuit] allow[s] the district court much discretion in setting bond, [it] will reverse [the district court's] order if it abuses that discretion due to some improper purpose, or otherwise fails to require an adequate bond or to make the necessary findings in support of its determinations." Hill v. Xyquad, Inc., 939 F.2d 627, 632 (8th Cir.1991).
Plaintiffs ask that no security, or only a nominal amount, be required because Plaintiffs are non-profit organizations and individual ranchers attempting to further the public interests and the goals of AHPA. Defendants make no argument to the contrary. In the absence of any showing that security is necessary, the Court will not require a bond.
V. REMEDY
The Court rejects Defendants' argument that "it is a commonsense proposition that the Court could not remand the rule to USDA for additional notice and comment at the preliminary injunction stage." (Doc. 124, p. 15.) Cf. Mental Health Ass'n of Minnesota v. Heckler, 720 F.2d 965 (8th Cir.1983) (affirming with modifications preliminary injunction issued by district court enjoining Secretary's procedures used to make disability determinations). The preliminary injunction issued by the district court in Heckler included a remand to the Secretary to ^publish new rules for notice and comment, as required by the APA prior to adoption. See Mental Health Ass'n of Minnesota v. Schweiker, 554 F.Supp. 157, 169 (D.Minn.1982). This was affirmed by the Eighth Circuit. See Heckler, 720 F.2d at 974. The Court could better understand Defendants' argument if this decision on Plaintiffs' motion for a preliminary injunction was made hastily and on less than a full record, but that is not the case. The entire administrative record was filed with the Court, and the parties and amici have been given ample time and opportunities to advise the Court of all things to be considered in regard to the motion. In light of the Eighth Circuit's clear directive that, with some narrow exceptions, courts may not consider any evidence beyond the administrative record when reviewing agency action, R-Calf II, 499 F.3d at 1114-15, Defendants' argument that the Court must wait until the summary judgment stage to decide if the USDA violated the APA, is somewhat disingenuous. Defendants have had as adequate an opportunity to brief and argue this issue as they would have on summary judgment, and Defendants do not claim there is some extra-record evidence not available during the preliminary injunction proceedings that would be presented to the Court in a summary judgment motion.
The Court is aware that in formulating equitable relief it "must proceed gingerly and not encroach on traditional administrative practices." Heckler, 720 F.2d at 972. Under Supreme Court precedent, where a fuller explanation of the agency's reasoning is needed, remand is the preferred action. See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 654, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990). In United States Steel Corporation v. EPA, 649 F.2d 572 (8th Cir.1981), the Eighth Circuit reviewed a challenge to the EPA's adoption of a final rule establishing state-wide air quality designations. The EPA adopted the designations after invoking the good faith exception to the APA, 5 U.S.C. § 553, and dispensing with prior notice and comment. The EPA instead offered to receive public comment for sixty days after promulgation. See id. at 574-75. The Eighth Circuit held that the EPA erred by failing to provide advance notice and comment. The Eighth Circuit noted that the sixty day post hoc comment period was an inadequate substitute for prior notice and comment when there was no indication that the agency would thereafter consider revising the regulations: "After the final rule is issued, the petitioner must come hat-in-hand and run the risk that the decisionmaker is likely to resist change." Id. at 576 (quoting Sharon Steel Corp. v. EPA, 597 F.2d 377 (3rd Cir.1979)). Rather than vacate the EPA's air quality designations, the Eighth Circuit left them in place pending further administrative proceedings. The case was remanded to the EPA to afford the petitioners notice and an opportunity to comment on the new proposed designations. The EPA was ordered to "promptly" consider the comments and to substitute any revised designations for the existing ones. See id. at 577.
The Court will remand this case to the USDA to provide notice and comment on the OTM beef provisions, but no provisions of the OTM Rule will be vacated. Plaintiffs' remaining claims will be stayed pending administrative action. The substance of the OTM Rule may be different after further administrative proceedings, but Plaintiffs will not be precluded from reasserting their challenges to the merits of the OTM Rule at a later date, if necessary. Accordingly,
IT IS ORDERED:
1. That Plaintiffs' Motion for Preliminary Injunction, Doc. 19, is granted in part.
2. That the case is remanded to the USDA to promptly provide notice and comment on the OTM beef provisions, to consider comments made by Plaintiffs and other interested parties, and to revise any provisions of the OTM Rule it deems necessary.
3. That the remainder of the case is stayed during the administrative proceedings on remand. The parties shall submit quarterly updates to the Court regarding the status of the administrative proceedings.
NOTES
[1] The Court did not consider the July 1, 2008 letter from counsel for Plaintiffs. The letter was filed before this Opinion was issued, but after the Opinion was completed.
[2] This is referred to as the Minimal Risk Region rule ("MMR Rule").
[3] There is no apparent basis for this conclusion because the SRMs also are to be removed from the imported live cattle at the time of slaughter in the United States.
[4] Pursuant to section 553 of the APA, there are three basic requirements for agency rulemaking: first, the public must be given notice of the proposed rulemaking; second, the public must be given an opportunity to comment on the proposed rule, either orally or in writing; and third, the agency must include with the final rule a statement of the rule's basis and purpose. Specifically, the Act requires that "[g]eneral notice of proposed rule making shall be published in the Federal Register," and that "[t]he notice shall include . . . either the terms or substance of the proposed rule or a description of the subjects and issues involved." 5 U.S.C. § 553(b). After such notice has been provided, "the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation." 5 U.S.C. § 553(c). When the final rules are promulgated, the agency is obligated to "incorporate in the rules adopted a concise general statement of their basis and purpose." Id.
[5] Plaintiffs assert that none of the USDA's assessments addressed the risk of BSE contamination in beef from cattle that were exposed to possible BSE-infected feed. Plaintiffs say they would have provided information on this issue had they been given the opportunity.
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176 N.W.2d 104 (1970)
STATE of Minnesota, Appellant,
v.
Robert T. MORALES, Respondent.
No. 42111.
Supreme Court of Minnesota.
March 13, 1970.
*105 Douglas M. Head, Atty. Gen., Richard H. Kyle, Sol. Gen., St. Paul, Keith M. Stidd, City Atty., David Kuebelbeck, Asst. City Atty., Minneapolis, James E. Sutherland, Senior Student, St. Paul, for appellant.
C. Paul Jones, Public Defender, Richard W. Swanson, Public Defender for Misdemeanors, Andris A. Baltins, Senior Student, Minneapolis, for respondent.
Heard before KNUTSON, C. J., and SHERAN, PETERSON, FRANK T. GALLAGHER, and THEODORE B. KNUDSON, JJ.
OPINION
PER CURIAM.
Appeal by the state pursuant to Minn.St. 632.11 from an order of the Municipal Court of Hennepin County dismissing a complaint charging criminal damage to property upon the ground that defendant was illegally arrested.
From the very meager record it appears that on July 9, 1969, defendant and another were arrested without a warrant by Minneapolis police officers. The next day, defendant was charged by complaint with the statutory misdemeanor offense of criminal damage to property, specifically a telephone booth and its equipment, in violation of Minn.St. 609.595, subd. 2.[1] The complaint was signed under oath before a magistrate by an employee of Northwestern Bell Telephone Company. Complainant alleged that the telephone company owned the booth; that he was "advised" by a detective of the burglary division of the police department of the vandalism; that from the "arrest report" he was "informed" that "2 witnesses had observed 2 males * * * throw a brick through the phone booth window, enter the booth and rip the handset cord from the telephone after damaging the brick masonry surrounding the booth"; that the damage to the booth, cord, handset, and two telephone directories totaled $58.40; and that the two witnesses notified the police and "positively identified" defendant and another as the persons who had damaged the booth and equipment. Affidavits of the prosecutor and defense counsel indicate that the arrest occurred when defendant and his companion were walking in the park near the location of the telephone booth and, by inference, shortly after the commission of the offense. Upon arraignment on July 11, defendant by *106 special appearance challenged the municipal court's jurisdiction over him by a written motion to dismiss the charge upon the ground, among others, that his arrest without a warrant was illegal. The court granted the motion and ordered dismissal without prejudice and without specifying or explaining the reasons therefor.
The state concedes, as it must, that a police officer may not arrest a person for a misdemeanor offense without a warrant unless committed or attempted in the presence of the officer. Minn.St. 629.34 (1); City of St. Paul v. Webb, 256 Minn. 210, 97 N.W.2d 638, 76 A.L.R.2d 1423. The state contends, however, that despite the facts the offense was not committed in the arresting officers' presence and that a misdemeanor was charged, the warrantless arrest was authorized by statute and was constitutionally valid because a felony, as well as the misdemeanor charged, had in fact been committed, and the officers had probable cause for believing that defendant had committed it. The state argues, as before the municipal court, that § 609.595, subd. 1(2), makes aggravated criminal damage to the property of a "public utility" a felony, and that the verified complaint and affidavits of the prosecutor and defense counsel submitted to the trial court compelled a judicial determination that as a matter of law the felony had in fact been committed and a finding that the arresting officers had probable cause to believe that defendant and another had committed it, thus requiring a reversal of the order of dismissal.
We unhesitatingly disagree. The proof relied upon by the state falls far short of that necessary to compel the municipal court to find that the officers had probable cause to believe that defendant and his companion damaged the telephone booth. The most that can be said for the state's efforts to justify depriving defendant of his liberty is that the proof submitted provided a minimal factual basis which could have persuaded the municipal court to find by inference that there was probable cause to arrest and to arguably permit a reviewing court to uphold that finding as complying with statutory[2] as well as constitutional requirements.
Assuming, without deciding, that a felony had in fact been committed,[3] when a warrantless arrest for a felony claimed to have been made on probable cause is challenged, it is obligatory upon the state not only to fully and fairly disclose all the facts and surrounding circumstances of the arrest, State ex rel. Rasmussen v. Tahash, 272 Minn. 539, 141 N.W.2d 3, but also to sustain the burden of proving compliance with Fourth Amendment rights. State v. Mastrian, 285 Minn. 51, 171 N.W.2d 695; Beck v. Ohio, 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142; Recznik v. City of Lorain, 393 U.S. 166, 89 S.Ct. 342, 21 L.Ed.2d 317.
To meet this obligation and the burden of proof in this case, the state essentially submitted only the verified complaint of an employee of the owner of the property, who eschewed any personal knowledge of either the damage to the property or the facts and circumstances surrounding the arrest. The arresting officers were neither called to testify nor, at the very leastas permitted by the rules of the municipal court,[4] were their affidavits or those of the eyewitnesses detailing the facts of the arrest procured. If such had been done, it would have been of inestimable aid to the municipal court in passing upon an *107 issue which not only assailed the legality of police conduct but required the court to determine whether or not there was an infringement of one of our most fundamental constitutional guaranties. Surely, where officers make an arrest at or near the scene of the commission of a serious offense upon an eyewitness account of its commission and identification of the offender, the proof available ought to be sufficient, if properly presented, to sustain a finding of probable cause. People v. Gardner, 252 Cal.App.2d 320, 60 Cal.Rptr. 321. Although the inadequate record requires us to speculate, it seems apparent that the decision of the municipal court was simply based upon the state's failure to disclose facts within the personal knowledge of the officers and the eyewitnesses which would most likely have been more than adequate to prove probable cause. As was likely anticipated by the trial judge in ordering dismissal without prejudice, the proper course following defendant's release would have been to secure a valid warrant for defendant's rearrest for the misdemeanor offense rather than a felony, which presumably the prosecutor in the proper exercise of his discretion concluded was the charge warranted by the circumstances.
Affirmed.
NOTES
[1] Minn.St. 609.595 provides: "Subdivision 1. [Aggravated criminal damage to property.] Whoever intentionally causes damage to physical property of another without the latter's consent may be sentenced to imprisonment for not more than five years or to payment of a fine of not more than $5,000, or both, if:
"(1) The damage to the property caused a reasonably foreseeable risk of bodily harm; or
"(2) The property damaged belongs to a public utility or a common carrier and the damage impairs the service to the public rendered by them; or
"(3) The damage reduces the value of the property by more than $100 measured by the cost of repair or replacement, whichever is less.
"Subd. 2. [Criminal damage to property.] Whoever intentionally so causes such damage under any other circumstances may be sentenced to imprisonment for not more than 90 days or to payment of a fine of not more than $100."
[2] Minn.St. 629.34 provides: "A peace officer may, without warrant, arrest a person:
* * * * * *
"(3) When a felony has in fact been committed, and he has reasonable cause for believing the person arrested to have committed it * * *."
[3] This issue we view as a question of law without regard to whether the arresting officers had knowledge of the statute and believed it to have been violated.
[4] Rule 37, subd. 1, Special Rules of Procedure, Hennepin County Municipal Court (27B M.S.A. p. 372).
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124 F.Supp.2d 958 (2000)
Kimberly R. PITCHFORD, Plaintiff,
v.
OAKWOOD MOBILE HOMES, INC., et al., Defendants.
Civil Action No. 5:99CV00053.
United States District Court, W.D. Virginia, Harrisonburg Division.
November 13, 2000.
*959 *960 Timothy Earl Cupp, Cupp & Cupp, P.C., Harrisonburg, VA, Thomas Dean Domonoske, Dale Wood Pittman, Law Office of Dale W. Pittman, Petersburg, VA, for Plaintiff.
Rosalie Pemberton Fessier, Boyce Eugene Brannock, Timerlake, Smith, Thomas & Moses, P.C., Staunton, VA, for Defendants.
MEMORANDUM OPINION
MICHAEL, Senior District Judge.
Before the court is a motion by the defendants to compel arbitration and stay proceedings in the above-captioned civil action, pursuant to an arbitration agreement between the parties. The matter was referred to the presiding United States Magistrate Judge, B. Waugh Crigler, pursuant to 28 U.S.C. § 636(b)(1)(B) for recommended findings of fact and a proposed disposition. The Magistrate recommended that the court deny the defendants' motion to compel. Both parties filed timely objections to the Report and Recommendation and the court shall make a de novo review. See 28 U.S.C. § 636(b)(1)(C).
I.
Kimberly Pitchford signed a Retail Installment Contract ("contract") with Oakwood Mobile Homes, Inc ("Oakwood") on June 19, 1997, agreeing to purchase a mobile home for $46,200. Pitchford paid a cash down payment of $2500 and financed the balance through defendant Oakwood Acceptance Corporation ("Oakwood Acceptance").
Pitchford was in immediate need of a place to live due to her personal circumstances of recently being divorced and caring for her four young children. Pitchford responded to an advertisement by Oakwood for a mobile home, went to Oakwood's Harrisonburg Office to view the mobile homes one day, and returned the following day to purchase a mobile home. The plaintiff met with a sales agent[1] for approximately 20-30 minutes to execute all of the relevant documents. The plaintiff apparently took considerable care in reviewing the six-page contract, which purported to embody the entire agreement of the parties. The sale was "subject to the terms of this Contract," the term "Contract" being defined as "this document and any separate document that secures this Contract." After signing the contract, the plaintiff was presented with sixteen pages of documents, eight of which required her signature, none of which "secured the contract." Of these documents, the only one to purport to add materially to the terms of the contract was the Arbitration Agreement.
The Arbitration Agreement is the source of the present dispute between the parties, the plaintiff contending on various grounds that the agreement is unenforceable. While many of the plaintiff's arguments would require an analysis of the surrounding facts, the court's determination that the Magnuson-Moss Act precludes enforcement of the Arbitration Agreement *961 dispenses with the need to go into the factual situation in further detail at this time. For a further factual analysis, the court refers the reader to the Report and Recommendation of the Magistrate Judge, at 1-6.
II.
A.
The defendant objects to the evidentiary hearing held in this matter on October 15, 1999. Defendants object on the grounds that the agreements between the parties are unambiguous on their faces, thereby triggering the parol evidence rule and prohibiting evidence of anything other than the documents themselves. District courts have jurisdiction under the sections 3 and 4 of the Federal Arbitration Act ("FAA") to adjudicate questions concerning the validity of any arbitration contract or clause. See 9 U.S.C. §§ 3,4; Hooters of America, Inc. v. Phillips, 173 F.3d 933, 937-38 (4th Cir.1999) (Wilkinson, C.J.); Glass v. Kidder Peabody & Co., 114 F.3d 446 (4th Cir.1997). The FAA states that, in any suit brought in federal court on any issue referable to arbitration, "upon being satisfied that the issue involved in such a suit ... is referable to arbitration [the court] shall stay the trial." 9 U.S.C. § 3 (emphasis added). The Supreme Court has interpreted this as calling for a hearing with a restricted inquiry into factual issues. See Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).
Where the parties contest the enforceability of an agreement and an evidentiary hearing is necessary to determine whether a contract is valid, as in the present case, the court would be remiss not to hold a hearing. This case has raised a myriad of complex problems that the court has labored to resolve. The Magistrate, recognizing that such a situation was present, was proper and responsible to hold the October 15, 1999 hearing in this case.
B.
The parties contest whether the Arbitration Agreement is a part of the contract for the purchase and sale of the mobile home, or whether the Arbitration Agreement is a separate agreement. The Magistrate found that the contract and the Arbitration Agreement were two separate agreements. Furthermore, the Magistrate found that, because the contract was fully executed and capable of standing on its own prior to any mention of the arbitration agreement, the two documents are separate. The defendant objects to this holding on the grounds that the Arbitration Agreement itself purports to be a part of the contract. The Arbitration Agreement begins by stating:
This Arbitration Agreement ("Agreement") is executed contemporaneously with, and as an inducement and consideration for, an installment and sales contract ("Contract") for the purchase of a manufactured home ("Home") as described in the Contract ... The parties hereto acknowledge that this Agreement is part of the Contract and that this contract evidences a transaction in interstate commerce governed by the Federal Arbitration Act.
However, the Contract states:
Your purchase of the Manufactured Home is subject to the terms of this Contract. "Contract" means this document and any separate document that secures this Contract.
The Arbitration Agreement does not secure the Contract. Although the Contract incorporates other documents by reference, such as the warranty, one searches the six pages of the contract in vain for any reference to arbitration or an arbitration agreement. Virginia contract law requires a plain reading of a contract where the language therein is unambiguous. See Dominion Sav. Bank, FSB v. Costello, 257 Va. 413, 416, 512 S.E.2d 564 (1999); Management Enterprises, Inc. v. Thorncroft Co., Inc., 243 Va. 469, 472, 416 S.E.2d 229 (1992). The plain reading of the Contract *962 the validity of which is not challenged by any party is that the Contract and any attendant securing document, plus those documents incorporated by reference, shall constitute the entire agreement between the parties as to the purchase of the home. To hold that the Arbitration Agreement is a part of the Contract, the court must look beyond the four corners of the valid, fully executed Contract. Thus, the Contract indicates that the Arbitration Agreement is not part of the Contract, but rather, is a separate agreement between the parties.
The court has considered whether the Contract and the Arbitration Agreement should be treated as one contract based on the fact that they appear to be part of a contemporaneous transaction. In the context of deeds and underlying notes, Virginia law holds that they shall be deemed separate agreements. Virginia Housing Development Authority v. Fox Run Ltd. Partnership, 255 Va. 356, 364-65, 497 S.E.2d 747 (1998). However, where notes and agreements are contemporaneous, they may be treated as one, "[s]o long as neither document varies or contradicts the terms of the other." Id. On their faces, the Contract and the Arbitration Agreement conflict with one another: the Contract explicitly details that which shall be considered part of the contract, clearly omitting the Arbitration Agreement, whereas the Arbitration Agreement plainly states that it is part of the Contract. The parties do not challenge the validity of the Contract, but vehemently disagree over the propriety of the Arbitration Agreement. The parties also do not dispute that the Contract was fully executed by the parties prior to any mention of arbitration.[2] The court relies on the plain meaning of the document that is relied upon by both of the parties which, read for its plain meaning, indicates that the Arbitration Agreement is not contemplated as part of the Contract.
Having determined that the Arbitration agreement and the Contract are two separate agreements, between the parties, the court shall look to the Arbitration Agreement to determine whether it is a valid document such that the defendants' motion to compel arbitration can be granted.
III.
The defendants invoke the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., as authority for their motion to compel arbitration. The judiciary has recognized that Congress, in enacting the FAA, expressed a preference in favor of arbitration, which the judiciary has enforced. See Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927. The FAA creates a "`heavy presumption of arbitrability,'" such that "`when the scope of the arbitration clause is open to question, a court must decide the question in favor of arbitration.'" American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88, 92 (4th Cir.1996) (quoting Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 867 F.2d 809, 812 (4th Cir.1989)). Nevertheless, "[a]rbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit." Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989).
The FAA serves the purpose of putting arbitration agreements "on the same footing" as other contracts. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 33, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). As the Supreme Court has held, "arbitration is simply a matter of contract between the parties." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). Accordingly, arbitration agreements are *963 enforceable "save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2; see also Marrowbone Dev. Co. v. District 17, 147 F.3d 296, 300 (4th Cir.1998) ("[T]he obligation to arbitrate is a creature of contract and ... a party cannot be required to submit to arbitration unless he has agreed to do so in a contract.") "It [i]s for the court, not the arbitrator, to decide in the first instance whether the dispute [is] to be resolved through arbitration." Hooters of America, Inc. v. Phillips, 173 F.3d 933, 937-38 (4th Cir.1999) (Wilkinson, C.J.). "When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally ... should apply ordinary state-law principles that govern the formation of contracts," giving due regard to the federal policy favoring arbitration. First Options, 514 U.S. at 944, 115 S.Ct. 1920.
Although there is a preference in the FAA favoring arbitration, the threshold question is whether a particular claim is even arbitrable. See Hooters, 173 F.3d at 937 (quoting AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 651, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)). "Although all statutory claims may not be appropriate for arbitration, having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue." Gilmer, 500 U.S. at 26, 111 S.Ct. 1647.
It is clear that the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq., applies to the parties in so far as it regulates Oakwood's warranty for Pitchford's mobile home. The question before the court, therefore, is whether disputes involving issues arising under the Magnuson-Moss Act can properly be submitted to binding arbitration, as called for by the parties' Arbitration Agreement. The burden is on the plaintiff to show that Congress intended to preclude a waiver of a judicial forum for Magnuson-Moss claims. See Gilmer, 500 U.S. at 26, 111 S.Ct. 1647.
A.
In 1974, Congress enacted the Magnuson-Moss Act "In order to improve the adequacy of information available to consumers [and] prevent deception." 15 U.S.C. § 2302(a). In the Magnuson-Moss Act, Congress evinces a clear policy to "encourage warrantors to establish procedures whereby customer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms." 15 U.S.C. § 2310(a)(1). Congress explicity empowered the Federal Trade Commission ("FTC") to prescribe rules setting forth the minimum requirements for any informal dispute settlement mechanism ("mechanism") to be used in conjunction with a written warranty. See id. at § 2310(a)(2). "The FTC regulations are extensive and address all facets of the mechanisms' operation." Wolf v. Ford Motor Co., 829 F.2d 1277, 1279 (4th Cir. 1987). Regulations and interpretations of an Act promulgated under the express delegation of Congress are entitled to judicial deference. See Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980) ("The Court has often repeated the general proposition that considerable respect is due the interpretation given [a] statute by the officers or agency charged with its administration" (internal citations and quotations omitted)).
The FTC has made it clear that, although Magnuson-Moss encourages the use of mechanisms, such mechanisms must conform to the minimum requirements as expressed in 16 C.F.R. § 703, et seq. Informal settlement dispute mechanisms are the Act's only exception to Congress's clear rule preserving a judicial forum for consumers. See 15 U.S.C. § 2310(d) (a consumer damages by a warrantor "may bring suit for damages and other legal and equitable relief"). The applicable Code of Federal Regulations holds that "Decisions *964 of the Mechanism shall not be legally binding on any person ... In any civil action arising out of a warranty obligation and relating to a matter considered by the Mechanism, any decision of the Mechanism shall be admissible in evidence, as provided in section 110(a)(3) of the Act." 16 C.F.R. § 703.5(1). Section 703.5(j) makes it clear that mechanisms under Magnuson-Moss cannot contemplate binding resolution of a warranty dispute. See also Wilson v. Waverlee Homes, 954 F.Supp. 1530, 1538 (M.D.Ala.1997) aff'd, 127 F.3d 40 (11th Cir.1997) (table) (legislative history reflects congressional intent that any non-judicial dispute resolution would be nonbinding, with consumers always retaining right of access to courts). Furthermore, the federal regulations state:
A warrantor shall not indicate in any written warranty ... either directly or indirectly that the decision of the warrantor ... or any designated third party is final or binding in any dispute concerning the warranty ... Nor shall a warrantor ... state that it alone shall determine what is a defect under the agreement. Such statements are deceptive since section 110(d) of the Act gives state and federal courts jurisdiction over suits for breach of warranty ...
16 C.F.R. § 700.8; see also 40 Fed.Reg. 60168, 60211 (1975) ("reference within the written warranty to any binding, non-judicial remedy is prohibited by the Rule and the [Magnuson-Moss] Act").
Contrary to the regulations, Oakwood explicitly states in its Arbitration Agreement that disputes or controversies arising out of the warranty (among other things) shall be submitted to a third party for binding arbitration. The regulation prohibits the aforementioned in written warranties, yet Oakwood includes the language in its Arbitration Agreement. The language does not appear in Oakwood's warranty because, contrary to federal regulation, Oakwood's warranty contains no explanation of the informal dispute settlement mechanism Oakwood intends to use. See 16 C.F.R. § 701.3(6) (requiring warrantors to include in the warranty information regarding its chosen mechanism). The fact that the disallowed statement regarding jurisdiction over warranty disputes is contained in the Arbitration Agreement rather than the warranty does not change the FTC's characterization of such a statement as "deceptive." To allow Oakwood to include the warranty in the binding arbitration agreement where federal law prohibits a binding arbitration agreement to be incorporated into the warranty would be an evisceration of the purpose and effect of the Magnuson-Moss Act.
The clear intent of Magnuson-Moss, as explicitly detailed in the attendant regulations is to encourage alternate dispute settlement mechanisms, but to not deprive any party of their right to have their warranty dispute adjudicated in a judicial forum. See 15 U.S.C. § 2310(a)(1); 16 C.F.R. §§ 700-703. Other federal courts to address this issue have also concluded that Magnuson-Moss precludes binding arbitration of disputes over written warranties. See Wilson, 954 F.Supp. at 1532 (case of first impression concluding that enforcement of binding arbitration clause in contracts for sale and financing of mobile home would violate Magnuson-Moss Warranty Act); see also Raesly v. Grand Housing, Inc., 105 F.Supp.2d 562, 573 (S.D.Miss.2000) ("binding arbitration of written warranties, in transactions to which the Magnuson-Moss Warranty Act applies, is forbidden by that Act"); Boyd v. Homes of Legend, Inc., 981 F.Supp. 1423 (M.D.Ala.1997) (Congress intended the Magnuson-Moss Act to preclude mandatory binding arbitration of written warranties). In Wilson, the Middle District of Alabama was apparently the first federal court to address the question of whether the Magnuson-Moss Act precludes agreements at the time of sale to binding arbitration of warranty disputes. See Wilson, 954 F.Supp. at 1537. That court performed an in depth review of the Congressional *965 intent of the Magnuson-Act to which this court conforms. See id. at 1537-39. Based on this and the foregoing analysis, the court holds that there can be no agreement at the time of sale to enter into binding arbitration on a written warranty.
B.
Contrary to the mandate of the Magnuson-Moss Act, the Arbitration Agreement between the parties requires binding arbitration of disputes arising under Oakwood's warranty. Thus, the court must next decide what effect the invalidity of said portions of the Arbitration Agreement have on the remainder of the agreement. In Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218-19, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), the Supreme Court held that when a particular claim is found to be inarbitrable, a court must compel arbitration for otherwise arbitrable claims notwithstanding the likely inefficiency of bifurcating the proceedings. The Court explained that, although there was congressional intent for efficient proceedings, the stronger express intent of Congress with the FAA was to place arbitration agreements on the same footing as other contracts. See id. When contractual principles make an arbitration agreement enforceable, such agreement could not be displaced in the interest of efficiency. See id. Supreme Court precedent holds that the purpose of the FAA was to treat arbitration agreements like contracts, but to construe such contracts in favor of arbitration whenever there was a doubt as to the arbitrability of the dispute. See e.g., First Options, 514 U.S. at 944, 115 S.Ct. 1920. Accordingly, in deciding the defendants' motion to compel arbitration, this court does not consider the potential inefficiency of bifurcating the plaintiff's claims, but rather focuses its concern on whether contractual principles would hold that the Arbitration Agreement between the parties is enforceable, notwithstanding the portions in violation of the Magnuson-Moss Act.
In order to determine the issue of whether the contract between the parties to arbitrate is enforceable notwithstanding certain unlawful provisions, the court must apply Virginia laws of contract. See First Options, 514 U.S. at 944, 115 S.Ct. 1920. A contract shall be considered as a whole when, "by its terms, nature, and purpose it contemplates and intends that each and all of its parts and the consideration shall be common each to the other and interdependent." Shelton v. Stewart, 193 Va. 162, 167, 67 S.E.2d 841 (1951) (citations and quotations omitted). However, Virginia law does permit clauses of contracts to be severed from the main contract if the parties manifest the intent that the portions of the contract can survive on their own. See e.g., Reistroffer v. Person, 247 Va. 45, 439 S.E.2d 376 (1994) (provision regarding attorney's fees was severable and survived nullified contract); Vega v. Chattan Assoc., 246 Va. 196, 199, 435 S.E.2d 142 (1993) ("Whether contractual provisions are severable is determined from the intention of the parties") (citing Eschner v. Eschner, 146 Va. 417, 422, 131 S.E. 800 (1926)).
Virginia courts have also recognized the difference between severing a clause or provision of a contract, and rewriting or "blue penciling" a contract in order to make it enforceable. See Nida v. Business Advisory System, Inc., 44 Va. Cir. 487, 1998 WL 972125, *5 (Va. Cir. Ct. Mar. 2, 1998). Although Virginia courts will look to the intent of the parties to determine severability of clauses or provisions, they will not "blue pencil" a contract to make it enforceable. See Cliff Simmons Roofing, Inc. v. Cash, 1999 WL 370247, *1-2 (Va. Cir. Ct. June 4, 1999) (refusing to edit contract by selectively enforcing only those portions permissible by law); Nida, 1998 WL 972125 at *5 ("Generally, Virginia courts do not rewrite the parties contract for them"); Pais v. Automation Products, Inc., 36 Va. Cir. 230 (1995) ("[T]his court has not been granted the authority to `blue pencil' or otherwise *966 rewrite the contract, the covenants therefore fail"). Therefore, it is critical to determine whether the Arbitration Agreement at issue is subject to severability or blue penciling.
"The difference between "blue penciling" and severing is a matter of focus. The former emphasizes deleting, and in some jurisdictions adding words in a particular clause. The latter emphasizes construing independent clauses independently." Roto-Die Co., Inc. v. Lesser, 899 F.Supp. 1515, 1523 (W.D.Va.1995) (refusing to interpret Virginia law as permitting blue pencil rule). The Arbitration Agreement between Oakwood and Pitchford maintains throughout that the arbitration shall be binding and that it includes any claims on the warranty. There is no isolated clause about either the fact that the parties shall be bound or the inclusion of the warranty. The structure and nature of the Arbitration Agreement indicate that all parts contemplate interdependence. See Shelton, 193 Va. at 167, 67 S.E.2d 841. Based on the drafting of the contract on its face, severability is unavailable because there is no particular clause or provision that could be treated independently to cure the conflict with the Magnuson-Moss Act. To the contrary, in order to cure the problems with the Arbitration Agreement, the court would be forced to edit the agreement in one of two ways: the court would have to remove all reference to the warranty or remove all reference to the fact that the arbitration must be binding. As noted above, this form of blue penciling is precisely what Virginia courts consistently have refused to engage in. The court sees the wisdom of the refusal to rewrite the contract between the parties because to do so would be to wreak potential havoc with basic contractual principles, such as mutual assent.
Bearing closely in mind the strong federal preference for arbitration, the court must also follow the statutory directive that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (emphasis added). Because the Arbitration Agreement between the parties is in violation of the Magnuson-Moss Act and can only be cured through blue penciling a procedure disallowed in Virginia the agreement is unenforceable.[3]
IV.
For the foregoing reasons, the defendants' motion to compel arbitration and stay the proceedings shall be denied. An appropriate Order shall this day enter.
ORDER
Before the court is the defendants' Motion to Compel Arbitration, which was filed in state court prior to the July 6, 1999 removal of the above-captioned civil action to this court. Defendants' Memorandum in Support of Motion to Compel was filed on August 24, 1999, and the action was referred by Order of the court dated August 30, 1999, to presiding United States Magistrate Judge B. Waugh Crigler for proposed findings of fact and a recommended disposition. The Magistrate filed his Report and Recommendation on December 20, 1999, to which both parties filed timely objections. Accordingly, the court has performed a de novo review of those portions of the Report and Recommendation to which objections were made. See 28 U.S.C. § 636(b)(1)(C). Having thoroughly reviewed the Report and Recommendation, all memoranda of the parties, the entire record, the applicable case law, and for the reasons stated in the accompanying Memorandum Opinion, it is accordingly this day
ADJUDGED ORDERED AND DECREED as follows:
*967 (1) The ultimate recommended disposition in the Magistrate Judge's December 20, 1999 Report and Recommendation shall be, and hereby is ACCEPTED, but the court has reached its decision on different grounds from the Magistrate, as detailed in the accompanying Memorandum Opinion.
(2) The defendants' January 18, 2000 Objections to the Report and Recommendation shall be, and hereby are, OVERRULED.
(3) The plaintiff's January 3, 2000 Objection to the Report and Recommendation shall be, and hereby is, SUSTAINED.
(4) The defendants' Motion to Compel Arbitration shall be, and hereby is, DENIED.
(5) The above-captioned civil action shall be referred back to the Magistrate Judge pursuant to the August 30, 1999 Order of the court.
The Clerk of Court hereby is directed to send a certified copper of this Order and the accompanying Memorandum Opinion to Magistrate Judge Crigler and all counsel of record.
NOTES
[1] The parties dispute which sales agent with whom the plaintiff dealt. For the purposes of the opinion, whether the plaintiff dealt with Wanda Fisher (as the plaintiff contends) or Ralph Smith (as the defendant contends) is not material. With respect to the transaction, the court will refer to undisputed facts, unless otherwise noted.
[2] There is disagreement between the parties over whether arbitration was ever discussed. However, even if it was, according to the defendant, it was not raised until after the full execution of the Contract. (Oct 15, 1999 Transcript at 94, 99.)
[3] The plaintiff's additional arguments as to invalidity of the Arbitration Agreement based on intent, lack of consideration, and unconscionability, are not herein addressed because, based on the court's holding, these issues need not be decided.
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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
MEGAN CAUGHLIN, a single woman, individually and on behalf of
statutory beneficiaries ALLICIA CAUGHLIN, VINCENT LAPOINTE and
JANICE LAPOINTE, the natural children and parents of STEPHANIE
JEAN CRISTIANI, Deceased, Plaintiff/Appellant,
v.
STATE OF ARIZONA, a governmental entity, Defendant/Appellee.
No. 1 CA-CV 14-0757
FILED 12-24-2015
Appeal from the Superior Court in Maricopa County
No. CV2014-006634
The Honorable Patricia A. Starr, Judge
REVERSED AND REMANDED
COUNSEL
Law Office of Scott E. Boehm, P.C., Phoenix
By Scott E. Boehm
Co-Counsel for Plaintiff/Appellant
Breyer Law Offices, P.C., Phoenix
By Mark P. Breyer and Brian C. Fawber
Co-Counsel for Plaintiff/Appellant
Arizona Attorney General’s Office, Phoenix
By Fred M. Zeder and Brock J. Heathcotte
Counsel for Defendant/Appellee
CAUGHLIN v. STATE
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Donn Kessler delivered the decision of the Court, in which
Judge Andrew W. Gould and Judge Patricia K. Norris joined.
K E S S L E R, Judge:
¶1 Megan Caughlin appeals the trial court’s dismissal of her
wrongful death action for failure to comply with the notice of claim statute.
See Ariz. Rev. Stat. (“A.R.S.”) §§ 12-612(A) (Supp. 2015), -821.01(A) (Supp.
2015).1 For the following reasons, we reverse the trial court’s order
dismissing her complaint and remand for further proceedings consistent
with this decision.
FACTUAL AND PROCEDURAL HISTORY
¶2 In May 2013, Stephanie Cristiani was driving on Interstate 17
when her front tire failed, causing her to collide with an adjacent light pole.
Cristiani died at the scene of the accident from multiple blunt force head
traumas.
¶3 Caughlin, Cristiani’s daughter, served four copies of the
notice of claim on the State within 180 days of the accident pursuant to
A.R.S. § 12-821.01(A).2 The notice of claim described the accident in detail
and the basis of the State’s alleged liability. The notice of claim also
identified all four of the wrongful death beneficiaries as “claimants,”3 and
specified that “a sum certain demand [was] being made against the State of
Arizona for $4,000,000.”
¶4 The State filed a motion to dismiss, arguing that Caughlin
failed to comply with the notice of claim statute by bundling the claims into
one conditional offer to settle. Although both Caughlin and the State were
1 We cite the current version of applicable statutes because no revisions
material to this decision have since occurred.
2 Caughlin also served copies of the notice of claim on Maricopa County
and the City of Phoenix, but later dismissed those entities from this action
when it was determined that the State was responsible for the light pole.
3 The four statutory beneficiaries include Cristiani’s parents, Janice and
Vincent LaPointe, and her two children, Megan and Allicia Caughlin.
2
CAUGHLIN v. STATE
Decision of the Court
clear below that the sum certain was for $4,000,000 total, because Caughlin
asserted an alternative argument that the court could find that the statutory
beneficiaries served the State separately for $4,000,000 each, the court
granted the motion to dismiss finding the sum certain was ambiguous. As
to the bundling argument, the court stated that plaintiffs’ argument that
naming four statutory beneficiaries with only one monetary demand was
proper “conflates the requirements for a wrongful death lawsuit and a
proper notice of claim.”
¶5 Caughlin timely appealed. We have jurisdiction pursuant to
A.R.S. § 12-2101(A)(1) (Supp. 2015).
DISCUSSION
¶6 “Before initiating an action for damages against a public
entity, a claimant must provide a notice of claim to the entity in compliance
with [A.R.S. § 12-821.01].” Deer Valley Unified Sch. Dist. No. 97 v. Houser, 214
Ariz. 293, 294, ¶ 1 (2007). “The claim shall contain facts sufficient to permit
the public entity . . . to understand the basis on which liability is claimed.
The claim shall also contain a specific amount for which the claim can be
settled and the facts supporting that amount.” A.R.S. § 12-821.01(A). These
statutory requirements “allow the public entity to investigate and assess
liability, . . . permit the possibility of settlement prior to litigation, and . . .
assist the public entity in financial planning and budgeting.” Deer Valley,
214 Ariz. at 295, ¶ 6 (citations omitted). Claims that fail to comply with
A.R.S. § 12-821.01(A) are statutorily barred. Id. To comply with the statute,
the specific settlement amount has to be a sum certain which, if accepted by
the State, will settle the matter. Id. at 296, ¶ 9.
¶7 When a motion to dismiss attaches a notice of claim, the
motion should be considered as one for summary judgment unless it is clear
the court did not consider the notice or the notice was attached to the
complaint. Vasquez v. State, 220 Ariz. 304, 308, ¶ 8 (App. 2008). We review
summary judgments de novo. Havasupai Tribe v. Arizona Bd. of Regents, 220
Ariz. 214, 223, ¶ 27 (App. 2008).
3
CAUGHLIN v. STATE
Decision of the Court
I. The notice of claim’s sum certain demand was clear and
unambiguous.
¶8 Caughlin contends that the notice of claim is unambiguous
and provides that the wrongful death action could be settled by the State
for a sum certain amount of $4,000,000.4 We agree.
¶9 The notice of claim lists all four statutory beneficiaries on the
first page and then states that “a sum certain demand is being made against
the State of Arizona for $4,000,000.” To drive that clarity home, the notice
of claim also references the statutory requirement, and notes that the
requirement is satisfied: “The Notice of Claim statute requires sum certain,
so such is being demanded.” It also reinforced the nature of the sum certain
as being for all four claimants by noting that “[b]y the time of trial, the
plaintiffs will have access to information currently in the possession of these
or other defendants . . . .” The notice also discussed all four claimants’
relationship with Stephanie Cristiani and how close they were to her and
their suffering from her death. Thus, as argued by Caughlin in the trial
court, there was only one claim for $4,000,000 representing the claim by all
the wrongful death statutory beneficiaries.
¶10 There is nothing ambiguous about the sum certain
demanded. On appeal, the State contends that the service of four copies of
the notice of claim on the State somehow transformed the notice into four
separate claims or at least could confuse the State into believing that.
However, the State conceded in the trial court that it understood the offer
was a single offer for the entire claim for $4,000,000. Accordingly, it cannot
successfully argue on appeal that it was confused by the multiple service of
the notice on various agencies of the State.
¶11 Moreover, while the arguments in the trial court could have
confused the court that it was possible there was an ambiguity in the
settlement amount, we look to the face of the notice of claim. That notice is
clear that all four claimants in the wrongful death action were offering to
settle the single claim against the State for $4,000,000. Accordingly, the trial
court erred in finding the notice of claim to be unclear and ambiguous.
4We reject the State’s contention that Caughlin failed to address the alleged
ambiguity of the sum certain. Caughlin’s argument expressly contends that
the notice of claim complied with A.R.S. § 12-821.01 by including a sum
certain demand for an unequivocal $4,000,000.
4
CAUGHLIN v. STATE
Decision of the Court
II. The State has abandoned its apportionment argument.
¶12 Caughlin also addressed the apportionment argument in her
opening brief. The State did not address that argument in its answering
brief. “Failure to respond in an answering brief to a debatable issue
constitutes confession of error.” Chalpin v. Snyder, 220 Ariz. 413, 423 n.7, ¶
40 (App. 2008). Moreover, when asked by this Court at oral argument
whether it had waived the apportionment/bundling argument, the State
conceded that bundling was not before this Court, it had waived the issue
on appeal, and in its view a bundled claim is not prohibited by the statute.
Accordingly, the State has affirmatively waived and abandoned any further
contentions in this case that the notice of claim was insufficient related to
bundling. We render no opinion on the propriety of a bundled claim.
CONCLUSION
¶13 For the foregoing reasons, we reverse the trial court’s order
granting the State’s motion to dismiss. The complaint was not barred by
the notice of claim statute. We remand for further proceedings consistent
with this decision. We also award Caughlin her taxable costs on appeal
upon timely compliance with Arizona Rule of Civil Appellate Procedure
21.
:ama
5
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947 F.2d 1486
Thompsonv.Sullivan*
NO. 91-8077
United States Court of Appeals,Fifth Circuit.
OCT 21, 1991
1
Appeal From: W.D.Tex.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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719 F.2d 689
Daniel ROSS, Appellant,v.Amos REED, individually and in his official capacity as Sec.of N.C. Dept. of Correction; Ralph D. Edwards, individuallyand in his official capacity as Dir. of Prisons; FletcherK. Sanders, individually and in his official capacity asComplex Administrator, Caledonia-Odom Complex; L.V.Stephenson, individually and in his official capacity asSupt. of Caledonia Corr. Inst.; L.E. Edwards,Superintendent, Halifax Corr. Inst.; Randall E. Lee,Chairman, Caledonia Disciplinary Comm., Appellees.
No. 83-6137.
United States Court of Appeals,Fourth Circuit.
Argued July 12, 1983.Decided Oct. 12, 1983.
Alexander Charns (Thomas F. Loflin, III, Loflin & Loflin, Durham, N.C., on brief) for appellant.
Jacob L. Safron, Sp. Deputy Atty. Gen., Raleigh, N.C. (Rufus L. Edmisten, Atty. Gen., Raleigh, N.C., on brief), for appellees.
Before PHILLIPS, SPROUSE and ERVIN, Circuit Judges.
JAMES DICKSON PHILLIPS, Circuit Judge:
1
Plaintiff Daniel Ross, a former North Carolina prison inmate, appeals from an order of the district court directing a verdict in favor of six defendant-employees1 of the North Carolina Department of Corrections in Ross's action against them under 42 U.S.C. Sec. 1983. Ross alleged that during his incarceration his first amendment rights had been violated when he was disciplined under a prison regulation for writing several letters to a state employee; he further claimed he had been subjected to cruel and unusual punishment in violation of his eighth amendment rights. The district court agreed that the prison regulation had been unconstitutionally applied to Ross, but ruled that all the defendants were immune from liability for damages. The court also directed a verdict in favor of the defendants on the eighth amendment claim. Ross appeals, seeking to have the prison regulation declared facially unconstitutional and to be awarded a new trial on the cruel and unusual punishment claim. We affirm.
2
* While serving a sentence for first degree murder, Ross escaped in 1975 from the custody of the North Carolina prison system. He was on escape status for over two years until recaptured in Pennsylvania and returned to North Carolina.
3
Upon being returned to state custody, Ross's thoughts turned toward parole. Before his escape, Ross's parole eligibility date had been computed by state personnel to be November 30, 1978. As a collateral consequence of being absent from custody without authorization, however, his parole date was recomputed to be October 13, 1980.
4
Unwilling to accept that the time spent on escape would not be counted in computing his parole eligibility date, Ross undertook to change that fact. (Ross asserted a belief that, because he had not been convicted of escape in a state court, the two years that he was actually on escape should still count as time served toward completion of sentence.) In addition to several other lawsuits concerning parole practices and procedures, Ross filed a lawsuit on December 12, 1979, against Ms. Hazel Keith. Ross alleged that Ms. Keith, who was the Supervisor of Combined Records for the North Carolina Department of Corrections, had violated his constitutional rights by not crediting the two years of escape time as time served toward completion of sentence.2
5
Shortly after that lawsuit was filed, Ms. Keith received the following letter from Ross:Dear Ms. Keith:
6
Since you fail to correct my prison record to reflect my original parole eligibility date to have been November 30, 1978, I am compelled to bring a lawsuit against you upon the following grounds: (1) no escape is shown in the record. (2) Because the same does not (undecipherable), you are unable to provide the court, inmate Ross, or anyone else, with a valid Judgment and Commitment of an escape conviction. (3) Erroneous information contained in inmate Ross' prison file has been and still is being relied on to a constitutionally significant degree to deny parole and other privileges, emoluments and benefits offered. (4) Inmate Ross was admitted to the N.C. prison under a Judgment and Commitment of first degree murder on March 19, 1969 with three months pre-trial credit. None other commitment is shown in record.
7
Apparently unwilling to rely upon the judicial process to vindicate his legal rights, Ross also started mailing a series of other letters to Ms. Keith. These letters were not addressed to Ms. Keith, but rather were addressed to North Carolina Congressman L.H. Fountain and to members of the news media. Ms. Keith was sent handwritten copies of these letters, which indicated that she was to receive a carbon copy. The text of all the letters was the same:
Re: Cruel and Unusual Punishment
Dear Congressman Fountain:
8
Ms. Hazell W. Keith, Director of N.C. Prison Combined Records has deliberately falsified my eligibility date for parole by programming the computer to compute escape. I have repeatedly begged her to correct this miscarry of justice by furnishing me a copy of escape judgment and commitment or compute my eligibility parole date to have been November 30, 1978. Please assist me.
9
Ms. Keith is a former racist supporter and has been and currently is known to accept a bribe for computerizing false and racist information in prison files for exchange of political favors. I request a prompt response.
10
s/Daniel Ross
11
cc: Ms. Hazell W. Keith
Director of Combined Records
831 West Morgan Street
Raleigh, N.C. 27603
12
Although Ross testified that he intended to do so, he never mailed the originals of these letters to the addressees. In mailing the designated copies to Ms. Keith, however, Ross, as he later testified, was engaging in a "last ditch effort" to get credit for the time he was on escape. Ross hoped Ms. Keith would think that he had mailed the letters to the indicated addressees, and that this would pressure her into "correcting an error" in his parole eligibility.
13
Upon receipt of the copies of these letters, Ms. Keith, who was understandably upset, brought the letters to the attention of corrections authorities. After inquiry and investigation, Ross was convicted by a disciplinary committee of violating a prison regulation and was ultimately given the disciplinary sanction of being reduced from minimum to medium custody. Ross's internal administrative appeals of his conviction were denied.
14
The demotion in custody status also entailed a transfer from the minimum custody Halifax facility to the medium facility at Caledonia. About a month after this transfer, on February 21, 1980, Ross notified the assistant superintendent of Caledonia of an emergency. An inmate with whom Ross had had a previous altercation had been transferred to Caledonia, and Ross assertedly was in fear for his life. Ross requested a transfer out of Caledonia. The Caledonia Classification Committee met that same day and reviewed Ross's claim for protective custody. Ross was then placed in administrative segregation pending a transfer, and was kept there until he was finally transferred on May 20, 1980, to another medium custody facility.
15
Shortly after his final transfer, Ross filed this lawsuit alleging violations of his first and eighth amendment rights. Ross claimed that the prison regulation he was convicted under was unconstitutional on its face or at least was unconstitutionally applied to him in derogation of his free speech rights. He further claimed that his placement in administrative segregation and the conditions of his confinement therein constituted cruel and unusual punishment.
16
The district court ruled, on a motion for summary judgment, that the prison regulation had been unconstitutionally applied to Ross, and ordered an immediate return to minimum custody (which, as a matter of fact, had already occurred). At trial confined to the eighth amendment claim and the immunity and damages issues on the first amendment claim the court directed a verdict for the defendants on all counts. Ross then took this appeal.
II
17
Ross's first contention is that the district court erred in not striking down the prison regulation as unconstitutionally overbroad and vague.3 He seeks injunctive and declaratory relief against future enforcement of the regulation. The law does not entitle him to relief on this claim.
18
We agree with Ross initially that when overbreadth or vagueness challenges to a law are made, those challenges usually should be resolved before the validity of the law as applied is addressed. See Hoffman Estates v. The Flipside, Hoffman Estates, 455 U.S. 489, 494-95, 102 S.Ct. 1186, 1191, 71 L.Ed.2d 362 (1982). To be stricken for overbreadth, the regulation must reach a substantial amount of constitutionally protected conduct, Hoffman, 455 U.S. at 494, 102 S.Ct. at 1191; and because the regulation purports to cover both speech and conduct its overbreadth is less easily established than if it covered speech alone, see Broadrick v. Oklahoma, 413 U.S. 601, 615, 93 S.Ct. 2908, 2917, 37 L.Ed.2d 830 (1973). The regulation in issue could only be stricken for vagueness if it is "impermissibly vague in all of its applications," Hoffman, 455 U.S. at 495, 102 S.Ct. at 1191.
19
In order to resolve Ross's facial challenges, we would need first to look to the extent of first amendment rights had by prison inmates. Fundamentally, we know that
20
a prison inmate retains those first amendment rights that are not inconsistent with his status as a prisoner or with the legitimate penological objectives of the corrections system. Thus, challenges to prison restrictions that are asserted to inhibit first amendment interests must be analyzed in terms of legitimate policies and goals of the corrections system to whose custody and care the prisoner has been committed in accordance with due process of law.
21
Pell v. Procunier, 417 U.S. 817, 822, 94 S.Ct. 2800, 2804, 41 L.Ed.2d 495 (1974). We could not tell, however, without extended inquiry, whether the state's interests in deterrence of crime, rehabilitation and internal security would justify the admittedly wide-sweeping and arguably ambiguous regulation at issue here.
22
We do not need to address Ross's claim for injunctive and declaratory relief, however, because that claim is moot. Ross has been released from state custody pursuant to a writ of habeas corpus issued by this court. Ross v. Reed, 704 F.2d 705 (4th Cir.1983). Accordingly, Ross does not have sufficient interest in the outcome of the requested relief to present a justiciable case or controversy.
23
To be justiciable under Article III of the Constitution, the conflict between the litigants must present a "case or controversy" both at the time the lawsuit is filed and at the time it is decided. If intervening factual or legal events effectively dispel the case or controversy during pendency of the suit, the federal courts are powerless to decide the questions presented. Ross's release has had the effect of destroying the case or controversy concerning the facial validity of the regulations.
24
Mootness of the claim for injunctive relief lies essentially in the fact that the regulation cannot now be applied to Ross, who asserts only his individual claim.4 See Inmates v. Owen, 561 F.2d 560, 562 (4th Cir.1977). Similarly, the claim for declaratory relief is moot, because the release of Ross and the lack of class certification demonstrate the absence of "a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment," Golden v. Zwickler, 394 U.S. 103, 108, 89 S.Ct. 956, 959, 22 L.Ed.2d 113 (1969). Ross himself will be unaffected by any declaration of invalidity. And the fact that Ross, asserting claims of overbreadth and vagueness, has standing to assert the interests of third persons does not avoid the related problem of mootness; mootness is judged by the actual interests of the litigants involved, and this is true in first amendment cases as well as others. Golden v. Zwickler, 394 U.S. at 109-10, 89 S.Ct. at 960-61. No federal court has jurisdiction "to pronounce any statute ... void, because irreconcilable with the Constitution, except as it is called upon to adjudge the legal rights of litigants in actual controversies. " Liverpool, N.Y. & P.S.S. Co. v. Commissioners, 113 U.S. 33, 39, 5 S.Ct. 352, 355, 28 L.Ed. 899 (1885) (emphasis added). See also United Public Workers of America v. Mitchell, 330 U.S. 75, 89-90, 67 S.Ct. 556, 564, 91 L.Ed. 754 (1947).
25
In our view, Ross has no cognizable personal interest in achieving a declaration of facial invalidity. His damages claim for abrogation of his first amendment rights will not be affected; on this appeal we uphold dismissal of that claim on grounds inapplicable to his claims for injunctive and declaratory relief. Cf. Los Angeles v. Lyon, --- U.S. ----, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). Nor does this case meet the requirements for application of the "capable of repetition but evading review" exception to general mootness doctrine. See, e.g., Weinstein v. Bradford, 423 U.S. 147, 149, 96 S.Ct. 347, 348, 46 L.Ed.2d 350 (1975). First, the challenged action--application of the regulation to prison inmates--does not avoid review because of durational limits, but rather can be adequately challenged by the regular process of individualized litigation. Second, we cannot accept the contention that there is a reasonable expectation that Ross will again be subjected to the regulation. This could only occur if Ross returns to prison, but we must assume (from the legal perspective) that Ross will in the future be a law-abiding citizen. Lyon, --- U.S. at ---- - ----, 103 S.Ct. at 1665; O'Shea v. Littleton, 414 U.S. 488, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974).
III
26
The district court's ruling, by summary judgment, on Ross's first amendment claim was that his disciplinary demotion in custody occasioned by his letter-writing campaign violated first amendment rights. The defendants did not appeal the superfluous injunctive decree based upon this finding of violation and that finding stands unchallenged on this appeal. On trial of the remaining issues, the court ruled that the defendants were immune from liability for monetary relief under Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). Ross challenges the immunity ruling, contending that at the time of his demotion, defendants' acts contravened well settled law. We disagree.
27
All parties are agreed that the defendants--if indeed they are appropriate defendants5--are entitled to qualified immunity under Fitzgerald if "their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known," id. 102 S.Ct. at 2738. The question, simply put, is whether a reasonable person would have known that Ross had a clearly established constitutional right to send the particular letters in issue to Ms. Keith.
28
When the events at issue took place in late 1979-early 1980, the law was clear that prison authorities could not as a regular practice censor inmate mail, even if the letter unduly complains or magnifies grievances or is defamatory; rather, as was clear, censorship--and other restrictions on inmates' first amendment rights--must be justified by using narrowly drawn means to further substantial governmental interests in security, rehabilitation, and order. The proscription against run-of-the-mill censorship was first announced in Procunier v. Martinez, 416 U.S. 396, 94 S.Ct. 1800, 40 L.Ed.2d 224 (1974), and was considered sufficiently settled by the Fifth Circuit in 1979 that a prison guard who engaged in censorship was held not entitled to qualified immunity, McNamara v. Moody, 606 F.2d 621 (5th Cir.1979).
29
Ross argues that his situation is clearly governed by Martinez and Moody, and that what happened to him was essentially censorship. The underpinning of Ross's argument, of course, is that he was engaged in activity protected by the first amendment--and the district court presumably agreed with this in its ruling on the summary judgment motion. Conversely, defendants contend that this case is a far cry from Martinez or Moody; rather, they viewed their disciplinary actions as directed at Ross's improper conduct in attempting to gain a benefit to which he was not entitled. Defendants argue forcefully that the activities engaged in by Ross were not clearly established first amendment rights.
30
We agree with the defendant's contention that Ross's conduct was not so clearly protected by the first amendment as to make it a "clearly established" constitutional right. In fact, we have grave reservations whether the scheme perpetrated by Ross is within the purview of the first amendment. This is not a simple case where prison officials have attempted to regulate by censorship the ordinary correspondence of inmates. It is more properly viewed as one in which the officials have attempted--though perhaps without a full and sophisticated appreciation of the implications of first amendment doctrine--to forestall and punish an arguably illegal effort to coerce official action by making allegations known to be false or unsupportable.6
31
Nevertheless, defendants have not challenged the finding of a constitutional violation on their part. Although the possibility of nevertheless exercising our supervisory jurisdiction to reconsider the issue of violation exists, and although the district court after reflection upon the implications of the intervening decision in Harlow v. Fitzgerald later questioned the correctness of its holding of violation,7 we need not decide that issue. We hold instead that if, arguendo, the activity engaged in by Ross was protected by the first amendment, reasonable people would not have known that it was a clearly established constitutional right.8 The facts of this case demonstrate that it is different in kind from the situations encountered in Martinez and Moody. Accordingly, we affirm the district court's judgment that all the defendants are entitled to Harlow v. Fitzgerald immunity.
IV
32
We turn finally to Ross's claim that he was subjected to cruel and unusual punishment when he was placed in administrative segregation at the Caledonia facility.9 This claim apparently encompasses several different strands of official conduct: Ross's placement in administrative segregation (rather than being transferred), his detention in administrative segregation for almost three months pending a transfer, and his subjection to allegedly impermissible conditions while in administrative segregation. All are claimed to amount to cruel and unusual punishment. Again, we disagree.
33
It is first necessary to sort out the named defendants and analyze Ross's theory of liability as it may apply to each of them. Ross's theory apparently is that all defendants found to have violated his first amendment rights are per se legally responsible for all events that occurred after Ross was transferred to Caledonia. It seems to come to this: but for the defendants' activities in disciplining him, he would not have been transferred to Caledonia; but for the transfer, Ross would never have been in the same facility as Willie Simmons; but for the encounter with Simmons, Ross would never have been placed in administrative segregation and suffered the allegedly unconstitutional conditions of confinement.
34
We first reject the more extravagant causal links between official conduct and claimed constitutional injuries that such a theory implies. The lack of a sufficient nexus between the actions of some defendants and some of the specific deprivations of right charged to them is immediately revealed and establishes as a matter of law that they cannot be held liable for any such deprivations as may have occurred. First off, the immunity that attached to the actions of the defendants who initially imposed disciplinary sanctions extends to the resulting transfer to Caledonia as a part of the sanctions. Furthermore, that act of transfer was the last act traceable to those defendants involved in the disciplinary proceedings; beyond this point any legally cognizable causal chain is severed and those defendants cannot be held legally responsible for succeeding events. Beyond this point, they cannot be said to have "deprived" Ross of any constitutional right among those claimed later to have been violated. Their conduct is simply too remote in legal contemplation to have that effect. See Martinez v. California, 444 U.S. 277, 100 S.Ct. 553, 62 L.Ed.2d 481 (1980); Fox v. Custis, 712 F.2d 84 (4th Cir.1983).
35
We elaborate briefly on this holding, though it may be so obvious as to require no more than its statement. Ross had been in Caledonia for approximately a month before Simmons was transferred there in what apparently was a routine inmate transfer. Ross requested to be transferred as soon as he knew Simmons had arrived on the scene. The direct causes for Ross's placement in segregation were therefore the transfer of Simmons to Caledonia, and Ross's reaction to that transfer. The causal link between the disciplinary transfer and the later encounter with Simmons is too attenuated to serve as a basis for finding the defendants who originally imposed disciplinary sanctions upon Ross liable for the still more remote consequences that followed. This means that the defendants Reed, Ralph Edwards, L.E. Edwards, and Lee--all of whom were involved only in the original disciplinary proceeding against Ross--are, as a matter of law, not liable for any of the charged violations of eighth amendment rights related to the Caledonia segregated confinement of Ross.
36
There are, however, two defendants who did have a direct link to Ross's confinement in segregation: L.V. Stephenson, Superintendent of Caledonia, and Fletcher K. Sanders, administrative head of the Caledonia-Odom prison complex.10 Both of these men were directly involved in placing and keeping Ross in segregation for three months. Upon reviewing Ross's eighth amendment claims, however, we agree with the district court that these defendants are not liable for inflicting cruel and unusual punishment upon Ross.
37
Ross's first complaint--that his assignment to segregation instead of an immediate transfer constituted cruel and unusual punishment--approaches the frivolous. Ross requested an immediate transfer (to which incidentally he had no general right), but the only option immediately available to accomplish the protection he sought was to put him in protective segregation.11 Given the duty of providing protection for Ross that arguably had been imposed upon these officers by his notification of threatened harm, see Withers v. Levine, 615 F.2d 158 (4th Cir.1980), their response was not only constitutionally permissible, it may have been constitutionally compelled.
38
Ross's claim that his three-month stay in segregation violated his eighth amendment rights is also without merit. The duration of an inmate's stay in segregation is not controlling on the issue of cruel and unusual punishment, Sweet v. South Carolina Department of Corrections, 529 F.2d 854, 861 (4th Cir.1975), even when that duration is quite long. It is uncontroverted on the record that the prison officials were having a difficult time arranging for a transfer of Ross, because--for understandable reasons of record--custodians willing to take him on transfer were not easily found. As a matter of law, Ross's stay of three months in segregation--a stay occasioned by a request for protection--does not offend contemporary notions of decency and does not constitute a violation of the eighth amendment.12 See Rhodes v. Chapman, 452 U.S. 337, 101 S.Ct. 2392, 69 L.Ed.2d 59 (1981).
39
The physical conditions of confinement Ross claims he was subjected to while in segregation13 are little more substantial. Those claims essentially are that his room was at times extremely cold, though it is not clear how long or how often this condition is claimed to have existed; that his clothes were insufficient to keep him warm; that his cell was without light for eight weeks; and that certain of his therapeutic footwear was confiscated.14
40
The evidence on these alleged conditions was in conflict. Ross claimed he was without lights for eight weeks, but a repairman from the prison testified that he had checked all the cells in the wing where Ross was housed every day during the period in question. The purpose of this daily inspection was to make sure that the lights, plumbing and other fixtures in the cells were working properly. This repairman testified that Ross's light was never burned out and that Ross never complained about the lack of heat or lights. The repairman bolstered his testimony with records made contemporaneously with his inspections, and these records indicate that nothing was wrong in Ross's cell.
41
Other testimony revealed that the administrative segregation wing where Ross was housed was a brand new facility when Ross was placed there. Each inmate had a single cell with all the necessary plumbing, and the unit was centrally heated and cooled; in fact, the segregation unit was the only prison in the state that had air conditioned cells. Because the unit was centrally heated and cooled, turning the air off in one cell would require turning it off in the whole unit.
42
Although this conflicting testimony might, in an appropriate case, justify sending the issue of the actual conditions in the prison to a jury, this case was appropriately taken from the jury. We cannot say what the conditions of Ross's cell were, but we can say that, on this record, defendants Stephenson and Sanders could be liable for those conditions only if the omissions of underlings are imputed to them. Because respondeat superior liability has no place in Sec. 1983 jurisprudence, Monell v. New York City Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Vinnedge v. Gibbs, 550 F.2d 926 (4th Cir.1977), these two defendants cannot be liable in damages to Ross on account of the conditions of the cell.
43
Sanders, as head of the entire Caledonia-Odom complex, was in charge of over 1500 inmates; Stephenson, superintendent of Caledonia, was in charge of 800. In these large prisons, the highest level administrators cannot be held responsible for the individualized complaints of every prisoner, absent knowledge, actual or constructive, of facts sufficient to put them on notice. Layne v. Vinzant, 657 F.2d 468, 471 n. 3 (1st Cir.1981). On this record, there is no indication that Stephenson or Sanders themselves knew or should have known of the alleged condition of Ross's cell. Sanders testified he never received complaints from any inmate concerning the temperature in the cells. There is no evidence in the record of any complaint by Ross to anyone concerning the lack of heat in his cell, nor is there sufficient evidence of complaints about the lighting to put the defendants on notice. Indeed, the defendants' employee who was in charge of the habitability of the cells testified that he examined the cell every day and found no problems; although this repairman could have been lying, or simply negligent, we cannot impute his alleged omissions to Sanders and Stephenson.
44
It is true, of course, that prison administrators can be liable for the poor conditions of prisons, especially if those conditions exist prison-wide. See DiMarzo v. Cahill, 575 F.2d 15, 17-18 (1st Cir.1978). Here, however, the record conclusively establishes that the prison was a brand new facility; any incidents of improper conditions were individualized and sporadic; no complaints were made to put Sanders and Stephenson on notice of the conditions; the facility was inspected daily by a repairman who kept records of his findings. Based on these factual predicates, we cannot say that Sanders or Stephenson should have known of the conditions endured by Ross and we accordingly affirm the district court's holding that they are not liable on Ross's eighth amendment claim.
V
45
Ross's claim for injunctive and declaratory relief is moot. We affirm the holding of the district court that the defendants charged with violating Ross's first amendment rights are immune to claims for monetary relief. And we affirm the holding of the district court that none of the defendants charged with violating Ross's eighth amendment rights is liable on that claim.
46
AFFIRMED.
1
The six named defendants are: Amos Reed, Secretary of North Carolina Department of Corrections, accused of approving, sanctioning and authorizing the unconstitutional regulations and the unconstitutional treatment of Ross; Ralph D. Edwards, retired Director of the Division of Prisons, accused of the same acts as Reed; Fletcher K. Sanders, Administrator of Caledonia-Odom Prison Complex, charged with the same acts as Reed and also approved Ross's placement in segregation; L.V. Stephenson, Superintendent of Caledonia, accused of same acts as Sanders; L.E. Edwards, Superintendent of Halifax, who was involved in the disciplinary actions against Ross; Randall E. Lee, Chairman of Caledonia Complex Disciplinary Committee, who was involved in the disciplinary actions against Ross
2
The Keith lawsuit was ultimately dismissed upon Ross's failure to pay filing fees
3
Ross was convicted of violating 5 NCAC 2B.0302(1), which provides:
Directing toward any state official, any member of the Prison Staff, or any member of the general public, language that is generally considered profane, contemptuous, or threatening, or by a specific gesture or act demonstrating marked disdain, insolence, or impertinence with reference to such persons [shall constitute a major offense].
Because of our disposition of this claim on mootness grounds, we do not express any opinion of the constitutionality of this regulation.
4
Although Ross brought this suit as a class action, no motion for certification and no showing of the suitability of class treatment was made. The district court accordingly dismissed the class action allegations
5
The liability of some of these defendants appears tenuous at best, because it is apparently based on some theory of respondeat superior. For example, Amos Reed, head of the Department of Corrections, does not appear to be tied directly to Ross's disciplinary action. Also, it appears that other defendants would have immunity under other theories; for example, the investigative officer, Lee, may be immune under Segarra v. McDade, 706 F.2d 1301 (4th Cir.1983), principles. We do not address these issues, however, because the defendants have not appealed the determination that Ross's first amendment rights were violated by the application to him of the regulation, and because we find that Harlow v. Fitzgerald immunity applies to bar monetary relief for that violation
6
The following exchange occurred between the court and Ross:
Q. Do you have any evidence that she is a racist?
A. No, sir.
Q. All right. Do you have any that she accepted bribes?
A. No, sir.
7
"I have considerable question in my own mind, having heard the evidence in this case and having made both a study of the law and having now the benefit of Harlow v. Fitzgerald, which had not been decided at that time--I have serious question as to whether or not I would reach the same result again."
8
Ross relies here heavily on the fact that his counsel, under the auspices of the ACLU, wrote a letter to L.V. Stephenson complaining of Ross's punishment. Ross claims that this letter, which is not in evidence, put the defendants on notice that they were violating Ross's rights by demoting him to medium custody. We cannot accept this contention, assuming the predicate fact is properly before us
First, the letter was written two months after Ross had been transferred to Caledonia, so the defendants were not on notice at the time of the disciplinary proceedings. More important, however, is the fact that Ross's attorney's opinion of the law was not necessarily correct. Here, counsel opined that Ross's case was a pure censorship case in the mold of Moody and Martinez, but we have expressed the view that that theory is a most dubious one. We also note that the prison authorities, through their counsel and the state Attorney General's Office, reviewed the law as contained in Ross's letter; those attorneys disagreed with Ross's attorney's view of the law as it applied to Ross's situation. These different legal views indicate that, at the least, from the layman's perspective with which we are concerned, the constitutional rights claimed here were not "clearly established" at the critical time.
9
The issue as framed on appeal is couched strictly in eighth amendment terms and was only so argued to us on appeal. We therefore decline to address any other potential constitutional violations arising out of this placement in administrative segregation
We also note that the basis for the district court's ruling on the eighth amendment claim is not entirely clear from the record. Because we rule as a matter of law that Ross cannot recover on this claim, we are not concerned with the confusion surrounding this claim in the record.
10
Ross did write a letter to Reed complaining of his placement in segregation. Reed, through Ralph Edwards, referred the matter to Sanders, who was the appropriate official to handle the matter. This peripheral contact by Reed and Edwards is insufficient as a matter of law to impose liability upon them on this claim
11
There is no claim that the proper procedures were not followed in placing Ross in segregation, and the defendants' evidence indicates the proper steps were taken
12
Ross claims that his confinement in administrative segregation for more than 60 days constitutes cruel and unusual punishment because it violates a prison regulation. Ross points to 5 N.C.A.C. 2B.0302(e), which he claims reads as follows:
Except where the inmate is in segregation at his own request or where he is awaiting trial on serious criminal charges, no inmate is to be confined in administrative segregation more than sixty days.
We cannot accept Ross's claim. Initially, he has done a selective reading of .0302(e), which contains this proviso to which he did not advert in brief:
If at the end of that period, the unit superintendent/institution head determines that temporary segregated confinement has not diminished the threat posed by the inmate to himself or others, he should refer the matter to the Director's Review Committee for appropriate action.
Two witnesses--Fletcher Sanders and Earl Bershears--testified that a Director's committee had met; that committee had approved on April 18 a transfer of Ross, but had also approved his continued segregation for up to six months.
The evidence, uncontradicted by Ross at trial, is that he was not kept in segregation in violation of .0302(e). Even if he had been so confined, however, his claim here would not be one for cruel and unusual punishment but for deprivation of a fourteenth amendment liberty interest--assuming, of course, that the regulations created a liberty interest in Ross. That issue is not presented here.
We develop this peripheral point in this much detail as an occasion to express our dismay at the pressing of this type of wholly insubstantial claim by counsel. To do so is to disserve both the justice system and litigants with at least arguably meritorious claims. And it does no countervailing service to the client of the moment. There are other examples in this appeal.
13
The only arguable questions on this claim have to do with the conditions of Ross's cell, not with the general regulations concerning inmates in administrative segregation. The fact that Ross, after being placed in segregation, had less access to the canteen, was denied "contact" visits, was handcuffed when he left his cell, etc., does not approach cruel and unusual punishment. These are restrictions placed on all segregated inmates that, though perhaps disliked, do not approach the standard of offending contemporary notions of decency
14
This last claim is completely unsubstantiated as an eighth amendment claim and it is not advanced in any other form
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Case: 18-60850 Document: 00515320316 Page: 1 Date Filed: 02/24/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 18-60850 February 24, 2020
Summary Calendar Lyle W. Cayce
Clerk
OSCAR ZARRE-MENDOZA,
Petitioner
v.
WILLIAM P. BARR, U. S. ATTORNEY GENERAL,
Respondent
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A072 810 778
Before CLEMENT, ELROD, and OLDHAM, Circuit Judges.
PER CURIAM: *
Oscar Zarre-Mendoza, also known as Oscar Sarres Mendoza, is a native
and citizen of Honduras. He first entered the United States without
authorization in August of 1993. He was ordered deported in absentia in 1994.
After his initial deportation in 1997, he illegally reentered the United States
several times and was deported several times. He also committed several
Texas crimes, including an aggravated robbery for which he was sentenced to
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 18-60850 Document: 00515320316 Page: 2 Date Filed: 02/24/2020
No. 18-60850
20 years in prison. In 2017 he successfully moved to have his in absentia
deportation proceeding reopened on grounds not relevant here.
As found by the immigration judge (IJ) and the Board of Immigration
Appeals (BIA), and not contested by Zarre-Mendoza, the only possible form of
relief from deportation currently available to Zarre-Mendoza is deferral under
the Convention Against Torture (CAT). The IJ denied CAT relief, and the BIA
affirmed that denial, on the ground that Zarre-Mendoza failed to show the
required likelihood of torture by, or with the acquiescence of, the government
of Honduras.
We review the BIA’s decision and consider the IJ’s decision to the extent
it influenced the BIA. Martinez Manzanares v. Barr, 925 F.3d 222, 226 (5th
Cir. 2019). The BIA’s legal determinations are reviewed de novo. Id. However,
a finding that an alien has not demonstrated entitlement to CAT relief will be
upheld unless the evidence compels a contrary conclusion. See id. at 228-29;
Chen v. Gonzales, 470 F.3d 1131, 1134 (5th Cir. 2006).
“To obtain relief under [the] CAT, an alien must demonstrate . . . that it
is more likely than not that he will be tortured if he is removed to his home
country.” Majd v. Gonzales, 446 F.3d 590, 595 (5th Cir. 2006). “Torture is an
extreme form of cruel and inhuman treatment and does not include lesser
forms of cruel, inhuman or degrading treatment or punishment.”
§ 208.18(a)(2); see Iruegas-Valdez, 846 F.3d 806, 812 (5th Cir. 2017). In
addition, “the pain or suffering in question must be inflicted by or at the
instigation of or with the consent or acquiescence of a public official or other
person acting in an official capacity.” Iruegas-Valdez, 846 F.3d at 812 (internal
quotation marks and citation omitted).
Zarre-Mendoza’s petition for review repeats his prior arguments before
the IJ and BIA and presents scattered and conclusional allegations of
2
Case: 18-60850 Document: 00515320316 Page: 3 Date Filed: 02/24/2020
No. 18-60850
harassment and extortion by gangsters and police, along with a bare assertion
that his life is in danger. He notes that Honduras has a poor record in
protecting human rights and fighting gang violence.
Although Zarre-Mendoza recites the definition of torture, he does not
explain how his mistreatment by gangsters or police meets that definition. The
BIA agreed with the IJ’s conclusion that Zarre-Mendoza’s reported encounters
“with suspected gang members and police simply do not rise to the level of
extreme, cruel and inhuman treatment to establish past torture, nor has he
shown that the harm he fears upon return will qualify as torture.” Zarre-
Mendoza’s conclusional assertions that he was, and will be, tortured fail to
compel a conclusion that it is more likely than not that he will be tortured upon
his return to Honduras. See Majd, 446 F.3d at 595; cf. Garrido-Morato v.
Gonzales, 485 F.3d 319, 322 n.1 (5th Cir. 2007) (argument deemed abandoned
because it did not extend beyond a conclusory assertion).
Neither does Zarre-Mendoza show that there is “sufficient state action
involved in [the alleged] torture.” Iruegas-Valdez, 846 F.3d at 812 (internal
quotation marks and citation omitted); see Chen, 470 F.3d at 1141. His
conclusional assertions that police might not prevent or respond to gang
violence are insufficient to prove acquiescence. See Martinez Manzanares, 925
F.3d at 229; Garcia v. Holder, 756 F.3d 885, 892 (5th Cir. 2014). The evidence
thus does not compel a finding of government acquiescence. See Ramirez-Mejia
v. Lynch, 794 F.3d 485, 493-94 (5th Cir. 2015).
In light of the foregoing, we need not address Zarre-Mendoza’s
contention that he cannot safely relocate within Honduras. Zarre-Mendoza
has failed to show that the evidence compels a finding that he is entitled to
relief under the CAT. See Martinez Manzanares, 925 F.3d at 228-29. The
petition for review is DENIED.
3
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776 S.W.2d 334 (1989)
300 Ark. 25
Royse Nathaniel SANDERS, Jr., Appellant,
v.
STATE of Arkansas, Appellee.
No. CR 89-59.
Supreme Court of Arkansas.
September 18, 1989.
*335 Daniel D. Becker, Hot Springs, for appellant.
Lynley Arnett, Asst. Atty. Gen., Little Rock, for appellee.
GLAZE, Justice.
This is an appeal from the appellant's conviction of robbery and being a felon in possession of a firearm. He received a sentence of fifty-five years. The sole issue on appeal is whether the trial court erred in denying the appellant's objection that the jury panel had no black members. We find no error.
The appellant, a black male, was convicted of robbing a white man. At trial, he asserted that the jury panel in Garland County, from which the appellant's jury was picked, did not contain any black members. Appellant objected to the panel alleging that it would be highly prejudicial to have an all white jury. The trial court denied his challenge to the jury panel and entered an order stating how the jury panel had been selected. According to that order, the jury panel was selected by the use of a computer using random numbers to select names of qualified voters of Garland County. A master list of 2,065 names of qualified voters was prepared by computer. From that list, or the jury wheel, the court drew four hundred names to serve as jurors for the July 1988 term of court. There were four panels with one hundred jurors each. The members of the appellant's jury were randomly selected from three of the four panels.
The selection of a petit jury from a representative cross section of the community is an essential component of the sixth amendment right to a jury trial. Taylor v. Louisiana, 419 U.S. 522, 95 S.Ct. 692, 42 L.Ed.2d 690 (1975). But, there is no requirement that the petit jury actually chosen must mirror the community and reflect the various distinctive groups in the population. Id., see also Mitchell v. State, 299 Ark. 556, 776 S.W.2d 332 (1989). A defendant in a criminal case is entitled to require that the state not deliberately or systematically deny to members of his race the right to participate, as jurors, in the administration of justice. See, e.g., Waters v. State, 271 Ark. 33, 607 S.W.2d 336 (1980). It is the state's purposeful or deliberate denial to blacks, on account of race, of participation in the administration of justice by selection for jury service that violates the equal protection clause. Id.
In order to establish a prima facie violation of the fair-cross-section requirement, the appellant must show that (1) the group alleged to be excluded is a "distinctive" group in the community; (2) the representation of this group in venires from which the juries are selected is not fair and reasonable in relation to the number of such persons in the community; and (3) this underrepresentation is due to systematic exclusion of the group in the jury selection process. Duren v. Missouri, 439 U.S. 357, 99 S.Ct. 664, 58 L.Ed.2d 579 (1979). Once the appellant makes a prima facie showing of racial discrimination in the jury selection process, the burden shifts to the state to justify its procedure.
Here, the appellant clearly did not meet his burden of proof. The record is void of any statistical information to show the racial make-up of the community or of the 400 jurors on the four jury panels. See Thomas v. State, 289 Ark. 72, 709 S.W.2d 83 (1986). In addition, the record neither reflects that the appellant ever asserted below that there was a systematic exclusion of blacks from the jury nor indicates he wanted to investigate that such an exclusion occurred. Id.
From our review of the record, there is a lack of proof as to the racial make-up of the community and the jury panels, and in addition, there is simply no showing that *336 the underrepresentation of blacks in the appellant's jury panel is due to systematic exclusion in the jury selection process. As stated earlier, a computer was used to randomly pick jurors from a current list of registered voters, which did not show the voter's race. In this regard, Garland County's jury selection process met the conditions set out in Ark.Code Ann. § 16-32-103 to XX-XX-XXX (1987). As we have previously held, when the jury selection law is followedand it was herethere is no possibility of intentional exclusion of blacks from jury panels. Thomas, 289 Ark. at 74, 709 S.W.2d at 84.
For the reasons above, we affirm.
PURTLE, J., concurs.
PURTLE, Justice, concurring.
I concur only because I do not have time to research this issue in depth. There is something seriously amiss in the jury selection process when not one black person out of a panel of 300 prospective jurors is chosen. Clearly, a prima facie case of discrimination is established under these circumstances. The state should be charged with proving the validity of the panel. We have been furnished no figures reflecting the number of blacks residing in Garland County, although such figures are available from the Census Bureau and other compilations.
I am aware of the opinion of this court in Thomas v. State, 289 Ark. 72, 709 S.W.2d 83 (1986), and various United States Supreme Court opinions including Duren v. Missouri, 439 U.S. 357, 99 S.Ct. 664, 58 L.Ed.2d 579 (1979). Blacks are a distinctive group and are not represented at all on this panel of 300 venires. The state should be required to show some reason for the absence of this distinctive group. A list of all licensed drivers in the county might be more representative than the voter registration list. People who pay personal and real property taxes are listed in each county and could be a source from which jurors are selected. Any system obtaining the result in this case certainly needs further examination.
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115 Ariz. 511 (1977)
566 P.2d 312
PIONEER NATIONAL TRUST CO. of Arizona as Successor Trustee of TTI Building Corp., formerly known as Tucson Title Insurance Company as Trustee under Trust No. 218948, Appellant/Cross-Appellee,
v.
PIONEER NATIONAL TRUST CO. of Arizona as Successor Trustee of TTI Building Corp., formerly known as Tucson Title Insurance Company as Trustee under Trust No. 10359, Pioneer National Trust Co. of Arizona as Trustee Under Trust No. 10376, and the Unknown Heirs of any of the Named Parties Defendant, Appellees/Cross-Appellants.
No. 2 CA-CIV 2048.
Court of Appeals of Arizona, Division 2.
April 14, 1977.
Rehearing Denied May 25, 1977.
Review Denied June 14, 1977.
*512 Jeffrey H. Schwartz, and Miller, Pitt & Feldman, P.C., Tucson, for appellant/cross-appellee.
Rees, Mercaldo & Smith, P.C. by Paul G. Rees, Jr., Tucson, for appellees/cross-appellants.
OPINION
HOWARD, Chief Judge.
This appeal concerns the right of a vendee to a partial release of certain lots upon payment of the release price. There is also a cross-appeal which challenges the appellant's capacity to sue and contends the proceedings below were a nullity due to the failure to join the beneficiaries of the trust as indispensable parties.
In this opinion we shall designate the parties as follows: Appellant is Trustee No. 48; appellee Pioneer National Trust Company of Arizona, as Trustee under Trust No. 1-359, is Trustee No. 59, and Pioneer National Trust Company of Arizona, as Trustee under Trust No. 10376, is Trustee No. 76. Any reference to the foregoing trustees also includes their predecessors in interest.
On October 5, 1960, Trustee No. 48 sold 560 acres of land situated in Cochise County, Arizona to Trustee No. 59. A contract for sale of real estate entered into by the parties provided for a total purchase price of $28,000 which was payable as follows: $5,600 upon execution of the contract and the principal balance payable in annual installments of $2,800, due on or before November 1st of each year, plus interest, the first such installment due on or before November 1, 1961. Shortly after the execution of this contract Trustee No. 59 sold the land to Trustee No. 76.
The original contracts of sale between Trustee No. 48 and Trustee No. 59, contained the following provision:
"Provided the buyer is not in default hereunder, the seller will convey parcels of 40 acres each, from the lien of this contract of sale and said realty mortgage hereinafter described, upon the payment of $2,800.00 for each 40 acre parcel so conveyed. Payments for releases shall apply toward the next principal payment or payments due."
The printed portion of the contract contains the not uncommon provisions that it is expressly understood and agreed that each and every thing to be performed by the buyer under the terms of this contract shall be considered to be a condition and that time of payment shall be of the essence of the contract. The annual payment was made for the years 1961 through 1967. It was never paid on November 1st as required by the contract but payments were, on the average, fifteen days late. However, all of the annual payments were within the applicable grace period provided by A.R.S. § 33-741.
The payment due on November 1, 1968 was not paid and after expiration of the applicable grace period appellant brought this action to forfeit the interest of appellees. Trust No. 59 did not answer the complaint and a default judgment was entered against it. Trustee No. 76 contended below that, at the very least, it was entitled to a release of 280 acres from the lien of the *513 contract of sale by virtue of the payments made on the original contract during the years 1961 through 1967. The trial court, after making findings of fact and conclusions of law, found that the original contract was in default because of the nonpayment of the installment due November 1, 1968. But it also found that the right of forfeiture only extended to 280 acres, it being of the opinion that Trustee No. 76 was entitled to a deed for 280 acres of land because of the prior payments.
Appellant does not contend that Trustee No. 76 is precluded from securing a partial release of the acreage because no demand for release was made when the payments were made, nor, does it contend that the demand for partial release cannot be made after the institution of a forfeiture action. Rather, it contends that under the terms of the contract the vendee was not entitled to a partial release since the vendee was in default when the payments were made. The problem with this theory is that the contract does not provide that the releases are dependent upon the payments being made on time. The right to release depends upon whether the vendee is in default when it demands a release. This is the interpretation given to the contract by the trial court, and we agree. After each $2,800 payment was made, there was no longer a default. There being no default the vendee was entitled to a partial release of 40 acres after each payment. Appellant has cited to us no authority contrary to this conclusion.[1]
In its cross-appeal Trustee No. 76 contends that Trustee No. 48 was precluded from declaring a forfeiture and bringing this action because of the fact that the title company was enmeshed in a hopeless conflict of interest. This contention was first raised on a motion for new trial by new counsel for Trustee No. 76. At trial the attorney for Trustee No. 76, although invited to do so by the court, refused to raise any issue as to the capacity of the plaintiff to bring suit or the necessity for the beneficiaries of both trusts to be parties to the suit. In fact, the record demonstrates that the beneficiaries of Trust No. 76 hired the attorney representing the trust below and were in fact controlling the litigation. The trial court correctly ruled that these issues were untimely raised in a motion for a new trial. Cross-appellant seeks to circumvent its failure to object by asserting that the beneficiaries were indispensable parties and therefore the question can even be raised on appeal. See Riley v. County of Cochise, 10 Ariz. App. 55, 455 P.2d 1005 (1969). As was pointed out in Riley, the time-honored categories of "indispensable", "necessary" and "proper" parties have been discarded with emphasis now placed on the practical realities of joinder. A defect in parties may be waived by proceeding to trial without objection, unless the omitted party is what was formerly termed an "indispensable" party to a conclusive determination of the controversy. Howard v. Luke, 18 Ariz. 563, 164 P. 439 (1917). Parties will not be considered indispensable if they are beneficiaries of a trust whose interest the trustee may adequately represent. Hardy v. Island Homes, Inc., 363 P.2d 637 (Alaska 1961). In Bolin v. Superior Court, 85 Ariz. 131, 333 P.2d 295 (1958), the Arizona Supreme Court set forth the following test for indispensable parties:
"`... Indispensable parties are those who have such an interest in the subject matter that a final decree cannot be made without either affecting their interest or leaving the controversy in such condition that a final determination may be wholly inconsistent with equity and good conscience. The test of indispensability therefore is whether the absent person's interest in the controversy is such that no final judgment or decree can be entered which will do justice between the parties actually before the court, without injuriously affecting the rights of others not brought into the action.'" *514 85 Ariz. at 134-135, 333 P.2d at 297.
In the case In re Estate of Wiswall, 11 Ariz. App. 314, 464 P.2d 634 (1970), we noted that despite a trend favoring trustee representation, a trustee is not permitted to represent a beneficiary in civil actions where the two have conflicting interests. See generally, Bogert, Trusts and Trustees 2d Ed. § 593. While normally we do not believe the beneficiaries of a trust are indispensable parties in an action to forfeit their interest in a contract for the sale of real estate, the facts in this case are peculiar. There is a patent conflict of interest. The plaintiff was also the defendant (NOTE: there was no cross-appeal from the default judgment taken against Trustee No. 59 and therefore it should not be a party to this appeal). Mr. Keith Robbins, a real estate salesman who put together the syndicate which purchased the property from Trust No. 59 and who was one of the beneficiaries of Trust No. 76, appeared and testified at the trial. Appellant argued below that the beneficiaries of Trust No. 48 had retained its own counsel to represent their interest and similarly that the beneficiaries of Trust No. 76 had retained its own attorney to represent their interest in the proceedings. This contention was never refuted by the appellee at trial nor did it do so in its motion for new trial and it does not contend to the contrary on appeal. Under these circumstances we do not believe that the beneficiaries of Trust No. 76 were indispensable parties.
Judgment affirmed.
HATHAWAY and RICHMOND, JJ., concur.
NOTES
[1] The case of Bleyer v. Veeder, 119 N.J. Eq. 398, 183 A. 203 (1936) cited by appellant is inapposite.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-4059
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
CRAIG LAMONT MYERS,
Defendant - Appellant.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Peter J. Messitte, District Judge. (CR-
03-484-PJM)
Submitted: October 21, 2005 Decided: November 14, 2005
Before NIEMEYER and TRAXLER, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Richard A. Finci, HOULON, BERMAN, BERGMAN, FINCI & LEVENSTEIN,
Greenbelt, Maryland, for Appellant. Rod J. Rosenstein, United
States Attorney, Mythili Raman, Assistant United States Attorney,
Greenbelt, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Craig Lamont Myers pled guilty to conspiracy to
distribute cocaine base, in violation of 21 U.S.C. § 846 (2000),
and the district court sentenced him to 210 months’ imprisonment.
Myers appeals, contending that his sentence, which was imposed
under the then-mandatory federal sentencing guidelines, violates
United States v. Booker, 125 S. Ct. 738 (2005). The Government
asserts that Myers validly waived the right to appeal his sentence
in the plea agreement. We agree with the Government and dismiss
the appeal.
A defendant may waive the right to appeal if that waiver
is knowing and intelligent. United States v. Brown, 232 F.3d 399,
402-03 (4th Cir. 2000). To determine whether a waiver is knowing
and intelligent, we examine “the totality of the circumstances,
including the experience and conduct of the accused, as well as the
accused’s educational background and familiarity with the terms of
the plea agreement.” United States v. General, 278 F.3d 389, 400
(4th Cir. 2002) (internal quotation marks and citation omitted).
We review de novo the question of whether a defendant validly
waived his right to appeal. United States v. Blick, 408 F.3d 162,
168 (4th Cir. 2005).
Our review of the plea agreement and the hearing
conducted pursuant to Fed. R. Crim. P. 11 leads us to conclude that
Myers knowingly and voluntarily waived his right to appeal.
- 2 -
See General, 278 F.3d at 400-01; see also Blick, 408 F.3d at 169-73
(holding that a plea agreement containing a waiver of the right to
appeal, which was accepted by district court prior to the Supreme
Court’s decision in Booker, was not invalidated by change in law
effected by that decision). Moreover, Myers’ claim under Booker
falls within the scope of the waiver. See Blick, 408 F.3d at 170
(holding Booker claim is covered by appellate waiver).
Accordingly, we dismiss the appeal. We dispense with
oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument
would not aid the decisional process.
DISMISSED
- 3 -
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413 P.2d 27 (1966)
Harry E. GREGOIRE, B. Elaine Gregoire, Homer Enterprises, Inc., Appellants,
v.
NATIONAL BANK OF ALASKA, and A.R. Cronin, Appellees.
No. 609.
Supreme Court of Alaska.
April 7, 1966.
*28 Edgar Paul Boyko, Anchorage, for appellants.
Murphy L. Clark, Hughes, Thorsness & Lowe, Anchorage, for appellee National Bank of Alaska.
William W. Renfrew, Anchorage, for appellee A.R. Cronin.
Before NESBETT, C.J., and DIMOND and RABINOWITZ, JJ.
NESBETT, Chief Justice.
Appellants' main point on appeal is that the trial court grossly abused its discretion in denying a trial continuance of this case when their counsel was engaged in a criminal trial in a California court and could not be present.
Appellees emphasize the numerous previous delays and continuances in the case, all at appellants' request, to show that denial of an additional continuance was not an abuse of discretion.
The refusal to grant the continuance in question occurred in September of 1964, however, in order to consider the court's order in perspective it is necessary to review many of the proceedings had in the case since it was commenced on May 1, 1962.
The complaint filed by the appellee National Bank of Alaska, hereinafter referred to as the Bank, requested personal money judgments against appellants on certain *29 notes and guarantees and foreclosure of certain mortgages. Appellants filed a general denial and counterclaimed alleging that the Bank and its predecessor, the Bank of Homer, had conspired with its officers and that the conspiracy resulted in the conversion of $27,000 of appellants' funds to their damage in the sum of $75,000.
On December 29, 1962 appellants filed a third party complaint against A.R. Cronin, alleging that as an officer of the Bank of Homer he had been negligent, had mismanaged funds belonging to appellants and had issued notes on their behalf which they had not signed, to their damage in the sum of $104,000.
A pre-trial order was entered on June 24, 1963 and the case was eventually scheduled to be tried on October 7, 1963. On September 25, 1963 the Bank's notice of the taking of the deposition of a witness in California was vigorously opposed by appellants' counsel on the ground that pre-trial had been completed, discovery had been closed and trial was imminent. The notice of taking was vacated by the court.
The case was then removed from the trial calendar for an October 7th trial because negotiations among the parties indicated that an amicable settlement might be reached. On November 15, 1963 the case was again set for trial by jury on November 25, 1963.
Until November 21, 1963 appellants had been represented by John Stern, Esq. On November 19, 1963 Mr. Stern moved the court to be permitted to withdraw as appellants' attorney, alleging that he had been relieved as attorney by appellants on October 15, 1963; that appellants had picked up and signed a receipt for their files; that on October 15th, he, Stern, had prepared a motion and order for substitution of attorneys for the use of the attorney who was to be substituted, but that the order had never been filed by Stanley J. McCutcheon, the attorney who was to be substituted; that he, Stern, had no further interest in the case, did not have custody of the files and should be relieved of any further responsibility.
The Bank filed written objection to the motion to withdraw pointing out that the case was scheduled to go to trial in a matter of five days; that there was no showing that counsel and his client were at hopeless odds and that other counsel was not ready to be substituted. At the hearing on the motion appellant Harry E. Gregoire stated to the court that he had asked Mr. Stern to withdraw because of a conflict of interest, but that he had gone to Mr. McCutcheon on October 4 before releasing Mr. Stern; that he had been "perfectly willing to have this thing settled out of Court if possible * * *", that Mr. McCutcheon had referred him to Mr. Merbs, who was not going to represent him. Mr. Merbs was present in court and verified that he would not be representing the appellants. Mr. Stern, in response to a question asked by the court, stated that there was an irreconcilable conflict between his interests and appellants' interests. The court then granted the request to withdraw, but stated that the case would be left on the calendar to be tried the following Monday, November 25, 1963.
On November 21, 1963 appellants had filed a motion for continuance of the trial through Peter Walton, Esq., who advised the court that he was appearing in court only for the purpose of arguing appellants' motion for continuance. The court continued until December 4, 1963 trial of the mortgage foreclosure aspects of the case which were to be severed from the remaining issues. The remaining issues were ordered to be tried by a jury at a later date.
On December 3, 1963 Mr. Walton obtained a stay of proceedings in the case in order to petition the Supreme Court of Alaska for review of the trial court's order denying his motion for continuance. The Bank, by the affidavit of its senior vice-president, Karl V. Holmberg, protested the amount of the bond required for the *30 stay, alleging that the Bank had brought three witnesses from Homer, Alaska, for the trial at a cost of over $300.00; that it had been prepared for trial on four other occasions at an estimated additional cost of $500.00; that during settlement negotiations in early October "plaintiff", (referring to appellant Harry E. Gregoire) had admitted that his chief desire was to obtain an extension of time within which to pay his obligation which was greater than the period of redemption and that affiant of his own knowledge and belief was convinced that appellants' tactics were delaying and stalling rather than to face a determination on the merits. The amount of the bond remained at $750, which the court specified was to be used to cover appellees' costs on review and all expenses incurred in anticipation of trial.
This court on January 10, 1964 denied appellants' petition to review the trial court's order of December 2, 1963 denying the request for continuance.
On January 16, 1964 the Bank moved that the case be set for trial at the earliest possible date. This motion was noticed for hearing on January 23, 1964. On January 23, 1964 Edgar Paul Boyko, Esq. filed his appearance as counsel for appellant and argued to the court in opposition to the Bank's motion for an early trial. The court granted Mr. Boyko a period of ten days within which to make a showing to substantiate his request that the entire case be reopened for the amendment of appellants' pleadings, to make additional discovery and to hold another pre-trial conference.
On January 24, 1964 the Bank filed a motion to disqualify Mr. Walton from taking any further part in the litigation because of a conflict of interest. It was alleged that in February of 1960 Mr. Walton had represented the Bank in setting up the transaction which formed the basis of the Bank's first claim for relief and was then attempting to represent appellants who denied the enforceability of the note and mortgage. Hearing on the motion to disqualify was set for January 29, 1964. On January 28, 1964 Mr. Boyko and Mr. Walton filed a joint entry of appearance on behalf of the appellants and Homer Enterprises, Inc. On the same date Mr. Walton filed a 12 page affidavit denying a conflict of interest. On January 30, 1964 the court held a lengthy hearing on the motion to disqualify and on January 31, 1964 granted the motion. After counsel had disagreed as to the form of the order of disqualification, Mr. Walton filed a written withdrawal, which was accepted by the court.
On February 3, 1964 Mr. Boyko filed a motion for an order reopening discovery and authorizing a new pre-trial conference. On the same date he filed a second amended third party complaint on behalf of appellants setting out four claims; an amended answer and counterclaim setting out eleven separate defenses to the first claim, sixteen separate defenses to the second claim, ten separate defenses to the third claim and a counterclaim again alleging a conspiracy between the Bank and the Bank of Homer to destroy appellants' credit, to wrest valuable property from them, of converting bank funds of appellants and of contriving to impair the ability of counsel to represent appellants. On February 6, 1964 a subpoena duces tecum and notice of taking of deposition issued and on February 7th a demand for jury trial was filed all on appellants' behalf.
Both appellees moved to strike the amended answer and counterclaim and opposed the motion to reopen discovery and grant a new pre-trial conference. The appellee Cronin also moved to strike appellants' second amended third party complaint. After a hearing the court denied appellants' motion to reopen discovery and for a new pre-trial conference, granted appellees' motion to strike the amended answer and counterclaim and granted the motion to set the case for trial. Appellee Cronin's motion to strike the second amended third party complaint was also granted.
*31 Judge Moody reviewed the history of proceedings to that date pointing out that all pleadings had been filed and issue joined, that discovery had been accomplished and pre-trial completed prior to September of 1963 when appellees' motion to take a deposition was vacated by the court on appellants' insistence that the case was ready for trial and the trial date imminent. The judge pointed out that vacation of the various trial settings and the resultant delay was at the instance of appellants on each occasion. After attempting to accommodate counsel the judge finally set the case for trial during the week of March 16, 1964, recognizing the right of counsel to make a showing for a continuance.
On March 2, 1964 Mr. Boyko filed a notice of the special appearance of Kenneth D. Jensen, Esq. for the limited purpose of handling motions and other procedural matters in the absence of trial counsel.
On March 2, 1964 Mr. Boyko filed a motion for continuance of the trial of the case until after April 15, 1964 on the ground that he had a full trial and hearing schedule in March and the first part of April in the courts of Los Angeles. The Bank filed written opposition to the motion, pointing out that attorney Jensen was not shown to be unavailable for the scheduled trial and questioning the validity of the attempted limitation on the authority of Mr. Jensen. After a hearing the court granted the motion for continuance, although it appeared that the case probably could not be tried as scheduled. Trial was rescheduled for the first available date after March 16, 1964.
On April 10, 1964 the case was set for trial on September 21, 1964.
On June 24, 1964 Mr. Jensen, on behalf of appellants, filed a motion to modify the pre-trial order by reopening discovery, supported by a memorandum. Both appellees opposed the motion. On July 20, 1964 the court granted the motion to reopen discovery, stating as its reason the fact that the case was not scheduled to go to trial for more than 60 days.
On September 11, 1964 Mr. Boyko, on behalf of appellants again moved for a continuance stating that since August 3rd to date he had been in continuous trial; that he had continuous prior trial commitments scheduled through October 16, 1964 and that it would be impossible for him to attend the trial of this case on September 21, 1964. His affidavit went on to allege that his inability was beyond his control because the Emard case, scheduled for trial in Anchorage for the period July 20 to July 31, 1964 was continued at the court's own motion and for the court's own convenience to August 3rd and that the trial continued uninterruptedly through August 27th; that on August 28th he returned to his Los Angeles office and immediately commenced a criminal jury trial in Santa Barbara which was then in progress and estimated to last until September 14th; that immediately thereafter he would be required to attend the consolidated jury trial of two criminal matters in Los Angeles which would run through September 30, 1964 after which he was scheduled to go to Fairbanks to commence a trial on October 2nd to last a week, after which he was scheduled to attend a criminal hearing in Anchorage which would be completed on October 17th; that from October 18th to November 23rd he would be available to try this case, otherwise he would not be available until he had completed a scheduled trial in Seattle approximately 60 days after November 23, 1964.
The Bank filed a written memorandum in opposition, emphasizing the continuances that had already been granted to appellants; that counsel had been aware of the present trial setting since April 10, 1964 and was obliged to arrange his other trial settings accordingly; that appellants had had Mr. Jensen associated in the case since March of 1964 and that he had had the opportunity to familiarize himself with the case; that the motion did not comply with Civil Rule 6(d) since there had been no notice served five days before the hearing and that the motion was an indirect attempt to extend the discovery period for, although discovery had been reopened on July 20, *32 1964 pursuant to attorney Jensen's motion, no discovery had been taken to date.
Mr. Jensen appeared at the hearing on the motion for continuance to announce that he was not appearing to argue the motion; that he was not further appearing on behalf of Mr. Boyko; that he wished to be excused from the hearing as he did not intend to represent appellants at the trial because he had been employed by Mr. Boyko only to represent them on procedural matters and that Mr. Boyko now had attorney Tucker present in court to represent him on the motion for continuance. Mr. Tucker then stated that he appeared only for the purpose of arguing the continuance and not as counsel for appellants.
The court remarked that on April 10th the case had been set to be tried on September 21st; that appellants had had more than five months notice; that Mr. Boyko's affidavit did not state that any of the cases he was then engaged to try had been set for trial prior to this case; that he wondered if it was not Mr. Boyko's responsibility to advise the California courts of his Alaska settings, finally stating that the showing was insufficient and that the motion would be denied.
On September 18, 1964 Mr. Boyko filed a supplemental affidavit in support of a motion to reconsider the request for a continuance, outlining in detail his trial schedule "as of the time immediately following the last trial setting in the above entitled cause" when this case was set for trial on September 21, 1964. The list commenced with trial of the Emard case in Anchorage on July 20, 1964 and listed trials in Anchorage on August 3rd, in Santa Barbara on August 11, an arbitration hearing and a criminal trial in Los Angeles on August 25th and September 8th respectively, trial of this case on September 21, 1964 and trial of a case in Fairbanks on October 5th. The affidavit realleges that the continuance of the Emard trial from July 20 until August 3 was the principal reason for counsel being unable to attend the trial and goes on to explain that thereafter trial settings in California were changed to accommodate this delay; that the criminal case he was presently trying had begun on September 1st and was expected to last only four days, but that as of the date of the affidavit (September 18, 1964) the prosecution had not concluded its case and that it was his estimate that the trial would not go to the jury before September 29th. The affidavit again alleged that the delays which brought on his dilemma were the fault of and caused by the Anchorage court for its own convenience and asked that his request for a 30 day continuance be granted. Again, the Bank filed opposition to the motion.
The motion was heard on September 21, 1964 and was argued for Mr. Boyko by attorney Tucker. Appellant Harry E. Gregoire took the stand at Mr. Tucker's request and informed the court that he had talked with Mr. Boyko on the telephone that morning; that Mr. Boyko had advised him that he had commenced his defense in the criminal trial on Friday (September 18th) and would be in court the rest of the week, but that there might be a continuance because the judge was ill and that he was sending a telegram to Judge Moody and a special delivery letter to Mr. Gregoire.
The court denied the motion on the ground that it was not timely and the showing inadequate and announced that the case would go to trial on Wednesday, September 23, 1964.
When the case was called for trial on September 23, 1964 attorneys Jensen and Tucker presented to the court a form entitled "Withdrawal of Counsel", stating that with the consent of their client attached thereto, they, Jensen and Tucker, were withdrawing. Attached was a letter of that date signed by Harry E. Gregoire addressed to attorneys Tucker and Jensen expressing appreciation for their services to Mr. Boyko, but stating that for the purpose of the trial he recognized only Mr. Boyko as the trial attorney and that "In the event that you were ordered to represent me in court I would not recognize you as the trial attorneys."
*33 At the court's request Harry E. Gregoire took the stand and confirmed the statement contained in the letter. When asked by counsel for appellee Cronin if he was discharging Tucker and Jensen, appellant replied that he was unable to answer because of lack of counsel and that he was making this reply in accordance with written instructions from Mr. Boyko. The court then advised Mr. Gregoire that unless he desired that Mr. Tucker and Mr. Jensen not represent him, the court would require them to do so. The court further advised him of the difficulty of representing himself and then asked him if he still wanted the court to relieve them as counsel. Mr. Gregoire replied, "Yes, sir."[1] The court thereupon signed the order relieving Mr. Jensen and Mr. Tucker as counsel in the case. The court then proceeded with the trial which ultimately resulted in judgment against the appellants.
Generally a trial court's refusal to grant a continuance will not be disturbed on appeal unless an abuse of discretion is demonstrated.[2]
In 1961 this court stated that except in unusual circumstances it would not substitute its judgment for that of the trial judge in matters involving the diligence of counsel or the parties in processing their cases.[3]
The primary facts upon which appellants rely to show an abuse of discretion are:
(a) That the trial court changed the date of trial of the Emard case from July 20, 1964 to August 3, 1964 for its own convenience, and that this resulted in a later conflict on September 21, 1964 which made it impossible for Mr. Boyko to attend the trial of this case.
(b) That Mr. Boyko's request for a continuance was a reasonable one.
(c) That the trial schedule conflict was no fault of Mr. Boyko's and that his trial commitment in Santa Barbara actually made it impossible for him to attend the trial of the instant case in Anchorage.
The above claims will be considered in the order of listing.
It is repeatedly alleged in the affidavits of Mr. Boyko and in appellants' briefs that the primary cause of Mr. Boyko's trial conflict was the delay in bringing the Emard case to trial. These allegations are not supported by the record. The court file in the Emard case reveals that it was not until June 3, 1964 that that case was first set for hearing on July 20, 1964. As of that time the instant case had been set for trial almost two months. The Emard trial was never officially scheduled to be completed on July 31, 1964 as is alleged. A study of the transcript of proceedings had in the Emard case reveals that the resetting of the case from July 20 to August 3, 1964 was as much to accommodate some of counsel who were pressing for continuance and to dispose of the numerous motions, as it was due to a temporary shortage of judges in the superior court.
It is true that trial of the Emard case consumed about 25 days. The trial estimate may very well have been 11 days as counsel alleges. The fact that the trial took longer than counsel expected was not the fault of the superior court, as is implied.
Our conclusion is that there is no substance to the allegation that the trial court was responsible for the conflict in appellants' counsel's California trial schedule which occurred in September of 1964.
*34 Appellants' assertion that their request for a continuance was a reasonable one must be next examined.
The record reflects that appellants obtained a continuance of trial, over appellees' objections, on November 26, 1963. Appellants then obtained a stay of proceedings in the case on December 3, 1963 in order to petition for review of the trial court's order denying another continuance. The stay had the effect of vacating a December 4th trial setting and of holding all proceedings in abeyance until January 10, 1964 when the supreme court denied review. The Bank immediately moved for an early trial and a setting of March 16, 1964 was eventually obtained over Mr. Boyko's objection that that date would probably interfere with his trial schedule in California. On March 10, 1964 the trial court granted Mr. Boyko's request for a continuance of the March 16th trial date. On April 10, 1964 the case was set for trial on September 21, 1964.
Appellants' last request for a continuance was dated September 5, but filed on September 11, 1964. As of those dates the instant case had been set for trial for a period of five months. The motion alleged that a 30 day continuance was needed because appellants' trial attorney had been engaged in continuous and consecutive trials since August 3rd and would continue to be so engaged until October 16th. Appellants further alleged that they were unable to obtain other trial counsel and that in any event it would be impossible for anyone to become familiar with the case prior to the trial date. Mr. Boyko's affidavit in support of the motion stated that it would be "impossible" to attend the trial of this case on September 21, 1964. The reason given was that the superior court in Anchorage had rescheduled the Emard trial for its own convenience. The affidavit then outlined a busy trial schedule in California through September 30th to be followed by a trial in Fairbanks on October 5th. The trial of the instant case was entirely omitted from this schedule. The affidavit did not demonstrate that any of the California trials or the Fairbanks trial were set prior to April 10, 1964 or that for any particular reason they were entitled to a trial priority. As of the date of this affidavit Mr. Boyko expected to complete trial of the Doakes case in Santa Barbara on September 14, 1964. Appellees filed a lengthy memorandum in opposition to the request for a continuance.
After hearing, the court found that the showing in support of the request for a continuance was insufficient and ordered that the trial "go on as now set, for the week of September 21, 1964".
We agree that the showing in support of appellants' request of September 5th was insufficient. Trial of the instant case had twice before been continued at appellants' request over appellees' strenuous objections. There was no allegation that any of the trial settings which were being given preference by counsel for appellants were entitled to such preference. The fair assumption from the affidavit was that all of the trial settings mentioned in the affidavit were junior to the setting of the instant case and, as we have mentioned, appellants' allegation concerning the Emard case was without substance. In his later affidavit of September 18th Mr. Boyko admits that as of the date of his affidavit of September 5th it seemed likely that he could fulfill his California trials in early September and "proceed with the Gregoire trial on September 21", but that the motion was filed out of an "abundance of caution, and knowing the uncertainties of trial estimates." It is not easy to reconcile this later admission with his sworn statement of September 5th that it would be "impossible" to attend the trial of the instant case.
This brings us to his motion to reconsider and the supporting supplemental affidavit of September 18, 1964. As of the date of this affidavit the Doakes trial had continued three days beyond the September 14th estimate and the state presumably had not yet completed its case. Mr. Boyko's estimate of the date of completion of the Doakes case was September 29th, the conclusion of *35 which, according to his affidavit, would allow him only a few days to travel to Fairbanks for his scheduled trial there. Again, trial of the instant case is omitted from any of Mr. Boyko's trial plans and his request was "that the 30 day continuance be granted without further delay."
Hearing on this motion was held on September 21, 1964. At the hearing it was revealed to the court by appellant Harry E. Gregoire that he had talked with Mr. Boyko by telephone that morning; that the prosecution had completed its case in the Doakes trial and that Mr. Boyko had been presenting his evidence since September 18th, which was considerably sooner than he had previously forecast. Attorney Tucker, appearing for Mr. Boyko, argued for the full 30 day continuance. A check of the court's and counsel for appellees' trial schedule at the September 16th hearing on appellants' request had revealed that a 30 day continuance would result in delaying trial until early the following year because of existing trial commitments of the court and counsel for appellees then in effect.
In view of the foregoing we are of the opinion that the request for and continued insistence on a full 30 day continuance was not reasonable. Appellants or their counsel should, prior to September 23rd, have requested a short continuance or a continuance from day to day to await completion of the Doakes trial. As of September 21st it was quite obvious that the Doakes case would be completed considerably sooner than had been estimated. It was also then known that the instant case could not go to trial until at least September 23rd. Mr. Boyko was in daily telephone contact with his Anchorage secretary and had available Mr. Jensen and Mr. Tucker who could have caused such a request to be filed in Anchorage by September 22nd, the day before trial began. Nevertheless, Mr. Boyko's telegram of September 21st to the judge urged the granting of a 30 day continuance without revealing to the court the changed circumstances of the Doakes trial.
Appellant Harry E. Gregoire was in court on September 21st, was aware of all of the above facts, and could have requested the day to day indulgence of the court. As it turned out, and as will be more fully discussed later in this opinion, the Doakes trial was practically, if not fully, completed on the same day the instant case proceeded to trial.
The last fact to be examined is the contention that the trial schedule conflict was no fault of appellants or their counsel and that Mr. Boyko's trial commitment in Santa Barbara actually made it impossible for him to attend trial of the instant case in Anchorage.
After studying the record we have no doubt but that by a careful management of his trial commitments Mr. Boyko could have avoided most of the trial conflicts which he emphasized in his affidavits in support of his motion for a continuance. In view of the previous continuances granted at appellants' request, and the 5 ½ months notice accorded by the last trial setting, the instant case was entitled to and should have been given priority by counsel in arranging his fall trial schedule. Instead, subsequent to the trial setting of the instant case, counsel permitted himself to become committed to the trial of three criminal matters in California during the month of September. When a possibility of conflict developed, counsel insisted on a full 30 day continuance of the instant case in order to preserve intact the entire California trial schedule.
What counsel might not have been able to avoid was the possibility of a conflict caused by the fact that a particular case would require an unreasonably long period to try. This apparently is what happened with respect to the Doakes case. However, instead of asking the Alaska court for day to day continuances or for a definite short term continuance, counsel stubbornly insisted on a full 30 day continuance in order that he might attempt to honor all of his trial commitments except that of the instant case, the trial setting of which was in fact senior to all of his other commitments.
*36 The foregoing would apply where it appeared that a definite trial overlap was going to occur which would make it impossible for counsel to attend the Alaska trial without leaving the California trial before it had been completed.
It appears from the record, however, that no such overlap occurred, or, that if there was an overlap, it was no more than a day or a portion thereof.
During the hearing of November 4, 1964 on appellants' objections to proposed findings and judgment, in discussing with the court the court's refusal to grant a continuance, the following transpired:
MR. BOYKO: * * * I was ready for trial on the 23rd; I would have been actually, physically able to try it three, four days later. I would have hated to do it but I would have done it. All the Court would have had to do is inquire of Mr. Gregoire, `Well, now, what is the situation with Mr. Boyko? Get on the phone and find out.' If he had called me on the 23rd, the day this happened, I would have been able to tell him this much; that I was just in the midst of the argument to the jury, and chances were that in a day or in twenty-four hours that could be over. I couldn't have guaranteed then.
THE COURT: Well, now, you had counsel up here that had appeared specially for other purposes; why couldn't they have appeared specially for this purpose?
MR. BOYKO: What purpose, Your Honor?
THE COURT: For telling the Court what your status was on
MR. BOYKO: I did, it's right in the record. They told the Court that I was in a trial, and this is the fact.
THE COURT: Well, but you they didn't tell the Court that you might be available on the 24th.
MR. BOYKO: They didn't know it, and neither did I know it.
Later during the hearing the record reflects that counsel denied that he had just stated to the court that if someone had called him on the telephone on the 23rd that he would have been able to tell them that he could have been there in a day or so. However, still later in the same hearing the following transpired:
MR. BOYKO: I know. But they called me on the phone and told me that the motion for continuance had been denied for the second time, and there was nothing I could do.
THE COURT: But it was denied for thirty days. It wasn't denied for two or three days.
MR. BOYKO: Well, it was set for trial on the 23rd, and that was going to be it, and there wasn't I didn't have any way of knowing that if I said to Your Honor, `Well, I'll kill myself and come up here as soon as I get out of this.' I came home from that jury, I think it was, at 3:00 o'clock in the morning of the 24th.
THE COURT: Well, by the same token * * *
MR. BOYKO: I presume it would have been possible for me to hop a plane and come up here on the 23rd.
We find that there is no substance to appellants' claim that a trial conflict developed through no fault of theirs or their counsel and that the trial commitment in Santa Barbara made it impossible to attend the trial of the instant case in Anchorage.
Appellants' next point on appeal is that the appellees, with the acquiescence and support of the trial court, engaged in a cumulative course of conduct which resulted in a procedure so basically unfair and unjust as to require a new trial.
Appellants list six occurrences during the life of the case as being illustrative of their contention, but state that they rely principally upon the court's abuse of discretion in disqualifying Peter B. Walton, Esq. as appellants' counsel on the eve of trial when *37 he was the only counsel fully familiar with the case and prepared to try it.
Mr. Walton's first appearance in the case was on November 21, 1963 when he moved for a continuance on behalf of appellants. At the hearing on this motion it was made clear that he represented the appellants only for the purpose of making the motion. On December 3rd Mr. Walton obtained a stay of proceedings and attempted to have the trial court's order denying a continuance reviewed by the supreme court of Alaska, but review was denied by this court on January 10, 1964.
On January 24, 1964 the Bank moved to disqualify Mr. Walton on the ground that he had previously represented the Bank in procuring from appellants the mortgage and note which formed the basis for the Bank's first claim for relief and was, in this case, trying to represent the appellants, who denied the enforceability of the same note and mortgage. It was alleged that Mr. Walton might have knowledge of facts underlying the transaction which "may or may not be of great value to the defendants [appellants] in defending this litigation."[4]
At the time the motion was filed Mr. Walton was not representing appellants generally, however, on January 28, 1964, four days after the filing of the motion, he filed a joint general appearance in the case with Mr. Boyko.
Mr. Walton filed an extensive affidavit denying a conflict of interest. Affidavits to the contrary were filed by counsel for the Bank and Karl V. Holmberg, a senior vice-president of the Bank. The court held a hearing on January 30, 1964 at which time the testimony of Mr. Walton, appellant Harry E. Gregoire, and Mr. Karl V. Holmberg and Mr. John Holmberg, both officers of the Bank was taken.
The affidavit of Karl V. Holmberg was that on behalf of the Bank he employed the law firm by which Mr. Walton was employed to represent the Bank in obtaining a mortgage to secure a pre-existing indebtedness from appellants; that the firm *38 did prepare such a mortgage and billed the Bank for their services and were paid, a photostatic copy of the statement for services rendered being attached to the affidavit.
The testimony of Mr. Karl V. Holmberg was to the same effect as his affidavit. In response to questioning by appellants' counsel, he stated that to his knowledge the law firm did not acquire any confidential information through its representation of the Bank in obtaining the mortgage and note from appellants.
Mr. John Holmberg testified that he was employed as chairman of the executive committee of the Bank; that the Bank was participating with the Bank of Homer in a loan to appellants which was delinquent and unsecured; that he discussed the problem with Mr. Walton many times; that the law firm was representing the Bank and the Bank of Homer in obtaining security for the loan; that when the mortgage had been completed Mr. Walton delivered it to him and that no information was imparted to Mr. Walton that was not also available to appellants.
Mr. Walton's affidavit stated that the mortgage to secure the pre-existing indebtedness was prepared by him for Mr. Gregoire at Mr. Gregoire's request; that he had never at any time conferred with anyone with the Bank concerning the mortgage; that the Bank was not billed for the service; that he mailed the completed mortgage to Mr. Gregoire and that the Bank had nothing whatever to do with the preparation of the mortgage. On cross-examination Mr. Walton admitted that Mr. Karl V. Holmberg had telephoned him to ask if the instrument had been prepared and that he advised him that it had; that he may have delivered the mortgage to Mr. John Holmberg, he didn't remember. Mr. Walton again denied that the firm by which he was employed was paid for preparing the mortgage.
At the conclusion of the hearing the court was faced with the task of resolving a direct conflict in the testimony of the witnesses on certain key aspects of the claim of conflict of interest. The appellant Harry E. Gregoire had filed an affidavit in which he admitted execution of the mortgage in question but denied the validity of "the debt underlying it."
On January 31, 1964 the court stated in open court that the motion to disqualify was granted. When the court's decision was announced Mr. Walton stated to the court:
Anticipating that that might be the ruling of the Court, I would like to submit to the Court an order.
Counsel then disagreed as to the form of the proposed order, so the matter was set down for hearing.
On February 4, 1964 when the matter was called for hearing, and during the time the court and counsel were discussing the question of whether a conflict of interest existed, the following transpired:
MR. WALTON: If it please the Court, perhaps I can help the Court here. I realize it's always unpleasant for the Court to have to disqualify a lawyer, and it's always unpleasant for a lawyer to be disqualified. I'm the kind of a person, I hate to walk away from a task. I'd rather be told to get out before I'd walk away voluntarily. The Court has made its feeling clear. I expect I respect the Court's feelings. If I can make the whole issue a bit simplier [sic] by withdrawing at this time from the case, and it's apparent to me, I mean to do so right now.
THE COURT: Well, I want it known that the Court was reluctant to enter the rule because we felt that you were certainly sincere, and I believe that on the basis of what occurred here, that the Court heard nothing which would indicate that you had any confidential information, but I did as I indicated merely because someone had raised the question and you can never tell the public there isn't some conflict.
MR. CLARK: Yes.
*39 MR. WALTON: Will the Court accept my written withdrawal from this case? Incidentally, Your Honor, I might also point out that I had thought that there was possibly an opportunity for me to represent Gregoire on his third party complaint against Cronin; but I think Your Honor probably would not want me to have influence at all.
THE COURT: Well, it's not how I personally feel about it, and the Court doesn't run on that basis.
MR. WALTON: No, but your feelings of propriety
THE COURT: Right
MR. WALTON: Therefore, I'll just withdraw from the case.
THE COURT: Well, of course, with that in mind, the Court wouldn't have to rule on it.
MR. WALTON: That's why I quote it. I can make the whole issue moot.
It is obvious from the foregoing that Mr. Walton voluntarily withdrew as counsel for appellants. However, it appears quite likely that if he had not done so, the court would eventually have entered an order disqualifying him.
We are not required in this appeal to determine whether Mr. Walton was actually disqualified under the facts. All we are asked to determine is whether the trial court acted in such an unreasonable and unjustifiable manner as to amount to an abuse of discretion.
We do not think so. One of the main questions before the trial court was whether Mr. Walton had acquired any knowledge or information while representing the Bank in procuring the mortgage which might be utilized on behalf of appellants in resisting a judgment based on the mortgage. Appellants were admitting execution of the mortgage, but denying liability on the debt purported to be stated in the mortgage because of the alleged conspiracy and conversion of officers of the Bank and the Bank of Homer. Since it was not then known what testimony would be produced by appellants at a trial to substantiate their allegations, it could not be determined whether a conflict of interest might not develop during the trial which would require Mr. Walton to withdraw, if he was not in fact already disqualified. In addition, there was the question of propriety and the public image of the legal profession, as the judge pointed out.
The facts are similar in many respects to those in Wilson v. Wahl[5] where the attorney prepared claims against the city and thereafter accepted employment by the city to defend against the claims. Canons 6 and 37 had been considered by the court when it stated:
No dishonesty or intentional wrongdoing is imputed to Mr. Wahl, and neither has it been made to appear that any information obtained by him in connection with the preparation of the statutory claims has been used by him in violation of his obligations as an attorney to the disadvantage of any of these plaintiffs. Nevertheless, there is no doubt in our minds, and we have no hesitancy in holding, that under the circumstances he should not have accepted the employment in behalf of the city in defense of the damage actions, and that his doing so constituted a violation of the spirit, if not the letter, of the mentioned Canons of Professional Ethics (Canons 6 and 37) and the elementary general rules laid down in the authorities cited. When confronted with such a situation, and doubt exists in the mind of an attorney as to the proper course to follow, the doubt always should be resolved in favor of not accepting the employment. An attorney should avoid not only situations where a conflict of interest is actually indicated, but also those in which a conflict is likely to develop.[6]
*40 Instead of amounting to an abuse of discretion, we consider the trial judge's comments with respect to Mr. Walton's situation as being entirely appropriate. Mr. Walton's withdrawal was likewise appropriate.
Several statements made in appellants' brief in support of the above point, although not argued or referenced to any particular portion of the record for substantiation, require comment:
(1) The court encouraged appellees in their effort to force this case to trial after they had pressured attorney John Stern out of the case by means of economic leverage.
The record reveals that the Bank objected strenuously to the motion of Mr. Stern to withdraw because of the fact that the withdrawal would leave appellants without counsel on the eve of trial. Appellants consented to the withdrawal and had picked up the case files. There is nothing in the record to support the statement that the court encouraged appellees to force the case to trial.
(2) The court compelled their new attorney, Peter Walton, Esq., to waste valuable time and effort to gain a reasonable continuance, while he was trying to master the facts and law of this complex case.
The record reflects that the opposite is the truth. When Mr. Walton appeared to request a continuance he made it abundantly clear to the court that he was appearing for the sole purpose of pleading for a continuance. Mr. Walton did not enter a general appearance in the case until January 28, 1964, some two weeks after his moves for a continuance had been denied.
(3) The Court arbitrarily and without good reason, disqualified attorney Walton as soon as it had become apparent that he was now fully prepared and able to proceed to trial.
Mr. Walton did not enter his general appearance in the case until January 28, 1964, four days after the motion to disqualify had been filed. The minute order granting the motion to disqualify was entered three days later on January 31, 1964 and before he had had time to become "fully prepared". Further, during the hearing of February 4, 1964, Mr. Walton twice stated to the court that he had no intention of trying or assisting in the trial of the case.
(4) The trial judge contributed to the ultimate confusion by upsetting the entire trial calendar, for his own personal convenience, and then using the alleged sanctity of that very calendar as the excuse for refusing a continuance, when appellants' counsel became unavoidably engaged in trial, in another court.
Each of the above allegations is refuted by the record as cited and discussed in the foregoing opinion.
The last point on appeal to be considered is the claim that the judgment is void because the procedures employed in the case violated the constitutions of the United States and of Alaska by infringing upon appellants' right to trial by jury and by denial of procedural due process and of the equal protection of the laws.
When the case was called for trial on September 23, 1964 the first matter considered was the request of Mr. Jensen and Mr. Tucker to be permitted to withdraw as counsel in the case supported by the written consent to their withdrawal signed by appellant Harry E. Gregoire which has been described previously in this opinion.[7] The court then advised Mr. Gregoire, who was present in court, as follows:
THE COURT: Mr. Gregoire, I at this time advise you that Mr. Tucker and Mr. Jensen have appeared in this case on your behalf, either at your request or at your attorney's, Mr. Boyko's request. If you do not, of your own will, at this time desire that they not represent you, the Court will require them to remain here to represent you to the extent that they may do so. If you desire them not to represent *41 you, the Court will relieve them. But I want to advise you the situation you're in. The Court is going to proceed with the trial of this case; you will either have to proceed on your own, with these counsel or some other counsel that you can get. The Court has ruled that you've got to go to trial. Now, in view of that, do you want the Court to go ahead and relieve them as counsel? I'll state to you now, it's quite difficult for a person who is not trained in the law to represent himself in a case, and particularly in a case of this of this [sic] nature. Now, in view of that, do you still want the court to relieve them as counsel?
MR. GREGOIRE: Yes, sir.
The court thereupon signed the order relieving them as counsel for appellants.
Upon being asked if he was ready to proceed to trial Mr. Gregoire read a statement which he stated had been prepared for him by Mr. Boyko which stated that he was not represented by counsel for reasons beyond his control; that he was unable to represent himself; that if forced to proceed with the trial he would attend under protest and that he had been advised by Mr. Boyko that he was being deprived of numerous constitutional rights.
The jury was called in and appellant Gregoire was asked by the court if he was ready to proceed to which he replied "Under protest, Your Honor." When again asked if he was ready to proceed, he replied, "Yes, sir." Immediately thereafter the following proceedings were had:
Mr. RENFREW: Mr. Gregoire, you state that you're ready to proceed and that you are proceeding under protest. I'll ask you: Do you have any intention of putting on proof in support of your allegations in your claim?
MR. GREGOIRE: No, I'm on the statement I read, Mr. Renfrew.
MR. RENFREW: Your Honor, my position is this: That if no proof is to be offered by Mr. Gregoire, then, apparently, the only matters before the Court would be the matter of the mortgage foreclosure at this time at this proceeding. And, under those circumstances, it would be a useless and futile thing to empanel a jury.
The court then asked Mr. Gregoire if he intended to participate in the selection of a jury whereupon he replied, "No, sir."
After the roll of the jury had been called, the following transpired:
THE COURT: Yes. Mr. Gregoire, you may come forward if you desire to participate in this since you're representing yourself. The record will reflect do you want to come forward, Mr. Gregoire?
MR. GREGOIRE: No, I'm just attending under protest, Your Honor.
THE COURT: All right, the record will reflect he does not desire to be present. Mr. Gregoire, do you want a jury empanelled, and are you going to participate in the panelling of this case?
MR. GREGOIRE: Can't answer that, Your Honor, because I have been deprived of services of counsel.
THE COURT: All right, ladies and gentlemen of the jury, the defendant Harry Gregoire has refused or does not desire to have a jury empanelled; therefore, you're excused to report subject to call of the Clerk of the Court. Thank you for your services. Plaintiff, you may make your opening statement.
It appears clear enough that there was not an infringement or denial of appellants' right to a trial by jury. Appellants simply refused to participate in the selection of a jury for the trial of those issues raised in their pleadings which may have been properly triable by a jury.
The reason given by appellant Harry E. Gregoire for refusing to participate was that he was not represented by counsel for reasons beyond his control and that he could not represent himself.
We do not agree that appellants were deprived of counsel by reason of circumstances beyond their control. We are of the opinion that it was quite possible for *42 them to have obtained legal counsel in time for trial on September 23, 1964 if they had desired.
We have already expressed the view that their counsel, Mr. Boyko, could and should have requested a day to day continuance of this case after it became obvious to him that he would complete the Santa Barbara trial at or about the time this case was scheduled to go to trial, instead of ignoring his obligation to try this case and insisting on a full 30 day continuance to fulfill his other trial obligations.
But entirely apart from the fact that Mr. Boyko, by his own admission, could have been present in Anchorage by September 23rd or 24th, we feel that appellants were remiss in not taking steps to assure themselves of legal representation when they learned, on or about September 11th, of the possibility that Mr. Boyko might not be available on September 21st. As of that time Mr. Jensen had been an attorney of record since March 2, 1964. It is true that he had attempted to limit the scope of his appearance and responsibility to procedural matters. On the other hand, it appears that, with the exception of certain tapes, he had been in possession of all the files in the case since his appearance to obtain the March 6, 1964 continuance. He had also prepared and successfully argued a motion to reopen discovery in July of 1964.[8] Instead of making an effort to utilize Mr. Jensen's services as a trial counsel, appellant Harry E. Gregoire appeared in court to advise the judge that if either Mr. Jensen or Mr. Tucker were ordered to represent him by reason of the fact that they were attorneys of record, he would not recognize them as his counsel.
We find that appellants and their counsel were both at fault. Both had an obligation to act timely to honor their trial obligation. Had they done so appellants need not have gone to trial without counsel, therefore no constitutional right was infringed or violated and no constitutional question is raised.
Before disposing of this appeal we are required by its content to officially notice and comment on appellants' brief. Shortly after this brief was filed both appellees moved to strike on the ground that it contained impertinent, intemperate insulting language which was disparaging of the dignity and integrity of the court and counsel. We denied the motion without making a determination of its merits in order not to delay a decision on the merits of the appeal.
In our study of the brief and the record we have found that in addition to the statements already quoted in this opinion,[9] the brief is replete with abusive, disparaging and intemperate statements directed at both trial judges concerned in the case as well as counsel for appellees. None of the statements were substantiated by the record.
A sampling of the type statement referred to above follows:
A careful and unbiased reading of the record should lead this court to the inescapable conclusions that from the early beginning, appellees engaged in a deliberate course of action which consisted of bringing pressure to bear against appellants' attorneys of record, with the objective of forcing them out of the case, while, simultaneously, clamoring for an early trial. In this underhanded conduct, they were actively aided and abetted by the court in various proceedings, only the more significant of which are reiterated here:
When coupled with the cumulative effects of the other procedural mistakes made by the trial court and the subtle (and at times not so subtle) injustices flowing from each of them, it seems inescapable that the total result is a *43 proceeding of such fundamental unfairness and injustice as to create a legal and moral compulsion upon the appellate court to reverse the resulting judgment and to remand the case for a new trial.
The trial court erred in acquiescing in, condoning, and even encouraging the unethical conduct of appellees and their counsel, in repeatedly depriving appellants of their chosen attorneys of record, by using diverse means of forcing them out of the case, while concurrently keeping up extreme pressure to force the case to trial, with the obvious intent of avoiding a show-down on the merits.
In Enders v. Sinclair Ref. Co.[10] in commenting on the brief supporting a motion for rehearing, the court said:
Plaintiffs' brief on motion for rehearing contains many impertinent, disrespectful, abusive statements reflecting upon the court. These statements are of such a premeditated, insulting character that they cannot be permitted to pass without notice. Counsel for plaintiffs is an experienced lawyer, and his conduct cannot be excused on the ground of petulance or a failure to appreciate the implications of the language contained in his brief. The language is contemptuous, and counsel is subject to reprimand for his unlawyerlike conduct.
The motion was then denied, with $50 costs and plaintiff's brief was stricken from the court files. The remarks of the Wisconsin court are particularly applicable to the facts of this case.
In In re Glauberman[11] the court gave two examples of objectionable statements contained in the briefs which read:
`Here, the Court, without objection by the complainant's counsel, no longer plays the part of judex, that he (the vice chancellor) talks about on page 178 of S. of C., but acts as complainant's counsel, which he does throughout the entire proceeding.'
and
`The court (below) committed a colossal error in refusing to permit the Equitable project, if the condition of this company was such that but sixty days thereafter, he (the vice chancellor) thought that this company should be strangled and destroyed. The case in a "nutshell" resolves itself to the following: If not on the date of dismissal of Bernstein Suit No. 1, why now on July 25, 1929?'
Orders to show cause why they should not be held in contempt were issued to counsel. The matters were treated as criminal contempts committed in the presence of the court. Responsible counsel was fined $250 and suspended from appearing in any case in that court for a period of one year and the offending brief stricken from the record. The court stated:
The doctrine that a counsellor-at-law is in contempt who has filed an impertinent, scandalous and contemptuous brief, has been so thoroughly established in this state, that it is entirely unnecessary to cite the many cases in other jurisdictions which sustain that principle.
In the six and one-half years of existence of this court this is the first instance in which a counsel has employed abusive and intemperate language in his brief and has accused the trial court and opposing counsel of unethical and underhanded conduct. We consider the facts to be aggravated when compared with those contained in reported decisions on the subject.[12] But since it is the first instance *44 of its kind we shall dispose of it by reprimanding Mr. Boyko and admonishing him to be governed in the future by the rules of court and professional courtesy in his representations to the court and in his references to opposing counsel.
Since this court entertained some doubt as to whether appellants' unfulfilled obligation to make a timely attempt to procure substitute counsel was such that the dismissal of their counterclaim and third party complaint with prejudice should stand, it decided to resolve this doubt in favor of allowing appellants their day in court. Therefore, it is the order of this court that the "with prejudice" aspect of the judgment below dismissing appellants' counterclaim and third party complaint be set aside, upon such terms and conditions as the trial judge deems appropriate under Civil Rule 40(f) (2).[13] The judgment in all other respects is affirmed.
NOTES
[1] The court's complete statement is reported on page 40 of this opinion.
[2] Grunewald v. Missouri Pacific Railroad Company, 331 F.2d 983, 985-986 (8th Cir.1964).
[3] Adams v. Cowan, 360 P.2d 1013, 1014 (Alaska 1961). On the subject of the trial court's discretion in granting or refusing a continuance see: Link v. Wabash R.R. Co., 370 U.S. 626, 633-635, 82 S.Ct. 1386, 1390-1391, 8 L.Ed.2d 734, 739-740 (1962), Miller v. Johnson, 370 P.2d 171, 173-174 (Alaska 1962), Harms v. Simkin, 322 S.W.2d 930, 933-934 (Mo. Ct. App. 1959) Rev'd on other grounds, Brown v. Stroeter, 263 S.W.2d 458, 462 (Mo. Ct. App. 1953).
[4] The motion was based on a conflict between Mr. Walton's position and the requirements of Canon 6 and Canon 37 of the Canons of Professional Ethics.
Canon 6 states:
6. Adverse Influences and Conflicting Interests. It is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties, and any interest in or connection with the controversy, which might influence the client in the selection of counsel.
It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.
The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.
Canon 37 states:
37. Confidences of a Client. It is the duty of a lawyer to preserve his client's confidences. This duty outlasts the lawyer's employment, and extends as well to his employees; and neither of them should accept employment which involves or may involve the disclosure or use of these confidences, either for the private advantage of the lawyer or his employees or to the disadvantage of the client, without his knowledge and consent, and even though there are other available sources of such information. A lawyer should not continue employment when he discovers that this obligation prevents the performance of his full duty to his former or to his new client.
If a lawyer is accused by his client, he is not precluded from disclosing the truth in respect to the accusation. The announced intention of a client to commit a crime, is not included within the confidences which he is bound to respect. He may properly make such disclosures as may be necessary to prevent the act or protect those against whom it is threatened.
[5] 182 Kan. 532, 322 P.2d 804, 810 (1958).
[6] Wilson v. Wahl, supra note 5 appears to express the view of the overwhelming weight of authority. See Annot., 52 A.L.R.2d 1243, 1247 (1957); Annot., 51 A.L.R. 1307 (1927).
[7] Page 32, supra.
[8] We shall not attempt to pass upon the question of whether attorneys Jensen and Tucker could validly limit the scope of their responsibility in the case since it has not been briefed by counsel as a point on appeal.
[9] Page 40, supra.
[10] 220 Wis. 254, 265 N.W. 67 (1936).
[11] 107 N.J. Eq. 384, 152 A. 650, 651-653 (Ct.Err. & App.N.J. 1930).
[12] A. Makray, Inc. v. McCullough, 103 N.J.L. 346, 135 A. 815, 817 (Ct.Err. & App. 1927); Getter v. Levine, 315 Mich. 353, 24 N.W.2d 149 (1946); Leszczynski v. Penn. Ry., 274 App.Div. 1003, 84 N.Y.S.2d 579, 580 (1948); City of San Antonio v. Santa Rosa Infirmary, 249 S.W. 498, 510 (Tex.Ct.Civ.App. 1923), rev'd on other grounds, 259 S.W. 926 (Tex.Comm'n App. 1924); Carpenter v. Pacific Mut. Life Ins. Co., 10 Cal.2d 307, 74 P.2d 761, 766-767, aff'd Neblett v. Carpenter, 305 U.S. 297, 59 S.Ct. 170, 83 L.Ed. 182 (1938).
[13] Civ.R. 40(f) (2) states:
(2) Unless otherwise permitted by the court, application for the continuance of the trial of the case shall be made to the court at least 5 days before the date set for trial. The application must be supported by the affidavit of the applicant setting forth all reasons for the continuance. If such case is not tried upon the day set, the court in its discretion may impose such terms as it sees fit, and in addition may require the payment of jury fees and other costs by the party at whose request the continuance has been made.
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Citation Nr: 1829327
Decision Date: 05/25/18 Archive Date: 06/12/18
DOCKET NO. 14-30 313 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Houston, Texas
THE ISSUES
1. Entitlement to service connection for an acquired psychiatric disorder, to include posttraumatic stress disorder (PTSD) and major depressive disorder.
2. Entitlement to compensation benefits under 38 U.S.C. § 1151 for residuals of a left eye procedure.
REPRESENTATION
Veteran represented by: Texas Veterans Commission
WITNESS AT HEARING ON APPEAL
The Veteran
ATTORNEY FOR THE BOARD
M. C. Wilson, Counsel
INTRODUCTION
The Veteran served on active duty from July 1979 to May 1982.
This matter comes before the Board of Veterans' Appeals (Board) on appeal from a June 2013 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin. Jurisdiction over the present matter has since been transferred to the RO in Houston, Texas. In August 2017, the Veteran testified at a videoconference hearing before the undersigned Veterans Law Judge.
In November 2017, the Board remanded the present matter for further development. Review of the record shows substantial compliance with the remand directives with regard to the claim for compensation benefits under 38 U.S.C. § 1151. However, the Agency of Original Jurisdiction (AOJ) has not complied with the remand directives with regard to the claim for service connection and additional development is required; thus, another remand is necessary with regard to this issue. Stegall v. West, 11 Vet. App. 268 (1998) (a remand by the Board confers on the Veteran, as a matter of law, the right to substantial compliance with the remand).
This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017). 38 U.S.C. § 7107(a)(2) (2012).
The issue of the Veteran's entitlement to service connection for an acquired psychiatric disorder, to include PTSD and major depressive disorder is addressed in the REMAND portion of the decision below and is REMANDED to the AOJ.
FINDINGS OF FACT
1. The competent evidence does not show that the Veteran sustained additional disability as a result of VA carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault; or an event not reasonably foreseeable.
2. The competent evidence does not show that VA delayed treatment of the Veteran's eye condition.
CONCLUSION OF LAW
Compensation benefits under 38 U.S.C. § 1151 for residuals of a left eye procedure are not warranted. 38 U.S.C. § 1151 (2012); 38 C.F.R. § 3.361 (2017).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
Under certain circumstances, VA provides compensation for additional disability resulting from VA medical treatment in the same manner as if such disability were service-connected. See 38 U.S.C. § 1151 (2012). For a claimant to qualify for such compensation, the additional disability must not be the result of the veteran's willful misconduct, and such disability must be caused by hospital care, medical or surgical treatment, or examination furnished to the veteran under any law administered by the Secretary, either by a Department employee or in a Department facility. 38 U.S.C. § 1151(a). For a claimant to be entitled to compensation when additional disability is caused by VA hospital care, medical or surgical treatment, or examination, the proximate cause of the additional disability must be: (A) carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault on the part of VA in furnishing the care, treatment, or examination; or (B) an event not reasonably foreseeable. 38 U.S.C. § 1151(a)(1); 38 C.F.R. § 3.361 (2017).
To determine whether a veteran has additional disability, VA compares the veteran's condition immediately before the beginning of the hospital care, medical or surgical treatment, or examination upon which the claim is based to the veteran's condition after such care, treatment, or examination is completed.
To establish actual causation, the evidence must show that VA hospital care, medical or surgical treatment, or examination resulted in the veteran's additional disability or death. Merely showing that a veteran received care and has an additional disability does not establish cause. 38 C.F.R. § 3.361(c)(1).
The proximate cause of disability or death is the action or event which directly caused the disability or death, as distinguished from a remote contributing cause. 38 C.F.R. § 3.361(d). To establish that carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault on VA's part in furnishing hospital care, medical or surgical treatment, or examination proximately caused a veteran's additional disability or death, it must be shown that the hospital care, medical or surgical treatment, or examination caused the veteran's additional disability or death, and that (i) VA failed to exercise the degree of care that would be expected of a reasonable health care provider; or (ii) VA furnished the hospital care, medical or surgical treatment, or examination without the veteran's, or in appropriate cases, his representative's, informed consent. 38 C.F.R. § 3.361(d)(1).
Whether the proximate cause of a veteran's additional disability or death was an event not reasonably foreseeable is to be determined based on what a reasonable health care provider would have foreseen. The event need not be completely unforeseeable or unimaginable but must be one that a reasonable health care provider would not have considered to be an ordinary risk of the treatment provided. In determining whether an event was reasonably foreseeable, VA will consider whether the risk of that event was the type of risk that a reasonable health care provider would have disclosed in connection with the informed consent procedures of 38 C.F.R. § 17.32. 38 C.F.R. § 3.361(d)(2).
In addition, entitlement to benefits based on the failure to diagnose a preexisting condition requires a determination that: (1) VA failed to diagnose or treat a preexisting disease or injury; (2) a physician exercising the degree of skill and care ordinarily required of the medical profession reasonably should have diagnosed the condition and rendered treatment; and (3) the veteran suffered a disability that probably would have been avoided if the proper diagnosis and treatment had been rendered. 38 U.S.C. § 1151; Roberson v. Shinseki, 607 F.3d 809, 816-17 (Fed. Cir. 2010).
Here, during his August 2017 Board hearing, the Veteran reported that he went blind in his left eye due to a procedure that was performed at a VA medical center. More specifically, he reported that a December 2004 procedure that was undertaken to treat his glaucoma was performed incorrectly and/or that VA delayed treatment of a serious eye issue for too long.
A May 2013 medical opinion documents the relevant history of the Veteran's left eye disability. The Veteran presented with pain in the left eye and was found to have phakic pupillary block glaucoma in December 2004. At that time, the Veteran reported having poor vision in the left eye for the past six months and had not been using any anti-glaucoma drops or medications up until that point. Additionally, per the records, the Veteran was informed that he had glaucoma one year prior and surgery was recommended, but the Veteran was non-compliant and never returned for follow-up treatment. Upon the Veteran's presentation in December 2004, VA performed a laser peripheral iridotomy to normalize the intraocular pressure in his eyes-the procedure that the Veteran asserts caused his current left eye disability.
The reporting ophthalmologist concluded that left eye blindness was not caused by or a result of VA treatment, as it was most likely caused by and a result of the Veteran's own willful misconduct and noncompliance with treatment recommendations and the Veteran's failure to follow up with his doctor prior to December 2004. See May 2013 VA Disability Benefits Questionnaire. The reporting ophthalmologist did not address whether the Veteran's current disability was reasonably foreseeable, whether the December 2004 procedure was performed incorrectly, or whether VA delayed treatment of a serious eye issue for too long.
In March 2018, another ophthalmologist opined that the December 2004 Surgery was less likely than not the cause of the Veteran's left eye blindness. The examiner explained that the veteran was advised sixth months before his glaucoma surgery in December 2004 that he had a retinal detachment and needed to have it fixed, he did not keep his surgery day to fix his detachment, and he presented to the VA with a secondary angle closure glaucoma six months later, at which time surgery was performed to relieve his glaucoma. In addition, he had a longstanding open angle glaucoma and he was not compliant in using his eye drops.
According to the examiner, it is less likely than not that the identified residuals are due to carelessness, negligence, lack of proper skill, error in judgement, or similar instance of fault on the part of the VA in furnishing the hospital care, medical or surgical treatment, or examination. The Veteran was informed of the risks and benefits of surgery and proper precautions were taken. He was also referred to a retina surgeon so his detachment could be fixed, however, the Veteran did not have this done. The Veteran only used eye drops for a few weeks and did not return for further treatment, which is documented in December 2004 records.
Additionally, it is less likely than not that the Veteran's development of the identified residuals was an event not reasonably foreseeable. Developing the identified residual was the type of risk that a reasonable health care provider would have disclosed in connection with informed consent procedures. Reasonable care was taken by the staff and nothing more can be done if a veteran does not want care. The examiner reiterated that the Veteran was informed of a retina detachment in the operative eye at least six months before his glaucoma surgery and did nothing about it. The VA staff had a retina specialist evaluate the eye and schedule him for surgery in an attempt to save the vision in that eye, but the Veteran did not proceed with the surgery.
It is also less likely than not that the VA clinician, exercising the degree of skill and care ordinarily required of the medical profession reasonably should have diagnosed the condition and rendered treatment at an earlier date and it is less likely than not that the VA failed to timely diagnose or treat the Veteran's condition. The veteran had anatomical narrow angles in both eyes and open angle glaucoma in both eyes. The Veteran refused early surgery that may have prevented the unfortunate outcome for his eye. The retina detachment and the inconsistent use of his eye drops made it unlikely that his vision could be saved. The iridectomy that was performed was a success; it relieved his pain and brought his intraocular pressure down. Notably, the veteran was diagnosed with a major ophthalmic problem six months before he had problem with pressure in his eye. According to the Veteran, his eyes were not his priority at that time.
Additionally, it is less likely than not that the December 2004 laser peripheral iridotomy was performed incorrectly, as there is no evidence to suggest the procedure was performed incorrectly. The consent procedures, pre-operative care, and post-operative care meets the standard of care. The Veteran was relieved of his symptoms and there appears to be no evidence of problems with the procedure. He was informed and there is no evidence of complications.
The Board finds that the foregoing medical opinions, when reviewed together, are adequate because the examiners reviewed the Veteran's relevant medical history and offered clear opinions regarding the relationship between the Veteran's condition and his VA treatment. See Nieves-Rodriguez v. Peake, 22 Vet. App. 295 (2008); Stefl v. Nicholson, 21 Vet. App. 120, 124 (2007).
The Veteran reported in August 2014 that he intended to present evidence from an ophthalmologist that supports his claim, but he did not provide this information and did not respond to VA's request for authorization to obtain this information. See August 2014 VA Form 9; November 2017 VA development letter (asking the Veteran for authorization to obtain records from his private ophthalmologist).
Thus, based on the foregoing, the Board finds that the record is negative for competent evidence that the Veteran sustained additional disability as a result of VA carelessness, negligence, lack of proper skill, error in judgment, or similar instance of fault; or an event not reasonably foreseeable. Additionally, the evidence does not show that VA delayed treatment of the Veteran's eye condition.
Although the Veteran has asserted that compensation is warranted, the Board finds that he is not competent to provide evidence regarding matters as complex as determining what degree of care is expected of a reasonable healthcare provider. See Layno v. Brown, 6 Vet. App. 465, 469-70 (1994) (a claimant is competent to report on that of which he or she has personal knowledge). Accordingly, the appeal is denied. There is no doubt to be resolved. 38 U.S.C. § 5107(b) (2012); 38 C.F.R. § 3.102 (2017); Gilbert v. Derwinski, 1 Vet. App. 49 (1990).
ORDER
Compensation benefits under 38 U.S.C. § 1151 for residuals of a left eye procedure are denied.
REMAND
The record indicates that the Veteran has been diagnosed with various psychiatric disorders throughout the appeal period, to include major depressive disorder, anxiety disorder, and substance abuse, and he has asserted that his psychiatric symptoms had their onset during his period of active service. As noted in the Board's November 2017 remand, an October 1981 service treatment record (STR) documents possible use of the drug Antabuse (or disulfiram), which is used to produce an aversion to alcohol in the treatment of chronic alcoholism. See Dorland's Illustrated Medical Dictionary 97, 557-58 (32nd ed. 2012).
On remand, the AOJ was charged with providing an examination to identify all psychiatric disorders diagnosed during the period on appeal (or since May 2011), specifically rule in or exclude a diagnosis of PTSD under either DSM-IV or DSM-5 criteria, and provide an opinion as to whether it is at least as likely as not that an identified disorder had its onset during his period of active service, had its onset within one year of his discharge from active service, or was otherwise caused by his active service. In providing the requested opinion, the examining clinician was asked to address the significance of the October 1981 STR that documented possible use of the drug Antabuse (or disulfiram).
VA provided an examination and obtained a medical opinion in January 2018, at which time the Veteran was diagnosed with a polysubstance use disorder and substance-induced mood disorder, but the examiner failed to address the pertinent October 1981 STR and did not provide an opinion as to whether other disorders that were diagnosed since May 2011, such as major depressive disorder, are related to the Veteran's period of active service. In light of the foregoing, the January 2018 opinion is inadequate. A remand is necessary to obtain an adequate opinion regarding the likely etiology of the Veteran's claimed acquired psychiatric disorder. Barr v. Nicholson, 21 Vet. App. 303, 312 (2007); Stegall, 11 Vet. App. at 268. To the extent that the reviewing clinician finds that a previous diagnosis was incorrect or invalid, (s)he should explain the underlying reasoning for that conclusion in sufficient detail.
Additionally, the Board notes that VA treatment records indicate that the Veteran participated in a drug detoxification/rehabilitation program at a VA facility in Kerrville in 1996. See January and November 2004 VA treatment records. These records should be associated with the claims file on remand. 38 U.S.C. § 5103A(c) (2012); 38 C.F.R. § 3.159(c) (2017).
Accordingly, the case is REMANDED for the following action:
(Please note, this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c). Expedited handling is requested.)
1. Associate with the claims file records of the Veteran's participation in a drug detoxification /rehabilitation program at a VA facility in Kerrville in 1996. In addition, recent VA treatment records and any other pertinent records identified by the Veteran during the course of the remand should be obtained and associated with the claims file. If any records requested by VA are not available, this should be indicated in the file.
2. Notify the Veteran that he may submit lay statements from himself and from other individuals who have first-hand knowledge, and/or were contemporaneously informed his in-service and post-service psychiatric symptoms. The Veteran should be provided an appropriate amount of time to submit this lay evidence.
3. After completing the development requested above, obtain an addendum medical opinion from the psychiatrist who examined the Veteran in January 2018 or another appropriate clinician regarding the nature and etiology of the Veteran's psychiatric disability, to include PTSD, major depressive disorder, and any other identified psychiatric disorder that has been identified since May 2011. A diagnosis of PTSD must be ruled in or excluded. The Veteran's claims file should be made available to and be reviewed by the reviewing clinician, and he or she must indicate whether such review was accomplished.
(a) Identify all psychiatric disorders diagnosed during the appeal period (or since May 2011), to include major depressive disorder and anxiety disorder. Please state whether the Veteran met the criteria for a diagnosis of PTSD under either DSM-IV or DSM-5 criteria at any time during the appeal period. To the extent that the reviewing clinician finds that a previous diagnosis was incorrect or invalid, (s)he must explain the underlying reasoning for that conclusion in sufficient detail.
(b) For each disorder identified in (a), provide an opinion as to whether it is at least as likely as not that the disorder had its onset during his period of active service (July 1979 to May 1982). In providing the requested opinion, please address the significance of an October 1981 service treatment record that documents possible use of the drug Antabuse (or disulfiram).
(c) For each disorder identified in (a), provide an opinion as to whether it is at least as likely as not that it had its onset within one year of the Veteran's May 1982 discharge from his period of active service.
(d) For each disorder identified in (a), provide an opinion as to whether it is at least as likely as not that it was caused by his period of active service (July 1979 to May 1982).
All findings, conclusions, and the rationale for all opinions expressed should be provided in a report, which must reflect the reviewing clinician's consideration and analysis of both the medical and lay evidence of record, to include the Veteran's report that he has experienced psychiatric symptoms since service.
Please note that a reviewing clinician's report that (s)he cannot provide an opinion without resort to speculation is inadequate unless the clinician provides a rationale for that statement.
4. Readjudicate the claim on appeal. If any of the benefits sought remain denied, issue the Veteran and his representative a Supplemental Statement of the Case and allow for a reasonable period for response.
The Veteran has the right to submit additional evidence and argument on the matter the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999).
This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C. §§ 5109B, 7112 (2012).
______________________________________________
STEVEN D. REISS
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17‐2988
JOHN MCMAHAN, et al.,
Plaintiffs‐Appellants,
v.
DEUTSCHE BANK AG, et al.,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:12‐cv‐04356 — Sharon Johnson Coleman, Judge.
____________________
ARGUED APRIL 19, 2018 — DECIDED JUNE 13, 2018
____________________
Before RIPPLE, MANION, and KANNE, Circuit Judges.
MANION, Circuit Judge. In 2001, John McMahan and his
wholly owned corporation, Northwestern Nasal and Sinus
Associates, S.C.,1 participated in a tax shelter known as “Son
of BOSS.” The shelter “is a variation of a slightly older al‐
1 For ease of reference, and because the parties have not indicated a
material distinction between McMahan and his corporation, we will refer
to McMahan and his corporation collectively as “McMahan.”
2 No. 17‐2988
leged tax shelter known as BOSS, an acronym for ‘bond and
options sales strategy.’” Kligfeld Holdings v. Comm’r, 128 T.C.
192, 194 (2007). It “was aggressively marketed by law and
accounting firms in the late 1990s and early 2000s” and in‐
volves engaging in a series of transactions to create an “arti‐
ficial loss [that] may offset actual—and otherwise taxable—
gains, thereby sheltering them from Uncle Sam.” Am. Boat
Co., LLC v. United States, 583 F.3d 471, 474 (7th Cir. 2009). Un‐
fortunately for McMahan, the Internal Revenue Service (IRS)
considers the use of this shelter abusive. See I.R.S. Ann. 2004‐
21 I.R.B. 964 (“The Service has determined that Son of Boss
transactions are abusive and were designed, marketed, and
undertaken solely to create tax benefits unintended by any
reasonable interpretation of the tax laws.”). The IRS initiated
an audit of McMahan’s 2001 tax return in 2005. In 2010, the
IRS notified McMahan it was increasing his taxable income
for 2001 by approximately $2 million.
In 2012, McMahan filed this lawsuit in Illinois state court
against Robert Goldstein (his accountant), American Express
Tax and Business Services (Amex) (the firm that prepared
his tax return), and Deutsche Bank AG and Deutsche Bank
Securities Inc. (collectively, Deutsche Bank) (the entities that
facilitated the transactions necessary to perpetrate the shel‐
ter). McMahan claims these defendants harmed him by con‐
vincing him to participate in the shelter. Deutsche Bank re‐
moved the case to the district court, citing the diversity ju‐
risdiction statute, 28 U.S.C. § 1332. After a series of proce‐
dural steps described below, the district court dismissed
McMahan’s claims against Goldstein and Amex for lack of
prosecution and granted summary judgment to Deutsche
Bank on statute of limitations grounds. McMahan appeals.
We affirm.
No. 17‐2988 3
I.
A. Background2
In June 2000, McMahan met with Goldstein, who encour‐
aged McMahan to participate in a Son of BOSS tax shelter.
He indicated to McMahan that the shelter was legal and le‐
gitimate. To implement the shelter, the law firm of Jenkens &
Gilchrist was to draft a letter confirming the probable legali‐
ty of the shelter, and Goldstein told McMahan Deutsche
Bank would facilitate the necessary transactions and Amex
would prepare McMahan’s tax returns. McMahan partici‐
pated in the shelter in 2000 and 2001. In 2001, McMahan paid
fees to Goldstein, Amex, Jenkens & Gilchrist, and Deutsche
Bank for their roles in the scheme. He claimed the losses he
generated on his 2001 tax returns.
At some point in 2002, Goldstein told McMahan Son of
BOSS was no longer legitimate. This was McMahan’s first
indication that all was not well with Son of BOSS. But it was
not the last.
In 2003 and 2004, the IRS published notices stating its po‐
sition that Son of BOSS was illegitimate. See I.R.S. CCN CC‐
2 In the proceedings below, Deutsche Bank submitted a statement of
facts in support of its motion for summary judgment, but McMahan did
not submit one in opposition, so the district court took the facts stated in
Deutsche Bank’s statement as admitted. See N.D. Ill. Local Rule
56.1(a)(3), (b)(3) (requiring parties to submit a statement of material facts
and response when filing and responding to a summary judgment mo‐
tion, respectively); Smith v. Lamz, 321 F.3d 680, 683 (7th Cir. 2003) (“We
have consistently held that a failure to respond by the nonmovant as
mandated by the local rules results in an admission.”). Accordingly,
“[w]e recount the narrative that follows with that in mind.” Rao v. BP
Prods. N. Am., Inc., 589 F.3d 389, 393 (7th Cir. 2009).
4 No. 17‐2988
2003‐020 (noting the IRS had listed Son of BOSS “as an abu‐
sive tax shelter” since September 5, 2000); I.R.S. Ann. 2004‐21
I.R.B. 964 (announcing a settlement initiative for taxpayers
who had participated in Son of BOSS shelters). McMahan’s
tax counsel, Chuhak & Tecson, P.C., forwarded the 2004 no‐
tice concerning an IRS settlement initiative to McMahan. In
January 2005, McMahan’s tax counsel informed him Illinois
was offering a compliance program to avoid penalties for
participating in abusive tax shelters, including Son of BOSS.
Despite these notices, McMahan did not participate in any
amnesty, settlement, or compliance program. He claims the
defendants told him those programs did not apply to his sit‐
uation. However, McMahan’s counsel did send a letter to
Deutsche Bank asking it not to disclose McMahan’s name to
the IRS.
In February 2005, McMahan’s counsel sent him a letter
concerning the settlement of a class action against Jenkens &
Gilchrist. The lawsuit, filed in the Southern District of New
York in 2003, alleged that Jenkens & Gilchrist breached fidu‐
ciary duties by issuing incorrect opinions concerning tax
shelters. It also alleged that Deutsche Bank had promoted
the shelter and failed to advise about the inaccuracy of
Jenkens & Gilchrist’s opinions. Jenkens & Gilchrist had
agreed to settle the suit against it for $81.5 million. The letter
from his counsel informed McMahan that he “should expect
to receive an official notification and claim form in the near
future.”3
3 Letter from Albert Grasso to Dr. John and Lynn McMahan, R. 143‐
10.
No. 17‐2988 5
On the same day McMahan’s counsel sent him that letter,
the IRS sent McMahan notice that it was initiating an audit
of his 2001 tax returns. Five years later, in October 2010, the
IRS issued a deficiency notice to McMahan announcing the
IRS was adjusting his taxable income for 2001 upward by
approximately $2 million. McMahan ultimately settled with
the IRS in May 2012.
On March 26, 2012, McMahan filed this lawsuit against
Deutsche Bank, Goldstein, and Amex in the Circuit Court of
Cook County. McMahan alleged a multitude of malfeasance
connected with his participation in the shelter: breach of con‐
tract, accounting malpractice, breach of fiduciary duty, and
more. On June 5, 2012, Deutsche Bank removed the case to
the district court.
B. Dismissal for Lack of Prosecution
On December 12, 2013, the district court ordered
McMahan to arbitrate his claims against Amex and Gold‐
stein pursuant to a term of their engagement letter. The par‐
ties then communicated about arbitration in February 2014,
the last communication from McMahan’s counsel being an
email sent on February 27. From that point, Amex and Gold‐
stein heard nothing from McMahan for nearly sixteen
months. In May 2014, Goldstein died.
On June 11, 2015, McMahan’s counsel sent an email to
counsel for Amex and Goldstein announcing McMahan was
ready to proceed with arbitration. The parties had some fur‐
ther communication, but on June 25, 2015, counsel for Amex
and Goldstein informed McMahan’s counsel that they
would be filing a motion to dismiss for failure to prosecute.
They filed the motion the same day.
6 No. 17‐2988
McMahan filed a response to the motion and included af‐
fidavits from himself and counsel. The affidavits recount
that McMahan had spent most of the sixteen months of si‐
lence between communications with Amex and Goldstein’s
counsel trying to find an expert witness and trying to get the
money together to pay such an expert.
On September 1, 2015, the district court made an oral rul‐
ing granting the motion and dismissing McMahan’s claims
against Goldstein and Amex. The court concluded
McMahan’s conduct was dilatory and constituted “effective
abandonment of [his] claim.”4 It also noted that “the case
centers on [McMahan’s] discussions with Goldstein,” who
had died.5 The district court concluded that, “in the context
of this particular case, every passing day increases…the de‐
fendants’ difficulty in mounting an adequate defense as wit‐
nesses become more difficult to locate.”6 Over a year later,
McMahan filed a motion to reconsider, which the district
court denied on September 5, 2017.
C. Summary Judgment
In 2012, Deutsche Bank moved to dismiss the case against
it as time barred, arguing that McMahan, whose injuries ac‐
crued over ten years earlier, filed his complaint well outside
the five‐year statute of limitations. The district court, how‐
ever, relying on the Illinois Supreme Court’s decision in
Khan v. Deutsche Bank AG, 978 N.E.2d 1020 (Ill. 2012), denied
the motion. The district court interpreted Khan as imposing a
4 Transcript of Proceedings at 6, R. 148‐1.
5 Id.
6 Id.
No. 17‐2988 7
bright‐line rule that a taxpayer wronged in the ways that
McMahan alleges is not sufficiently aware of his claim, and
thus the statute of limitations does not begin to run, until he
receives his deficiency notice from the IRS. Because
McMahan did not receive his deficiency notice until 2010,
the district court held his 2012 complaint was timely.
In 2015, the Illinois Appellate Court decided Lane v.
Deutsche Bank, AG, 44 N.E.3d 548 (Ill. App. Ct. 2015), ex‐
pressly negating the bright‐line interpretation of Khan. Id. at
554; see also Lane v. Deutsche Bank, 48 N.E.3d 1093 (Ill. 2016)
(denying petition for leave to appeal). In light of Lane, the
district court allowed the parties to pursue discovery con‐
cerning the statute of limitations and submit summary
judgment briefing on that issue. On September 5, 2017, the
district court concluded it was undisputable McMahan was
on notice of his claims at least by February 2005 when he re‐
ceived notice that the IRS was performing an audit. As that
meant he filed his complaint outside the statute of limita‐
tions, the court granted summary judgment to Deutsche
Bank.
II.
McMahan appeals both the dismissal for lack of prosecu‐
tion and the grant of summary judgment. These are two dis‐
tinct rulings, so we address each individually.
A. Dismissal for Lack of Prosecution
We begin with the dismissal for lack of prosecution. Fed‐
eral Rule of Civil Procedure 41(b) provides that “[i]f the
plaintiff fails to prosecute or to comply with these rules or a
court order, a defendant may move to dismiss the action or
any claim against it.” We review a district court’s decision to
8 No. 17‐2988
dismiss pursuant to Rule 41(b) for abuse of discretion. Web‐
ber v. Eye Corp., 721 F.2d 1067, 1068 (7th Cir. 1983). “So long
as the district judge’s analysis was not tainted by a legal er‐
ror or the failure to consider an essential factor, we will re‐
verse only…if the decision strikes us as fundamentally
wrong.” Moffitt v. Ill. State Bd. of Educ., 236 F.3d 868, 873 (7th
Cir. 2001) (citations omitted).
“The sanction of dismissal is the most severe sanction
that a court may apply, and its use must be tempered by a
careful exercise of judicial discretion.” Webber, 721 F.2d at
1069 (quoting Durgin v. Graham, 372 F.2d 130, 131 (5th Cir.
1967)). Accordingly, we have directed district courts ideally
to consider the following factors when entertaining a Rule
41(b) motion:
[T]he frequency and magnitude of the plain‐
tiff’s failure to comply with deadlines for the
prosecution of the suit, the apportionment of
responsibility for those failures between the
plaintiff and his counsel, the effect of those
failures on the judge’s calendar and time, the
prejudice if any to the defendant caused by the
plaintiffʹs dilatory conduct, the probable merits
of the suit, and the consequences of dismissal
for the social objectives of the type of litigation
that the suit represents.
Aura Lamp & Lighting Inc. v. Int’l Trading Corp., 325 F.3d 903,
908 (7th Cir. 2003). Ultimately, the decision to dismiss “de‐
pends on all the circumstances of the case.” Kasalo v. Harris
& Harris, Ltd., 656 F.3d 557, 561 (7th Cir. 2011).
No. 17‐2988 9
Considering all the circumstances of this case, we con‐
clude the district court did not abuse its discretion. True,
McMahan can confidently argue that he did not miss any
deadlines, because the court imposed none. But looming
larger is the simple fact of McMahan’s delay—the sixteen
months of silence. McMahan claims he was actively pursu‐
ing the case by trying to arrange for an expert witness for the
arbitration, but he never communicated that to his oppo‐
nents. Additionally, McMahan’s own evidence shows that a
primary reason for the delay was McMahan’s difficulty try‐
ing to get the money together to pay an expert. Particularly
given the lack of communication, it was not an abuse of dis‐
cretion for the district court to discount that excuse. Cf. James
v. McDonald’s Corp., 417 F.3d 672, 681 (7th Cir. 2005) (affirm‐
ing dismissal where plaintiff claimed “she ‘very much want‐
ed to pursue her cause,’ but could not because the district
court compelled her to arbitrate her claims, which she could
not afford to do”).
In addition, the district court reasonably concluded the
delay prejudiced Goldstein and Amex. An unreasonable de‐
lay gives rise to a presumption of prejudice. Washington v.
Walker, 734 F.2d 1237, 1239 (7th Cir. 1984). Such a presump‐
tion is particularly apt in this case, where the events at issue
took place over a decade before McMahan filed the lawsuit
and where a key witness, Goldstein, has died.7 In this situa‐
7 It should be noted that Goldstein’s death, on its own, would not be
enough to show prejudice in this case. Goldstein died in May 2014, a
mere three months after the last communication from McMahan. There is
no indication that McMahan delayed in anticipation of Goldstein’s death
or that Goldstein would not have died prior to the arbitration even if
McMahan had more actively pursued his suit. However, Goldstein’s
death exacerbates the difficulty of finding witnesses to events that oc‐
10 No. 17‐2988
tion, it was entirely reasonable for the district court to con‐
clude that “every passing day…increases the defendant’s
difficulty in mounting an adequate defense.” The district
court took all these circumstances into account and conclud‐
ed that failing even to communicate with opposing counsel
for sixteen months was an unreasonable delay that caused
prejudice. That was not an abuse of discretion.
McMahan’s arguments that the district court did not con‐
sider a lesser sanction first and that the district court did not
warn him that dismissal was coming do not convince us
otherwise. There is no requirement to enter lesser sanctions
before dismissing a case for lack of prosecution. Ball v. City of
Chicago, 2 F.3d 752, 756 (7th Cir. 1993). Neither is a warning
required in every case. “[T]he warning requirement is not a
‘rigid rule…. It was intended rather as a useful guideline to
district judges—a safe harbor to minimize the likelihood of
appeal and reversal.’” Kasalo, 656 F.3d at 562 (alteration in
original) (citation omitted) (quoting Fischer v. Cingular Wire‐
less, LLC, 446 F.3d 663, 665 (7th Cir. 2006)). Those opinions
admonishing a district court for dismissing a case without
warning involve sua sponte dismissals. See, e.g., In re Bluestein
& Co., 68 F.3d 1022, 1027 (7th Cir. 1995). There is no need to
warn that dismissal is coming when, as here, the defendant
files a motion with notice to the plaintiff asking for dismis‐
sal. Morris v. Morgan Stanley & Co., 942 F.2d 648, 652 (9th Cir.
1991). In such a situation, the plaintiff has an opportunity to
explain itself by responding to the motion, as McMahan did
here. If, after hearing from both sides, the district court be‐
lieves dismissal is appropriate, no purpose would be served
curred so far in the past and is properly considered among the totality of
the circumstances.
No. 17‐2988 11
by issuing a warning: the motion itself was the warning. Cf.
Johnson v. Kamminga, 34 F.3d 466, 468 (7th Cir. 1994) (reject‐
ing a warning requirement that “would in effect be granting
each litigant one opportunity to disregard the court’s sched‐
ule without fear of penalty”). There was no abuse here.
B. Summary Judgment
We turn to the grant of summary judgment for Deutsche
Bank on statute of limitations grounds. “The standard for
summary judgment is well established: with the court draw‐
ing all inferences in the light most favorable to the non‐
moving party, the moving party must discharge its burden
of showing that there are no genuine questions of material
fact and that [it] is entitled to judgment as a matter of law.”
Spierer v. Rossman, 798 F.3d 502, 507 (7th Cir. 2015). Once the
movant has carried this burden, it passes to the non‐movant
“to come forward with specific facts showing that there is a
genuine issue for trial.” Id. “The existence of merely a scintil‐
la of evidence in support of the non‐moving party’s position
is insufficient; there must be evidence on which the jury
could reasonably find for the non‐moving party.” Madison v.
Frazier, 539 F.3d 646, 652 (7th Cir. 2008).
Because this case comes to us under the diversity statute,
“we apply state substantive law.” Austin v. Walgreen Co., 885
F.3d 1085, 1088 (7th Cir. 2018) (internal quotation marks
omitted) (quoting Gasperini v. Ctr. for Humanities, Inc., 518
U.S. 415, 427 (1996)). Substantive law includes statutes of
limitations and “rules that are an ‘integral part of the statute
of limitations,’ such as tolling and equitable estoppel.” Hol‐
lander v. Brown, 457 F.3d 688, 694 (7th Cir. 2006) (quoting
Walker v. Armco Steel Corp., 446 U.S. 740, 748 (1980)). The par‐
ties do not dispute that Illinois law applies to this case.
12 No. 17‐2988
By the time the district court entered summary judgment
against McMahan, only one of his claims against Deutsche
Bank was still live: that Deutsche Bank aided and abetted
Jenkens & Gilchrist in misrepresenting the legitimacy of the
shelter. That claim was subject to a five‐year statute of limi‐
tations. 735 ILCS 5/13‐205. There is no dispute that
McMahan’s claim accrued in 2001 when he paid fees to
Deutsche Bank for its role in facilitating the shelter‐related
transfers. Therefore, removing all other considerations, the
limitations period on McMahan’s claim would have expired
in 2006. McMahan filed his complaint in 2012. He relies on
the “discovery rule” to overcome that six‐year gap.
Under Illinois law, the discovery rule “postpone[s] the
start of the period of limitations until the injured party
knows or reasonably should know of the injury and knows
or reasonably should know that the injury was wrongfully
caused.” Khan, 978 N.E.2d at 1028–29; accord Feltmeier v.
Feltmeier, 798 N.E.2d 75, 89 (Ill. 2003). It is only at that point
“the statute begins to run and the party is under an obliga‐
tion to inquire further to determine whether an actionable
wrong was committed.” Khan, 978 N.E.2d at 1029 (quoting
Nolan v. Johns‐Manville Asbestos, 421 N.E.2d 864, 868 (Ill.
1981)).
The parties direct us primarily to two Illinois cases, Khan
and Lane, both of which apply the discovery rule in suits
against Deutsche Bank by taxpayers who participated in a
tax shelter. In Khan, the Illinois Supreme Court held the
plaintiffs did not “discover” their claims against the defend‐
ant bank until they received the notice of deficiency from the
IRS. 978 N.E.2d at 1036.
No. 17‐2988 13
Three years later, the plaintiff in Lane argued the su‐
preme court’s holding in Khan established a bright‐line rule:
he did not have notice of his claims against the bank until
the IRS notified him of his tax deficiency. Lane, 44 N.E.3d at
554. The Illinois Appellate Court explicitly rejected that ar‐
gument. Id. Instead, the court concluded that particular
events occurring after the cause of action accrued served to
put the plaintiff on notice that he had claims against the
bank. Id. at 555–56. Specifically, the court noted the plaintiff
learned of a memo circulated by his contact at his accounting
firm that the tax shelter in which he had participated was
illegitimate; the plaintiff learned the IRS was auditing “the
entity through which [his] losses flowed”; and the attorney
who prepared the letter indicating the tax shelter was legally
acceptable “[pleaded] guilty to defrauding the IRS by au‐
thoring false opinion letters and entering into a phony con‐
sulting agreement.” Id. at 555. The court reasoned that these
events should have put the plaintiff on notice that something
was amiss with the tax shelter. Id. The IRS’s issuance of the
deficiency notice in 2013 simply made him aware of all his
potential damages. Id.
In this case, McMahan participated in a tax shelter in
2001 and did not receive a deficiency notice until 2010. But,
similar to the plaintiff in Lane, events in the interim should
have put him on notice that he may have had claims against
Deutsche Bank. Most notably, in 2005 McMahan became
aware of a class action involving claims of breach of fiduci‐
ary duty against Jenkens & Gilchrist relating to its role in
promoting tax shelters. The letter informing him of the class
action also indicated McMahan’s entitlement to recover in
the settlement of that suit. The very same day he received
that letter, the IRS notified McMahan it was auditing his
14 No. 17‐2988
2001 tax returns. By at least that point, as the district court
concluded, McMahan had sufficient notice that something
was not right to put the impetus on him to investigate fur‐
ther whether he had claims against Deutsche Bank. Cf. Mar‐
vel Eng’g Co. v. Matson, Driscoll & D’Amico, 501 N.E.2d 948,
952 (Ill. App. Ct. 1986) (“[P]laintiff’s lack of diligence pre‐
cludes application of the discovery rule in its favor.”). Be‐
cause the undisputed facts show McMahan was on notice no
later than 2005, he should have filed his complaint no later
than 2010. He waited until 2012, so summary judgment was
appropriate.
III.
In accordance with the foregoing, we AFFIRM the district
court in all respects.
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528 F.3d 817 (2008)
MAVERICK MEDIA GROUP, INC., Plaintiff-Appellant,
v.
HILLSBOROUGH COUNTY, FLORIDA, Defendant-Appellee.
No. 07-12330.
United States Court of Appeals, Eleventh Circuit.
May 22, 2008.
*819 Mark W. Forsling, Paul Edmund Vranicar, Schreeder, Wheeler & Flint, LLP, Atlanta, GA, for Plaintiff-Appellant.
William David Brinton, Rogers Towers, PA, Jacksonville, FL, Stephen Mark Todd, Hillsborough Cty. Atty., Tampa, FL, for Defendant-Appellee.
Before BIRCH, DUBINA and HILL, Circuit Judges.
PER CURIAM:
Maverick Media Group, Inc., ("Maverick"), sued Hillsborough County, Florida, (the "County"), claiming that the County unconstitutionally denied it permits for outdoor signs. The district court entered summary judgment for the County and Maverick appealed. A review of the record reveals that Maverick does not have standing to bring this claim. Therefore, we shall vacate the district court's judgment and remand for dismissal of the case.
I.
A. In order to have Article III standing to challenge the County's sign ordinance, Maverick must have a constitutional injury that is redressable by the court.
In order to have Article III standing in federal court, a plaintiff must suffer an injury in fact that is both causally connected to the conduct complained of and redressable by a favorable decision of the court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). These constitutional standing requirements are jurisdictional in that they "involve[] the court's competency to consider a given type of case," and, therefore, "cannot be waived or otherwise conferred upon the court by the parties." Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.2005). Standing "is the threshold question in every federal case, determining the power of the court to entertain the suit." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). "`In the absence of standing, a court is not free to opine in an advisory capacity about the merits of a plaintiff's claims,'" and "`the court is powerless to continue.'" CAMP Legal Defense Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1269 (11th Cir.2006) (internal citations omitted).
The County in its Answer to the Complaint denied that Maverick had standing to bring its claims. The Magistrate Judge concluded that Maverick had standing.[1] Although the County did not cross-appeal this part of the district court's judgment, we must satisfy ourselves that Maverick has standing before proceeding to consider the merits of this appeal. Id. Unless Maverick has Article III standing to bring its claims, the district court had no constitutional *820 authority to enter a judgment in the case. Id.
B. Maverick's injury is not redressable by the court.
We have recently held that a plaintiff whose sign permit applications were denied on the basis of one provision in a county's sign ordinance, but which could have been denied on the basis of some alternate, but unchallenged regulation, does not have a redressable injury. KH Outdoor, L.L.C. v. Clay County, 482 F.3d 1299, 1301 (11th Cir.2007). In that case, KH Outdoor sought to erect offsite billboards, prohibited by a provision of the county's sign ordinance. We held that its injury was not redressable because even if the court were to strike the challenged provision, there were other unchallenged regulations that would still have prohibited its signs. Id.[2] In the absence of a redressable injury, KH Outdoor did not have standing to contest the ordinance. Id.[3]
This approach has been endorsed by several of our sister circuits. In Midwest Media Prop., LLC v. Symmes Tp., 503 F.3d 456, 461 (6th Cir.2007), the plaintiff sign company sought permits to erect offsite billboards, which the township's ordinance prohibited.[4] The Sixth Circuit held that the plaintiff's injury was not redressable because "[e]ven if plaintiffs could show that the township's original [offsite] advertising ban . . . violated the First Amendment, each of [plaintiff's] nine sign applications sought to post signs that plainly violated the township's size and height regulations," which plaintiffs chose not to challenge in their complaint. Id. The court said that "even if . . . our court invalidated [the offsite sign ban], that would not redress plaintiffs' injury because the size and height restrictions still would preclude the township from approving their sign applications and thus still would preclude plaintiffs from erecting each of these signs." Id. at 461-62. Therefore, the court concluded, plaintiffs had no standing.
Similarly, in Advantage Media, L.L.C. v. City of Eden Prairie, 456 F.3d 793, 801 (8th Cir.2006), the Eighth Circuit concluded that the plaintiff sign company lacked standing to challenge a city ordinance banning billboards because "a favorable decision for Advantage, even with respect to those sign code provisions which were factors in the denial of its permit applications would not allow it to build its proposed signs, for these would still violate other unchallenged provisions of the sign code like the restrictions on size, height, location, and setback." Plaintiff's injury was not redressable, the court concluded, "for even in victory it would be `no closer' to erecting its billboards or obtaining damages than when litigation began." Id. at 802 (internal citation omitted). Without a redressable injury, the court held that the *821 sign company lacked standing to proceed. Id.
The Fourth Circuit reached the same result in Covenant Media of South Carolina, LLC v. City of North Charleston, 493 F.3d 421 (4th Cir.2007). In that case the plaintiff sign company's applications violated multiple sections of the city's sign ordinance, not all of which it challenged. The court said that "[b]ecause Covenant's application violated the spacing requirement, it could not have been approved regardless of whether other substantive provisions of the Sign Regulation are held to be unconstitutional." Id. at 430. Therefore, the plaintiff's alleged injury was unredressable and it had no standing to proceed.
The Seventh Circuit has also endorsed this redressability analysis as applied to sign company plaintiffs whose applications could have been denied under alternate, unchallenged provisions of a sign ordinance, holding that plaintiffs have no standing where "[plaintiff] suffers an injury [it cannot erect the proposed billboard], but winning the case will not alter that situation". Harp Adver. Ill., Inc., v. Village of Chicago Ridge, Ill., 9 F.3d 1290, 1292 (7th Cir.1993). See also Get Outdoors II, LLC v. City of San Diego, 506 F.3d 886, 893 (9th Cir.2007) (endorsing our approach in KH Outdoor, so long as standing is defeated as a result of an unchallenged secondary restriction, such as one based on height or size).
Thus, the KH Outdoor redressability analysis is applicable to the case where a county could deny a plaintiff's sign permit applications under an alternative provision of its ordinance that the plaintiff's complaint does not challenge. This is such a case. Just as in KH Outdoor, Hillsborough County's ordinance contains height and size limitations for permitted signs. These limitations would have prohibited the erection of Maverick's billboards independently of the ordinance's categorical billboard prohibitions, and the Magistrate specifically so found. [R & R at n. 23.] In his Report and Recommendation, the Magistrate found that the evidence submitted by Maverick revealed that it sought permits only for signs measuring 14' × 48', "the size of which clearly exceeds the size limitations contained in the excepted off-site directional signs provisions." [R & R at n.23, citing §§ 7.04.02(B)(6), (C)(6), (D)(2), (E)(2), and (F)(2)].[5] Therefore, the County could have denied Maverick's applications under an alternative, unchallenged provision of its sign ordinance.
Maverick did not specifically challenge the height and size restrictions in the County's ordinance because it did not apply for the type of sign permitted by the County's ordinance. Therefore, its applications were not denied under these provisions. Since its applications were for offsite billboards, they were denied under ordinance provisions prohibiting billboards and offsite signs.[6]
Nor may Maverick invoke the overbreadth doctrine in an attempt to get at these limitations. See CAMP, 451 F.3d at 1270. In CAMP, we rejected the contention that a plaintiff who has suffered injury under one provision of an ordinance *822 has standing to challenge the entire ordinance. Id. at 1270. We clarified that the overbreadth doctrine is an exception only to the prudential standing requirement that a plaintiff must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties. Id. at 1270-71 (citing Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). The doctrine merely permits the plaintiff to whom a provision of a statute is constitutionally applied to assert that the same provision might be unconstitutionally applied to third parties not before the court. Broadrick v. Oklahoma, 413 U.S. 601, 613, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973). Thus, a plaintiff who has established constitutional injury as to himself under a provision of a statute may also attack that provision under the overbreadth doctrine to vindicate the rights of others not before the court. CAMP, 451 F.3d at 1273-74 (citing FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 233, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990)).
The overbreadth doctrine does not, however, grant a plaintiff carte blanche to challenge an entire ordinance merely because some part of the ordinanceto which the plaintiff is not subjectmight be unconstitutional. Id. at 1271. It does not, because it may not, waive the Article III requirement that the plaintiff have suffered a real injury in fact as to a challenged provision of an ordinance. Id.; see also Granite State Outdoor Advertising, Inc., v. City of Clearwater, Fla., 351 F.3d 1112, 1116-17 (11th Cir.2003) (overbreadth doctrine does not vitiate the requirement for an injury in fact as to the challenged provision). Therefore, a plaintiff may not attack any provision of an ordinance under which he has not suffered a real injury in fact. Id. See also Get Outdoors II, 506 F.3d at 892 (plaintiff may not "leverage its injuries under certain, specific provisions to state an injury under the sign ordinance generally"); Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 350 (6th Cir.2007) ("Prime Media's standing with regard to the size and height requirements does not magically carry over to allow it to litigate other independent provisions of the ordinance without a separate showing of an actual injury under those provisions"); Covenant Media, 493 F.3d at 421 ("That Covenant has standing to challenge the timeliness of the City's decision on the December 2004 application does not provide it a passport to explore the constitutionality of every provision of the Sign Regulation").
Therefore, Maverick may challenge only those provisions of the ordinance under which it suffered an injury in fact. The Magistrate determined that Maverick did not suffer injury under the permitted sign provisions of the ordinance because Maverick did not apply for such signs. All of Maverick's sign applications were for prohibited billboardssigns that greatly exceed the height and size limitations for permitted signs. The Magistrate specifically found, without objection by Maverick, that it was "not subject to the exceptions to the prohibitions on off-site signs found in [the old ordinance] because the evidence submitted by Maverick reveals that it sought permits for signs measuring 14' by 48', the size of which clearly exceeds the size limitations contained in the excepted off-site directional signs provisions."
If there were any evidence in this record that Maverick sought to display signs that otherwise complied with the permitted sign provision, it might have an injury in fact as to the height and size restrictions in this provision. Since there is no such evidence, Maverick suffered no injury *823 in fact under the permitted sign provision of the prior ordinance and it has no standing to challenge it under the overbreadth doctrine or any other doctrine. See Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 352 (6th Cir.2007) (reaching same conclusion and observing that "[i]f it had attempted to produce a billboard which complied with the height and size requirements, and was threatened with rejection or regulation under the other challenged ordinance provisions, there would arguably be a cognizable injury in fact . . . . However, the record bears no evidence of such a development").[7]
II.
In sum, Maverick does not have standing to bring this action challenging the billboard and offsite sign prohibitions in the County's prior sign ordinance because its injury in fact under these provisions is unredressable by the court. It may not challenge the entire ordinance on its face because it has suffered no injury in fact as to any other provisions. Therefore, the judgment of the district court is due to be vacated, and the case will be remanded to the district court with instructions to dismiss the case.
VACATED and REMANDED.
NOTES
[1] The district court referred the case to the Magistrate Judge for a Report and Recommendation on the cross-motions for summary judgment.
[2] In KH Outdoor, the "other" regulations were found in state law that imposed certain application requirements that had not been met by the plaintiff. 482 F.3d at 1303-04.
[3] The Magistrate in this case concluded that Maverick had standing because "[Maverick's] injury likely would be redressed by a favorable decision (e.g., actual or nominal damages)." The district court summarily adopted the Report and Recommendation. This was error. In KH Outdoor, the plaintiffs requested damages. In concluding that the plaintiff did not have standing, we necessarily concluded that damagesjust as sign permits are unavailable to the plaintiff whose sign applications may be denied under an alternative, unchallenged provision of an ordinance. See also Get Outdoors II, 506 F.3d at 894 (nominal damages unavailable to plaintiff whose applications deniable under alternate provision of ordinance).
[4] Offsite signs are those that are not located at the site of the business advertised.
[5] The ordinance defined billboards as any advertising sign measuring 72 square feet in aggregate sign area or more. [R & R, n. 22]. Both the Amended Complaint and Maverick's property leases for its signs confirm that all of Maverick's applications were for signs measuring 14 by 48 feet in size, and the Magistrate specifically so found in his R & R.
[6] The Magistrate Judge found that the County denied Maverick's applications on the ground that they were for prohibited off-site signs or billboard signs.
[7] Nor does Maverick's claim that the offsite sign prohibition is not content-neutral change this analysis in any way. Maverick's offsite sign applications, denied under the ordinance's prohibition on offsite signs, similarly could have been denied under the size and height limitations, because all the applications were for signs that exceeded those limitations.
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605 N.E.2d 727 (1992)
238 Ill. App.3d 944
178 Ill.Dec. 933
Robert SMITH, Plaintiff-Appellant,
v.
The TOWN OF NORMAL, a municipal corporation, The Zoning Board of Appeals of the Town of Normal, and Clinton Curtis, Defendants-Appellees (Rand Veerman, Defendant).
No. 4-92-0430.
Appellate Court of Illinois, Fourth District.
December 23, 1992.
*729 Frank Miles, Hayes, schneider, Hammer, Miles & Cox, Bloomington, for plaintiff-appellant.
Wayne Karplus, Town Atty., Town of Normal, Normal, for defendant-appellee Town of Normal.
J. Todd Greenburg, Hannah R. Eisner, City of Bloomington Legal Dept., Bloomington, for defendant-appellee Zoning Bd. of Appeals-Normal.
Shelly Brenneman Carter, Bloomington, for defendant-appellee Clinton Curtis.
Justice McCULLOUGH delivered the opinion of the court:
The Zoning Board of Appeals of the Town of Normal (Board) sustained the determination made by the building commissioner of the Town of Normal (Commissioner) that the Town of Normal Zoning Code (Code) (Normal, Ill., Zoning Code ch. 15, § 15.1-1 (19)) required plaintiff Robert Smith (Smith) to change the lawful nonconforming use of his property from a rooming house to a single-family residence. Smith appeals, contending (1) the Board's interpretation of the Code was contrary to the manifest weight of the evidence; (2) the applicable nonconforming-use provisions of the Code (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990), § 15.4-6 (19)) are void for vagueness; and (3) the Code, as interpreted and applied by the Board, Commissioner and circuit court is unconstitutional because it bears no direct and substantial relationship to the protection or promotion of the public health, safety and welfare. We affirm.
Smith owns a seven-bedroom house in Normal, Illinois, which he purchased in 1979 for $37,000 or $38,000. He rents this house to eight students at a rate of $985 per semester per student, which generates an income of approximately $16,000 a year. He also rents the house during the summer for approximately $1,000 to $1,200. Smith valued his house at approximately $65,000, based on four times the gross income from the tenants. *730 Smith's house is located in an area zoned for single-family residences. However, section 15.3-2 of the Code states:
"A non-conforming use is any use of land, buildings or structures, which use is not permitted in the zoning district in which such use is located, but which use was permitted at the time such use was established." (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).)
Section 15.4-6(D)(1) of the Code provides that if a lawful use of a structure existed at the time the Code became effective but that use would now be prohibited under the Code, that use may continue under certain circumstances. (Normal, Ill., Zoning Code ch. 15, § 15.4-6(D)(1) (19 ).) Prior to the enactment of the Code, Smith's use of the structure as a rooming house was permitted. Upon the Code's enactment, the area was zoned for single-family residences, and Smith's use of the structure as a rooming house became a lawful nonconforming use.
On August 14, 1991, a fire of suspicious origin occurred at Smith's rooming house. The fire originated in the rear of the house where the north side of the rear deck joined to the exterior walls of the house. On the first floor of the house, there was flame damage to a three-foot-wide portion of the exterior wall extending the entire height of the first floor and there was flame damage to a portion of the first-floor kitchen ceiling. A "header joist" which extended through the kitchen between the first and second floors was flame damaged; however, it was not conclusively established that this header joist would need to be reinforced or replaced as a result of the fire. A three-foot-high "knee wall," which bears the load of the northernmost roof of the house, had flame damage. A portion of the load-bearing exterior wall on the east side of the house on the second floor directly south of the knee wall was flame damaged. A "shed roof" extending over the first-floor kitchen was damaged and a portion of the roof was damaged by firemen cutting a ventilation hole in the roof. The testimony before the Board indicated that as few as 5 or as many as 18 studs would either have to be replaced or strengthened by nailing new studs to the flame-damaged studs. Smith estimated the cost of repairs to the structure at $4,000. The Board made a finding of fact that the cost of repairs to the structure caused by the fire did not exceed 50% of the fair cash market value of the structure. Smith was issued a building permit to repair the damage caused by the fire.
On September 4, 1991, the Commissioner wrote Smith a letter stating that his structure could no longer be used as a rooming house. Smith was told that by operation of law, the property had reverted to use as a single-family residence only. The Commissioner concluded that the structure could no longer be used as a rooming house because the fire at Smith's property caused the need for replacement or reconstruction of the exterior bearing walls.
Smith filed a notice of appeal of that determination with the Board on September 11, 1991. On October 17, 1991, the Board held a hearing at which testimony was presented regarding the extent of the fire damage and the amount of work necessary to repair the building. The Board adopted its findings of fact on December 12, 1991, in which it concluded that the Commissioner properly interpreted the Code. The Board noted that Clinton Curtis, a defendant herein, owns a house near Smith's property and testified that his property, a single-family residence, was valued at $17,000.
The Board made a specific finding that the first-floor exterior wall directly north of the rear entrance, the knee wall on the exterior of the second floor, and the exterior wall on the east side of the house on the second floor directly south of the knee wall are load-bearing walls, and that the header joist above the first-floor kitchen is a load-bearing component of the structure. The Board found that the Commissioner did not misunderstand the factual situation giving rise to the action from which the appeal was taken. Moreover, the Board found he did not misinterpret or erroneously apply the provisions of the Code in his ruling that the repairs to the load-bearing walls on Smith's property constituted reconstruction *731 under the provisions of the Code and, therefore, Smith's property could no longer be used as a rooming house. One member of the Board disagreed and would overrule the Commissioner by finding that the proposed work to Smith's property constituted ordinary repairs under section 15.4-6(F) of the Code. Normal, Ill., Zoning Code ch. 15, § 15.4-6(F) (19).
Smith filed his complaint for administrative review of the Board's decision in the circuit court on January 8, 1992. The circuit court affirmed the Board's decision construing the Code. Defendant timely filed his notice of appeal.
Smith first contends the Board's decision sustaining the Commissioner's interpretation of the Code was against the manifest weight of the evidence. Specifically, Smith alleges section 15.4-6(D)(4), rather than section 15.4-6(D)(1) of the Code, applies in this situation. (Normal, Ill., Zoning Code ch. 15, §§ 15.4-6(D)(4), (D)(1) (19).) Furthermore, Smith argues the proposed work on the building constitutes "repair of a structural element" rather than "reconstruction of a structure" and that this work is "ordinary repair" under the Code.
Generally, in construing municipal ordinances, the same rules are applied which govern construction of statutes. (Application of County Collector (1989), 132 Ill.2d 64, 72, 138 Ill.Dec. 138, 141, 547 N.E.2d 107, 110.) In construing a zoning ordinance, the intention of the drafters should be given effect by considering the common accepted usage of the words employed, the context in which they are employed, and the general structure of the ordinance. Dixon v. City of Monticello (1991), 223 Ill.App.3d 549, 555, 165 Ill.Dec. 878, 883, 585 N.E.2d 609, 614.
Because agencies can make informed judgments on the issues based upon their experience and expertise, it is generally recognized that courts will give substantial weight and deference to an interpretation of an ambiguous statute by the agency charged with the administration and enforcement of the statute. (Illinois Consolidated Telephone Co. v. Illinois Commerce Comm'n (1983), 95 Ill.2d 142, 152, 69 Ill.Dec. 78, 83, 447 N.E.2d 295, 300.) A court may not overturn the decision of an administrative body unless the authority of the administrative body was exercised in an arbitrary or capricious manner or the decision is against the manifest weight of the evidence. (Murdy v. Edgar (1984), 103 Ill.2d 384, 391, 83 Ill.Dec. 151, 154, 469 N.E.2d 1085,1088.) Court orders or administrative decisions may be upheld on any grounds required by the record, even though those grounds were not the ones which were the basis of the decision. Rauschenberger v. Board of Education, Heritage Community Unit School District No. 8 (1991), 223 Ill.App.3d 412, 416, 165 Ill.Dec. 616, 619-20, 584 N.E.2d 1050, 1053-54.
Section 15.4-6 of the Code states:
"[I]t is the intent of this Code to permit these non-conformities to continue until they are removed but not to encourage their survival under the terms of this Code. It is further the intent of this Code that non-conformities shall not be enlarged upon, expanded, or extended, nor be used as grounds for adding other structures or uses prohibited elsewhere in the same district, except as provided in subsection G." (Normal, Ill., Zoning Code ch. 15, § 15.4-6 (amended Apr. 15, 1991).)
Thus, this intent must be kept in mind when construing and interpreting the various sections of the Code.
The Board concluded that section 15.4-6(D)(1) of the Code applied to this situation. That section provides:
"(D) Non-Conforming Uses of Structures. If a lawful use involving individual structures with a fair cash market value cost of $1,000 or more, or of structure and land in combination, exists at the effective date of adoption of amendment of this Code that would not be allowed in the district under the terms of this Code, the lawful use may be continued as long as it remains otherwise lawful, subject to the following provisions:
(1) No existing structure devoted to a use not permitted by this Code in the district in which it was located shall be *732 enlarged, extended, constructed, reconstructed, moved, or structurally altered except in changing the use of the structure to a use permitted in the district in which it is located."
Normal, Ill., Zoning Code ch. 15, § 15.46(D)(1) (19 ).
On the other hand, Smith asserts that section 15.4-6(D)(4) of the Code applies in this situation. That section states:
"(4) Where non-conforming use status applies to a structure and premises in combination, removal or destruction of the structure shall eliminate the nonconforming status of the land. Destruction for the purpose of this subsection is defined as damage to an extent of more than fifty (50) percent of the fair cash market value at the time of destruction." Normal, Ill., Zoning Code ch. 15, § 15.4-6(D)(4) (19 ).
Smith contends his nonconforming use is that of "a structure and premises in combination." If that is true, he reasons, destruction sufficient to eliminate the nonconforming use of the structure has to be to an extent of more than 50% of the fair cash market value of the structure. The parties agreed that the damage to his house did not exceed 50% of the fair cash market value of the structure; hence, "destruction" sufficient to remove the right to operate the house in a nonconforming way has not occurred.
In support of his argument that section 15.4-6(D)(4) of the Code applies, Smith notes that the building is "permanently affixed to the ground" (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990)), which is indicative of use of land and structure together. Smith further points to the facts that the building permit which authorized the work to be done to remedy the fire damage contains the legal description of the property, the permanent identification number, and lot dimensions. Finally, Smith states he was required to improve a parking lot to continue the nonconforming use of the structure as a rooming house. He concludes all these things evidence the fact that his nonconforming use of the structure is that of a "structure and premises in combination."
The Town of Normal (Town) contends section 15.4-6(D)(4) of the Code is inapplicable to Smith's property. It alleges that that section affects the nonconforming use of land upon the destruction of a structure containing a nonconforming use. The Town asserts that if a store with the parking lot in the front yard in a residential district existed, the store would be a nonconforming use of a structure and the parking lot would be a nonconforming use of the land. If the store is destroyed (as defined by this section), the nonconforming use of the land (i.e., the parking lot), must also cease.
The Town's interpretation of section 15.4-6(D)(4) of the Code is more persuasive. The fact that Smith's building permit contains a legal description and lot dimensions simply does not make his nonconforming use one of "structure and premises in combination." (Normal, Ill., Zoning Code ch. 15, § 15.4-6(D)(4) (19 ).) His use of the land is really only incidental to the nonconforming use of the structure. To accept his argument, that, because the structure is permanently affixed to the ground the use of the structure is "a combination of premises and structure," would create absurd results; every structure is permanently affixed to the land and therefore section 15.4-6(D)(1) of the Code would be meaningless. The Board properly concluded that section 15.4-6(D)(1) of the Code applied rather than section 15.4-6(D)(4) of the Code.
Thus, we must determine whether the Board correctly concluded that the work Smith intends to do on the structure is prohibited by section 15.4-6(D)(1) of the Code so that he loses his right to continue to use the structure in a nonconforming manner. On appeal before the Board, the Town argued that what Smith proposed to do constituted "reconstruction" which is forbidden by this section. On appeal here, in addition, the Town alleges that this work amounts to "structural alteration," which is also prohibited by this section.
*733 "Construction" is defined in the Code as "the act of adding an addition to an existing structure or the erection of a new principal or accessory structure on a lot." (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).) Although not defined in the Code, "reconstruction" means "the action of reconstructing or state of being reconstructed," "something reassembled (as from parts) into its original form or appearance." (Webster's Third New International Dictionary 1898 (1986).) "Reconstruct" means "to construct again: * * * to build again: * * * to make over"; synonyms include rebuild, repair or reassemble. (Webster's Third New International Dictionary 1897 (1986).) "Structural Alteration" is defined in the Code as "any change, other than incidental repairs, which would prolong the life of the supporting members of a building, such as the addition, removal or alteration of bearing walls, columns, beams, girders or foundations." Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).
The work Smith proposes to do includes replacing or adding new studs to those which were flame damaged, repairing the kitchen ceiling joist and fixing the ventilation hole cut in the roof by the firemen. Specifically, he must replace or reinforce studs in load-bearing walls to continue the life of these walls. Without reinforcing the studs which were flame damaged, the existing walls cannot safely support the ceilings they are meant to support. Because what Smith intends to do will "prolong the life of the supporting members of a building," it is a structural alteration and he cannot do this work without losing his right to operate the structure in a nonconforming manner. Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).
Smith also asserts that this work constitutes "ordinary repair" which is allowed by the Code. Section 15.4-6(F) states:
"(F) Repairs and Maintenance. On any non-conforming structure or portion of a structure containing a non-conforming use, ordinary repairs, or repair or replacement of non-bearing walls, fixtures, wiring or plumbing may be made to an extent not exceeding fifty (50) percent of the fair cash market value of the non-conforming structure provided that the cubic content existing when it became non-conforming shall not be expanded." (Normal, Ill., Zoning Code ch. 15, § 15.4-6(F) (19 ).)
Smith contends he can make ordinary repairs which do not exceed 50% of the fair cash market value of the structure without losing his right to use the property in a nonconforming manner. The Town alleges he cannot do this work because (1) it is not ordinary repair; and (2) since the Code allows repair or replacement of nonbearing walls, it specifically prohibits replacement or repair of load-bearing walls. Since he intends to repair bearing walls, he cannot do the work without losing the right to continue the nonconforming use of the structure. The Town further asserts that ordinary repairs may not be made to bearing walls.
We need only address the Town's second assertion. Section 15.4-6(F) of the Code specifically allows repair of nonbearing walls. The allowance of repair or replacement to nonbearing walls excludes the repair or replacement of load-bearing walls. It is a fundamental principle of statutory construction that express mention of one thing in a statute excludes all other things not mentioned. Welch v. Johnson (1992), 147 Ill.2d 40, 167 Ill.Dec. 989, 588 N.E.2d 1119.
"Repair" is defined in the Code as "any change that is not construction, removal or alteration. This would include a simple and minor mending to bring an element of a structure back to its original condition. It assumes that minimal expense and effort need be incurred to complete the repair." (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).) Smith alleges that what he proposes to do will merely "bring an element of the structure back to its original condition" because adding the new studs will bring the load-bearing walls back to their prefire condition. He further notes that in 1988 he was allowed to remove *734 studs from a load-bearing wall that is now flame damaged and insert a set of French doors. He asserts that this was "ordinary repair" which he was allowed to make. He claims that since he previously made a change in a load-bearing wall without losing the right to continue the nonconforming use of the structure, the Town is now estopped from prohibiting this work.
The Town argues that it is not estopped because it allowed Smith to do work on a load-bearing wall in 1988. The Town further alleges the work proposed here is not "ordinary" and is more than "simple and minor mending." The Town asserts that the work will require more than the minimal expense and effort to complete the repairs and that he can only repair or replace nonbearing walls.
Section 15.4-6(F) of the Code does not allow Smith to do this work without losing his right to operate the structure in a nonconforming manner. Smith proposes to do work on bearing walls. Since the work is to be done on bearing walls, it cannot be characterized as ordinary repair. Further, although what he proposes to do may constitute "repair," as that term is defined in the Code, it is not authorized by this section as it involves bearing walls. This interpretation is in accordance with the intent of the Code to allow the continuation of nonconforming uses but not to encourage their survival. The repair or replacement of a bearing wall would encourage the survival of a structure.
Finally, Smith's contention that because the Town allowed him previously to remove studs from a bearing wall and replace a window with French doors, it is now estopped from allowing these changes is without merit. As the Town notes, the work done in 1988 by Smith constituted an "Alteration," defined in the Code as "any change in size, shape or character of a building or structure or change in the use thereof." (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).) The work done in 1988 was merely a change in the character of the building and did not do anything to prolong or encourage the life of the structure. Rather, it merely enhanced or changed the character of the building by removing a window and adding a set of French doors. On the other hand, the work proposed by Smith here does not alter the character of the building but specifically is designed to prolong the life of the structure.
In conclusion, the Board's decision was not against the manifest weight of the evidence. The proposed work constitutes "Structural Alteration" prohibited by the Code. (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).) The proposed work cannot be characterized as "ordinary repairs" or "repair or replacement of non-bearing walls" because it involves work on bearing walls and thus is not permitted by section 15.4-6(F) of the Code. (Normal, Ill., Zoning Code ch. 15, § 15.4-6(F) (19 ).) Therefore, because the work is not allowed by the Code, Smith loses the right to the lawful nonconforming use of the structure as a rooming house.
Next, Smith contends the "applicable nonconforming use provisions" of the Code are void for vagueness. Smith alleges that reasonable people can only guess at what the Code permits or prohibits when a fire causes some damage to a bearing wall and a structure operating a nonconforming use.
A zoning ordinance is presumed valid, and the burden is upon the party attacking the ordinance to establish its invalidity by clear and convincing evidence. (Harris Trust & Savings Bank v. Duggan (1983), 95 Ill.2d 516, 531, 70 Ill.Dec. 195, 202, 449 N.E.2d 69, 76.) An ordinance is unconstitutionally vague when persons of common intelligence must necessarily guess at its meaning. In other words, the ordinary person must be capable of appreciating, from the language of the ordinance or statute, how he will be affected by its operation. (Broadrick v. Oklahoma (1973), 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830; Union National Bank & Trust Co. v. Village of New Lenox (1987), 152 Ill.App.3d 919, 922, 105 Ill.Dec. 875, 877, 505 N.E.2d 1, 3.) An ordinance is void if it is indefinite and uncertain and its precise meaning cannot be ascertained. *735 (Hahnenkamp v. Madison County (1989), 183 Ill.App.3d 76, 85, 131 Ill.Dec. 648, 654, 538 N.E.2d 1204, 1210.) If there is a doubt as to the construction to be given to a particular provision in an ordinance, the doubt must be resolved in favor of an interpretation which supports the ordinance. Lakin v. City of Peoria (1984), 129 Ill. App.3d 651, 656, 84 Ill.Dec. 837, 841, 472 N.E.2d 1233, 1237.
Neither section 15.4-6(D)(1) nor 15.4-6(F) of the Code is unconstitutionally vague. Section 15.4-6(D)(1) of the Code lists the type of work prohibited on structures containing a nonconforming use. That section provides that a structure devoted to a nonconforming use cannot be "enlarged, extended, constructed, reconstructed, moved, or structurally altered." (Normal, Ill., Zoning Code ch. 15, § 15.4-6(D)(1) (19 .) Of those prohibited activities, "Construct[ed]," "Removal" and "Structurally Altered" are specifically defined in the Code. (Normal, Ill., Zoning Code ch. 15, § 15.3-2 (amended Aug. 20, 1990).) The remaining words are common and are capable of being understood by persons of common intelligence. The gist of this section, when read with the provisions regarding the intent of the Code to not allow any work that will prolong the life of nonconforming structures, is capable of being understood by persons of common intelligence.
Likewise, section 15.4-6(F) of the Code is equally clear. That section allows for ordinary repairs or repair or replacement to nonbearing walls, fixtures, wiring or plumbing, provided that these repairs do not exceed 50% of the fair cash market value of the structure and do not expand the cubic content of the structure. "Repair" is defined in the Code and examples are given. "Replace" is a common word capable of being understood by persons of ordinary intelligence. Again, this section is not vague when read in conjunction with the section regarding the purpose of the Code. Repairs that are in the usual course of events, i.e., a leaky faucet or broken window, can be made for the comfort and safety of the tenants. Similarly, repairs to the wiring or plumbing or nonbearing walls (i.e., elements of the structure that are not necessary to the continued existence of the structure) are allowed. This carries out the intent of the Code to allow the continuation of these structures but not encourage their survival. Repairs necessary to an extent of more than 50% of the fair cash market value of the house or to the walls necessary to the survival of the structure permit more than the continuation of the structure; such repairs would encourage the survival of the structure. The drafters of the Code intended that if a structure becomes dilapidated such that repairs exceeding 50% of the fair cash market value are necessary, the nonconforming use should cease.
Therefore, neither section 15.4-6(D)(1) nor section 15.4-6(F) of the Code is void for vagueness. Both are capable of being understood by persons of common intelligence.
Finally, Smith contends the Code is unconstitutional as applied to his property because it bears no direct and substantial relationship to the protection of the public health, safety and welfare. The Town contends the Code is rationally related to the public health, safety and welfare. This relationship is found in the applicable Code provisions regarding the intent of the Code, "to foster the use and development of land in an orderly manner * * * * * * [T]o regulate and manage land use in order to implement sound comprehensive planning policies, and to protect individual land owners and general neighborhoods from incompatible and detrimental land uses." Normal, Ill., Zoning Code ch. 15, § 15.2-1 (19 ).
A nonconforming use is a property right of which the owner cannot be unreasonably and arbitrarily deprived. (County of Cook v. Renaissance Arcade & Bookstore (1988), 122 Ill.2d 123, 141, 522 N.E.2d 73, 80, 118 Ill.Dec. 618, 625, 522 N.E.2d 73, 80.) Enacting a zoning ordinance is a legislative function, and once a legislative body has enacted legislation in response to a need to protect and promote the general welfare of its citizens, there is a presumption that the enactment is a valid exercise of police power. *736 The zoning ordinance must not only bear a reasonable relationship to the protected public interest, but the means utilized must also be a reasonable method for accomplishing the objective. (Suhadolnik v. City of Springfield (1989), 184 Ill.App.3d 155, 164-65, 133 Ill.Dec. 29, 34, 540 N.E.2d 895, 900.) Even though the right to a nonconforming use is a property right, a governmental body may restrict a nonconforming use as may be necessary for the public health, comfort, safety or welfare. (Furlong v. City of Chicago (1986), 142 Ill.App.3d 347, 350, 96 Ill.Dec. 841, 843, 491 N.E.2d 1301, 1303.) The one challenging the ordinance bears the burden of demonstrating its invalidity. (Tomasek v. City of Des Plaines (1976), 64 Ill.2d 172, 179-80, 354 N.E.2d 899, 903.) A zoning ordinance may be valid in general, but invalid as to a particular piece of property. Suhadolnik, 184 Ill.App.3d at 165, 133 Ill.Dec. at 35, 540 N.E.2d at 901.
The elimination of nonconforming uses is a legitimate goal. (Gilmore v. County of Du Page (1991), 209 Ill.App.3d 66, 71, 153 Ill.Dec. 884, 888, 567 N.E.2d 1111, 1115.) The Code specifically states the drafters intended to allow the continuation of nonconforming uses of these structures but not to encourage their survival. The evidence indicated Smith's rooming house is located in a residential district which consists mainly of elderly, long-time residents. There were allegations presented to the Board that the tenants of Smith's house were loud, disruptive and possibly selling drugs from the house. The Code also has the stated intent of protecting general neighborhoods from incompatible and detrimental land uses. This neighborhood is zoned for single family residences and a rooming house holding eight students is certainly incompatible with that type of neighborhood. The restrictions on the type of work that can be done on structures containing a lawful nonconforming use advance the intent of the Code to gradually eliminate these nonconforming uses. By prohibiting certain kinds of improvements on structures containing nonconforming uses, as those structures age and become in need of these types of work, the need for the extensive repair will effectuate the elimination of the nonconforming use.
Thus, prohibiting certain types of repair or extensive repair on structures devoted to a nonconforming use is a reasonable method for eliminating such nonconforming uses over time. The elimination of these nonconforming uses bears a rational relationship to the public interest in protecting landowners in general neighborhoods from incompatible and detrimental land use. Thus, these sections of the Code are not unconstitutional as applied to Smith's property.
For the foregoing reasons, the Board's decision was not against the manifest weight of the evidence.
Affirmed.
COOK and GREEN, JJ., concur.
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IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
IN THE MATTER OF B.B.
Direct Appeal from the Juvenile Court for Davidson County
No. 9719-0003807 Burton Glover, Judge
No. M1999-00643-COA-R3-CV - Decided June 20, 2000
The trial court terminated the mother's parental rights to B.B. on the grounds that: (1) the
child had been removed from the mother for more than six (6) months and the conditions which led
to removal or other conditions which in all reasonable probability would cause the child to be
subjected to further abuse or neglect still persisted; (2) the mother substantially failed to comply with
the plan of care established by the Department of Children's Services; and (3) the mother was
incompetent to adequately provide for the further care and supervision of the child. Because clear
and convincing evidence supports the trial court's findings and its conclusion that termination was
in the best interest of the child, we affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Juvenile Court
Affirmed and Remanded
COTTRELL, J., delivered the opinion of the court, in which CANTRELL , P.J., M.S. and KOCH , J.,
joined.
Jennifer Lynn Thompson, Nashville, Tennessee, for the appellant, Lisa Ann Mears.
Paul G. Summers, Attorney General and Reporter, Douglas Earl Dimond, Assistant Attorney
General, for the appellee, State of Tennessee, Department of Children's Services.
OPINION
This case involves the termination of the parental rights of the mother of B.B., a minor child
born in May 1991.1 The trial court terminated the mother's parental rights after finding that: (1) the
child had been removed from the mother for more than six (6) months and the conditions which led
to removal or other conditions which in all reasonable probability would cause the child to be
subjected to further abuse or neglect still persisted; (2) the mother substantially failed to comply with
the plan of care established by the Department of Children's Services ("DCS"); and (3) the mother
was incompetent to adequately provide for the further care and supervision of the child. For the
1
B.B.'s father surrendered his parental rights in September of 1998.
following reasons, we affirm.
B.B. was placed in State custody on October 7, 1997, after DCS filed a petition for custody
and emergency removal. The petition alleged that B.B. was at serious risk because her mother, the
petitioner herein, had threatened to kill her.2 The petition stated:
The mother . . . is unable and unwilling to care for . . . [B.B.] at this time due to
ongoing mental health issues. [B.B.] is ADHD and oppositional defiant . . . Home
Ties was placed in the home in August. They recognized that [the mother] had
mental health issues and made a referral to Mental Health Coop.
A removal order was issued the day the petition was filed and a hearing date was set. The
next day, B.B.'s mother was hospitalized for mental health treatment. Shortly thereafter, counsel was
appointed for B.B.'s mother and a guardian ad litem was appointed for B.B. After an October 10,
1997 hearing, the trial court found that the parties agreed that B.B. would remain in DCS custody,
while B.B.'s grandmother explored the possibility of assistance from the family. The court reported
that DCS would prepare a comprehensive plan of care and would attempt to place B.B. so that she
could continue at the special school she had been attending. The court also directed DCS to work
closely with the grandmother to assess whether B.B. really needed to stay in State custody.
DCS formulated a plan of care which was staffed on November 6, 1997, and agreed to by the
mother, grandmother, and guardian ad litem for the child. Its stated goals were to reunite the child
with her mother or place her with a relative. The plan recognized B.B.’s diagnoses of oppositional
defiant disorder and attention deficit disorder as well as her behavioral problems, and incorporated
requirements for continued treatment, including medication and counseling. The plan also
contemplated various medical examinations, continued placement in a school with special education
classes, and transportation from her foster home to the school. The plan permitted weekly visits with
her mother at her grandmother's home. The plan also recognized the mother’s diagnosis of severe
depression and required the mother to continue the medication prescribed by her psychiatrist and to
access other mental health services with the goal that she become stable enough to resume caring
for B.B. Metro Mental Health Coop and DCS were to monitor mother’s performance and assist with
obtaining needed services.
A second hearing was held on November 17, 1997 for settlement and presentation of the plan
of care. At that time, the court found that B.B. was doing "very well" in the foster home. During this
hearing, the parties reported that the case had been settled. The court subsequently made findings that
B.B. was a dependent and neglected child in that her mother suffered from severe depression which
rendered her incapable of parenting the child. The court stated that B.B.'s attention deficit disorder
and hyperactivity exacerbated the mother's inability to parent B.B. The court therefore ordered B.B.
to remain in the custody of DCS, and continued supervised visitation with the mother and
2
According to the record, B.B. told two teachers that her mother had threatened her with a
knife. The mother purportedly stated that she would kill B.B. if B.B. did not leave home.
-2-
grandmother. The court further stated:
The mother shall continue to cooperate with Mental Health Coop and her psychiatrist,
Dr. Rosenshein, and shall continue to take her medication as prescribed, and shall
continue to follow the Plan of Care so that the goal can remain reunification.
The case was heard again on February 20, 1998, pursuant to the court's earlier order for a
ninety-day review. The court found that B.B.'s behavior had improved and that the foster mother had
reported that B.B. was a "delightful child." The court found that B.B. was on Ritalin, had started
counseling, and visited her grandmother and mother every weekend, staying for a day and sometimes
all night. It noted that the mother was taking medication for depression and co-dependent personality
and was continuing to go to Metro Health Coop and to see her psychiatrist. The court also advised
the grandmother that the family needed to decide if anyone in the family could provide a permanent
home for B.B.
After another hearing to review the foster care placement on May 18, 1998, the court found
that the mother was undergoing psychological evaluations but had been either unable or unwilling
to answer the questions on the written portion of the test. The court also noted that the foster mother
and B.B.'s counselor had reported that the child exhibited more behavioral problems after overnight
visits with the mother and grandmother. The grandmother reported that no one else in the family
could take B.B. and that her own health problems created a difficulty in her taking B.B. The trial
court determined that progress toward the goal of returning B.B. to her mother was not appropriate
and that the goal needed to be changed. The court ordered a new staffing and a revised plan.
After a June 24 hearing, the trial court entered a permanency planning order in which it
reported that the mother's psychological examination demonstrated that she could not care for B.B.
The court determined that progress on the goal of reuniting B.B. with her mother was inappropriate
and needed to be changed to adoption or relative placement. The court ordered that the new staffing
be held immediately. The above mentioned evaluation3 concluded with a recommendation that the
child not be returned to the mother's care at that time on the basis that the mother "does not have some
of the basic qualities necessary for even adequate parenting."
After a July 27 hearing, the trial court entered a permanency planning order which approved
changing the plan of care goal from reunification to adoption.4 DCS had reviewed the revised plan
of care with the mother and the grandmother. B.B.'s guardian ad litem concurred in the change in
3
The mother, who was of borderline intellectual ability, had also tested "significantly high"
for child abuse potential. The test showed that the mother "endorses numerous traits known to be
present in physical child abusers," although the report noted that "no test can actually predict abusive
behavior."
4
The order included a statement that the grandmother reported that the mother did not attend
the hearing because she gets upset in court.
-3-
goal. Supervised visitation between mother and daughter was subsequently reduced to one hour per
week.
DCS filed a petition to terminate the parental rights of the mother on October 27, 1998. The
hearing on the petition was held on February 9 and on March 11, 1999. The court specifically applied
Tenn. Code Ann. § 36-1-113(g)(3)(A), finding that B.B. had been removed from her parent for over
six months and the conditions which led to removal or other conditions which in all reasonable
probability would cause further abuse or neglect still persisted and there was little likelihood that
these conditions would be remedied. The court found that the continuation of the legal relationship
between parent and child greatly diminished the child's chances of early integration into a stable and
permanent home. The court also found that the mother failed to follow the foster care plan, which
the court found to be reasonable and related to remedying the conditions which necessitated foster
care. In addition, the court applied Tenn. Code Ann. § 36-1-113(7)(B)(i), finding that the mother was
incompetent to adequately provide for the child's further care and supervision because her mental
condition was impaired, and likely to remain so, to the extent that it was unlikely that she would be
able to resume care of the child in the near future. The court determined that the mother had failed
to make an adjustment of circumstances, conduct, or conditions so as to make it in the child's best
interest to return home, that the mother failed to maintain regular visitation or other contact, that the
mother failed to pay any portion of substitute physical care and maintenance, and that there was no
meaningful relationship between the mother and child. The court specifically found that the mother
had failed to effect a lasting adjustment after reasonable efforts by social agencies "for such a duration
of time that lasting adjustment does not reasonably appear possible.” The court terminated the
mother's parental rights and awarded custody, control, and guardianship to the State of Tennessee.5
The mother then commenced this appeal, based solely on a claim that the evidence preponderates
against the trial court's finding that grounds for termination were shown by clear and convincing
evidence.
I. Standard of Proof
Because the decision to terminate parental rights affects fundamental constitutional rights,
courts apply a higher standard of proof when adjudicating termination cases. See O'Daniel v.
Messier, 905 S.W.2d 182, 186 (Tenn. Ct. App. 1995). To justify the termination of parental rights,
the grounds for termination must be established by clear and convincing evidence. See Tenn. Code.
Ann. § 36-1-113(c)(1) (Supp. 1999); State Dep’t of Human Servs. v. Defriece, 937 S.W.2d 954, 960
(Tenn. Ct. App. 1996). Evidence which satisfies the clear and convincing standard "eliminates any
serious or substantial doubt concerning the correctness of the conclusion to be drawn from the
evidence." O'Daniel, 905 S.W.2d at 188. "This heightened standard . . . serves to prevent the
unwarranted termination or interference with the biological parents' rights to their children." In re
5
In addition to the grounds found to exist by the court, the petition also alleged that the
mother had willfully abandoned B.B. for more than four (4) consecutive months preceding the filing
of the petition in that she failed to support the child. That ground did not form a basis for the trial
court's termination and is not an issue in this appeal.
-4-
M.W.A., 980 S.W.2d 620, 622 (Tenn. Ct. App. 1998).
Parental rights may be terminated in only a limited number of statutorily defined
circumstances. Before termination, one or more of the asserted statutory grounds must be proved by
clear and convincing evidence and the court must determine, also by clear and convincing evidence,
that termination is in the child's best interests. See Tenn. Code Ann. § 36-1-113(c)(2) (Supp. 1999).
The mother argues that the trial court erred in finding clear and convincing evidence of a
factual basis to terminate her parental rights. The trial court based its decision to terminate the
mother's parental rights on three subsections of Tenn. Code Ann. § 36-1-113.6 We must affirm the
trial court's judgment if any one of these bases exists in this case.
II. The Evidence
The record shows that B.B. was removed from the parental home because the mother was
unable or unwilling to provide care for B.B. due to mental health issues. The mother had been
suffering from depression for a number of years. She had been receiving social services, through the
Home Ties program and other agencies, even before the removal. The record shows that the mother
specifically declined to follow the recommendations of the Home Ties representative in handling B.B.
The record also shows that B.B. had significant behavioral problems related to her diagnoses with
oppositional defiant disorder and attention deficit disorder. B.B. had been attending a special needs
school and was receiving counseling and other services. The mother had failed to cooperate in
parenting classes and other counseling related to B.B.’s needs.
After B.B. was removed from the home, DCS established a plan of care with the stated goal
of reunification of mother and child. The plan required the mother to continue seeing a psychiatrist,
continue taking medication for her condition, and continue using Metro Mental Health Case
Management. The representative from DCS testified that the mother provided no proof that she had
complied with any of these directives. On the contrary, the mother admitted that she had maintained
her medication "off and on" even though she was aware that compliance with the plan was necessary
for reunification. The mother also admitted that she saw the psychiatrist only sporadically and had
ceased her relationship with Metro Mental Health.
At trial, the DCS representative testified that the mother had not taken advantage of the
services, such as parenting classes, that Home Ties offered. He stated that "more than once" he
sought parenting instruction for the mother at the Mental Health Coop, but the mother refused to go
there, notwithstanding the fact that she was offered door to door transportation. The DCS
representative reported that the mother essentially avoided him, to the point that he was unable to
6
Although the court's order specifically refers to only two of the statutory grounds by citation
to code section, the trial court's finding that the mother did not follow the plan of care relates to an
additional statutory ground, Tenn. Code Ann. § 36-1-113(g)(2), as alleged in the petition.
-5-
inspect her residence to determine whether she was maintaining it properly. No family placement
was available; the grandmother testified at trial that neither she nor either of mother's sisters could
take custody of B.B.
The DCS representative testified that the conditions which precipitated B.B.'s removal from
the home, or other conditions, which in all reasonable probability would subject the child to further
abuse or neglect and prevent the child's return still persisted. The DCS representative expressed
apprehension about the mother's mental health:
I'm concerned that she retreats into her own little world and becomes no longer
approachable so the social service workers like myself or from Mental Health Coop
can't approach her with services. I can see that as a great danger. I believe that the
child would return to her and she would retreat into this shell, for lack of a better
word, that the child would be at risk. . . . You know, it's hard for me to sit here and say
this, but I just don't believe that the child would be safe with her, you know, in a
situation where both parties, both have got such tremendous needs.
As previously noted, shortly after B.B. was removed from the home, her mother was admitted
to a psychiatric care hospital. She received diagnoses of major depression, recurrent with psychotic
features, and dependent personality disorder. During this admission, it was reported that the mother
had been treated in the past for major depression and had been “very noncompliant with medications
generally and with treatment.” The mother was also hospitalized after a purported suicide attempt
during the week prior to the first day of the termination hearing. The mother denied that she had
attempted suicide, but reported that she was glad for the intervention because she got started back
on her medication. She testified she had been compliant with her medication for approximately one
week before the first day of the hearing.
After removal of B.B., DCS arranged for a psychological evaluation of B.B.’s mother. The
psychologist who performed the evaluation testified that he had been asked to perform the evaluation
because there were questions regarding the mother’s intellectual functioning and parenting ability
raised by the mother’s history of referrals and interventions. The psychologist testified that the
mother scored in the borderline range in intellectual performance, but concluded that the mother’s
intellectual functioning alone would not interfere with effective parenting although her psychological
problems would prevent her from parenting appropriately.
He reported clear and striking contradictions in the mother’s descriptions of B.B. and in her
descriptions of her own parenting ability. In particular, he noted that the mother’s answers on the
Parenting Stress Index indicated she perceived herself as having no problems in parenting and
perceived B.B. as having no problems. These answers, however, were contradictory to other
statements by the mother. The evaluation stated that:
[The mother] has a rigid and overly simplistic cognitive style in which important
elements in the environment are ignored in decision-making. She has virtually no
skills in dealing appropriately with negative emotions and is at risk for impulsive and
-6-
damaging behavior when under stress. A striking self-centeredness is indicated in
which it will be very difficult to put others' needs before hers. Immaturity is indicated
in which a child's actions are likely to be taken personally when appropriate parenting
would call for distancing and objective thinking in responding.
The psychologist concluded that the mother’s “very maladaptive cognitive style” interfered
with her ability to interact with her environment on most levels. He characterized the mother as at
risk for being overwhelmed by even minimal stress and observed that she used most of her mental
energy to deny or avoid negative feelings and had difficulty dealing effectively and appropriately with
her emotions. According to the psychologist, the mother avoided facing emotion, and didn’t take in
enough evidence of her environment to make proper decisions or show proper judgments. He
predicted that attempts to force her to consider other people or pay attention to other things would
likely trigger irritability and she would have an especially difficult time trying to parent a child as
difficult as B.B. After explaining that the mother’s social isolation removed one method of dealing
with stress, he psychologist stated, “Her social skills being weak and her emotional skills being weak
are the two biggest things that tell about parenting.”
According to the psychologist, the results from the test suggested that providing intervention
to correct the significant problems in the mother’s functioning would be extremely difficult. He
explained that the mother’s difficulties were not the result of psychological stresses “but they are
characterological, deeply ingrained difficulties dealing with people, dealing with emotions, and
dealing with stress.” He was pessimistic that changing her environment would result in significant
changes. The psychologist also testified that improvements in the mother’s functioning would be
difficult to effect because she did not perceive that any of the problems she experienced in parenting
B.B. were her fault or that she had any significant problems, except depression. The psychologist
concluded that the mother’s mental condition was so impaired and likely to remain so impaired that
she would be unable to resume care and responsibility of B.B. in the near future.
Another psychologist, who had treated the mother in the two months prior to the hearing, also
testified. Her initial diagnosis of the mother, having performed no psychological evaluation, was
major depression with recurrent psychotic features. According to the psychologist, that diagnosis is
normally treated with medication, psychotherapy, and family education. She reported that
stabilization through medication often takes a number of months if the patient is compliant, but the
mother had reported a history of noncompliance with treatment. The psychologist had referred the
mother to a psychiatrist, who prescribed some medications, all of which the mother refused to accept.
This psychologist saw the mother only once before she was involved a crisis intervention about a
week before the hearing when the mother, depressed about the prospect of losing contact with B.B.,
became self harmful. The mother was placed in respite care for three days, although the psychologist
had recommended hospitalization for a month in order to stabilize her medications.
The psychologist testified she would like to see the mother continue the course of medication
she was on, continue in psychotherapy, and undergo social skills training. If the mother were to treat
her mental health issues consistently for at least six months and participate in appropriate education,
this psychologist thought there was a possibility the mother could become able to parent her child.
-7-
If the mother did not treat those issues, there was no possibility. The psychologist agreed that the
mother needed to take care of her own needs in order to be able to care for her child.
The record shows that initially, the mother seemed uninterested in getting treatment; however,
at trial she expressed a desire to maintain her medications. The mother did not comply with
psychiatrist’s medication recommendations made approximately one month before the hearing. The
record shows that the mother has a long history of resistance to treatment and her condition, with the
additional stresses of a child with special needs, could, in the opinion of the psychologist, place her
at risk for homicidal and suicidal ideation if left untreated.
III. Termination under Tenn. Code Ann. § 36-1-113(g)(3)(A)
We first examine the record for clear and convincing proof of the criteria enumerated in Tenn.
Code Ann. § 36-1-113(g)(3)(A) as grounds for termination of parental or guardianship rights:
(3) (A) The child has been removed from the home of the parent or guardian by order
of a court for a period of six (6) months and:
(i) The conditions which led to the child's removal or other conditions
which in all reasonable probability would cause the child to be
subjected to further abuse or neglect and which, therefore, prevent the
child's safe return to the care of the parent(s) or guardian(s), still
persist;
(ii) There is little likelihood that these conditions will be remedied at
an early date so that the child can be safely returned to the parent(s) or
guardian(s) in the near future; and
(iii) The continuation of the parent or guardian and child relationship
greatly diminishes the child's chances of early integration into a safe,
stable and permanent home.
It is undisputed that B.B. has been removed from the home by court order for over six (6)
months. She was removed in October of 1997 because her mother’s mental condition prevented the
mother from appropriately caring for B.B. The petition for termination of parental rights was filed
in October of 1998, and the trial was held in February and March of 1999.
Having considered this record, we find that clear and convincing evidence supported the trial
court's conclusion that the conditions which led to B.B.'s removal or other conditions which in all
reasonable probability would cause her to be subjected to further abuse or neglect and which,
therefore, prevent the child's safe return to the care of the mother still persist. See Tenn. Code Ann.
§ 36-1-113(g)(3)(A) (Supp. 1999). Nothing in the record shows a likelihood that these conditions
will be remedied at an early date so that the child could be returned safely to the mother in the near
future. On the contrary, the record shows that the mother had a history of failing to take her
-8-
medications or to undergo regular psychological treatment, as required by the plan of care and as
necessary to enable her to prepare to parent a child. Further, the mother has demonstrated an
unwillingness to consistently avail herself of social services needed by her and by B.B. During the
period since B.B. was removed from the home, these problems were not rectified. The mother
attended no parenting classes, and pursued no other regular instruction to improve herself or her
relationship with her daughter. She did not continue regular psychiatric treatment or take medication
prescribed for her condition. We see no evidence that the mother is in any better position to parent
B.B. now than she was at the time the child was removed from her home. The record also contains
no evidence that B.B.'s grandmother and aunts would provide any greater assistance with the child
than they did before her removal from the home.
Nor can we say the trial court erred in finding that the continuation of the parent and child
relationship greatly diminished B.B.'s chances of early integration into a safe, stable and permanent
home. The foster mother testified that her family loved B.B. and they had not ruled out adoption.
The record shows that the stability provided B.B. in the foster home had improved her mental health
and behavior. This child, who has special problems of her own, needs a stable environment which
the mother cannot provide.
We are not persuaded that the mother’s last minute willingness to take her medication as
prescribed alters the conclusion that there is little likelihood that the mother’s inability to parent B.B.
would be remedied at an early date so that B.B. could safely return to the mother in the near future.
The mother’s history and the experts’ prognosis for improvement in her condition which would allow
her to properly care for her child compel us to agree with the trial court that return of B.B. to the
mother is not likely to be possible anytime in the near future.
A parent’s failure to make fundamental adjustments which could make a safe return of a child
possible is a basis for termination. See State v. Hunter, No. M1999-02606-COA-R3-CV, 2000 WL
313549 at *4 (Tenn. Ct. App. March 29, 2000) (no Tenn. R. App. P. application filed).
IV. Termination under Tenn. Code Ann. § 36-1-113(g)(2)
Tenn. Code Ann. § 36-1-113(g)(2) permits termination of parental rights when
[t]here has been substantial noncompliance by the parent or guardian with the
statement of responsibilities in a permanency plan or a plan of care pursuant to the
provisions of title 37, chapter 2, part 4;
As noted above, the mother failed to comply with several aspects of the plan of care, all of
which directly affected her ability to effectively parent B.B. The plan of care required the mother the
-9-
obtain treatment for her mental health problems, continue taking her medications for treatment of her
mental health problems, and continue using Metro Mental Health Case Management. It also required
her to maintain her home in a clean, habitable condition, to pay child support, and to attend parenting
classes. The record contains no evidence that the mother seriously pursued any of these aspects of
the plan of care. During the time the plan of care was in effect, she did not seriously and regularly
obtain mental health care. In addition, she severed her ties with Metro Mental Health, refused to take
her medications for any meaningful length of time, and failed to take parenting classes. The record
shows that she evaded the DCS representative who came to inspect her house. Although she had
begun taking her medications immediately before the termination hearing and was communicating
occasionally with a psychologist, “[t]oken attendance [in counseling session and token maintenance
of medication] without addressing the real issues present here [are] not sufficient to indicate
compliance with the foster care plan.” Dep’t of Human Servs. v. Adams, No. 03A01-9403-CV-00114,
1994 WL 579911 at *9 (Tenn. Ct. App. Oct. 24, 1994) (no Tenn. R. App. P. 11 application filed).
Based on the evidence, we cannot say that the trial court erred in finding by clear and convincing
evidence that the mother had substantially failed to comply with the plan of care.
V. Termination under Tenn. Code Ann. § 36-1-113(g)(7)(B)(i)
Nor can we say that the trial court's decision to terminate the mother's parental rights pursuant
to Tenn. Code Ann. § 36-1-113(g)(7)(B)(i) was erroneous. That subsection permits courts to
terminate parental rights if they determine on the basis of clear and convincing evidence that:
(i) The parent or guardian of the child is incompetent to adequately provide for the
further care and supervision of the child because the parent's or guardian's mental
condition is presently so impaired and is so likely to remain so that it is unlikely that
the parent or guardian will be able to assume or resume the care of and responsibility
for the child in the near future . . .
Here, the record shows that the mother was diagnosed with major depression with psychotic
features. Her treating psychologist testified that someone with this diagnosis is more at risk for
homicidal and suicidal ideation and the additional stress of having a child with special needs would
increase that risk.7 The doctor advised that the mother could not resume custody of B.B. until she had
complied with treatment for a minimum of six months, and then only a possibility she would be able
to parent the child would exist. The record shows that the mother had always resisted medical
treatment to varying degrees and had not continued her medication for any meaningful length of time.
In addition, psychological testing raised questions about the mother's ability to parent the child. This
evidence is sufficient to justify the trial court's conclusion that the mother was incompetent to
adequately provide for the further care and supervision of the child because her mental condition was
so impaired.
7
This psychologist testified at the February 9, 1999 hearing that she had been treating the
mother since December.
-10-
Our Supreme Court has held that mental illness which makes a parent unfit for care for a child
can constitute grounds for termination of parental rights. See State Dep’t of Human Servs. v. Smith,
785 S.W.2d 336, 338 (Tenn. 1990). In reversing a Court of Appeals decision to the contrary, the
Supreme Court stated:
The holding of the Court of Appeals in this case - - that “mental disability” can not
be the basis of termination of parental rights since the acts of the mentally disabled
parent are not willful - - would nullify a significant part of the legislative plan for the
welfare of dependent and neglected children. An obvious result of the holding is to
condemn a child, whose parents are unfit to properly care for the child because of
mental illness, to a life in serial foster homes without any possibility of a stable,
permanent home.
Id.
The evidence in this case, primarily the mother’s history of noncompliance with medication
and treatment recommendations and the psychologists’ description of the mother’s condition,
supports a finding that her condition is likely to remain so impaired as to prevent her from adequately
parenting the child.
VI. Best Interest of the Child
The legislature has stated that “[i]n all cases, when the best interests of the child and those of
the adults are in conflict, such conflict shall always be resolved to favor the rights and the best
interests of the child . . .” Tenn. Code Ann. §36-1-101(d) (Supp. 1999). Further, Tenn. Code Ann.
§ 36-1-113(c) requires that termination of parental rights must be based upon:
(1) A finding by the court by clear and convincing evidence that the grounds for
termination or [sic] parental or guardianship rights have been established; and
(2) That termination of the parent's or guardian's rights is in the best interests of the
child.
Having found that the grounds for termination were properly established, we turn to the
fundamental question of the best interest of the child. Factors to consider in making that
determination include:
(1) Whether the parent or guardian has made such an adjustment of circumstance,
conduct, or conditions as to make it safe and in the child's best interest to be in the
home of the parent or guardian;
(2) Whether the parent or guardian has failed to effect a lasting adjustment after
reasonable efforts by available social services agencies for such duration of time that
lasting adjustment does not reasonably appear possible;
(3) Whether the parent or guardian has maintained regular visitation or other contact
-11-
with the child;
(4) Whether a meaningful relationship has otherwise been established between the
parent or guardian and the child;
(5) The effect a change of caretakers and physical environment is likely to have on the
child's emotional, psychological and medical condition;
(6) Whether the parent or guardian, or other person residing with the parent or
guardian, has shown brutality, physical, sexual, emotional or psychological abuse, or
neglect toward other children in the family or household;
(7) Whether the physical environment of the parent's or guardian's home is healthy
and safe, whether there is criminal activity in the home, or whether there is such use
of alcohol or controlled substances as may render the parent or guardian consistently
unable to care for the child in a safe and stable manner;
(8) Whether the parent's or guardian's mental and/or emotional status would be
detrimental to the child or prevent the parent or guardian from effectively providing
safe and stable care and supervision for the child; or
(9) Whether the parent or guardian has paid child support consistent with the child
support guidelines promulgated by the department pursuant to § 36-5-101.
Tenn. Code Ann. § 36-1-113(i) (Supp. 1999).
We find abundant evidence showing that the mother failed to adjust her conduct so as to make
it safe and in B.B.'s best interest to be in her home at present. See Tenn. Code Ann. § 36-1-113(i)(1).
It is likewise clear from the evidence before us that the mother failed adjust her circumstances,
conduct or conditions to make it in B.B.’s best interest to return to her in the foreseeable future. The
mother failed to effect a lasting adjustment after reasonable efforts by social agencies to bring about
change. See Tenn. Code Ann. § 36-1-113(i)(2). Nor does a lasting adjustment appear reasonably
possible. See Adams, 1994 WL 579911 at *9. Notwithstanding the facts that B.B. had been removed
from the home for over a year and the mother had been informed that treatment for her mental
condition was necessary for reunification, at the beginning of the termination hearing, the mother's
track record for taking her medication was approximately one week. The mother failed to continue
in counseling, or seek parenting instruction. The record shows that the mother refused to take
responsibility for her failure to comply with many of the suggestions made by DCS, blaming various
social service agencies. The mother’s failure to make the adjustments of conduct urged by DCS and
her care givers assured that the conditions in her home that led to the court’s determination that B.B.
was a "dependent and neglected" child would not change. See Smith, 785 S.W.2d at 339. Further,
clear and convincing evidence established that B.B. needs a stable, permanent home. See id. The
record shows that B.B. has thrived in the stable environment of her foster home and that she has been
able to receive the treatment and other services she needs for her own significant problems. The
General Assembly has decided that the child’s need for a permanent, stable, and safe environment
must outweigh a parent’s interest in retaining parental rights where those two interests conflict. See
Smith, 785 S.W.2d at 338. As this court observed in Adams:
Based upon the record before us, if we do not affirm the Judgment of the trial court,
we would place the children in an endlessly hopeless situation, caught in the system
-12-
with no escape. . . . The children need and deserve a chance to thrive and grow in a
loving permanent home that offers them the opportunity to reach their fullest
potential, despite the neglect and abuse they suffered in early childhood.
Adams, 1994 WL 579911 at *10.
Under these circumstances, we must conclude that the trial court did not err in finding that
termination was in B.B.'s best interest.
VII.
Accordingly, we affirm the trial court's decision. This cause is remanded for such further
proceedings which may be necessary. Costs of this appeal are taxed to the mother, for which
execution may issue if necessary.
-13-
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537 U.S. 926
CARMONAv.UNITED STATES.
No. 02-5655.
Supreme Court of United States.
October 7, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.
2
C. A. 2d Cir. Certiorari denied.
| {
"pile_set_name": "FreeLaw"
} |
Slip Op 17-152
UNITED STATES COURT OF INTERNATIONAL TRADE
ICDAS CELIK ENERJI TERSANE VE
ULASIM SANAYI, A.S.,
Plaintiff,
v.
UNITED STATES,
Before: Leo M. Gordon, Judge
Defendant,
Consol. Court No. 14-00267
and
REBAR TRADE ACTION COALITION, et
al., and HABAS SINAI VE TIBBI GAZLAR
ISTIHSAL ENDUSTRISI, A.S.,
Defendant-Intervenors.
OPINION
[Final Determination sustained.]
Dated: November 17, 2017
Matthew M. Nolan, Diana D. Quaia, and Nancy A. Noonan, Arent Fox LLP of
Washington, DC for Plaintiff Icdas Celik Enerji Tersane ve Ulasim Sanayi, A.S.
Richard P. Schroeder, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice of Washington, DC for Defendant, United States. With him on
the briefs were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson,
Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the briefs was Scott
McBride, Assistant Chief Counsel, U.S. Department of Commerce, Office of the Chief Counsel
for Trade Enforcement and Compliance of Washington, DC.
Alan H. Price, John R. Shane, and Maureen E. Thorson, Wiley Rein LLP of
Washington, DC for Defendant-Intervenors Rebar Trade Action Coalition, Nucor
Corporation, Gerdau Ameristeel U.S. Inc., Commercial Metals Company, and Byer Steel
Corporation.
Consol. Court No. 14-00267 Page 2
Gordon, Judge: This action involves the U.S. Department of Commerce
(“Commerce”) final determination in the countervailing duty (“CVD”) investigation of steel
concrete reinforcing bar from the Republic of Turkey. See Steel Reinforcing Bar From the
Republic of Turkey, 79 Fed. Reg. 54,963 (Dep’t of Commerce Sept. 15, 2014) (final affirm.
& crit. circum. determ.) (“Final Determination”); see also Issues & Decision Memorandum
for the Final Affirmative Countervailing Duty Determination and Final Affirmative Critical
Circumstances Determination in the Countervailing Duty Investigation of Steel Concrete
Reinforcing Bar from the Republic of Turkey, C-489-819 (Dep’t of Commerce
Sept. 8, 2014), available at http://enforcement.trade.gov/frn/summary/turkey/2014-
21989-1.pdf (last visited this date) (“Decision Memorandum”); see also Steel Concrete
Reinforcing Bar from the Republic of Turkey, 79 Fed. Reg. 65,926 (Dep’t of Commerce
Nov. 6, 2014) (final countervailing duty order) (“Order”). Before the court are the motions
for judgment on the agency record of Plaintiff Icdas Celik Enerji Tersane ve Ulasim, A.S.
(“Icdas”) and Defendant-Intervenor Rebar Trade Action Coalition ("RTAC"), and its
individual members, Nucor Corporation, Gerdau Ameristeel U.S. Inc., Commercial Metals
Company, and Byer Steel Corporation. The court has jurisdiction pursuant to Section
516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i)
(2012)1, and 28 U.S.C. § 1581(c) (2012).
This opinion addresses Icdas' challenge to the Final Determination. See Pl.’s
R. 56.2 Mot. for J. on the Agency R., ECF No. 52 (“Icdas’ Br.”); see also Def.’s Resp. in
1
Further citations to the Tariff Act of 1930, as amended, are to the relevant portions of
Title 19 of the U.S. Code, 2012 edition.
Consol. Court No. 14-00267 Page 3
Opp’n to Pl.’s R. 56.2 Mots. for J. on the Agency R., ECF No. 69 (“Def.’s Resp.”); RTAC’s
Resp. to Pl.’s R. 56.2 Mot. for J. on the Agency R., ECF No. 70 (“RTAC’s Resp.”); Pl.’s
Reply Br., ECF No. 79 (“Icdas’ Reply”).
Specifically, Icdas challenges (1) Commerce’s selection of benchmark prices used
to calculate countervailable benefits that respondents obtained from lignite coal
purchases and (2) Commerce’s ex parte meeting with petitioners late in the proceeding
and acceptance of untimely information. For the reasons set forth below, the court
sustains the Final Determination.
I. Standard of Review
The court sustains Commerce’s “determinations, findings, or conclusions” unless
they are “unsupported by substantial evidence on the record, or otherwise not in
accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). More specifically, when reviewing
agency determinations, findings, or conclusions for substantial evidence, the court
assesses whether the agency action is reasonable given the record as a whole. Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1350-51 (Fed. Cir. 2006). Substantial
evidence has been described as “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” DuPont Teijin Films USA v. United States,
407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S.
197, 229 (1938)). Substantial evidence has also been described as “something less than
the weight of the evidence, and the possibility of drawing two inconsistent conclusions
from the evidence does not prevent an administrative agency’s finding from being
supported by substantial evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620
Consol. Court No. 14-00267 Page 4
(1966). Fundamentally, though, “substantial evidence” is best understood as a word
formula connoting reasonableness review. 3 Charles H. Koch, Jr., Administrative Law and
Practice § 9.24[1] (3d ed. 2017). Therefore, when addressing a substantial evidence issue
raised by a party, the court analyzes whether the challenged agency action “was
reasonable given the circumstances presented by the whole record.” 8A West’s Fed.
Forms, National Courts § 3.6 (5th ed. 2017).
II. Discussion
A. Lignite Benchmark
1. Rejection of Tier One Steam Coal Price Benchmark Data
Icdas challenges Commerce’s determination of the lignite price benchmark on two
separate grounds. First, Icdas alleges that Commerce’s failure to use the available
market-determined prices of steam-coal imports into Turkey as “tier one” data violates the
Congressional statutory directive in 19 U.S.C. § 1677(5)(E) as well as Commerce’s own
express regulatory preference for the use of such tier one data to establish benchmarks
as set forth in 19 C.F.R. § 351.511(a)(2). Second, Icdas argues that Commerce’s use of
the “tier two” GTIS world market lignite pricing data to compute a benchmark “includes
prices that are not reasonably available to Icdas, are not commercially realistic, and
resulted in a highly distorted margin.” Icdas’ Br. 26. This section addresses Icdas’ first
contention regarding Commerce’s failure to use tier one steam coal import pricing data,
while Section II.A.2, infra, addresses Icdas’ challenge to Commerce’s use of the tier two
GTIS lignite pricing data.
Consol. Court No. 14-00267 Page 5
All parties agree that Commerce has established an express three-tiered hierarchy
for the determination of market-price benchmarks in evaluating the adequacy of
remuneration for alleged subsidy programs. “Under 19 CFR 351.511(a)(2), [Commerce]
sets forth the basis for identifying appropriate market-determined benchmarks for
measuring the adequacy of remuneration for government provided goods or services.
These potential benchmarks are listed in hierarchical order by preference: (1) market
prices from actual transactions within the country under investigation (e.g., actual sales,
actual imports or competitively run government auctions) (tier one); (2) world market
prices that would be available to purchasers in the country under investigation (tier two);
or (3) an assessment of whether the government price is consistent with market principles
(tier three). As provided in the regulations, the preferred benchmark in the hierarchy is an
observed market price from actual transactions within the country under investigation.”
Decision Memorandum at 14. Accordingly, under this hierarchy, Commerce will first look
to see if there is evidence of a “market-determined price for the good or service resulting
from actual transactions in the country in question.” 19 C.F.R. § 351.511(a)(2).
Icdas relies heavily on this express regulatory preference for market-determined
pricing, but attempts to discard the clear limitation that such a preference only applies for
market-determined pricing relating to the “good” in question. Specifically, Icdas asserts
that Commerce was obligated to use the tier one pricing data resulting from actual import
transactions of hard steam coal; however, Commerce explained in its decision
memorandum that it had found that hard steam coal was not supplied by the Government
of Turkey (“GOT”), but instead only lignite coal was provided to Icdas by a Turkish state-
Consol. Court No. 14-00267 Page 6
owned entity. For this reason, among others, Commerce determined that it would be
inappropriate to use steam coal prices to derive a benchmark for lignite. Decision
Memorandum at 14-16.
Icdas argues that all of the parties, at some point during the investigation, assumed
that steam coal and lignite coal were interchangeable in their use in power generation
and for purposes of Commerce’s investigation. Icdas’ Br. 20-22. Icdas also highlights that
in its preliminary determination, Commerce expressly found lignite and hard steam coal
to be interchangeable for purposes of the investigation’s analysis. Id. at 22 (citing
Commerce’s preliminary determination memo at 18). With this background, Icdas asserts
that “[n]o information on the record shows that any of these findings changed between
the Preliminary Determination and the Final Determination . . . . Commerce provided no
support in its apparent conclusion that lignite coal is different than hard steam coal for
purposes of power plant consumption.” Id. at 22-23.
More specifically, Icdas contends that Commerce relied upon mere “speculation”
in determining that steam coal is not interchangeable with lignite coal for purposes of the
investigation. Id. at 23. RTAC, in response, notes that Icdas acknowledged in its own
questionnaire responses several significant differences between lignite and hard steam
coal including the significant differences in caloric values of the types of coal (which in
turn affect their pricing), as well as the fact that hard steam coal ashes can be resold to
cement producers while lignite coal ash must be disposed of as waste. RTAC’s Resp. 15
(citing Icdas' CVD Questionnaire Response at 23-24). In addition, Commerce explained
that it was only after its preliminary determination during verification that it became aware
Consol. Court No. 14-00267 Page 7
of the essential differences between the types of coal (including the differing physical
characteristics and uses of hard steam coal, lignite coal, coking coal, etc.), as well as the
fact that Turkish Coal Enterprises (“TKI”) “mines only lignite” and that Icdas only
purchased lignite domestically, while it imported hard steam coal. Decision Memorandum
at 13-14. Commerce also noted that the administrative record indicated significant
additional differences between steam coal and lignite, such as the fact that “lignite is
mined close to the surface and is less expensive to extract, whereas steam coal is mined
deep in the ground,” and “generating energy with lignite requires a larger volume of coal
than with hard coal, importing lignite requires greater freight and transportation expenses,
so imports of lignite (in comparison to hard coal imports) into Turkey are negligible.” Def.’s
Resp. 38 (citing GOT Verification Report).
Icdas argues that Commerce improperly narrowed the scope of the petition and
the investigation without good cause. Icdas’ Br. 20-21. Specifically, Icdas argues that it
“makes little sense for [Commerce] to exclude ‘steam coal’ from any potential benchmarks
when, in fact, steam coal includes both lignite and hard steam coal.” Id. at 21. Here, Icdas
misses the very point of Commerce’s verification and fact-finding in the course of its
investigation. Commerce initially analyzed a broad petition that posited subsidies in the
“Steam Coal” market, but upon gaining a better understanding of the factual
circumstances during the course of its investigation, Commerce found that only the
narrower lignite coal market was at issue because Icdas’ only domestic coal purchases
were of lignite while it imported hard steam coal. Contrary to Icdas’ position, in light of this
factual development, it would have made “little sense” for Commerce to continue to
Consol. Court No. 14-00267 Page 8
analyze the broader market for “steam coal” when the only potential countervailable
subsidies respondents were receiving were specific to lignite coal. Commerce acted
reasonably when focusing its investigation to the “Provision of Lignite for LTAR.”2
Decision Memorandum at 14.
Icdas’ insistence that Commerce erred by rejecting the pricing data of steam coal
imports into Turkey entirely relies upon the assumption that Commerce could not and did
not reasonably determine on the record that steam coal and lignite coal were not
interchangeable for purposes of the investigation. Commerce, however, with the benefit
of further investigation after its preliminary determination, determined that lignite coal and
steam coal were not interchangeable and that lignite coal was the “only government-
provided good” being provided for LTAR, and reasonably found that steam coal prices
from import transactions into Turkey were not appropriate sources for a benchmark for
the investigation. Decision Memorandum at 15-16. Notably, Icdas did not dispute that the
lignite coal market in Turkey was distorted, implicitly accepting Commerce’s
determination that domestic lignite prices from actual transactions could not serve as a
tier one source of data for calculating a benchmark. See Icdas’ Br. 17-25; Def.’s Resp.
40. Accordingly, Commerce reasonably concluded that it would proceed to evaluate tier
two pricing data for world market transactions for lignite coal.
On this administrative record the court believes that a reasonable mind could reach
Commerce’s determination that steam coal is not interchangeable with lignite coal as well
2
“LTAR” stands for less than adequate remuneration.
Consol. Court No. 14-00267 Page 9
as its determination that there were no appropriate tier one data sets for evaluating the
adequacy of remuneration for transactions in the lignite coal market.
2. Use of GTIS Data
On January 22, 2014, RTAC included Global Trade Information Services (“GTIS’)
pricing data for 2012 exports of lignite from various countries as part of its submission of
factual information. See Non-Confidential App. to Pl. Icdas’ Br. in Support of its R. 56.2
Mot. for J. on the Agency R. 50-53, 56-68 (RTAC’s Submission of Factual Information
Jan. 22, 2014), ECF. No. 57 (“Icdas’ Br. App.”). On July 29, 2014, RTAC submitted its
administrative case brief in which it argued that Commerce should depart from its
preliminary determination and find that lignite coal is distinguishable from hard steam
coal, and that Commerce accordingly should use lignite coal world market prices to
calculate the benefit received by Icdas’ purchases of lignite coal from TKI. See Icdas’ Br.
App. 249-260 (Case Brief of the Rebar Trade Commission July 29, 2014). On July 31,
2014, Icdas submitted a rebuttal brief arguing that Commerce properly used imported
hard steam coal prices to calculate the lignite benchmark in its preliminary determination.
See Icdas’ Br. App. 265-271 (Revised Rebuttal Brief of Icdas July 31, 2014). On
September 9, 2014, Commerce issued the Final Determination and corresponding
Decision Memorandum in which it explained its decision to distinguish lignite coal from
hard steam coal and its refusal to use hard steam coal prices in calculating the benchmark
for Icdas’ benefit from the lignite purchases from TKI. See Decision Memorandum at 13-
17. On September 15, 2014, Icdas submitted a ministerial errors allegation to Commerce,
in which it attempted to argue that Commerce’s selection and reliance upon the GTIS
Consol. Court No. 14-00267 Page 10
lignite data was an “unintentional error” due to the GTIS’s data’s alleged inaccurate and
incomplete nature. See Icdas’ Br. App. 319-325 (Icdas’ Ministerial Errors Allegation Letter
Sept. 15, 2014). Commerce rejected Icdas’ ministerial errors allegation, explaining that
the selection and use of the GTIS data was a deliberate choice, and further noting that
“[i]f Icdas had believed that the GTIS data on the record was incomplete, it had the
opportunity during the investigation to add additional GTIS information to the record, and
did not do so.” Icdas’ Br. App. 338 (Memorandum from K. Johnson to M. Skinner, re:
Allegations of Ministerial Errors in the Final Determination Oct. 1, 2014).
Using arguments substantially similar to those in its ministerial errors allegation,
Icdas asserts in its briefing to the court that Commerce’s use of the GTIS lignite pricing
data set to establish the tier two benchmark was improper, contending that such prices
are “not reasonably available to Icdas, are not commercially realistic, and resulted in a
highly distorted margin.” Icdas’ Br. 26. Commerce does not dispute Icdas’ arguments on
the merits, but instead contends that these arguments have been waived as Icdas failed
to properly raise them before the agency during the administrative proceeding, and has
thus failed to exhaust its administrative remedies. Def.’s Resp. 44-47.
The court agrees that Icdas failed to exhaust its administrative remedies. See
28 U.S.C. § 2637(d); see also Icdas’ Br. App. 265-271; 19 C.F.R. § 351.309(c)(2)
(case briefs should contain all relevant arguments); Boomerang Tube LLC v. United
States, 856 F.3d 908 (Fed. Cir. 2017); Corus Staal BV v. United States, 502 F.3d 1370,
1379 (Fed. Cir. 2007).
Consol. Court No. 14-00267 Page 11
Commerce’s use of the GTIS data to determine the lignite benchmark was
squarely in play. Specifically, RTAC argued in its administrative case brief that Commerce
should use the GTIS lignite data in calculating the lignite benchmark. See Icdas’ Br. App.
260 & n.40 (highlighting RTAC’s submission of the GTIS lignite data in early 2014). Icdas,
in its rebuttal brief, failed to directly address this argument or challenge the GTIS data
specifically proposed for use by RTAC. See Icdas’ Br. App. 266-272. Icdas had the
opportunity to challenge the adequacy of the GTIS data before Commerce but chose not
to do so, attempting to correct its omission through ministerial error comments submitted
after the final determination. See Icdas’ Br. App. 319-325 (providing substantially the
same arguments as to the impropriety of using the GTIS lignite data due to its inaccuracy
and incompleteness as Icdas has raised before this court). Contrary to Icdas’ arguments
in its reply brief, Icdas’ Reply Br. at 4-5, nothing limited its ability to respond in toto to the
usefulness of the GTIS lignite data. And in response to the ministerial error comments,
RTAC was quick to point out that Icdas did not challenge the substance of the GTIS data
until it was too late. Icdas’ Br. App. 329 (RTAC’s Response to Icdas’ Ministerial Errors
Allegation Letter) (“Icdas is trying to argue now what it failed to argue in its case or rebuttal
briefs. Icdas could have made an alternative argument on the GTIS data in the event the
Department relied on it for the final determination. The information was on the record
since Petitioner's January 22, 2014, factual information submission, but Icdas failed to
criticize it until after the final determination. Instead of raising this issue at the proper time,
Icdas argued that the Department should use another source to value lignite and ignored
the validity of the GTIS data altogether.”). It is all too clear that Icdas attempted to correct
Consol. Court No. 14-00267 Page 12
its omissions by including them in a ministerial errors allegation letter, and again tries to
raise those same arguments before the court after failing to properly present them to
Commerce.
The facts here are similar to Boomerang Tube LLC v. United States, 856 F.3d 908
(Fed. Cir. 2017), in which the Federal Circuit concluded that it was appropriate to require
exhaustion of administrative remedies for interested parties attempting to raise new
arguments that that they failed to raise before Commerce in their rebuttal briefs. Like the
parties in Boomerang, Icdas here committed a similar omission and failed to raise
arguments about Commerce’s use of the GTIS data to determine the lignite benchmark
that it could and should have raised in its rebuttal brief.
Icdas tries to avoid this result by arguing that it somehow provided skeletal “notice”
to Commerce of its arguments. Icdas’ Reply 3-5 (citing Trust Chem. Co. v. United States,
35 CIT ___, 791 F. Supp. 2d 1257, 1268 n.27 (2011) (“The determinative question is
whether Commerce was put on notice of the issue, not whether Plaintiff’s exact wording
below is used in the subsequent litigation.”)). This misunderstands the requirement of
exhaustion of administrative remedies and its twin purposes of protecting administrative
authority (by requiring arguments to be presented to the agency in the first instance so
that agency may find facts, apply its expertise, and interpret statutes and regulations that
it administers) and promoting judicial economy (by avoiding unnecessary remands for
agency to address arguments in first instance). Providing mere notice of an argument or
issue accomplishes neither purpose; notice is therefore not enough. As for the passing
observation in a footnote in Trust Chem. Co. that a “determinative question” for the
Consol. Court No. 14-00267 Page 13
exhaustion requirement is whether Commerce was simply “put on notice” of the issue,
this is not correct because “mere notice” fails to accomplish the twin purposes of the
exhaustion requirement, and therefore simply putting Commerce on notice cannot satisfy
the exhaustion requirement. Arguments must be presented in toto for this entire judicial
review process to work sensibly.
B. Ex Parte Meeting
Icdas challenges Commerce’s decision to hold an ex parte meeting with RTAC late
in the proceeding at which Commerce accepted untimely information (two photographs)
provided by RTAC. Icdas’ Br. at 32-34. Defendant responds that the procedural waiver
for RTAC’s photographs did not cause prejudice to Icdas because they did not depict
anything material to Commerce's decision, and that Icdas had a full opportunity to convey
its views on the meeting and photos, and Icdas did so, before Commerce issued the
Final Determination. Def.’s Resp. 50-51. Icdas for its part cites a “heavy burden” to prevail
on a claim of procedural unfairness. See Icdas’ Br. 34. Problematically for Icdas
(and despite the bad optics of an ex parte meeting held so late in the proceeding),
Commerce is expressly authorized by statute to hold ex parte meetings. See 19 U.S.C.
§ 1677f(a)(3). The statute requires Commerce to maintain a record of any ex parte
meetings and disclose any information that is submitted during the meeting, 19 U.S.C.
§ 1677f(a)(3), (4), which Commerce did here. See Icdas’ Br. App. 282-86 (Memorandum
from M. Skinner to The File, re: Ex Parte Meeting with Members of Domestic Industry and
Counsel to Petitioners Aug. 19, 2014). As Icdas has failed to demonstrate that the
Consol. Court No. 14-00267 Page 14
untimely photographs factored into the Final Determination, the court sustains Commerce
on this issue.
III. Conclusion
For the foregoing reasons, the court sustains the Final Determination for each of
Icdas’ issues.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: November 17, 2017
New York, New York
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271 F.3d 212 (5th Cir. 2001)
VERONICA A. WALLACE, Plaintiff - Appellant,v.THE METHODIST HOSPITAL SYSTEM, Defendant - Appellee.
No. 00-20255
UNITED STATES COURT OF APPEALS,FIFTH CIRCUIT
November 7, 2001
[Copyrighted Material Omitted][Copyrighted Material Omitted]
Appeal from the United States District Court For the Southern District of Texas
Before EMILIO M. GARZA and PARKER, Circuit Judges, and HINOJOSA*, District Judge.
EMILIO M. GARZA, Circuit Judge:
1
Veronica A. Wallace ("Wallace") appeals the district court's grant of judgment as a matter of law to the defendant, The Methodist Hospital System ("Methodist"), on her Title VII1 and Texas Commission on Human Rights Act (TCHRA)2 claims of sex discrimination. We affirm.
2
* Wallace began working at Methodist in 1986 as a technician, but in 1990, she entered nursing school.3 While she was in nursing school, Donna Hahus ("Hahus"), the head nurse of Methodist's Medical Intensive Care Unit (MICU), hired Wallace as a student nurse. In the fall of 1992, soon after Wallace completed her nursing degree and became a Registered Nurse, Hahus hired Wallace as a staff nurse in the MICU. At the time she was hired, Wallace was pregnant with her first child. During the spring of 1993, Wallace took three-and-a-half months' maternity leave. By using accrued sick time, holiday time, and vacation time, Wallace received full pay and benefits throughout this leave.
3
Wallace returned to work in June. Shortly after returning to work, Wallace discovered that she was pregnant with her second child. Wallace switched her schedule from days to nights and began working a compressed schedule, putting in three twelve-hour shifts each week instead of five eight-hour shifts. Wallace testified that on her return, Hahus treated her differently. Specifically, when Hahus came on her shift and Wallace was finishing her shift, Hahus did not converse with Wallace when she entered a room to check a patient's chart. However, Martine Rousseau-Merzile, a nurse who was not pregnant during her employ in the MICU, testified that this was how Hahus treated her, i.e., she would just go about her business looking at the charts without speaking.
4
Just before Wallace left on her second maternity leave, Hahus and Tory Schmitz ("Schmitz"), Wallace's direct supervisor, met with Wallace to give her an evaluation. Wallace received a satisfactory rating and a merit increase as a result of this appraisal. Nonetheless, the evaluation contained written comments criticizing Wallace for "an impression that she is unconcerned with errors and omissions" and her overall score dropped ten points from the previous year when she was also pregnant. The evaluation noted that Wallace had been working the compressed schedule since returning from maternity leave. During this meeting, Hahus remarked to Wallace that she needed to "choose between nursing and family." Additionally, Schmitz told Wallace that she was unsure "how to classify [Wallace] because [she was] gone three months before and [she would be] gone three months again."
5
From March 2, 1994 through June 4, 1994, Wallace took her second maternity leave. Unlike her first maternity leave, Wallace had little accumulated time on which to draw, leaving a portion of her leave unpaid. With Hahus's assistance, however, Wallace increased the paid portion of her leave. Hahus listed enough days of Wallace's leave as excused absences to allow Wallace to accrue an additional four weeks of paid vacation time, which Wallace applied to her leave.
6
Within a month of returning to work after her second leave, Wallace learned that she was pregnant with her third child. Wallace testified that Hahus mentioned the availability of the compressed schedule to a group of nurses. Wallace stated her preference for this schedule. Hahus retorted that Wallace was "still costing the hospital money because [she] was receiving full benefits and giving 80 hour pay periods." Hahus, however, had no control over whether nurses worked a compressed schedule because it was part of a program Methodist offered to its employees. Wallace resumed working a compressed schedule.
7
Sometime prior to when she was slated to take her third maternity leave, Hahus chastised Wallace for following a physician's order literally, exclaiming "How stupid could you be?" A physician had issued an order to draw blood to ascertain the digoxin level of a patient to whom Wallace had just administered digoxin. Wallace knew that drawing the blood so close in time to the drug's administration would result in a false high and so she attempted to locate the physician giving the order. Learning that he had already left for the day, Wallace drew the blood. Hahus received the test results, which she realized registered a false high because of the close proximity of the draw and the administration.
8
On December 19, 1994, Dr. Barrosa, a gastroenterologist, issued a written order for tube feeding to begin on Mr. B.,4 a patient in the MICU.5 Under the order of Mr. B's attending physician, Dr. Kenneth Lloyd, Mr. B already had in place a Salem Sump, a large bore tube used for suctioning fluids from the stomach but which could also be used for tube feeding. Wallace knew that the Salem Sump could be used for feeding. Without an order to do so, even though one was required,6 Wallace replaced the Salem Sump with a feeding tube of a smaller diameter. She also wrote in the patient's record that she had received a verbal order from Dr. Nicola Hanania to put in the smaller bore tube.7Dr. Lloyd discovered that the Salem Sump had been replaced. He did not want the Salem Sump removed because of Mr. B's medical problems. After checking the chart and seeing the order with Dr. Hanania's name affixed, Dr. Lloyd asked Dr. Hanania why he had ordered the tube change. Dr. Hanania informed Dr. Lloyd that he had given no such order. Dr. Lloyd then spoke with Wallace. At trial, Wallace admitted that she could have but did not contact a physician about Dr. Barrosa's order.
9
The next day, Dr. Lloyd told Schmitz about the incident. Schmitz spoke to both Dr. Hanania and Dr. Barrosa, verifying that neither had given an order to change the tube. Dr. Barrosa testified that he did not want the Salem Sump changed. At the direction of Hahus, Schmitz called Wallace at home to inquire about the incident. Wallace admitted to Schmitz that she had inserted the tube without an order and had written that she had received a verbal order without having received one. Additionally, Wallace stated to Schmitz that she "wouldn't do it again." Schmitz related to Hahus what Wallace told her. Hahus verified with Dr. Hanania that he had not given the verbal order as Wallace had written. Hahus also discussed the incident with Marcella Louis, a nursing director and chairman of the peer review committee, Paula Hansen ("Hansen"), another nursing director and Hahus's supervisor, and Dr. Davies, the medical director of Methodist. Hansen, who was not aware that Wallace was pregnant, agreed that termination was the appropriate course of action. Hansen then contacted Leslie Wagner ("Wagner") in the Human Resources department. Hansen informed Wagner of the incident, and of Hansen's and Hahus's recommended course of action. Wagner agreed with the decision to terminate Wallace.
10
On December 21, 1994, Hahus called Wallace and asked her to report to Hahus's office. At that meeting, Hahus informed Wallace that she was terminating her for falsifying a hospital record by writing a verbal order for a specific procedure and then implementing that procedure without a physician's knowledge or consent. Hahus further explained that these actions were "willful or illegal, unprofessional conduct or unethical conduct detrimental to patient care or to [Methodist]'s operations that result in neglect, abuse, or exploitation of any patient,"8 which constituted a "Class I Violation."9 At the time of her discharge, Wallace was one month away from taking her third maternity leave.
11
Wallace requested an informal grievance meeting as provided by Methodist policy. Wagner, Hahus, Hansen, and Schmitz were present at that meeting. Wallace again admitted that, without receiving a doctor's order, she wrote a verbal order in Mr. B's chart and she replaced the Salem Sump, inserting a smaller bore nasogastric tube. Wallace also admitted that there were physicians available from whom she could have obtained an order prior to writing the order and inserting the feeding tube. In her defense, Wallace contended generally that other nurses engaged in the same actions, but were not terminated. The termination was upheld.
12
Shortly after Wallace's termination, Pat Gaskin ("Gaskin"), another nurse in the MICU, overheard Shawn Forney, a clinical dietician in the MICU, ask Schmitz why Wallace had been terminated. Schmitz replied, "First of all, she's been pregnant three times in the last three years." Upon hearing Schmitz's reply, Gaskin walked away.
13
Wallace filed suit against Methodist, alleging that Wallace had been terminated because of her sex, i.e., her pregnancies, in violation of Title VII and the TCHR. In September of 1998, the case went to trial. The jury was unable to reach a verdict and the district court declared a mistrial. The district court held a second trial in December of 1998. At the close of Wallace's case and at the close of all the evidence, Methodist moved for a judgment as a matter of law (JMOL), pursuant to Federal Rule of Civil Procedure 50. Both times the district court denied the motions. The jury returned a verdict for Wallace, awarding her $70,000 in compensatory damages and $437,500 in punitive damages. Methodist again moved for a JMOL. The district court granted the motion and dismissed the case with prejudice. Wallace filed a timely notice of appeal.
II
14
* We review the district court's grant of JMOL de novo. See Ins. Co. of N. Am. v. Aberdeen Ins. Servs., 253 F.3d 878, 883 (5th Cir. 2001). JMOL is appropriate when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed. R. Civ. P. 50(a). There is no legally sufficient evidentiary basis when "'the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict.'" Rubinstein v. Adm'rs of the Tulane Educ. Fund, 218 F.3d 392, 401 (5th Cir. 2000) (quoting Boeing Co. v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc), overruled on other grounds by Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en banc)). We are to review the record as a whole, drawing all reasonable inferences in favor of the nonmoving party and without making credibility determinations or weighing the evidence. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S. Ct. 2097, 2110, 147 L. Ed. 2d 105 (2000). We also "give credence to . . . that 'evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses.'" See id. at 151, 120 S. Ct. at 2110 (quoting 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2559, p. 300 (2d ed. 1995)). Finally, there must be more than a mere scintilla of evidence in the record to render the grant of JMOL inappropriate. See Anderson v. Liberty Lobby Inc., 477 U.S. 242, 251, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986); Krystek v. Univ. of So. Miss., 164 F.3d 251, 255 (5th Cir. 1999).
15
Title VII makes it unlawful for an employer to discharge an employee because of her sex, which includes discrimination because of pregnancy.10 See 42 U.S.C. § 2000e-2(a); 42 U.S.C. § 2000e(k) (defining sex discrimination as, inter alia, discrimination "because of or on the basis of pregnancy"); Krystek, 164 F.3d at 255-56. A plaintiff can prove intentional discrimination through either direct or circumstantial evidence. See Urbano v. Cont'l Airlines, Inc., 138 F.3d 204, 206 (5th Cir. 1998). Where the plaintiff offers circumstantial evidence, the McDonnell Douglas11-Burdine12framework requires the plaintiff to establish a prima facie case of discrimination, which, if established, raises a presumption of discrimination. See Rutherford v. Harris County, Tex., 197 F.3d 173, 179-80 (5th Cir. 1999). The employer must then produce a legitimate nondiscriminatory reason for the adverse employment decision. See Byers v. Dallas Morning News, Inc., 209 F.3d 419, 425 (5th Cir. 2000). Once the employer produces a legitimate nondiscriminatory reason, the presumption of discrimination dissipates. See Russell v. McKinney Hosp. Venture, 235 F.3d 219, 222 (5th Cir. 2000). The plaintiff bears the ultimate burden of persuading the trier of fact by a preponderance of the evidence that the employer intentionally discriminated against her because of her protected status. See Burdine, 450 U.S. at 253, 101 S. Ct. at 1093; St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 511-12, 113 S. Ct. 2742, 2749-50, 125 L. Ed. 2d 407 (1993).
16
"To carry that burden, the plaintiff must produce substantial evidence of pretext." Auguster v. Vermilion Parish Sch. Bd., 249 F.3d 400, 402 (5th Cir. 2001). The plaintiff must put forward evidence rebutting each of the nondiscriminatory reasons the employer articulates. See Rubinstein, 218 F.3d at 400-01; Rutherford, 197 F.3d at 184; see also Clay v. Holy Cross Hosp., 253 F.3d 1000, 1007 (7th Cir. 2001) (a plaintiff "must present facts to rebut each and every legitimate non-discriminatory reason advanced by [her employer] in order to survive summary judgment"). A plaintiff may establish pretext "by showing that a discriminatory motive more likely motivated" her employer's decision, such as through evidence of disparate treatment, "or that [her employer's] explanation is unworthy of credence." Deffenbaugh-Williams v. Wal-Mart Stores, Inc., 156 F.3d 581, 589 (5th Cir. 1998) (quotations and citations omitted), vacated by 169 F.3d 215 (1999),reinstated in pertinent part by 182 F.3d 333 (1999).
17
In considering a motion for JMOL, "a plaintiff's prima facie case, combined with sufficient evidence to find that the employer's asserted justification is false, may permit the trier of fact to conclude that the employer unlawfully discriminated." Reeves, 530 U.S. at 148, 120 S. Ct. at 2109. Nonetheless, "[w]hether judgment as a matter of law is appropriate in any particular case will depend on a number of factors. Those include the strength of the plaintiff's prima facie case, the probative value of the proof that the employer's explanation is false, and any other evidence that supports the employer's case and that properly may be considered on a motion for judgment as a matter of law." Id. at 148-149, 120 S. Ct. at 2109.
18
In the case at bar, Methodist does not dispute that Wallace established a prima facie case of discrimination. In response to that prima facie case, Methodist proffered two legitimate nondiscriminatory reasons for discharging Wallace, both of which qualified for immediate termination under Methodist's written policies without regard to her past performance: (1) she performed a procedure, namely the insertion of a nasogastric tube, without receiving a physician's order even though Methodist's written policies required an order; and (2) she falsified medical records, in that she wrote a verbal order to insert the tube without having received an order. Wallace admitted removing the Salem Sump and inserting the smaller bore feeding tube without a doctor's order, and writing a verbal order into the patient's charts in spite of the absence of such an order. Wallace maintains, however, that she was subject to disparate disciplinary treatment, and, therefore, Methodist's stated reasons were a pretext for discrimination.
19
At the heart of whether the district court properly granted JMOL is whether Wallace introduced substantial evidence of pretext. To that end, Wallace maintains that she adduced evidence of disparate treatment and that the district court erred in finding that the examples proffered were not of similarly situated nurses. Further, Wallace asserts that the statements by Hahus and Schmitz are not merely stray remarks, as the district court concluded, but evidence of discriminatory intent. Finally, she avers generally that her prima facie case coupled with the evidence of pretext she presented, including examples of disparate treatment, Hahus's and Schmitz's remarks, Methodist's failure to investigate, and anecdotal notes kept by Hahus and Schmitz, was sufficient to avoid JMOL. We address each of these contentions in turn, finding none of them availing.
B
20
We have held that in order for a plaintiff to show disparate treatment, she must demonstrate "that the misconduct for which she was discharged was nearly identical to that engaged in by a[n] employee [not within her protected class] whom [the company] retained." Smith v. Wal-Mart Stores (No. 471)., 891 F.2d 1177, 1180 (5th Cir. 1990) (per curiam) (first and second alterations ours, third alteration in original) (quoting Davin v. Delta Air Lines, Inc., 678 F.2d 567, 570 (5th Cir. Unit B 1982)); see Mayberry v. Vought Aircraft Co., 55 F.3d 1086, 1089 (5th Cir. 1995); Little v. Republic Ref. Co., 924 F.2d 93, 97 (5th Cir. 1991); see also Barnes v. Yellow Freight Sys., Inc., 778 F.2d 1096, 1101 (5th Cir. 1985) ("When a supervisor of one race treats employees of the same race more favorably than similarly situated employees of another race under circumstances that are essentially identical, a presumption of discriminatory intent is raised." (emphasis added)). Or put another way, the conduct at issue is not nearly identical when the difference between the plaintiff's conduct and that of those alleged to be similarly situated accounts for the difference in treatment received from the employer. See Wyvill v. United Cos. Life Ins. Co., 212 F.3d 296, 304-05 (5th Cir. 2000) (requiring the plaintiff to show that the company treated others differently in "nearly identical circumstances" and finding that "the striking differences between the two men's situations more than account for the different treatment they received"); see also Polanco v. City of Austin, Tex., 78 F.3d 968, 977 (5th Cir. 1996) (where jury had to reject the employer's contention that two employees were not similarly situated, the "evidence had to contradict the legitimacy of the [employer's] explanation that the differences between [the two employees] justified" the difference in treatment).
21
As previously mentioned, Methodist articulated two nondiscriminatory reasons for terminating Wallace: (1) she performed a procedure, namely, the insertion of a nasogastric tube, without receiving a physician's order even though Methodist's written policies required a physician's order; and (2) she falsified medical records. With respect to the first reason Methodist articulated, we find, with but one exception, that the nurses to whom Wallace points are not similarly situated. These nurses either acted under a doctor's orders, did not need a doctor's order for their actions, or no one in a supervisory capacity was aware of the nurse's actions.
22
Wallace does, however, provide an example of a non-pregnant nurse that performed almost the exact procedure Wallace performed without having received a doctor's order. Although she did not first remove a Salem Sump, Cheryl Gray ("Gray") inserted a nasogastric tube without having received a doctor's order to do so.13 Further, the patient's doctor did not want a tube inserted because the patient had recently had surgery in the area where the tube was placed. Hahus and Schmitz supervised Gray. Schmitz and Hahus did not terminate Gray for her actions; instead, they only verbally reprimanded her.
23
The district court held that the Gray incident did not constitute evidence of disparate treatment. We agree with Wallace that this example constitutes evidence of disparate treatment with respect to the first reason Methodist articulated. Methodist offered two independent reasons for terminating Wallace, each of which alone could have served as a basis for terminating her without regard to her past performance. Consequently, Gray did not have to also falsify the medical record, as the district court had required, in order for the incident to demonstrate disparate discipline as to Methodist's first reason.14 Accordingly, we find that Wallace has put forward evidence of disparate treatment with respect to the first reason Methodist articulated.
24
Nevertheless, Wallace failed to proffer evidence that any non-pregnant nurse falsifying a patient's record received more favorable treatment. To the contrary, the record reflects that Methodist terminated another nurse for falsifying a medical record. Thus, Wallace falls short of her burden of presenting evidence rebutting each of the legitimate nondiscriminatory reasons produced by Methodist.
C
25
In light of Wallace's failure to rebut each of the reasons Methodist proffered, the comments of Schmitz and Hahus must satisfy the test we laid out in Brown v. CSC Logic, Inc., 82 F.3d 651 (5th Cir. 1996), in order to constitute sufficient evidence of discrimination. See Rubinstein, 218 F.3d at 400-01; Auguster, 249 F.3d at 405 (concluding that while we had questioned the vitality of our stray remarks doctrine post-Reeves, the doctrine remained intact "at least where the plaintiff has failed to produce substantial evidence of pretext"). That test is: "[F]or comments in the workplace to provide sufficient evidence of discrimination, they must be '1) related [to the protected class of persons of which the plaintiff is a member]; 2) proximate in time to the terminations; 3) made by an individual with authority over the employment decision at issue; and 4) related to the employment decision at issue.'" Krystek, 164 F.3d at 256 (alteration in original) (quoting Brown, 82 F.3d at 655). Where "[c]omments [] are vague and remote in time [they] are insufficient to establish discrimination. In contrast, specific comments made over a lengthy period of time are sufficient." Brown, 82 F.3d at 655-56 (internal quotations and citations omitted); see Wyvill, 212 F.3d at 304 ("In order for a[] [protected class-]based comment to be probative of an employer's discriminatory intent, it must be direct and unambiguous, allowing a reasonable jury to conclude without any inferences or presumptions that [the employee's protected class] was a determinative factor in the decision to terminate the employee.").
26
Wallace points to two remarks Schmitz made: (1) "I don't know how to classify you because you were gone three months and now you'll be gone three months again"; (2) Schmitz's answer as to why Wallace was fired -- "First of all, she's been pregnant three times in three years." Schmitz admitted that she may have made the first statement but explained that one of the factors for promotion was experience and that two years of experience was a cutoff. Schmitz was uncertain whether she should count the time Wallace spent on maternity leave as part of her experience. Schmitz's statement merely refers to Wallace's absences from work due to her maternity leaves. It is only if we infer that Schmitz's reference to Wallace's absences is code language for Wallace's pregnancies that it relates to Wallace's protected class. If we were to make this inference and countenance this general statement as evidence of discriminatory intent, we would find in effect that any employer's remark observing that an employee has taken leave constitutes such evidence. We decline to do so for, as the Seventh Circuit has stated, "[t]he [Pregnancy Discrimination Act] requires the employer to ignore an employee's pregnancy, but . . . not her absence from work, unless the employer overlooks the comparable absences of non-pregnant employees." Marshall v. Am. Hosp. Ass'n, 157 F.3d 520, 526 (7th Cir. 1998) (quoting Troupe v. May Dep't Stores, 20 F.3d 734, 738 (7th Cir. 1994) (holding that the supervisor's failure to give employee new assignments once she announced that she was pregnant and that her maternity leave would occur during the two months prior to the employer's busiest time did not constitute evidence of discrimination).
27
Next, Gaskin overheard Schmitz state that Wallace was fired because "[f]irst of all, she's been pregnant three times in three years." In support of her contention that Schmitz's comment is probative evidence of discriminatory intent, Wallace relies on EEOC v. Manville Sales Corp., 27 F.3d 1089 (5th Cir. 1994). Rather than demonstrating the probative value of Schmitz's comment,Manville illustrates why Schmitz's comment fails to satisfy the Brown test. In Manville, the evidence established that Morris, the district manager of the area in which the plaintiff worked as a sales representative, though not the ultimate decision-maker, recommended the plaintiff's discharge. See id. at 1091. By contrast, while Schmitz participated in the investigation of the incident that led to Wallace's termination, Wallace presented no evidence that Schmitz recommended termination or otherwise participated in the decisionmaking process. See Nichols v. Loral Vought Sys. Corp., 81 F.3d 38, 42 (5th Cir. 1996) ("To be probative, allegedly discriminatory statements must be made by the relevant decision maker."); see also Haas v. ADVO Sys., Inc., 168 F.3d 732, 733-34 (5th Cir. 1999) (interviewer's comment that his "only concerns about hiring [the plaintiff] were [his] age" constituted indirect evidence of discrimination because the jury could infer that the interviewer's discriminatory view tainted his recommendation against hiring plaintiff and that the ultimate decisionmaker relied on this recommendation (first alteration ours, second alteration in original). Furthermore, because Schmitz did not participate in the decision to terminate Wallace and Schmitz's statement offers no indication that she was privy to those reasons, Schmitz's statement is, at best, her opinion of why Methodist terminated Wallace. We have previously held that a similar statement was merely a stray remark where the statement reflected solely the speaker's opinion of the basis for an employment decision and the speaker had not exercised influence over that process. See Krystal, 164 F.3d at 256. Thus, Schmitz's comment is not evidence of intentional discrimination.
28
Wallace points to the following remarks made by Hahus: (1) "How stupid could you be?"; (2) "You are still costing the hospital money because you are receiving full benefits and giving 80 hour pay periods"; and (3) Wallace "needed to choose between nursing and family." As an initial matter, Hahus's remarks satisfy Brown's third criterion, i.e., that a person with authority over the employment decision has made the comment. We find that Hahus's comments are nonetheless deficient under the remaining Brown factors.
29
Hahus made the first remark sometime within the six months prior to Wallace's discharge. This comment is neither related to Wallace's protected class nor is it related to her termination. The word "stupid" is not an epithet or a slur referring to a pregnant woman, it simply denotes a lack of intelligence. That Hahus intended this denotation is borne out by the circumstances prompting this comment -- Wallace drew blood to test the level of a drug she had just administered, fully knowing that it would register a "false high." See EEOC v. Tex. Instruments Inc., 100 F.3d 1173, 1181 (5th Cir. 1996) (holding that statement was stray remark where it was "consistent with the context in which it was allegedly made"). Thus, we conclude that this statement does not constitute evidence of discrimination.
30
Sometime shortly after Wallace's return to work from her second maternity leave, Hahus also remarked to Wallace that she was "still costing the hospital money because [she was] receiving full benefits and giving 80 hour pay periods." Wallace's testimony established that Hahus mentioned the availability of the compressed schedule to a group of nurses, among whom Wallace was standing. Wallace then expressed her desire to work a compressed schedule to which Hahus responded with the above comment. In context, the comment is simply a statement of Hahus's view of the compressed schedule program. See id. This remark had nothing to do with Wallace's status as a pregnant woman or any future employment decision and it is not probative of discriminatory intent.
31
Wallace contends that Hahus's statement that Wallace "needed to choose between work and family" is akin to the supervisor's comment to the plaintiff in Deffenbaugh-Williams that the plaintiff would "never move up with the company being associated with a black man." 156 F.3d at 584. We disagree. The statement in Deffenbaugh-Williams unequivocally related to the plaintiff's ability to advance in her workplace solely because of her relationship with an African-American man. By contrast, here, while Hahus's comment may reflect a stereotype about a woman's commitment to the workplace while maintaining a family life,15 it does not relate specifically to an employment decision of any kind as did the statement in Deffenbaugh-Williams. Additionally, in the same meeting in which Hahus made this comment, she nonetheless gave Wallace a satisfactory evaluation, resulting in a merit pay raise. Therefore, we find that the statement is not probative evidence of discriminatory intent. In short, we find that none of the statements made by Schmitz or Hahus constitute sufficient evidence of discriminatory intent.
D
32
Finally, Wallace contends generally that the district court "invaded the province of the jury" in granting Methodist's motion for JMOL. Specifically, Wallace asserts that she presented substantial evidence of pretext, i.e., evidence of disparate treatment, Hahus's and Schmitz's remarks, Methodist's failure to investigate, and the anecdotal notes Schmitz and Hahus kept. She further maintains that her prima facie case considered in tandem with the substantial evidence of pretext rendered the district court's grant of JMOL inappropriate under Reeves. We find these contentions unavailing.
33
In support of her argument that she proffered substantial evidence of pretext, Wallace reiterates her contentions regarding the evidence of disparate treatment and Hahus's and Schmitz's statements. As examined above, Wallace failed to offer evidence rebutting both of the legitimate nondiscriminatory reasons Methodist produced, and the remarks on which she relies cannot alone constitute sufficient evidence of discrimination.
34
The record also belies Wallace's contentions regarding Methodist's failure to investigate the incident leading to her termination. Trial testimony showed Schmitz spoke with both Dr. Barrosa and Dr. Hanania regarding that incident. At Hahus's direction, Schmitz also contacted Wallace to ascertain whether Wallace had written a verbal order and inserted the feeding tube, both without having received a doctor's order. Wallace admitted that she had done so and Schmitz informed Hahus as such. Hahus verified with Dr. Hanania that he had not given Wallace a verbal order to insert the feeding tube. Regarding the incident, Hahus consulted with the chairman of the peer review committee, Methodist's director of medicine, and Hansen, Methodist's director of nursing and Hahus's supervisor. Although Wallace makes much ado about Hahus not contacting Methodist's Human Resources Department, testimony established that Hansen consulted with the department, thereby complying with Methodist's own procedures.
35
Additionally, Wallace requested and received an informal grievance hearing. At that hearing, Wallace again admitted inserting the tube and writing the order without the requisite physician's order. In her defense, she alleged that other nurses routinely engaged in the same conduct for which she was being terminated. Wallace faults Methodist for not investigating this general allegation. In light of the undisputed evidence of the steps Methodist took to investigate the incident and Wallace's repeated admissions to the acts that were the basis for her termination, that Methodist did not investigate Wallace's generalized opinion that she was subject to disparate treatment does not demonstrate pretext. Cf. Swanson v. Gen. Servs. Admin., 110 F.3d 1180, 1186 (5th Cir. 1997) (finding that the plaintiff's conclusory assertions of less favorable treatment, absent specific examples, were insufficient to establish discrimination).
36
Wallace also asseverates that anecdotal notes kept by Hahus and Schmitz showed discriminatory animus. The fact that Hahus and Schmitz kept these notes does not in and of itself demonstrate discriminatory intent because Hahus and Schmitz kept notes regarding every MICU employee. The notes chronicled incidents in each employee's performance. Hahus and Schmitz used these notes to assist in their formal performance evaluations of MICU employees and to address problems an employee might have without immediate resort to Methodist's more formal due process system.
37
Wallace asserts that these notes are "replete with references to her consecutive maternity leaves and contain increasingly critical remarks with each pregnancy." The references in the notes to Wallace's maternity leaves merely mention that Wallace had been on leave. Critical comments are made throughout the notes regarding Wallace's performance. Moreover, Wallace's termination was made without regard to her past performance, rendering these notes irrelevant rather than demonstrative of discriminatory animus, as Wallace contends.
38
Wallace's failure to proffer substantial evidence of pretext undermines her related contention that the evidence of pretext coupled with her prima facie case provides sufficient evidence of discrimination to withstand a motion for JMOL.
III
39
In sum, the evidence is undisputed that Wallace engaged in the acts for which Methodist terminated her. Further, although she adduced evidence rebutting one of the legitimate nondiscriminatory reasons Methodist produced, she failed to proffer evidence rebutting the second reason, namely, the falsification of medical records. Neither the comments on which she relied nor the anecdotal notes demonstrated discriminatory intent. Finally, the record reveals that Methodist conducted an investigation of the incident giving rise to Wallace's termination. We conclude that there was no legally sufficient basis from which the jury could conclude that Wallace had been discharged because of discrimination. Accordingly, the district court did not err in granting Methodist's motion for JMOL.
40
For the foregoing reasons, we AFFIRM.
Notes:
*
District Judge of the Southern District of Texas, sitting by designation.
1
42 U.S.C. § 2000e et seq.
2
Tex. Labor Code Ann. § 21.051 et seq.
3
Our recitation of the facts reflects the lens through which we view the evidence on a motion for a judgment as a matter of law, namely, in the light most favorable to the nonmovant. See Section II.A. infra.
4
The patient has been referred to throughout these proceedings as "Mr. B."
5
Dr. Barrosa's order stated:
12-19-94 11:00 a.m.
1) Start TF [tube feeding] with FS [full strength] VivinexTen @ 30 millimeters per hour.
2) Check gastric residuals q4h [every 4 hours] - hold TF [tube feeding] X 2H [for 2 hours] if greater than 200 millimeters.
3) Keep bed in reverse Trendelenburg [keep the head up higher than the feet].
4) Okay to transfer to floor from GI standpoint.
6
Methodist Policy D-707 provides:
A physician order is required for insertion or removal of a nasogastric tube.
7
Wallace wrote:
12-19-94 Place feeding tube & check with X-ray. 4p [4:00 p.m.]
VO [verbal order] Dr. Hanania/Veronica Wallace
A verbal order is simply an order given verbally. Pursuant to Methodist Policy D-203, nurses are permitted to transcribe a physician's order.
8
Methodist policy provides that Class I violations include:
G. Willful or illegal, unprofessional conduct or unethical conduct detrimental to patient care or to [Methodist]'s operations that result in neglect, abuse, or exploitation of any patient.
H. Deliberate omission of information, falsification of employee/employer records, or falsifying information to management regarding their availability for work, job duties, or performance.
9
Methodist Due Process Policy P001 provides:
A CLASS I Violation is defined as a serious violation of System standards under circumstances that, after a thorough consideration of the facts, may justify termination for a first violation without regard to the employee's length of service or prior record of conduct.
Recommended action to be taken is termination for the first violation after review by Employee Relations. See III.H.2.
Section III.H.2 of Policy P001 provides:
Immediate termination. If termination is elected due to the clarity of the issues involved and the severity of the violation, the manager/supervisor must review the facts with Employee Relations before terminating the employee and no later than a workday following a weekend termination to ensure that the action was equitable and consistent with similar cases.
10
We need not analyze Wallace's TCHRA claim separately because generally such claims are analyzed under our Title VII precedent. See Schackelford v. Deloitte & Touche, LLP, 190 F.3d 398, 404 n.2 (5th Cir. 1999) ("[T]he law governing claims under the TCHRA and Title VII is identical."); Rios v. Ind. Bayer Corp., 965 F. Supp. 919, 921 (S.D. Tex. 1997) ("[C]ourts must look to analogous federal law when resolving disputes brought under the [TCHRA].").
11
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973)
12
Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 101 S. Ct. 1089, 67 L. Ed. 2d 207 (1981).
13
Although initially Wallace contends that Gray also recorded a verbal order for the procedure, thus falsifying the record as Wallace did, Wallace admits in her reply brief that Gray did not indicate on the patient's chart that she had inserted a nasogastric tube.
14
We note that Methodist did not assert that these two acts together constituted a single nondiscriminatory reason for Wallace's termination. As a result, we have focused solely on what Wallace must show in order to rebut each of the independent reasons Methodist asserts.
15
See, e.g., Deborah L. Rhode, Speaking of Sex: The Denial of Gender Equality 153 (1997) (arguing that "women who make families a priority . . . hear that they are not sufficiently 'committed' to their careers").
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